Court Opinion

ID: 9640097
Source: CourtListenerOpinion
Date Created: 2023-08-22 16:57:21.131539+00
Date Added: 2024-06-11T18:10:26.413195
License: Public Domain

DAVIS, Circuit Judge
(dissenting).
I am constrained to dissent from the conclusion reached by the court in this case.
In order to get a full understanding of this case and reach a correct conclusion it is necessary to restate some of the facts.
The “Greystone” mark was first owned and used from 1895 to 1929 by the California Wine Association, hereinafter referred to as the Association. In May, 1911, the Association registered this name in the United States Patent Office as a trademark for Hock-Tyoe (white Rhine type) of wine, though it also used the name on labels of other types of wines such as Port, Burgundy and Sherry, and also on labels of brandy. The name “Greystone”, when referring to wines, was used to connote wines produced in several California counties including Napa, Sonoma and Lake counties, and was not limited to wines produced at or about a certain “Greystone” Winery then owned by the Association. These “Greystone” wines were marketed generally by the Association throughout the United States until prohibition in 1920, and thereafter in sacramental and medicinal channels. There is evidence of such sales being made in Pennsylvania.
In 1924, a partnership in San Jose, California, consisting chiefly of members of the Bisceglia family, and known as Bisceglia Brothers, purchased from the Association the “Greystone” Winery. The contract of sale and deed do not purport to convey any trade-marks or good will. This partnership, hereinafter referred to as the California Bisceglias, did not operate this winery for many years nor did it attempt to use the “Greystone” mark until 1933.
In 1929 several wine manufacturing concerns in California, including the Association, but not the California Bisceglias, pooled their property and formed the appellant, Fruit Industries, Ltd. As a result, the appellant acquired title, among other things, to the “Greystone” trademark, and also to approximately 18,000 bottles of “Greystone” wine. Appellant took all necessary steps to keep the “Grey-stone” trade-mark alive in the United States Patent Office throughout prohibition, and since repeal it has been engaged in continuous litigation and negotiations in order to retain its title to the “Greystone” trade-mark and its right to the exclusive use thereof.
Late in 1932 and early in 1933, when it became evident that prohibition would be repealed certain of the concerns which had consolidated into the appellant, including the Association, desired to withdraw from the appellant. In June, 1933, the Association filed suit to recover all *756of its property including its trade-marks, among which was the “Greystone” mark, its pooled wine, real property, etc.’ Pending the outcome of this suit, all of appellant’s “Greystone” and other pooled wine, formerly belonging to the Association, was impounded by the court. This litigation which involved three suits lasted for two years, until June, 1935, when the impounding order was lifted.
In the meantime the California Bisceglias were trying in every possible way to usurp appellant’s right to the “Greystone” trade-mark. They registered it in the. United States Patent Office in 1933. This registration the appellant succeeded in having cancelled in 1934. Continuous negotiations between the California Bisceglias and the appellant were carried on until March 1936, when the appellant finally filed suit against them for infringement of the “Greystone” trade-mark, demanding an accounting of profits and damages. This litigation was finally compromised in October, 1936, when an agreement was entered into between the appellant and the California Bisceglias under which the appellant withdrew its suit and the California Bisceglias assigned to the appellant all their right in the trademark “Greystone” or “Graystone” including two registrations thereof in Pennsylvania, dated June 21, 1933, and February 6, 1936, respectively. (The latter registration had been obtained by the appellee.)
However, this settlement of the suit with the California Bisceglias did not, contrary to appellant’s expectation, end its troubles, for it then found that “Grey-stone” wines were still being sold in Pennsylvania by the appellee, a corporation named “Bisceglia Brothers”, but claiming to have; no connection with the California Bisceglias.
The appellee is the successor to a wine distributing business originally conducted by one Edward Black, and then by his widow as “Edward Black’s Estate”. However, even when Black (or his widow) was conducting the business, it was known as “Bisceglia Bros.” which name had been registered since 1929 under the Pennsylvania Fictitious Names Act. For the sake of clarity, we shall refer to the appellee and its predecessors as the Pennsylvania Bisceglias, although it is alleged that no one of that name is interested in them.
The Pennsylvania Bisceglias ever since December 1933 have been selling “Grey-stone” wines which were manufactured and shipped to them by the California Bisceglias. The labels on such wine, besides bearing the word “Greystone”, bore the words in large print, “Manufactured by * * * Bisceglia Bros. * * * San Jose, California”. In very small letters, the words “Edward Black” or “Edward Black Est.” appeared on the labels but never during the years 1933 to 1936, inclusive did there appear upon them any mention of the Pennsylvania Bisceglias in any form, nor was the connection of Edward Black or his estate with the wine anywhere indicated.
In August, 1935, the Pennsylvania Bisceglias were incorporated and Mr. Margolis, who married Edward Black’s widow, became president of the corporation. It does not appear in the briefs just who owned the beneficial interest in the stock of this corporation, but Alphonse Bisceglia testified that neither he, nor any of the California Bisceglias had any interest in the Pennsylvania Bisceglias, and that none of the .Pennsylvania Bisceglias had any interest in the California Bisceglias, though the credibility of this testimony seems to be weakened by other evidence.
If there was no connection between the Pennsylvania and California Bisceglias, it seems st,range that the Pennsylvania Bisceglias on February 6, 1936, were able to obtain registration in Pennsylvania of the “Greystone” name when the word “Graystone” had been registered in that state by the California Bisceglias since 1933. It is also interesting at this point to note that in the compromise agreement of October, 1936, the registration of “Grey-stone” by the Pennsylvania Bisceglias was purportedly conveyed to the appellant by the California Bisceglias.
In April, 1936, Alphonse Bisceglia, of the California Bisceglias, came East and told Margolis, with whom he was very “friendly”, all about the negotiations and litigation between the appellant and the California Bisceglias. He also allegedly made some objection to Margolis concerning the use of the word “Greystone” by the Pennsylvania Bisceglias. However, upon returning to California, in July 1936, he wrote to the Pennsylvania Bisceglias conceding to it “Exclusive right of the Greystone label in Pennsylvania, and urging it to “proceed with an extensive advertising campaign on the Graystone brand”. It is not without significance that *757the California Bisceglias so acted at a time when they were being sued by the appellant for infringement of the Grey-stone trade-mark, at a time when negotiations for settlement of such suit were in progress and just a few months prior to the actual compromise of such suit. Alphonse Bisceglia admitted that he was fearful of signing the compromise agreement after the above dealings with the Pennsylvania Bisceglias, and that he signed only after his attorney assured him that the contract transferred only the present interest of the California Bisceglias in the “Greystone” trade-mark and relieved them of all liability “for the acts of third parties acting independently and not under understanding or agreement with” them.
When “Greystone” wines continued to be sold in Pennsylvania by the Pennsylvania Bisceglias, the appellant wrote to the Liquor Control Board of that commonwealth, informing it of the negotiations, litigation and compromise agreement between it and the California Bisceglias, and claiming exclusive right to the “Grey-stone” name. The Board thereupon ceased taking orders of “Greystone” wine from the Pennsylvania Bisceglias until March, 1937 when they effected satisfactory indemnity arrangements pending the determination of the rights of the respective parties. In February, 1937, the Pennsylvania Bisceglias instituted the present suit.
The District Court, among other things, found that the Pennsylvania Bisceglias had marketed and advertised “Greystone” wines in Pennsylvania since December 1933; that the appellant knew that “Greystone” wines, not its product, were being sold in Pennsylvania since early in 1934; that the appellant did not address any objections to the Pennsylvania Bisceglias concerning their use of the “Greystone” name until January or February of 1937 and had made no attempt to market or advertise “Grey-stone” wines in Pennsylvania between December 1933 and January 1937, approximately three years.
Frofn these bare facts, the District Court drew the following inferences: (1) That the appellant acquiesced in the use by the Pennsylvania Bisceglias of the “Greystone” name; (2) that the appellant intended to abandon that name in Pennsylvania, and (3) that the appellant was guilty of laches in protecting its rights to that name. From these inferences of fact, the learned trial Judge drew the following conclusion of law: “7. Defendant has by its conduct and its failure to project its business in this state, and having an equal opportunity, evidenced an intent to abandon, and is by its laches and acquiescence precluded from preventing the plaintiff from enjoying the benefits of its trade and good will in Pennsylvania which it has built up at great expense.”
Before examining the above conclusion of law, it must be noted that the inferences upon which it is based are questions, not of “evidentiary” but of “ultimate”, facts which are not binding upon this court. Helvering v. Tex-Penn Oil Co., 300 U.S. 481, 57 S.Ct. 569, 81 L.Ed. 755.
After examining the record it seems evident that the appellant never intended to abandon its right in the “Greystone” name, that it never consciously acquiesced in the use thereof by the Pennsylvania Bisceglias, and that it was not, under the circumstances, guilty of laches in protecting its rights thereto. It is obvious that none of these inferences would have been drawn if the appellee in this case had been the California Bisceglias rather than the Pennsylvania Bisceglias, for the constant negotiations and litigation existing between' the appellant and the California Bisceglias conclusively negatives any such inferences. Is then the fact that the appellee is the Pennsylvania Bisceglias conclusive of the interpretation to be given the appellant’s actions? If the Pennsylvania Bisceglias had shown that the appellant knew or reasonably should have known that they were independent of, and separate from, the California Bisceglias, then it might be that the failure of the appellant to protest to them concerning their use of the “Grey-stone” name, evidenced an intention to abandon to them the “Greystone” name, or evidenced an acquiescence in such use, or was evidence of laches. However, it clearly appears that the appellant believed that the Pennsylvania Bisceglias were identified with, the agent of, or in some way closely connected with the California Bisceglias, and when all the evidence is considered, the conclusion is inescapable that they were closely connected and that the Pennsylvania Bisceglias knew what was going on between the California Bisceglias and the appellant. The Pennsylvania Bisceglias adopted as their name “Bisceglia Brothers” which for years had been the legal name of the California Bisceglias (and we wonder why they adopt*758ed this particular name); they bottled and sold the wines of the California Bisceglias; for the years 1933 to 1937 they carried the name “Bisceglia Brothers * * * San Jose California” prominently on the label, without any indication that there was a “Bisceglia Brothers” of Philadelphia, Pennsylvania; they sold “Greystone” wines at a time when the word “Gray-stone” was registered as a trade name in Pennsylvania by the California Bisceglias; the labels on the bottles frequently contained a picture of the “Greystone” winery in California which one of the appellant’s predecessors, the Association, had conveyed to the California Bisceglias, and the certificate of registration of the fictitious name “Bisceglia Bros.”, filed by Edward Black, designated the business to be carried on as a “bonded winery agency”. Indeed, if the Pennsylvania Bisceglias were actually separate from, and independent of, the California Bisceglias, there was nothing on the face of things which would have led a reasonably prudent man to suspect that fact.
Under these circumstances the failure of the appellant to protest to the Pennsylvania Bisceglias of their use of the “Grey-stone” name, when it was vigorously protesting to the California Bisceglias, can not be said to be any evidence of an intent to abandon the “Greystone” name in Pennsylvania, of any acquiescence in the use of that name by the Pennsylvania Bisceglias, or of laches.
This brings us to the bare question here involved: There being no evidence of an intent to abandon and no evidence of acquiescence in the use of the trade-mark by the appellee, does the fact that the appellant did not use the trade-mark in Pennsylvania from December 1933 to January 1937, under the facts and circumstances of this case, constitute an abandonment of it as a matter of law? This question must be answered in the negative, for “in the absence of intentional abandonment, mere disuse will not destroy trade-mark rights” and “abandonment is not shown, even by numerous infringements, in the absence of the owner’s acquiescence”. 63 C.J. 524, 525; Beech-Nut Packing Co. v. P. Lorillard Co., D.C., 299 F. 834, affirmed 3 Cir., 7 F.2d 967, affirmed 269 U.S. 551, 46 S.Ct. 203, 70 L.Ed. 407;. Anheuser-Busch, Inc. v. Budweiser Malt Products Corp., D.C., 287 F. 243, affirmed 2 Cir., 295 F. 306; Edward & John Burke v. Bishop, C.C., 175 F. 167.
Furthermore, the appellant, being a cooperative enterprise, financed by the Farm Credit Administration, a federal agency, could not sell any wines to the Pennsylvania Liquor Control Board in late 1933 or early 1934, for, under the federal fiscal regulations, the appellant was required to discount all paper given in payment for its products, and the paper of the Board was not then acceptable for discount. From 1934 to late in 1936 its right to the “Greystone” name was in almost constant litigation with the Association and the California Bisceglias. Within a few months after the settlement with the California Bisceglias, the appellant made attempts to revive its market of “Greystone” wines in Pennsylvania. Clearly- no intentional abandonment of the name resulted or can be inferred under these circumstances.
The District Court laid much stress on the fact that the Pennsylvania Bisceglias had expended large sums in advertising the “Greystone” name, but this they did with their eyes wide open and, under the evidence in this case have no one to blame but themselves.
However, even though these expenditures were made innocently, they do not under the circumstances invest the Pennsylvania Bisceglias with the right to appellant’s property. 63 C.J. 574; Straus v. Notaseme Hosiery Co., 240 U.S. 179, 36 S.Ct. 288, 60 L.Ed. 590.
It seems to me that the decree of the District Court should be reversed and the cause .remanded with instructions to dismiss the bill of complaint.