Opinion ID: 406807
Heading Depth: 1
Heading Rank: 3

Heading: Farmland's Rights in the Double Circle

Text: 20 The central question in this case is whether Universal's rights in its registered trade and collective marks affect Farmland's right to claim a common law trademark in the double circle. The appellants do not dispute that Farmland's appropriation and use of the double circle are sufficient, absent any conflicting rights in Universal, to establish ownership of a common law trademark. Nor do they deny that the Association's logo is likely to be confused with Farmland's and would be an infringement if Farmland owned the trademark. They argue, rather, that Farmland cannot claim a common law trademark in the double circle, because Universal owns it and licenses it to Farmland. They also argue that Universal's ownership and registration of the trademark CO-OP, which is a prominent element of Farmland's double circle, preclude Farmland from claiming a common law trademark. We reject both arguments. 21 The appellants have neither established that Universal owns a trademark in the double circle nor put the question sufficiently in dispute to withstand a motion for summary judgment. In support of their position, the appellants submitted to the district court certified copies of several applications by Universal and its predecessor, National Cooperatives, Inc., for federal registration and renewal of trademarks in the word CO-OP. These applications include, among the specimens of CO-OP, Farmland's double circle. To show that Universal claims rights in the double circle, the appellants have also submitted a copy of a complaint Universal filed against the Association in the United States District Court for the District of Columbia in 1979. The complaint alleged that the Association's logo, at issue here, infringed Universal's trademark. But these submissions do not sustain the appellants' position. Registration or renewal concerns only the mark registered and does not extend to the specimens submitted with an application. The inclusion of the double circle among different specimens creates no presumption that Universal owns a trademark in it. 5 And Universal's complaint in the District of Columbia alleged infringement only of the word CO-OP; it did not claim any rights in the double circle. 22 The appellants' filings, although they cannot establish that Universal owns the double circle, might, standing alone, be enough to put the matter in dispute. But Farmland has countered the appellants' contentions with the sworn affidavit of Floyd E. Grabiel II, a Universal official personally familiar with and responsible for Universal's trademarks. Grabiel's affidavit states that Universal has no claim and makes no claim to Farmland's Double Circle trademark. With regard to Farmland's Double Circle trademark, Universal claims ownership of only the word 'COOP'. The affidavit also states that the double circle format was included in renewal and registration applications only as a specimen and not as the subject of any trademark registration. Since the appellants have submitted no sworn statement disputing Grabiel's ability to speak authoritatively on Universal's position, and their filings can be explained consistently with Grabiel's affidavit, those filings do not put any material question of fact in dispute. Universal makes no claim to the double circle, and Farmland's use of the mark cannot be subject to a license by Universal. 23 The question we are left with, then, is whether Farmland's inclusion in its mark of a prominent element it concedes to belong to Universal prevents it from asserting a valid common law trademark in the entire composite. As we have observed, see pp. 1138-1139, supra, Farmland's infringement claim is governed by state law, and we must decide the issue as a Texas court would. The Texas courts have apparently not had occasion to consider the question. We conclude, however, that they would adhere to the general common law principles that other courts have uniformly applied. See Blue Bell, Inc. v. Farah Manufacturing Co., 5 Cir. 1975, 508 F.2d 1260, 1264. 24 The whole, in trademark law, is often greater than the sum of its parts. Common words in which no one may acquire a trademark because they are descriptive or generic may, when used in combination, become a valid trademark. E.g., In re Colonial Stores, Inc., 1968, 394 F.2d 549, 55 CCPA 1049; Scientific Applications v. Energy Conservation Corp., N.D.Ga.1977, 436 F.Supp. 354, 360; National Trailways Bus System v. Trialway Van Lines, Inc., E.D.N.Y.1963, 222 F.Supp. 143, 145. See also 1 J. Gilson, Trademark Protection and Practice § 2.02(5) (1982). Similarly, a mark containing such words can be appropriated as a trademark if they are part of an arbitrary or fanciful design or device. Estate of Beckwith v. Commissioner of Patents, 1920, 252 U.S. 538, 541, 40 S.Ct. 414, 415, 64 L.Ed. 705, 706. Cf. Quabaug Rubber Co. v. Fabiano Shoe Co., 1 Cir. 1977, 567 F.2d 154 (color alone cannot constitute valid trademark, but color in combination with distinctive shape can). As the Supreme Court has said, The commercial impression of a trademark is derived from it as a whole, not from its elements separated and considered in detail. For this reason it should be considered in its entirety .... Beckwith, 252 U.S. at 545-46, 40 S.Ct. at 416-17, 64 L.Ed. at 708 (citation omitted). 25 This principle is not restricted to composites including descriptive or generic elements but extends to a mark that, like Farmland's, contains an element that cannot itself belong to the user of the composite because it belongs, or might belong, to someone else. In In re Franklin Press, Inc., Cust. & Pat.App.1979, 597 F.2d 270, the Court of Customs and Patent Appeals allowed registration of the applicant's composite mark, which included the words Employees Represented By ITU, IPPU & GCU, & GAIU. The applicant had, pursuant to § 6 of the Trademark Act of 1946, 15 U.S.C. § 1056, disclaimed any interest in this language apart from its use in the composite mark. The Trademark Trial and Appeal Board of the Patent and Trademark Office (PTO) had upheld an examiner's decision finding the disclaimer insufficient to render the mark registrable and refusing to register the mark unless the language was deleted. The Board found that since the phrase contain(ed) proprietary indicia of origin of parties other than applicant, the registration thereof as a part of a composite mark would be inimical and contrary to the rights of ownership possessed therein by these parties. 597 F.2d at 272. The Court of Customs and Patent Appeals reversed the Board's decision, holding that the applicant's disclaimer of the phrase in question adequately addressed the Board's concerns. The court found that the PTO had not shown what harm registration of the mark would cause the proprietary rights of the labor organizations named in the disputed phrase. The court held that the PTO lacked power to assert the unions' rights sua sponte and that those rights could be asserted only by the affected unions in an opposition to the registration. Id. at 274. 26 Several grounds might be advanced for distinguishing the present case from Franklin Press, but none persuades us that the principle of that case is inapplicable here. First, the court in Franklin Press noted that the examiner had expressly found that the mark in question did not so resemble( ) any registered mark as to be likely to cause confusion .... Id. at 273. The district court in the present case did not determine that Farmland's double circle is unlikely to be confused with Universal's registered trademark. The appellants, however, have not established, or even argued, that Farmland's trademark is invalid because it so resembles Universal's. They argue only that inclusion of Universal's mark in the composite double circle automatically renders the latter invalid as a trademark. Franklin Press establishes that inclusion of another's mark in a composite does not automatically preclude trademark status and does not of its own force establish likelihood of confusion. See also Armstrong Cork Co. v. World Carpets, Inc., 5 Cir. 1979, 597 F.2d 496, 501-04, cert. denied, 444 U.S. 932, 100 S.Ct. 277, 62 L.Ed.2d 190; 3 R. Callman, Uniform Competition, Trademarks, & Monopolies § 82.1(g) at 656 (3d ed. 1969). 6 27 In this connection, we note that the word CO-OP in Farmland's mark is obviously more prominent than the disputed language in Franklin Press. If CO-OP is the dominant element of Farmland's trademark, its inclusion might be enough to render the latter invalid as an infringement of Universal's rights. See 3 Callman, supra, § 82.1(g) at 656-57. The appellants, however, have not established that the CO-OP element so dominates the double circle, and visual prominence alone does not make an element dominant. The dominant element of a trademark is the element most readily associated with the products or services it identifies. Id. at 659-60. And when a composite includes both words and a design, the design element is likely to dominate if it is more conspicuous or well known to the purchasing public. See Crown Overall Mfg. Co. v. Chahin, W.D.Tex.1951, 96 F.Supp. 805, aff'd, 5 Cir. 1953, 200 F.2d 935; Caffarelli Bros. v. Western Grocery Co., 1908, 102 Tex. 104, 127 S.W. 1018; 3 Callman, supra, § 82.1(g)(4) at 703-05. It is thus significant that, as Farmland has established by uncontradicted affidavits, the farming community associates the double circle design with Farmland, and Farmland members are known by the words double circle. More important, the appellants' own filings in this case (specifically, exhibits 4-8 to their original complaint) establish that the word Co-op is widely used as a trademark in numerous industries and thus that it is a relatively weak mark. See 1 J. Gilson, Trademark Protection and Practice § 2.01 at 2-3 (1982). A word that may be subject to lessened trademark protection because of its popularity and lack of distinctiveness 7 is not likely, when included in a composite, to be the element that attracts the public's attention. Cf. Sun Banks of Florida, Inc. v. Sun Federal Savings and Loan Assoc., 5 Cir. 1981, 651 F.2d 311, 317 (because the word sun is commonly used by Florida businesses, its inclusion in the trademarks of two banks does not create confusing similarity). In the light of these considerations, we cannot hold that CO-OP is the dominant element of Farmland's trademark. 28 It might also be argued that the procedure for opposition to trademark registration, by which the unions could have protected their interests in Franklin Press, is unavailable in a common law infringement action. But it is obvious from the affidavits filed in this case that Universal has known of Farmland's double circle for years and that it recognizes Farmland's common law trademark rights in it. Moreover, because Universal is not a party in this case, nothing we decide would preclude it from asserting, in a future infringement action against Farmland, that Farmland's mark is likely to cause confusion with its own. 8 29 Finally, the applicant in Franklin Press had, pursuant to § 6 of the Trademark Act of 1946, formally disclaimed the language in question, apart from its use in the mark to be registered. By contrast, no statute specifically provides for any such formal disclaimer in the present infringement action. But while disclaimer may be required for registration, it cannot be a condition of common law rights in a trademark. As the court stated in Franklin Press, common law rights in the composite mark ... remain unaffected without regard to ... disclaimer of the phrase in question .... 597 F.2d at 273. More fundamentally, however, Farmland has effectively disclaimed any rights in the word CO-OP apart from its use in the double circle. Its filing of the Grabiel affidavit, which claims those rights for Universal, is sufficient disclaimer for all practical purposes. 30 We thus conclude that the presence of Universal's registered mark in Farmland's composite does not defeat the latter's validity as a common law trademark. This is so whether Farmland uses the word CO-OP by virtue of Universal's by-laws or by virtue of a licensing agreement; it would be so if the relationship between Farmland and Universal consisted of nothing more than the latter's failure to prosecute a successful infringement action against the former. Thus, even if the appellants have succeeded in raising a disputed question of fact concerning Farmland's authority to use CO-OP, the question is not material. 9 IV. Universal as a Necessary Party 31 The appellants argue that Universal is a necessary party to this action and that partial summary judgment for Farmland without the joinder of Universal was error. The appellants' argument rests, however, on the premise that Farmland licenses the double circle from Universal, a premise we have rejected, see pp. 1139-1140, supra. We thus find no error in the district court's granting of partial summary judgment in the absence of Universal. 32 The licensor of a trademark is usually treated as a necessary or indispensible party in an infringement action by its licensee. Pure Food Products, Inc. v. American Bakeries Co., N.D.Ill.1972, 176 U.S.P.Q. 233. Sound reasons support this rule. Even if Farmland's use of the word CO-OP is under license from Universal, however, those reasons do not apply in this case because no rights in the word CO-OP itself are in dispute. 33 Rule 19(a)(2), Fed.R.Civ.P., requires joinder of a party if 34 he claims an interest relating to the subject of the action and is so situated that the disposition of the action in his absence may (i) as a practical matter impair or impede his ability to protect that interest or (ii) leave any of the persons already parties subject to a substantial risk of incurring double, multiple, or otherwise inconsistent obligations by reason of his claimed interest. 10 35 The licensor of a trademark that is the subject of an infringement action by a licensee falls squarely within the language and policy of this rule. As owner of the mark, the licensor has a legally protected interest in the subject matter of the action. See 3A J. Moore & J. Lucas, Moore's Federal Practice P 19.07-1(2) at 19-129, P 19.14(2.-2) at 19-276 (1982); 7 C. Wright & A. Miller, Federal Practice & Procedure § 1614 at 154-55 (1972). A judgment for the alleged infringer, whether based on a finding that the licensed mark is not a valid trademark or that the defendant's mark does not infringe it, may prejudice the licensor's rights in his own mark. A judgment for the plaintiff-licensee could result in double obligations for the defendant, should the licensor subsequently sue on his own. 36 This is not the case where, as here, the rights asserted in the trademark derive not from a license agreement but from the common law. It is irrelevant that the mark is a composite, an element of which belongs to a third party and might be the subject of a license agreement. In the present case, Universal claims no rights in the double circle. A judgment for Gibson and the Association would not prejudice Universal's rights in its registered marks; it would only deny Farmland the right to prevent the Association from using the allegedly infringing logo. 11 Judgment for Farmland will not subject the appellants to multiple or inconsistent obligations, since Universal does not claim ownership of the infringed trademark. 12