Blue Bell, Inc. v. Jaymar-Ruby, Inc.

¶5J. JOSEPH SMITH, Circuit Judge:

¶6These are cross-appeals from an order of the United States District Court for the Southern District of New York, Whitman Knapp, Judge, dismissing plaintiff’s trademark infringement action and defendant’s counterclaim for attorneys’ fees. We affirm although on grounds somewhat different from those of the district court.

¶7I. PLAINTIFF’S INFRINGEMENT ACTION

¶8Plaintiff’s contention that its “Jeanie” trademark on its women’s sportswear is infringed by defendant’s use of its “Jaymar” trademark on its men’s slacks is without merit. We begin with the related questions of the similarity of, and likelihood of confusion between, the two marks — obviously the critical elements of an infringement action. Here we must agree with the dis*435trict court that the possibility of such confusion is at most negligible.

¶9Taking the two marks as a whole, Sleeper Lounge Co. v. Bell Manufacturing Co., 253 F.2d 720, 722 (9th Cir. 1958), it is obvious that “Jaymar” will not be mistaken for “Jeanie.” Plaintiff argues, however, that the proper comparison is between the oversized “J’s” which dominate both marks.1 Assuming arguendo that plaintiff is correct, we nevertheless find that plaintiff’s “J” — a rather gaunt affair with no top and a pointed tip (not unlike a fishhook) — is quite different from defendant’s stylized version — a shorter, stouter, but rather calligraphic rendition with a top and a scrolled end. Compare, Application of Burndy Corp., 300 F.2d 938, 49 CCPA 967 (1962); Application of Anderson Electric Corp., 370 F.2d 593, 54 CCPA 931 (1967).

¶10This initial finding of non-infringement — which we make independently of the district court — is buttressed by an absence of the other factors suggesting infringement.2See, Polaroid Corp. v. Polarad Electronics Corp., 287 F.2d 492, 495 (2d Cir. 1961), cert. denied, 386 U.S. 820, 82 S.Ct. 36, 7 L.Ed. 2d 25 (1961). First, plaintiff’s declining use of its “Jeanie” name demonstrates that it was far from a “strong” mark. While the trademark may have been more than merely descriptive of the clothing to which it was attached, it is doubtful that it had acquired a secondary meaning.3See, W. E. Bassett Co. v.

¶11Revlon, Inc., 354 F.2d 868, 871 (2d Cir. 1966).

¶12Second, we find that the proximity between the disputed lines (women’s and men’s sportswear) was only moderate and that there was no substantial evidence that either of the parties was likely to “bridge the gap.” See, Hyde Park Clothes, Inc. v. Hyde Park Fashions, 204 F.2d 223, 224 (2d Cir. 1953), cert. denied, 346 U.S. 827, 74 S.Ct. 46, 98 L.Ed. 351 (1953). We realize that since Hyde Park was decided, men’s and women’s apparel has had a tendency to converge and that the Trademark Trial and Appeal Board has found the two lines sufficiently related in some registration proceedings.4 But here there is no evidence that the two will ever conflict: According to its own officials, plaintiff has never contemplated extending the feminine “Jeanie” mark to its men’s fashions, and it is clear that the defendant, which has never manufactured women’s clothes, has no intention of doing so in the future. See King Research, Inc. v. Shulton, Inc., 454 F.2d 66, 68 (2d Cir. 1972).

¶13Third, plaintiff has been unable to demonstrate any actual confusion between the two marks or a lack of sophistication on the part of the consuming public. While it is true that actual mistake is but an indicia of the critical factor of a likelihood of confusion, the fact remains that the price range and the fairly detailed purchasing process of the goods in question 5 further suggest that *436it is unlikely that consumers will be misled.

¶14Finally, there is no evidence that the defendant adopted or used its mark in bad faith. It is, of course, not uncommon for a trademark holder to emphasize the initial letter in its name.

¶15In sum, we find that the trademarks at issue are clearly non-infringing and that plaintiff’s action was properly dismissed.

¶16II. DEFENDANT’S COUNTERCLAIM FOR ATTORNEYS’ FEES

¶17Defendant’s counterclaim for attorneys’ fees rests on the allegation that plaintiff’s “use” of its pointed-J mark was insufficient to support its registration. Defendant contends that it is entitled under § 38 of the Lanham Act to the expenses it incurred in defending itself from plaintiff’s assertion of this invalid mark:

Any person who shall procure registration in the Patent Office of a mark by a false or fraudulent declaration or representation, oral or in writing, or by any false means, shall be liable in a civil action by any person injured thereby for any damages sustained in consequence thereof.

¶1815 U.S.C. § 1120.

¶19We cannot agree. First it should be noted that defendant’s counterclaim goes only to the pointed-J mark in its unembellished form. There was ample evidence that plaintiff made extensive use of its various “Jeanie” marks before and after their registration. But since plaintiff’s theory has been that the parties’ unadorned “J’s” conflict, it is fair to say that the pointed-J registration alone occasioned Jaymar’s defense costs.

¶20Here the evidence of use is far less compelling. At the time of its application, plaintiff — on advice of counsel6— submitted five tags bearing the pointed-J mark. The application stated:

The trademark was first used October 26, 1961 and was first used in interstate commerce October 26, 1961 and is now in use in such commerce.

¶21But internal memoranda make it clear that this “use” consisted of a token shipment of goods worth a few dollars to a cooperating company which immediately returned them to the plaintiff.7 Plaintiff’s files further indicate that the sole purpose of this interstate exercise was to satisfy the trademark laws.8

¶22*437In question then is whether this “use” was sufficient to support registration under the Lanham Act. 15 U. S.C. §§ 1051, 1127. We hold that it was not. It is true that a number of decisions have held that a minimal amount of interstate commerce — either a sale or transportation — will suffice.9 But while these decisions accept minimal use primarily intended to satisfy the trademark laws, none of them endorses sham transactions exclusively designed to do so. Rather we find a clear line of decisions holding that the use must be bona fide, with token transactions accepted only where there is an accompanying intent to engage in continuing commercial use in the future.10

¶23Plaintiff attempts to avoid the leading decision in this line, Phillips v. Hudnut, 49 App.D.C. 247, 263 F. 643, 644 (1920), on the grounds that it was decided prior to the definition of “use” in the Lanham Act.11 But it is clear that neither this definition nor any other portion of the Act abrogated the fundamental rule that the law protects only the use, not mere adoption, of a trademark.12 Indeed the specific definition of “use” in § 1127 suggests to us that Congress clearly intended to require some bona fide commercial utilization of a mark prior to its registration.

¶24Here there was no such use. The “sale” was obviously contrived with the *438goods immediately returned to the plaintiff. And while plaintiff undoubtedly intended to use its “Jeanie” marks— and in fact did so — there is no evidence that it similarly intended to utilize the pointed-J mark alone. We hold, therefore, that plaintiff’s application was false in that the “use” it alleged was legally insufficient.

¶25Despite a similar finding, the district court held that this degree of falsity did not justify the award of attorneys’ fees as there was no further proof of fraudulent intent. While we entertain some doubt about this reading of § 1120’s “false or fraudulent” requirement as “false and fraudulent,”13 we nevertheless conclude for different reasons that in this particular case, the exceptional “damages” of attorneys’ fees are not recoverable.

¶26We begin with two decisions in this circuit that attorneys’ fees may be recovered under § 1120. Academy Award Products v. Bulova Watch Co., 129 F.Supp. 780 (S.D.N.Y.1955), aff’d, 233 F.2d 449 (2d Cir. 1956); Merry Hull & Co. v. Hi-Line Co., 243 F.Supp. 45, 56-57 (S.D.N.Y.1965). However, these decisions preceded the Supreme Court’s denial of attorneys’ fees in the related context of trademark infringement actions. Fleischmann Distilling Corp. v. Maier Brewing Co., 386 U.S. 714, 87 S.Ct. 1404, 18 L.Ed.2d 475 (1967).

¶27In Fleischmann the Court began by restating the general American rule that “attorney’s fees are not ordinarily recoverable in the absence of a statute or enforceable contract” so providing. 386 U.S. 714, 717, 87 S.Ct. 1404, 1407, 18 L.Ed.2d 475. After noting that there are equitable exceptions to the rule, the Court stressed the comprehensive nature of § 35 of the Lanham Act:

The recognized exceptions to the general rule were not, however, developed in the context of statutory causes of action for which the legislature had prescribed intricate remedies. Trademark actions under the Lanham Act do occur in such a setting. For, in the Lanham Act, Congress meticulously detailed the remedies available to a plaintiff who proves that his valid trademark has been infringed.

¶28386 U.S. 714, 719, 87 S.Ct. 1404, 1408, 18 L.Ed.2d 475.

¶29The Court buttressed this all-inclusive view of § 35 by contrasting the explicit authorization of attorneys’ fees in patent, copyright, and a number of other federal actions 14 with the several unsuccessful attempts to introduce such a provision into the Trademark Act.15386 *439U.S. 714, 721, 87 S.Ct. 1404, 1408, 18 L.Ed.2d 475.

¶30It is true that Fleischmcmn is limited by its terms to infringement actions under § 35, while here we have an action under § 38 arising out of the use of a falsely obtained registration. Nevertheless, our review of the cryptic legislative history of § 38 convinces us that an implication of authorization for the extraordinary remedy of attorneys’ fees would be equally unwarranted.16

¶31Given this absence of statutory authorization, we believe defendant’s counterclaim was properly dismissed.17 This is not to say that defense expenses can never be awarded in an action involving a false registration. One can conceive of a case where an absolutely false registration was fraudulently obtained solely for the purpose of instituting completely vexatious litigation.18 Indeed such were nearly the facts in Academy Award Products Co. v. Bulova Watch Co., 129 F.Supp. 780, 782-783 (S.D.N.Y.1955), aff’d, 233 F.2d 449 (2d Cir. 1956). In such a case, attorneys’ fees might be

¶32awarded as a matter of equity quite apart from § 38. See, Vaughan v. Atkinson 369 U.S. 527, 530-531, 82 S.Ct. 997, 8 L.Ed.2d 88 (1962); Fleischmann v. Maier Brewing Co., 386 U.S. 714, 718, 87 S.Ct. 1404, 18 L.Ed.2d 475 (1967); Newman v. Piggie Park Enterprises, 390 U.S. 400, 402 n. 4, 88 S.Ct. 964, 19 L.Ed.2d 1263 (1968); Hall v. Cole, 412 U.S. 1, 5, 93 S.Ct. 1943, 36 L.Ed.2d 702 (1973); 6 J. Moore, Federal Practice ¶ 54.77[2], p. 1709 (2d ed. 1972).

¶33But this is not such a case. While it is true that there is little merit in plaintiff’s infringement claim and that its registration was technically false, the fact remains that it validly registered and used its “Jeanie” trademark in good faith for a number of years. Thus, while plaintiff may have been guilty of overreaching in registering the pointed-J mark, there is no suggestion that it did so solely for the purpose of bringing vexatious litigation almost ten years later. Defendant’s counterclaim was properly dismissed.

¶34Affirmed.