Court Opinion

ID: 9448310
Source: CourtListenerOpinion
Date Created: 2023-08-03 23:31:12.710691+00
Date Added: 2024-06-11T17:31:22.575956
License: Public Domain

*948RICH, Judge
(concurring).
The lengthy Petition for Rehearing filed by the Patent Office alleges, quite unjustifiably, that this court failed to “take into account the public interest in the issue of likelihood of confusion.” It is said that in the first portion of the Lanham Act’s section 2(d), preceding the proviso, and in its forerunner in section 5(b) of the 1905 Act, “likelihood of confusion or mistake or deceit of purchasers is a test for registration with respect to prior registrations.” [My emphasis.] From that incontrovertible fact the Patent Office draws the following deduction:
“The language in section 2(d) retained from the Act of 1905 is clearly intended to protect the public against likelihood, of confusion * * [My emphasis.]
And it is stated: that “the Commissioner and the Examiner,” in examining applications for registration of trademarks, “act as the guardians of the public interest;” that on this appeal “this Court has the duty to determine whether or not the Patent Office tribunals correctly discharged their duty as guardians of the public interest;” and that “Neither the Patent Office tribunals nor this Court can properly avoid making an independent determination of the issue of likelihood of confusion as it involves the public interest.”
I should like to examine this concept that section 2(d) was put into the law by the legislature to protect the “public interest” and that this administrative agency in applying it is functioning as the guardian of that public interest. I should like to discuss how, as a practical matter, the public interest is protected within the framework of the Lanham Act. This court is as much concerned with protecting the public as is the Patent Office. The problem, however, is how best to do it.
It seems tolerably clear from the Patent Office brief on its petition that it deems the “public” to be potential purchasers of the wares involved, that its “interest” is to be saved from the hazards of a caveat emptor policy, more particularly confusion or deception as to the source or quality of goods through the use of the same or similar trademarks, and that this is the interest over which it thinks it is standing guard in administering the law, particularly section 2 (d). With all this I can agree insofar as the trademark act as a whole is concerned, but it seems to me that the Patent Office misapprehends its function in enforcing the provisions of the first clause of section 2(d). It is, at times, like a cat watching the wrong rat hole.
I gather from what the Patent Office petition says, and from its acts in the instant case, that its zeal as “guardian of the public interest” is so exercised as to deny registration if it feels there is, by its independent determination, any likelihood of confusion of any kind as between the mark sought to be registered and the prior registration, without regard to the desires, opinions or agreements of the owner of the prior registration and without taking into account, it seems to me, either the facts of commercial life or the intended operation of the Lanham Act. It seems to do this on the assumption that in so doing it is actually protecting the public from confusion. But is it?
Both reason and history seem to point to the correctness of the proposition that the only role the Patent Office can play in protecting the public from confusion, through its administration, in part, of the trademark law, is by protecting trademarks. The refusal of registration, except as it is an aspect of protecting existing marks (or the protection of the freedom of the public to use words and symbols in the public domain), does not serve to protect the public from confusion because refusal to register has almost no effect on trademark use, which use always precedes application to register, continues during the prosecution of the application, and usually goes on after registration is finally refused, unless something other than that refusal intervenes to stop such use, I will develop this proposition further.
*949First, however, let us clear away one possible source of misunderstanding. Confusion is not caused by registrations in the Patent Office.1 Section 2(d) is not directed to confusion from registration. The purchasing public knows no more about trademark registrations than a man walking down the street in a strange city knows about legal title to the land and buildings he passes. There may be an occasional sign giving notice of ownership, just as an occasional trademark owner will call attention to the fact that he owns it, but it is the exception. What the public knows is the wares and the marks they bear and, perhaps subconsciously, its relationship to them. It is not concerned with legal titles to and registrations of marks. In speaking of likelihood of confusion, insofar as- ex parte cases are concerned section 2(d) is dealing with what is usually, in ex parte prosecution, a hypothetical situation, what would be likely, on the assumption the mark sought to be registered is used on the goods named in the application and the reference mark is used on the goods named in the registration, under the presumed market conditions relating to the sale and use of those goods. But hypothetical situations do not confuse the purchasing public. The public is confused only by what is done in the marketplace, by real life activity, use of the mark, its counterfeiting, colorable imitation, copying, and the use of such marks as are likely to be confused with it. The denial of a registration has little or no effect on such activity. Its denial affords, therefore, little or no protection to the purchasing public. On the other hand, the granting of a registration may protect the public from confusion. A good guardian of the public interest must look at both sides of the coin.
The instant case affords an example. Applicant seeks to register MERITO for rum. The facts assumed to have been proved and accepted in the Patent Office as the basis for decision (so that this case is removed from the category of the hypothetical) show that applicant adopted and started to use MERITO on rum at a time when it was the owner, by assignment, of the reference registration of MARQUÉS DEL MÉRITO for wines. That was in June 1941. Applicant has now sold MERITO rum for over 20 years. In the period 1941-1958, it sold one and a half million cases of MERITO rum for more than forty-three million dollars and spent over a million and a half dollars advertising it. MERITO rum (I judicially notice) is today on the shelves of liquor stores in the Nation’s Capital. A few weeks after filing the instant application the reference registration was reassigned to the original registrant so that, under section 2(d), it is now a mark “registered * * * by another.” On that registration applicant is rejected, notwithstanding complete approval of use and registration by the registrant, the Patent Office insisting that rejection is necessary to protect the public from confusion.
In this situation what in fact protects the public?
The Patent Office, “carrying out its statutory duty of making its own independent determination,” which is actually the subjective opinion of an examiner, concludes that, beyond question, the use of MERITO on rum concurrently with use by another of MARQUÉS DEL MÉRITO on wine is likely to confuse the public. In order to protect the public, as the guardian of its interests, it refuses registration. What happens? Nothing. The sale of MERITO rum continues. If the public is confused — and there is no evidence to show that it is — the presumed confusion is merely that it thinks that the same people put out or sponsor MARQUÉS DEL MÉRITO wines and MERITO rum. (They did once but they don’t *950now.) I suspect that the public is indifferent to the situation, as it is when the owner of a product sold under a trademark sells its business to another who continues to sell the same product under the same mark. If there is any “confusion” in this picture, it certainly is not injuring the public. The only possible injury is to the owner of the MARQUÉS DEL MÉRITO mark. The refusal of the registration has not protected the public in any way I can see. The customer who calls for MERITO rum still gets MERITO rum from the original source. He has not been confused, mistaken or deceived as to that. The MERITO mark is serving its proper function.
But suppose, now, that another purvey- or of rum starts to sell MERITO rum, or MERIT-O, or NERITO, or MARETO rum. Is the purchasing public then likely to be confused, or mistaken, or deceived ? Where have the guardianship activities of the Patent Office left it? The longtime and original vendor of MERITO rum would like to enjoin the competitor from copying or colorably imitating the trademark by which its old customers and those recommended by them have been assured of getting rum from the original source. But it has no registration and enjoys no Lanham Act benefits, notwithstanding its twenty years in the field as the sole source of MERITO rum. It can protect itself, and incidentally protect its customers and the “public” from getting products they do not want, only by whatever means the common law or state statutes provide, but not through any Lanham Act weapons so carefully withheld from it by the Patent Office as guardian of the interests of that “public.” There is not even a record in the Patent Office that the original vendor has any right to this mark MERITO and when sued the pirate claims he was without notice of plaintiff’s mark, challenges plaintiff’s exclusive rights to the mark and compels plaintiff to prove its ownership as well as infringement.’ The confusion arid deception of the public continues while the litigation drags on, the infringing stocks are disposed of, and the infringer becomes judgment-proof, awaiting the next chance to strike and take another free ride on MERITO’s reputation and advertising expenditures.
On the other hand, if the original purveyors of MERITO rum had a Lanham Act principal register registration, as applied for, they would be in a position to crack down promptly on infringers and preliminarily enjoin the sale of spurious MERITO rum, thus protecting the purchasing public from confusion, mistake and deception. The very existence of a registration would tend to inhibit infringement. How else could the Patent Office guard that interest of the public than by affording such protection? Did its denial of registration protect the public? Does anyone expect appellant to' stop selling MERITO rum ?
I have no doubt that courts of equity would protect, eventually, applicant-appellant in its right to exclude others from using MERITO, or any mark likely to be confused therewith, on rum. If I am' right in this, then refusal of the registration produces the anomalous situation of enforceable trademark rights unregistrable under the Lanham Act, one of the situations of the prior law which that act sought to correct. See Alfred Dunhill of London v. Dunhill, 49 CCPA -, 293 F.2d 685.
I do not believe it is a correct construction of section 2(d) to say that it is intended to prevent the registration of any mark which, in any conceivable way, might confuse some portion of the public and in that way to protect the public. I am of this view for the reason, illustrated above, that the public is not thereby protected.
I believe the primary purpose of section 2(d) is, as an integral part of the act, to protect the owners of prior trademarks. By protecting them, and thus enabling them to protect themselves against infringers, it follows, but as a secondary effect, that the public is protected from confusion caused by the sale of spuriously marked goods. No government could police trademark use so as to protect the *951public from confusion. It must count on the self-interest of trademark owners to do that.
To show that the purpose of section 2(d) is the direct protection of the public, the solicitor quotes the following from Senate Report 1333, 79th Cong., 2d Sess., U.S.Code Cong.Service 1946, p. 1274, which we, of the majority, are charged with not taking into account:
“The purpose underlying any trade-mark statute is twofold. One is to protect the public so that it may be confident that, in purchasing a product bearing a particular trademark which it favorably knows, it will get the product which it asks for and wants to get. Secondly, where the owner of a trade-mark has spent energy, time, and money in presenting to the public the product, he is protected in his investment from its misappropriation by pirates and cheats. This is the well-established rule of law protecting both the public and the trade-mark owner.” [Emphasis mine.]
What could more aptly apply to the protection of the applicant’s MERITO trademark for rum so as to assure that the public, which favorably knows it, will get it when it asks for it and so that the applicant, who has invested heavily in it will be protected against pirates and cheats ? The significance of that passage would seem to depend on whether you italicize “to protect the public,” as the solicitor did, and forget the rest or whether you visualize more than one possible way of protecting the public. Moreover, the passage does not refer to section 2(d) at all but to the statute — any trademark statute, in fact — as a whole.
I quote from the next page of the same report:
“This bill * * * has as its object the protection of trade-marks, securing to the owner the good will of his business and protecting the public against spurious and falsely marked goods. The matter has been approached with the view of protecting trade-marks and making infringement and piracy unprofitable.
******
“To protect trade-marks, therefore, is to protect the public from deceit, to foster fair competition, and to secure to the business community the advantages of reputation and good will by preventing their diversion from those who have created them to those who have not. This is the end to which the bill is directed.” [Emphasis mine.]
I believe the court’s decision in this case will more effectively carry out these objectives and protect the public than would the decision of the Patent Office denying registration. I do not disagree with the thesis that a major objective of the Lanham Act is to protect the public and that in administering that law the Patent Office acts as a guardian of the public’s interests. But I do think there should be a reappraisal of how to go about doing that. I think it would be well to forget some of the generalities uttered in many cases under the Act of 1905 in an earlier time and reconsider what Congress stated, in the Lanham Act itself, are its purposes:
“The intent of this Act is to regulate commerce within the control of Congress by making actionable the deceptive and misleading use of marks in such commerce; to protect registered marks used in such commerce from interference by State, or territorial legislation; to protect persons engaged in such commerce against unfair competition; to prevent fraud and deception in such commerce by the use of reproductions, copies, counterfeits, or color-able imitations of registered marks; and to provide rights and remedies stipulated by treaties and conventions respecting trademarks, trade names, and unfair competition entered into between the United States and foreign nations.” Sec. 45 (15 U.S.C. § 1127, 15 U.S.C.A. § 1127) [Emphasis mine.]
*952Refusal to register MERITO for rum accomplishes none of these objectives.
Referring to the section 45 statement of intent above*quoted, Edward S. Rogers, one of the chief architects of the Lanham Act, said in his introduction to Robert’s, The New Trade-Mark Manual (p. xiv);
“Here we have a direct statement of a national policy by the Congress. The purpose of the Act is, in brief, to protect trademarks and to repress unfair competition.”
He also said (p. xx):
“The Lanham Act is the embodiment of the purpose to secure to every business man the advantage which public preference for his goods gives to him and to protect him in the exclusive right to the names and marks which perpetuate the good will which merit earns.”
And on page xxi:
“The situation has another aspect which should not be overlooked. The public has rights, too. A purchaser is entitled to receive what he expects to get and not be misled by deceptive resemblance into purchasing something he does not want.” [Emphasis mine.]
Twelve years ago, after two years of experience with the administration of the Lanham Act, Professor Walter Derenberg, participating in the program at Duke University called “Trade-Marks in Transition,” in his paper entitled “The Patent Office as Guardian of the Public Interest in Trade-Mark Registration Proceedings” (Law and Contemporary Problems, Vol. 14, No. 2, pages 288-322, reprinted 31 J.P.O.S. 647), dealt in great detail with the very problem which the instant case presents. He dealt separately with “public interest” in ex parte and in contested Patent Office proceedings. Speaking of the former, he .refers to the “difficult problem of proper evaluation and consideration of the public-interest aspects of * * * third party rights” when “an application for registration comes into possible conflict with prior-rights of third parties (Section 2(d)),” and of “the problem of balancing public interest and private rights for the purpose of administering Section 2(d).” He-said (p. 292):
“ * * * it is * * * apparent that the extent to which such public interest should be recognized depends to a very large degree upon the scope of legal protection to which the former owner of the conflicting registration is entitled.”
After going into the problem with great care and scholarly consideration of the background law, his final conclusion as to the proper handling of ex parte cases was this (p. 305; 31 J.P.O.S. at p.. 674):
“The conclusion would seem to be inescapable, therefore, that even under the broad confusion test of Section 2(d) of the new Act, applications involving possible confusion as to sponsorship or reputation should not be rejected ex parte on the ground of an ever present parallel interest of the public to be protected from this type of confusion. It. seems that for the purpose of registration proceedings the private interests of the previous registrant are-primarily involved and that the public interest in such situations is not sufficiently predominant to compel the Office to reject the application in its capacity as guardian of the public interest and irrespective of the previous registrant’s own attitude.” [Emphasis mine.]
What we have in the present case is a situation in which the only chance of public “confusion” is as to a possible common sponsorship of MERITO rum and MARQUÉS DEL MÉRITO wine. I submit that there is no possibility that purchasers (of either the rum or the wine) will be either mistaken or deceived. The purchaser of either will “receive what he expects to get and not be misled by deceptive resemblance into purchasing *953^something he does not want,” to use Mr. .Rogers’ words. ,
It was Derenberg’s expert conclusion that in such a situation the Patent Office is not required by section 2(d) to reject the application to register, since the interest affected is predominantly private not public, and that consent by the owner ■ of the private interest, the prior registrant, may relieve any concern the Patent Office might have on that score. In the .absence of such a consent, the law still .affords opportunity for opposition and ■ cancellation wherein private interests ■can protect themselves, where the public interest is not clearly involved.
It would be trite to say, in this country ■of government of the people by the people, that all law is in the public interest and that every administrative agency in trying to apply the law is acting as a guardian of the public interests. But in speaking of a law enacted to protect trademark •owners, there is considerable risk of error in pursuing a policy under which the administrative agency deems itself to be .guarding the public interest whenever it refuses to register. It properly guards those interests only when such refusal ■truly furthers those interests. They are not furthered by denying registration to ■an established, widely-used trademark, even where the use of that mark may ■cause some confusion in the minds of :Some members of the public, if that confusion is of such a nature that it does not clearly injure the public and injury to the owner of the prior mark is negatived by his consent. The clause “confusion or mistake or to deceive purchas•ers” must be construed by a rule of reason to include only such as will injure •someone. Otherwise it prevents registration to no purpose.

. The examiner’s letter of September 30, 1959, his final action, says:
“ * * * it is the duty of the Patent Office to protect the public and guard against confusion through the registration of a mark * * [Emphasis mine.]
The board, in affirming, made no such statement.