Court Opinion

ID: 9636568
Source: CourtListenerOpinion
Date Created: 2023-08-22 14:33:30.832397+00
Date Added: 2024-06-11T18:09:46.932775
License: Public Domain

GOODRICH, Circuit Judge
(dissenting).
The disagreement among the members of the Court is confined to the point whether the plaintiff has lost its claim to equitable relief because of its laches. Its period of sleeping on its rights nearly doubles Rip Van Winkle’s famous siesta. Nor do I find, any more than the majority finds, excuse for the delay either in the fact that the discontinuance of the 1908 lawsuit was with the defendant’s consent nor in the fact that the prohibition tide was rising. It is agreed that the plaintiff has shown no excuse for its long delay in suing.
But that is not the end of the story. It is perfectly dear in the Pennsylvania decisions, the federal decisions and the text books that a mere lapse of time is not sufficient to constitute laches.1 There must be *378something else. We must, therefore, go further in seeing what has happened to the parties during these thirty-five years of delay. The record shows testimony, epitomized in findings of fact, that the plaintiff sold 23,000,000 cases of “Budweiser” near beer from 1920 to 1933. It sold over 21,-000,000 pounds of bulk and canned malt syrup under the “Budweiser” mark. From repeal in 1933 through 1946 the 'barrel equivalent of the plaintiff’s beer sold was 30% million barrels. Since repeal and through 1946, the plaintiff has spent over $25,000,000 in advertising its beer, and the majority of that amount has been spent in advertising “Budweiser” beer. This, and cumulative evidence of a similar sort, adds up to the conclusion that the plaintiff has actively and successfully promoted sales of beer and malt products under the brand of “Budweiser” continuously since 1905 and has attained great success therein.
Defendant’s sales prior to prohibition under the'label “Budweiser” were small and limited to the northern territory of Pennsylvania and Buffalo, New York. Defendant’s brewery was- a small brewery and has remained so. Its barrel capacity has not changed since before 1909. Prior to the present suit the beer labeled “DuBois Budweiser” was only a fraction of the total 'beer this brewery brewed. The figures are as follows : the bottle beer labeled “DuBois Budweiser” ran from less than 8% in 1923 to less than 12% in 1939, while the draught beer sold as “DuBois Budweiser” ran from less than 8% in 1933 to less than 30% in 1939.
I think this evidence is highly significant. It certainly shows that the defendant did not change its position and spend money, relying upon the plaintiff’s lack of continuing pressure to stop the use of the name “Budweiser.” It shows that the defendant, having jumped on the runners of the plaintiff’s bobsled in 1905 has continued to ride without effort since. There is no element of 'unfairness, therefore, involved in forcing the defendant to stop the use of the term since he has not spent money or otherwise committed himself. Indeed, it is interesting to note that while the defendant’s net sales in 1946 amounted to $1,862,174.16, its advertising expenses were less than $20,000.
In connection with laches the question of defendant’s fraud is material. The use of this term has caused confusion through ■lack of clarity in what is meant by fraud. It is often said that the intentional use of another’s trade-mark is a fraud.2 Then it is said that fraud prevents the operation of the defense of laches.3 It is quite clear that if these propositions are taken together, without explanation, the defense of laches would not be available except in cases where the defendant had not known that he was using the plaintiff’s mark.
I take it that what is really meant in talking about fraud and laches is that if the defendant is using the plaintiff’s trademark •to secure the substitution of his goods for those of the plaintiff, this type of confusion will make the laches defense unavailable. But it is to be noted that the defendant’s bottled beer bears a distinctive label and neither now nor earlier has it 'been labeled to look like the plaintiff’s bottled beer.
But there is further testimony. I agree with the Trial Judge that “Some of it may be subject to the severe criticism visited upon it by defendant’s counsel, but not all of it.” He points out, in his opinion following the findings of fact, that agents of the defendant seeking retailers as customers, “were likely to, and in some cases have, suggested such substitutions as possible to their proposed customers.” The substitutions were substitutions of “DuBois Budweiser” beer for the plaintiff’s “Budweiser” when “Budweiser” was called for. Such substitution is hard tp effect, except with a very unwary customer, when bottled beer *379is called for and when the labels are dissimilar as here. But it is very easy to do in selling draught beer over the bar where taps side by side may say “Budweiser” and “DuBois Budweiser.” It would take not only a sober but a very clear visioned and attentive purchaser to tell which he was getting. How much substituting went on, I do not know. There is evidence to show that some of it was encouraged. It may be of some significance to note the increase in defendant’s keg “DuBois Budweiser” sales as compared with the increase in bottle sales.
I think, on the whole, that the defense of laches should not prevail despite the long period of delay. No doubt the delay would prevent the plaintiff from getting an accounting and profits, but it has very shrewdly dropped this from its demand. Plaintiff has gone on building up through all the means of modern American advertising the association in the beer drinker’s mind of the “Budweiser” name and Anheuser-Busch beer. The defendant has simply followed along and, in a limited area, siphoned off a small amount of the business which the plaintiff had thus built up. Defendant has made no commitments which make relief against it harsh or inequitable, and people who work for defendant have created at least opportunity for fraud upon the beer buying public.
I should affirm.

 In Klepser v. Furry, 1927, 289 Pa. 152, 159, 137 A. 175, 177, the court said: "“In suits for unfair competition or infringement it is well settled that mere laches in the sense of delay to bring suit does not constitute a defense. Such laches may bar an accounting for past profits, but will not bar an injunction against a further continuance of the wrong.” See Consolidated Home Specialties Co. v. Plotkin, 1947, 358 Pa. 14, 55 A.2d 404; Juan F. Portuondo Cigar Mfg. Co. v. Vicente Portuondo Cigar Mfg. Co., 1809, 222 Pa. 116, 70 A. 968; Saxlehner v. Eisner & Mendelson Co., 1900, 179 U.S. 19, 21 S.Ct. 7, 43 L.Ed. 60; Menendez v. Holt, 1888, 128 U.S. 514, 9 S.Ct. 143, 32 L.Ed. 526; McLean v. Fleming *3781877, 96 U.S. 245, 24 L.Ed. 828 ; 2 Nims, Unfair Competition, and Trade-Marks § 409 (4th ed. 1947),; 2 Callmann, Unfair Competition and Trade Marks § 87.3 (1945).

 Consolidated Home Specialties Co. v. Plotkin, 1947, 358 Pa. 14, 55 A.2d 404; Menendez v. Holt, 1888, 128 U.S. 514, 9 S.Ct. 143, 32 L.Ed. 526.

 Saxlehner v. Eisner & Mendelson Co., 1900, 179 U.S. 19, 21 S.Ct. 7, 45 L.Ed. 60; See 2 Nims, Unfair Competition and Trade-Marks, § 409 (4th ed. 1947); 2 Callmann, Unfair Competition and Trade Marks § 87.3 (1945).