Court Opinion

ID: 9650957
Source: CourtListenerOpinion
Date Created: 2023-08-23 15:57:35.896026+00
Date Added: 2024-06-11T13:19:58.969575
License: Public Domain

HEALY, Circuit Judge
(dissenting).
What appellee sought in the patent office and endeavors to effect by his bill, in *657equity here is the registration of his trademark as applied to his toilet seat covers made of tissue paper. His trademark consists of the words “Safe Way” followed by a dash, with a sketch of a toilet seat cover interposed between the words. The nature and practical limitations of his business are in a high degree peculiar; and an appraisal of the equities requires a more adequate statement of these limitations than I am able to find in the majority opinion.
Appellee first adopted this mark for his seat covers in 1933 and has since continued its use. He does not deal with the public generally, his product being unsuited to such a practice. He does business only with a special class of customers who maintain public rest rooms, namely, railroad and bus companies, gasoline service stations, hotels, office buildings, theaters, and the like. These concerns constitute his clientele. They do not, in their turn, vend or market his product. They place his dispensing cabinets in their public rest rooms where the seat covers, installed in the cabinets in packages of about 100 each, are available without charge to those who desire to .make use of them. The record substantially establishes the fact that toilet seat covers are not carried or sold in wholesale or retail stores and are not suitable for sale or distribution in this manner. Appellee learned by investigation and experience that stores, including Safeway, furnish no outlet for such an article. In a word, there is no demand for toilet seat covers on the part of the general public. Appellee advertises his business under the trade name “Sani-Guard Sales Co.” in mediums directed only to his special class of customers,' and not to stores or to the public.
At the outset of the discussion it should be noted that the law of trade-marks is but a part of the broader law of unfair competition. American Steel Foundries v. Robertson, 269 U.S. 372, 380, 46 S.Ct. 160, 70 L.Ed. 317. And-the mere fact that one person has adopted and used a trade-mark on his goods does not prevent the adoption and use of the same trade-mark by others on articles of a different description, there being no property in a trade-mark apart from the business or trade in connection with which it is employed. American Steel Foundries v. Robertson, supra.
The problem that has confronted the courts in trade-mark and unfair competition cases is whether, under -the facts of the particular case, there is likelihood of the deception of customers, concretely, whether purchasers or prospective purchasers of an article of merchandise having a trade-mark are likely to buy it in the mistaken belief that it is the merchandise of another since it bears -the other’s familiar symbol or trade name. The probability of deception is naturally enhanced where the articles are competitive. Even if non-competitive the use of the mark will be restrained'or its registration denied if there is likelihood of the purchaser’s being misled by it into attributing the article to other than its true source. This, as a study of the underlying facts of the many cases will reveal, has been the preoccupation of the judges. A few of the leading authorities developing the doctrine will be analyzed in a moment, but I desire first to mention the two salient, and I think, insupportable, postulates on which the majority here proceed, namely, (1) the supposedly competitive nature of the products of the parties, and (2) the assumed deception of gratuitous users as being the equivalent of buyer deception.
(1) It needs no words of mine to differentiate between the sanitary role played by appellee’s seat , cover and the peculiar office designed to be performed by Safeway’s toilet paper. Safeway has not argued not did the patent office find that the one competes with the other; it has remained for my- associates to make that finding. Safeway’s argument is merely -that the two articles have the same “descriptive properties” — an elusive phrase not now found in the statute as revised by the Lanham Act, and one with which the courts and the bar have heretofore wrestled with indifferent success. I prefer the restraint of the patent office and of Safeway to the elastic competitive theory of the majority. One might with equal plausibility find competition between earmuffs and children’s mittens.
*658(2) It is clear on the face of. the record that the gratuitous users of appellee’s seat covers can not be classified as purchasers or prospective purchasers of seat covers. They are not in the market for such an article. The likelihood, if any, of their Being deceived as to the source of the article would seem to be immaterial. Even if material there is no showing of a curious user’s ever having thought or assumed that Safeway Stores was the source of appellee’s toilet seat cover.
The point in respect of the status of the gratuitous user as distinguished from that of a buyer may require a little further scrutiny, and I turn to a few of the modern trade-mark cases. In Radio Corporation of America v. Rayon Corporation of America, 139 F.2d 833, 31 C.C.P.A., Patents, 803, the Court of Customs and Patent Appeals reversed the decision of the Commissioner favorable to the registration of Rayon Corporation’s trade-mark comprising “R C A the symbol ^ the initials of which J Fabric,” had long been used by the opposer Radio Corporation. The Commissioner, being no doubt imbued with a wholesome respect for the court’s decision, rejected appellee’s trade-mark on the authority of that holding. It is of more than usual importance, therefore, to understand what facts underlay the Rayon decision. The court, 139 F. 2d at page 837 of the published report, summarized the facts and its own process of reasoning thus: “Appellant is concerned with radios and other radio electrical apparatus. Appellee applies its mark to knitted rayon materials. Both radios and knitted rayon materials are used in homes, and are often bought by the same class of people. Considering the fact that the notation ‘RCA’ has come to be known by the American public as meaning ‘Radio Corporation of America,’ it would be very reasonable for purchasers, upon seeing the ‘R.C.A.’ mark upon knitted rayon materials, to cónclude that appellant was engaged in, or was sponsoring, the manufacture of such goods.” This holding typifies the present-day philosophy on the subject but I take' it to be inadequate authority for the rejection of appellee’s trade-mark.
Perhaps the most influential of the precedents is the opinion of Judge Learned Hand, speaking for the Second Circuit, in Yale Electric Corporation v. Robertson, Commissioner, et al., 26 F.2d 972, 973. The equitable bill there was between the Yale Electric Corporation as plaintiff and the Yale & Towne Company as defendant. The former had sought to register its trade-mark applied ■ to flashlights and batteries consisting of the word “Yale” stamped thereon. The mark had long previously been used by Yale & Towne upon many sorts of hardware, especially upon locks and keys, but not on flashlights and batteries. The patent office rejected Yale Electric’s application and the Second Circuit held that it was right in so doing. The thing I desire to emphasize is that the products of both these parties were of the sort commonly sold to the general public in hardware and department stores and suitable for display in show cases, possibly side by side. The court said that “the record contains many instances where the defendant’s buyers did, or said that they should, suppose the plaintiff’s flash-lights to be one of the defendant’s products, and it is extremely probable that mistakes will continue unless the practice ceases.” It went on to say: “The law of unfair trade comes down very nearly to this — as judges have repeated again and again — that one merchant shall not divert customers from another by representing what he sells as emanating from the second. This has been, and perhaps even more now is, the whole Law and the Prophets on the subject,
As in the above authorities, all the cases I have been able to examine proceed on the basic fact of the likelihood of the confusion of people who are in the market as buyers. In the present instance, as I have endeavored to point out, appellee’s customers are the public service concerns. There is no evidence that they have ever been deceived or that there is any likelihood of their deception, and no claim .to that effect is advanced by Safeway or by my associates. Appellee’s customers know the source of the seat covers they buy. Who, then, are the purchasers likely to be deceived, by ap*659pellee’s trademark? So far as the record shows they are non-existent. The mind rejects as fanciful the argument that the casual user of appellee’s seat cover in a public rest room is exposed to a species of deception capable of injury to Safeway.
The case here is singularly unlike Stork Restaurant v. Sahati, 9 Cir., 166 F.2d 348, which my brothers regard as controlling. The parties to that suit were in the same line of endeavor. The Stork Club in New York, as everybody knows, had built up a national reputation as a night club. The defendants and their predecessors operated a night spot of sorts of their own at San Francisco where they dispensed drinks and food in a cocktail lounge, tavern and bar, and they advertised and sometimes provided musical entertainment. They flagrantly pirated the name “Stork Club” in a patent effort to attract customers by using this highly advertized name, even going so far as to employ the original Stork Club’s well-known insignia of a stork in high hat and monocle. There was no palliative showing and the defendants were without so much as the shadow of a moral or equitable defense. It is true that there are broad generalizations in this court’s opinion in the Stork case, as there are in many of the unfair competition cases. Hence I think it is essential that in appraising these authorities we do not lose sight of the basic facts of each, for otherwise the prevailing law on the subject can neither be understood nor l-ationally and fairly applied.
There is no adequate ground for believing that appellee was in bad faith in the selection of his mark. Bad faith, like fraud generally, is not presumed in the absence of persuasive proof either direct or circumstantial. And unless the court is prepared to accept as all-compelling the single circumstance that prior to 1933 a retail grocery chain had gained some prominence under the name Safeway Stores, and that appellee had seen some of its Los Angeles Stores, we have nothing in this record on which to predicate a charge of deliberate copying. The word “Safeway” may, as my associates suggest, be a coined word, but the two words of appellee’s mark are not coined. They are words conjointly used in everyday speech and have been employed together in common parlance since the maturity of the language. Nor is appellee’s mark identical with Safeway Stores’ trade name. The words “Safe Way” with the representation of a toilet seat cover interposed between them constitute a distinctive mark giving to the eye an impression substantially unlike that given by the single word “Safeway.” It comprises a symbol appropriately descriptive of a sanitary method; and I am able to discover in this record no sufficient reason for debarring appellee from the use of the symbol, or from having it registered if he thinks registration helpful. He appears to have traded on nobody’s reputation but his own; and there is not the slightest showing that his use of the symbol in his peculiar .and praiseworthy enterprise has posed or is likely to pose any threat to the good name or business of Safeway Stores.
Finally, I desire to add a word concerning the court’s collateral order directing the entry of an injunction against appellee’s continued use of his mark. What I have to say on that subject would seem to require a preface. It does not follow as a matter of course that because the majority feel constrained to deny appellee’s prayer for a decree compelling registration that they must perforce grant Safeway’s counterclaim for injunctive relief. The two things are not necessarily representative of the two sides of a shield, although they ordinarily would be if the judges felt entirely free to make up their own minds. But the extraordinary emphasis which my brothers here place upon the deference which courts are obliged to pay to the findings of the patent office leads one to suppose that in considerable measure they have had their minds made up for them. What I wish to point out is that, in respect of Safeway’s cross demand for equitable protection the court is obliged to defer to no views other than its own. On this phase we owe deference solely to the mandate of our own hearts, and appeals to doctrines of administrative finality will not serve. In this aspect of the case it is for the court alone to determine the weight and force of the evidence, to find the facts, and to decide where the equities lie; and it neither *660ought nor can evade its responsibility or surrender any measure of its authority.
As concerns the allegations of its counterclaim Safeway has' the burden of proof. It must, in order to entitle itself to the relief it seeks, establish its right thereto by a preponderance of the evidence. I think it has not .come forward wtih evidence, direct or circumstantial, showing that any unfairness or harm has so far developed from appellee^ use of his symbol, nor am I able to find in the record any facts indicative of a likelihood of harm in the future. Should circumstances hereafter change to the extent of creating a genuine condition of unfair competition it will then be time enough- for Safeway to ask the interposition of a court of equity.1
On the other side, it is a certainty that appellee will be seriously hurt if he is enjoined from the use of his mark. Over a period of fifteen, years he has labored to build up a reputation for his trade-marked product and has succeeded in establishing for his business a useful: if comparatively modest place in the sun. It is to be remembered also that at no time prior to appellee’s filing in the patent office in 1942, after nine years of open use and prominent display of his symbol in many hundreds of public places in Safeway’s main theatre of operations, did that company make the slightest protest against his. use of .the symbol. While Safeway claims that it was unaware of the use we are not in the circumstances obliged to credit its assertion. Its silence is a devastating commentary on the merits of its case, but- here I speak of it particularly in the sense of laches. While I' recognize that the matter of Safeway!s laches is of no moment so far as concerns the patent office determination, laches is a matter of vital significance in considering whether' Safeway is entitled to injunctive relief. It appears to me that on a balancing of the equities Safeway is not entitled to prevail.

 The use of a registered trade-mark may of course be enjoined if its use results in unfair competition. Of. observation of Judge Hand in Yale Electric Corporation v. Robertson, supra, 26 F.2d at page 974.