Citations
- 256 F. Supp. 626
Full opinion text
DECISION
TAVARES, District Judge.
Plaintiff, a German corporation, is the manufacturer of the Volkswagen line of automobiles; defendant operates an automobile repair shop in Southern California, as a sole proprietor, specializing in work on Volkswagen and Porsche cars. Plaintiff claims that defendant is guilty of infringing its trademarks and of unfair competition.
The jurisdictional allegations are based primarily on the “Lanham” Trademark Act of 1946, 15 U.S.C. § 1051 and following. The Lanham Act was intended to regulate all of that “commerce” that is within the control of Congress: 15 U.S.C. § 1127, last sentence. .It provides a federal cause of action for infringement of registered trademarks, and for unfair competition in the use of registered trademarks: 15 U.S.C. §§ 1114-1121, 1126(h). It provides similar protection to trade names or commercial names, whether or not registered, and whether or not they form part of trademarks: 15 U.S.C. § 1126(g).
The District Courts have original jurisdiction of any civil action arising under any act of Congress relating to patents, copyrights, and trademarks: 28 U.S.C. § 1338(a). They also have original jurisdiction of any civil action asserting a claim of unfair competition, when joined with a substantial and related claim under the copyright, patent, or trademark laws, by virtue of 28 U.S.C. § 1338(b), known as the pendent-jurisdiction statute. The latter statute will sustain federal jurisdiction of a cause of action for unfair competition arising under state law, when such cause of action is joined with a substantial and related claim under the copyright, patent or trademark laws: Ramirez & Feraud Chili Co. v. Las Palmas Food Co., (S.D. Cal.1956), 146 F.Supp. 594, 603, affirmed (9 Cir. 1957), 245 F.2d 874, Cert, denied, 1958, 355 U.S. 927, 78 S.Ct. 384, 2 L.Ed.2d 357.
The jurisdiction of the District Courts in such cases exists without regard to the amount in controversy or to diversity or lack of diversity of the citizenship of the parties: 15 U.S.C. § 1121.
Apparently the law of the Ninth Circuit is that the Lanham Act, and specifically 15 U.S.C. § 1126(h) provides a federal cause of action for unfair competition generally (if such competition affects interstate commerce), and independent of any related claim under the copyright, patent or trademark laws; the cases of Stauffer v. Exley (9 Cir. 1950), 184 F.2d 962, and Pagliero v. Wallace China Co., (9 Cir. 1952), 198 F.2d 339, are to this effect, although this conflicts with the Second and Third Circuits: American Auto Association v. Spiegel (2 Cir. 1953), 205 F.2d 771, Cert, denied, 346 U.S. 887, 74 S.Ct. 138, 98 L.Ed. 391, and L’Aiglon Apparel v. Lana, Lobell (3 Cir. 1954), 214 F.2d 649.
Two district court judges in California have declined to follow their court of appeals in the Stauffer and Pagliero cases, claiming that the statements in those cases are dicta. In the Ramirez case, in which the opinion of Judge Mathes was adopted in its entirety by the Court of Appeals for the Ninth Circuit, Judge Mathes says flatly:
“ * * * no federal cause of action is given by the [Lanham] Act for unfair competition generally.” 146 F. Supp. 594 at 603.
That holding was followed in Panaview Door and Window Co. v. Van Ness (S.D. Cal.1954), 124 F.Supp. 329.
But the latest Ninth Circuit cases ignore the Ramirez and Panaview cases, and reiterate the position taken in Stauffer and Pagliero: “In holding that under the Lanham Act (15 U.S.C.A. § 1126) there had been created a substantive federal law of unfair competition wherever interstate commerce was involved, the Ninth Circuit differs from other circuits. Stauffer v. Exley, 9 Cir. 1950, 184 F.2d 962; Pagliero v. Wallace China Co., 9 Cir. 1952,198 F.2d 339; * * Neal v. Thomas Organ Co. (9 Cir. 1963), 325 F.2d 978, at 983-984, Cert, denied, 379 U.S. 828, 85 S.Ct. 55, 13 L.Ed.2d 37. See also Bliss v. Gotham Industries, Inc., (9 Cir. 1963), 316 F.2d 848.
In the case at bar, however, it is clear that the jurisdiction of this court has properly been invoked because the cause of action for unfair competition is joined with a substantial and related claim of alleged infringement of registered trademarks and service marks. “Once properly obtained, jurisdiction of the one cause of action, the alleged infringement of the trade-mark, persists to deal with all grounds supporting it, including unfair competition with the marked article.” Armstrong Paint & Varnish Works v. Nu-Enamel Corp., 305 U.S. 315, at 324-325, 59 S.Ct. 191, 196, 83 L.Ed. 195.
Here plaintiff has also invoked the diversity jurisdiction of this court pursuant to 28 U.S.C. § 1332.
It seems fairly well settled in the Ninth Circuit that federal law should be applied to the issue of infringement of registered trademarks, but that state law should be applied to the claim of unfair competition, where diversity is one basis for jurisdiction. “ * * * the rule of Erie v. Tompkins [304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188] is applicable to the unfair competition issue raised under 1338(b) even though federal law is applicable to the ‘related claim under the copyright, patent or trademark laws.’ ” Kemart Corp. v. Printing Arts Research Lab., Inc. (9 Cir. 1959), 269 F.2d 375, 389; followed in Bliss v. Gotham Industries, Inc. (9 Cir. 1963), 316 F.2d 848, in which the court said, at page 853:
“ * * * Kemart being a diversity case, local law would apply regardless of whether the claim for unfair competition was ‘appended (by virtue of 28 U.S.C.A. 1338(b)) to its claim arising under the patent laws’ or stood alone in the complaint.”
Kemart was also followed in Neal v. Thomas Organ Co. (9 Cir. 1963), 325 F.2d 978, 983-984.
Plaintiff is the owner of three registered trademarks: the word “Volkswagen;” the encircled “VW” emblem, which consists of the letters “V” and “W” in superimposed relationship, framed by, and in contact with a circle; and the initials “VW.” Plaintiff’s right to these trademarks has become incontestible (15 U.S.C. §§ 1065, and 1115) unless, as defendant contends, the word “Volkswagen” is a common descriptive name. Defendant also denies infringement of plaintiff’s trademarks, and denies unfair competition.
Defendant makes a plausible argument that the word “Volkswagen” is generic or descriptive and that therefore plaintiff can’t acquire an incontestible right to the use of that term. 15 U.S.C. § 1065(4) provides that:
“ * * * no incontestible right shall be acquired in a mark which is the common descriptive name of any article or substance, patented or otherwise.”
And in California, at least, foreign words are translated into their English equivalents before making the determination of whether the term is descriptive. Italian Swiss Colony v. Italian Vineyard Co. (1910) 158 Cal. 252, 110 P. 913, 32 L.R.A.,N.S., 439.
But here the evidence is clear that plaintiff’s use of the term “Volkswagen” descriptive though it may be, has given the term a secondary meaning. Plaintiff applies the term to its entire line of vehicles, including trucks. Many of plaintiff’s vehicles do not fall into the category of a cheap, popular car, or “peoples’ car.” The evidence also shows that plaintiff has spent immense sums in advertising and promotion of the term “Volkswagen” in connection with its products and that the public identifies the plaintiff and its United States subsidiary in connection with that term. Accordingly, this Court finds that defendant is not free to make unlimited use of the term Volkswagen, and that the plaintiff is entitled to what protection the law affords against the use of its trademarks.
There is no real dispute regarding the law applicable to this case. Certainly the defendant has the right to inform the public that he specializes in repairing Volkswagen cars; but the crucial point is that he may not do so in such a manner as to mislead the public into believing that he is part of the plaintiff’s organization.
. . ,, , , , . ,r , „ m The rule » weU stated u.: Yale & Towne Mfg. Co. v. Haber (E.D.N.Y.1934), 7 F.Supp. 791, 792:
_ “Of course, defendant may advertise that it repairs Yale locks, but must do so in a way not calculated to deceive the public into the belief that the business conducted by it is conducted by the plaintiff.”
Whether the defendant here has used plaintiff’s name in a manner calculated to deceive the public is a question of fact Although the Court has carefully considered the many cases cited by counsel for both parties, precedents _ are not of much help m deciding an issue of ls md‘
“It is elementary that in the decision of a case of this kind, involving the question of confusing similarity, each case must stand on its own facts, and prior decisions are of little assistance.” Fleischmann Distilling Corp. v. Maier <5Tny <9 C¡r' 1963)’ 314 ’ '
The evidence reveals that for more than three years prior to filing suit, the plaintiff directed a series of objections to the defendant concerning the defendant’s advertising, and the defendant made various efforts to adjust to the plaintiff’s demands. The plaintiff contends that defendant “dragged his feet” in connection with the changes he did make, and claims that this is some indication of bad faith on the part of the defendant; however, the Court finds that the defendant made reasonable efforts to accommodate the plaintiff and to adjust his advertising to meet the plaintiff’s objections. It is not necessary to review in detail the changes made by the defendant in his attempts to sat-the Pontiff; _ it will be sufficient to describe the points of ultimate dis- . agreement bdween the parties Essen- ^ the plamtCTlff clal“® that the phrase Volkswagen Service has acquired a sfc°ndary meaning and that the plaintiff should have the exclusive right to its u®e- either alone or m combination with othfr .words- Plamtlff also asserts an exclusive right to the use of a silhouette o( the mo8t wldel V()Itswws„ veUde. Def