Petition for Writ of Certiorari — CBS Inc. v. Silverman

Eo Supreme Court, U.S,

88-1804 FILED

MAY Ss 1969

—_—_—_—_—_—_—_—_—_—_—_—_—— SOT F. SPANIOL, JR,

CLERK

——

IN THI

Supreme Court of the United States

OCTOBER TERM, 1988

oe

CBS IN

Petitioner,

STEPHEN M. SILVERMAN,

) j sf

Respond i.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

DAVID RABINOWITZ

(Counsel of Record)

STANLEY ROTHENBERG

CYNTHIA S. KERN

MOSES & SINGER

1271 Avenue of the Americas

New York, New York 10020

(212) 246-3700

iftornevs for Petitioner.

CBS Inc.

QUESTIONS PRESENTED FOR REVIEW

A panel of the United States Court of Appeals for the Second

Circuit held that CBS had abandoned its trademarks in ‘‘Amos

‘N* Andy’’ and associated marks when, in direct response to

signiticant adverse public opinion, CBS withdrew the Amos ‘N’

Andy radio and television programs from commercial use. The

Second Circuit reversed, in pertinent part, a judgment of the

District Court for the Southern District of New York, which

declared that CBS Inc. had not abandoned its trademarks in the

Amos ‘N’ Andy radio and television series because no intent to

abandon the trademarks had been demonstrated. In reversing

the District Court, the Second Circuit effectively ignored this

Court’s and its own precedent that actual intent to abandon

must be found before a trademark can be deemed abandoned.

The Court of Apvpeals decision presents the following ques-

tions:

1. Should a party be denied trademark protection if it with-

draws its trademark from commercial use in response to

adverse public opinion where there is clearly no intent to aban-

don the trademark?

2. Did the Second Circuit ignore applicable state law in a

diversity case when it held that voluntary intent to abandon a

trademark was not necessary to abandonment of the trade-

mark, thus creating a new state law standard for determining

when abandonment of trademarks has taken place?

PARTIES TO THE ACTION

Petitioner, defendant below, is CBS Inc. (**CBS’’). A list of

CBS’s subsidiaries is set forth in the appendix to this petition

for a writ of certiorari! (“‘App.’’), at App. 64a.

The respondent, plaintiff below, is Stephen M. Silverman.

il

TABLE OF CONTENTS

PAGE

weeenne £ ecocN te FOR REVIEW ..........

EE PAR BTOPIN, wc eee eee 1]

8 0 | \

ee ys ee es cs ke ee eee nee l

STATEMENT OF JURISDICTIONAL GROUNDS ... 2

Dee eee es FP VionNS INVOLVED ........... 2

I GS SE OF Or 2

EY SO) OE >

I 7

FEDERAL JURISDICTION OVER THIS ACTION... 9

REASONS FOR GRANTING THE WRIT ........... 9

I. THE DECISION BELOW DIRECTLY CON-

FLICTS WITH DECISIONS OF THIS COURT

AND WITH THOSE OF OTHER CIRCUITS .... 9

A. This Court Has Held That The Standard For

Abandonment Of A Trademark Is Actual Intent

AE Sr 10

B. There Is Confusion Among The Circuits As To

The Standards For Determining Trademark

ec aa se et be ke ee 12

C. The Second Circuit’s New Abandonment Rule Is

Inconsistent With The Lanham Act .......... 14

PAGE

D. The Rule In Other Circuits Is That An Outside

Cause For Suspension Of Use Of A Trademark

Precludes Abandonment .................... 15

Il. THE DECISION BELOW ERRONEOUSLY

APPLIED FEDERAL LAW TO A QUESTION

GOVERNED BY STATELAW..............__. 16

CONCLUSION

TABLE OF AUTHORITIES

Cases PAGE

Ambrit, Inc. v. Kraft, Inc., 805 F.2d 974 (11th Cir.

1986), cert. denied, 107 S. Ct. 1983 (1987).......... 13

American Foods, Inc. v. Golden Flake, Inc., 312 F.2d

eRe Rie CUE cp ek a dw OER aa cee A eo 12

American Lava Corp. v. Multronics, Inc., 461 F.2d 836

ee ee ee ae ear USS a UNA aan a we So 2 ee

Baglin v. Cusenier Co., 221 U.S. 580, 31S. Ct. 669, 55 L.

Re ee SEER or chee aaa chee ee as eee a 10, 11, 16

Citibank, N.A. v. Citibanc Group, Inc., 724 F.2d 1540

SRN, Os oe a ge ee ek go eee ee a 12

Defiance Button Mach. Co. v. C & C Metal Products

Corp., 759 F.2d 1053 (2d Cir. 1985), cert. denied, 474

ic Ne ME ac ine oe a ae Ce eele See Res 16

Erie R. Co. v. Tompkins, 304 U.S. 64 (1938) ......... 4,17

Exxon Corp. v. Humble Exploration Co., Inc., 695 F.2d

ee OO ee eet ie ye Sad Vek ee 13, 16

Exxon Corp. v. Humble Exploration Co., Inc., 592 F.

Se CELE Re CONES onan oxo Oe ye ER CRS eRe 16

Hiland Potato Chip Co. v. Culbro Snack Foods, Inc.,

pei fe ee te age 3: Pe 13

Miller Brewing Co. v. Oland’s Breweries [1971] Limited,

SO ae ee ee ES i hw es BN 12

N.A.A.C.P. v. N.A.A.C.P. Legal Defense & Education

Fund, 753 F.2d 131 (D.C. Cir.), cert. denied, 472 U.S.

1021 (1985)

V1

PAGE

National Board of YWCA v. YWCA _ of Charleston,

S.C., 335 F. Supp. GIS Gp a ee i4

Neva-Wet Corp. v. Never Wet Processing Corp., 277

N.Y. 163, 13 N.B.26 733 Qe ee 17, 18

Poncy v. Johnson & Johnson, 460 F. Supp. 795 (D.N.J.

1978)... ooo 0600-5 oe ea en 16

Purcell v. Summers, 145 F.2d 979 (4th Cir. 1944)...... 14

Rockowitz C. & B. Corp. v. Madame X Co., Inc., 248

N.Y. 272, 162 NE. 7G 00 17

Saratoga Vichy Spring Co., Inc. vy. Lehman, 625 F.2d

1037 (2d Cir, 1990). pe gi

Saxlehner v. Eisner & Mendelson Co., 179 U.S. 19, 21S.

Ct. 7, 45 L. Eel. GQGiRR ee 10, 12

Silverman v. CBS Inc., 632 F. Supp. 1344 (S.D.N.Y.

1986)... . . 5 is 0 5 pele een 2

Silverman v. CBS Inc., 666 F. Supp. 575 (S.D.N.Y.

1987) 2. ca we ee ne

Skippy, Inc. v. CPC International, Inc., 674 F.2d 209

(4th Cir.), cert. denied, 459 U.S. 969 (1982)......... 12

Star-kist Foods, Inc. v. P.J. Rhodes & Co., 769 F.2d

1393 (9th Cir. OBS)... yc 16

Sterling Brewers, Inc. vy. Schenley Ind., Inc., 441 F.2d

675 (C.C.P.A, 1970) | oe 16

United States Jaycees v. Philadelphia Jaycees, 639 F.2d

134 (3d Cir. 1981)... 12

United States Javcees vy. San Francisco Junior Chamber

of Commerce, 354 F. Supp. 61 (N.D. Calif. 1972),

aff'd, 573 F.2d 1226 (9th (ee ee 14

PAGI

Wallace & Co. v. Repetti, Inc., 266 F. 307 (2d Cir.), cert.

0 EON Se EE °. rere eae ; 12

Statutes

ON Ege OS a eee a se ae ar 2

a ha baaeebeekeeeeeueweeeweas 13

ee kaa e beets eae banca ness 14

a oe ee area eee oe 13, 14

ee 0 ar ae Serer ee gr 2

ee ree SUD EE COE, oa ce ck ce ee eke ee es ee 9

Other Authorities

Hearings on H.R. 82 Before a Subcomm. of the Senate

Comm. on Patents, 78th Cong., 2d Sess. 24 (1944) .. 15

The New York Times, November 17, 1988, p. B13..... 2

Supreme Court of the United States

PETITION FOR A WRIT OF CERTIORARI TO THI

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCLUTI

( Ap

( ( | AD CHS

ECIS L Cy Ap]

€ C ( ft Apy

to

sions of the District Court, which are reported at Si/verman y.

CBS Inc., 632 F. Supp. 1344 (S.D.N.Y. 1986) and 666 F. Supp.

575 (S.D.N.Y. 1987), are reproduced at App. 27a and Sila.

STATEMENT OF JURISDICTIONAL GROUNDS

The judgment of the Court of Appeals was entered on Febru-

ary 6, 1989. This Court has jurisdiction to review the judgment

pursuant to 28 U.S.C. § 1254(1).

STATUTORY PROVISIONS INVOLVED

The relevant provisions of the Federal Trademark Act of

1946 (the *‘Lanham Act’’), as amended, 15 U.S.C. §§ 1051 er

seq., are reproduced at App. 63a.

STATEMENT OF THE CASE

CBS Inc. stopped commercial exploitation of the ‘‘Amos ‘N’

Andy” radio and television series and the associated trade-

marks because of and in deference to adverse public reaction to

the depiction of blacks in those series. That adverse public reac-

tion continues today.

As recently as November 16, 1988, Congressman Robert H.

Michel, the House Republican leader, was forced to apologize

publicly for making nostalgic remarks about the Amos ‘N’

Andy radio programs on a national television program. The

New York Times, November 17, 1988, p. B13 (App. 65a). On

March 16, 1989, the syndicated television program Entertain-

ment Tonight aired a discussion of Amos ‘N’ Andy and this

case. The Rev. Jesse Jackson Was interviewed and said, in part,

that Amos ‘N’ Andy was “racist and demeaning and enforced

the ugliest of stereotypes.’’ The N.A.A.C.P. was quoted as say-

ing that it ‘will do everything it can to prevent [the] produc-

tion”’ of plaintiff's musical play.

The main question Presented here is whether, as the District

Court said:

It would be offensive to basic precepts of fairness and jus-

tice to penalize CBS, by stripping it of its trademark

rights, merely because it succumbed to societal pressures

and pursued a course of conduct that it reasonably believes

to be in the best interests of the community.

666 F. Supp. at 581 (App. 61a).

The extremely popular Amos ‘N’ Andy radio program series

began in 1928 and the rights to it were purchased by CBS in

1948, which continued the radio program until 1955. CBS also

created and broadcast the Amos ‘N’ Andy television program

beginning in 1951. App. 28a.

In response to significant and vocal opposition from numer-

ous civil rights groups, CBS decided to withdraw the Amos ‘N’

Andy television series from further commercial distribution in

1964. App. 52a.

CBS did not, however, by such voluntary withdrawal, aban-

don its trademarks in the Amos ‘N’ Andy programs. To the

contrary, for the next twenty years CBS constantly policed its

rights. CBS actively took steps to protect its rights in the prop-

erties by registering copyrights in the television programs in

1978 and 1980 and renewing them thereafter. App. 6la, 54a.

CBS also licensed the Amos ‘N’ Andy programs and trade-

marks for educational, historical or documentary uses. App.

53a. In such cases, CBS did demand and receive a license fee for

the use of the Amos ‘N’ Andy properties.

In addition to those uses of the trademarks, CBS continually

reevaluated possible additional uses for the properties associ-

ated with the trademarks. App. 53a. For example, as testified to

at trial, CBS explored releasing the television programs on cable

television, but decided against that proposal based upon the

continued adverse public reaction to Amos ‘N’ Andy.

In short, as the District Court found, during the period of

suspension of commercial exploitation, CBS never intended to

abandon the Amos ‘N’ Andy trademarks. App. 59a.

On this record, without challenging the District Court’s fac-

tual findings, the Court of Appeals reversed and voided CBS’s

trademarks. The Court of Appeals held the trademarks to be

abandoned because CBS did not have concrete plans to resume

‘‘commercial’’ use of the trademarks. App. 17a. CBS was

thereby penalized for making only limited, responsible use of its

trademarks, a result prohibited by this Court’s express prece-

dents.

In reversing, the Court of Appeals disregarded the well-

settled rule that trademark abandonment, both under federal

and state law, requires strict proof of an actual intent to aban-

don. The Second Circuit applied a new standard requiring a

trademark owner that has suspended commercial use to show

(1) ‘‘plans to resume use in the reasonably foreseeable future

when the conditions requiring suspension abate,’’ as well as (2)

reasonable grounds for the suspension of use. App. 16a. This

holding followed a recent Fifth Circuit case that also departed

from the well-established ‘‘intent to abandon’’ standard in

favor of a standard requiring ‘‘intent to resume use’’ to avoid

abandonment.

Supreme Court and other federal and state trademark nonuse

cases require only a showing of reasonable grounds for suspen-

sion of use of the mark to rebut a claim of abandonment based

on nonuse. Consequently, the Court of Appeals’ additional

requirement of affirmative plans to resume use deviated from

controlling precedent.

The Court of Appeals also departed from a large and control-

ling body of precedent in holding that ‘‘commercial’’ use, as

distinct from use ‘tin commerce’’, was necessary to preserve

CBS's trademarks. It is well settled that trademarks can be

established and maintained for non-profit uses.

Finally, because state law applies to the subject trademarks,

which were not federally registered, the Court of Appeals also

erred under Erie when it diverged from existing state prece-

dents. New York state law requires proof of an actual intent to

abandon, the standard rejected by the Court of Appeals here.

THE FACTS OF THE CASE

Most of the facts described here were found by the District

Court. The remainder are based on uncontradicted evidence

submitted to the District Court. The District Court’s factual

findings were not disturbed on appeal.

Beginning in 1928, Freeman F. Gosden and Charles J. Cor-

rell created and broadcast a radio program known as ‘‘The

Amos ‘N’ Andy Show’’. The program quickly became one of

the most popular shows on radio. App. 28a.

By contract dated August 19, 1948, Gosden and Correll

assigned all of their rights in the Amos ‘N’ Andy programs,

including any goodwill attached to their creations, to CBS. CBS

broadcast ‘*‘The Amos ‘N’ Andy Show’’ on radio until 1955.

App. 28a.

In 1951, CBS began broadcasting the television series entitled

‘*The Amos ‘N’ Andy Show’’. The television show continued in

non-network syndication until November 1964, when CBS

decided not to grant any further licenses for its broadcast. Tele-

vision broadcasts ceased in 1966. App. 28a.

CBS withdrew ‘‘The Amos ‘N’ Andy Show’’ from television

syndication in response to pressure from civil rights groups,

especially the N.A.A.C.P., which claimed that the show pre-

sented a demeaning portrayal of blacks. CBS’s suspension of

commercial use was and is based on its concern with the sensi-

tivity of the subject matter and its expectation of being put in

disfavor with civil rights groups. App. 52a, 53a.

As a result of the long-running Amos ‘N’ Andy radio and tel-

evision series, many attributes of the programs acquired

national fame and recognition, as plaintiff admitted. App. 60a

n. The well-known attributes of the Amos ‘N’ Andy properties

include the names of the principal characters (e.g., Amos

Jones, Andy Brown, The Kingfish, Algonquin J. Calhoun and

Sapphire), the appearance of the characters as portrayed in the

television series, their business and social enterprises (The Fresh

Air Taxi Company, the Mystic Knights of the Sea Lodge), and

numerous distinctive words, phrases and symbols used repeat-

edly in the programs (most prominently, ‘‘Holy mackral’’). See

App. 44a n.

The title *"Amos ‘N’ Andy’’ was and is a powerful trademark

presenting the radio and television series. According to a tele-

phone survey in 1985, a substantial percentage of the public

today “would believe that plaintiff’s musical play, if produced,

Was approved, licensed, or produced by the same source as the

radio and television programs, namely, CBS. See App. 47a n.

As stated above, CBS since 1964 has only permitted use of its

Amos ‘N° Andy properties for educational, historical or docu-

lentary purposes. For example, CBS used excerpts from the

Amos *N’ Andy television series in a CBS news special broad-

cast In 1968. In 1972 CBS licensed excerpts for inclusion in the

motion picture *‘Malcolm X’’. In 1982, CBS licensed a limited

run Writer's Workshop play in New York City entitled ‘‘What

Ever Happened Ta Amos ‘N’ Andy?’ In 1983, CBS licensed

Mr. Michael Avery to use excerpts of the Amos ‘N’ Andy televi-

sion series in a film documentary entitled ‘‘Amos ‘N’ Andy:

Anatomy of a Controversy’’. App. 53a.

CBS has also periodically reconsidered reviving the television

series, including, for example, rebroadcasting the existing tele-

vision series over cable television. As of 1984,’ however, CBS

had not discovered a commercial use of the property that, in its

view, would not provoke an adverse public reaction and that

would be consistent with the sensitive nature of the property.

App. 33a.

a)

CBS has vigorously protected its rights to the Amos ‘N’ Andy

television series and associated characters during the years of

limited use. CBS has continually demanded that intringers

cease and desist unauthorized use of the property, whenever it

learned of such use. In 1978 and 1980, CBS registered approxi-

mately 70 television episodes for copyright (seven had already

] The District Court refused to receive evidence of CBS's activity with

respect to the property after the date of commencement of the lawsuit

in March 1984.

been registered in 1961), and renewed them in 1981. Later, CBS

sought and obtained copyright registration for the scripts of

many Amos ‘N’ Andy radio programs. App. 6la, 54a.

Beginning in 1981, plaintiff, Stephen M. Silverman,

requested permission from CBS to produce a musical play

based upon a script entitled ‘‘Amos ‘N’ Andy Go To The Mov-

ies’’ (the ‘*Silverman script’’). App. 52a. The Silverman script

was designed to take advantage of the continuing public good-

will for CBS’s Amos ‘N’ Andy television programs. Silverman

has conceded that the association of his musical play with the

television and radio series would make it more popular, and

attempted to interest CBS in the project (before the lawsuit

began) by pointing out the existence of a ‘‘built-in audience’’

and the general familiarity with and nostalgia for the Amos ‘N’

Andy programs. App. 60a n.

CBS declined to grant the requested license to Mr. Silverman,

following its policy against commercial exploitation of Amos

‘N’ Andy. This action followed.

THIS ACTION

Plaintiff filed this action on March 16, 1984 seeking a decla-

ration that CBS had no trademark or other exclusive rights in

the material contained in scripts for the Amos ‘N’ Andy radio

programs broadcast between 1928 and March, 1948. Silverman

claimed that he was therefore free to produce a musical play

based on a script he had written. App. 28a.

Silverman concealed from the District Court the fact that he

had included in his script substantial excerpts from a copy-

righted CBS radio script of a later date (1952). In the course of

discovery, CBS discovered the secret copying of material from

CBS’s copyrighted script and other copyrighted works. CBS

then interposed counterclaims for copyright and trademark

infringement, unfair competition and dilution of its trade-

marks. App. 29a.

On May 23, 1985, CBS moved for summary judgment on its

counterclaims and dismissing the complaint. On April 15, 1986,

the District Court granted CBS partial summary judgment on

its copyright claims, finding that Silverman’s script infringed a

copyrighted CBS radio script, enjoined further copying and

declared the copyright in Silverman’s script to be void. App.

30a-43a.

On the ground of unripeness, the District Court dismissed

CBS’s trademark infringement, unfair competition and anti-

dilution claims, finding that they would not be ripe until and

unless Silverman actually produced his musical play. App. 46a-

48a. The Court also dismissed Silverman’s complaint except in

so far as it sought a declaration that CBS had abandoned its

trademark rights in any trademarks associated with the Amos

‘N’ Andy television series. App. 49a n.

Silverman proceeded to trial on the abandonment issue in

April, 1987. On August 4, 1987, the District Court ruled that

CBS had not abandoned its trademarks associated with the

Amos ‘N’ Andy radio and television series. The Court relied on

CBS’s continuing, albeit limited, use of the trademarks, its con-

tinual policing of infringements, its registration and renewal of

over 100 copyrights covering radio scripts and television pro-

grams, and its periodic internal reconsideration of broader use

of the Amos ‘N’ Andy properties. App. 6la.

The District Court noted that CBS had withdrawn the Amos

‘N’ Andy programs from commercial use in deference to civil

rights concerns, and concluded:

It would be offensive to basic precepts of fairness and jus-

tice to penalize CBS, by Stripping it of its trademark

rights, merely because it succumbed to societal pressures

and pursued a course of conduct that it reasonably believes

to be in the best interests of the community.

App. 6la.

The Court of Appeals reversed the District Court on the issue

of abandonment of trademarks, contravening this Court’s prec-

~ edents and decisions of other Courts of Appeals, its own prior

decisions and decisions of New York state’s highest court in

doing so. Rejecting the “intent to abandon’’ standard estab-

lished in this Court’s decisions (and its own), the Court of

Appeals created a new standard for rebutting a presumption of

abandonment based upon nonuse, as follows:

A proprietor who temporarily suspends use of a mark can

rebut the presumption of abandonment by showing rea-

sonable grounds for the suspension and plans to resume

use in the reasonably foreseeable future when the condi-

tions requiring suspension abate.

App. 16a.

This new standard ‘‘rewarded’’ CBS for its responsible use of

the Amos ‘N’ Andy trademarks by voiding them. Because the

Second Circuit’s new standard for determining whether a trade-

mark has been abandoned represents a major departure from

prior federal and state precedent, CBS seeks a writ of certiorari.

FEDERAL JURISDICTION OVER THIS ACTION

According to plaintiff-respondent, the District Court had

jurisdiction over this action pursuant to 28 U.S.C. § 1338(a)

and (b) and principles of pendent jurisdiction.

REASONS FOR GRANTING THE WRIT

l.

THE DECISION BELOW DIRECTLY CONFLICTS WITH

DECISIONS OF THIS COURT AND WITH THOSE OF

OTHER CIRCUITS

The Second Circuit held below that a trademark owner can

only rebut a presumption of abandonment of its mark based on

nonuse for two or more years if it can show (1) ‘‘reasonable

grounds for the suspension’”’ of use and (2) ‘‘plans to resume

use in the reasonably foreseeable future when the conditions

requiring suspension abate.’’ App. 16a.

This holding is in direct conflict with two prior decisions of

this Court which hold that acts that otherwise would prove

stanconment may de rebutted merely by showing that there

2: NO 2ctua. intent to abandon. The decision below is also in

SOnTuct eit Céecisions of other circuits on the meaning of aban-

oinméni anc is 2.80 contrary to the Lanham Act’s definition of

2Danconment. [he holding also conflicts with a long line

séolsions im iné same and other circuits holding that proof of an

[é7h.2. C2use Tor suspension of use alone suffices to redut

4. This Court Has Held That The Standard For Abandonment

Or A Trademark Is Actual Intent To Abandon

establish the eer ot ln 1S saicvinl

Dut an actual intent to gine Acts which unexpla —

..2 7 Sutficient to establish an abandonment mav be

ans4&ercc oO. snowing that there never was an intention to

sive up and relinquist the right claimed. (emphasis added)

—

Saxcenmer .. Eisner & Mendelson Co., 179 U.S. 19. 31, 2! 5.

~, 11-12. 48 L. Ed. 60 (1900).

he District Court ‘aia expressly found that CBS nad no

nieni to adandon’’ the Amos ‘N’ Andy trademarks. as Sax-

mer requires. 666 ¥ Supp. at 380 (App. §9a). As the District

~o-7r sac. CBS's “‘actions are entirely inconsistent with 1}

t tc don or relinquish rights in the Amos ‘N° And)

maras. /a@. The Court of Appeals did not disagree. but

re;eetea ine Saxlehner “intent to abandon” standard in favor

72 he’ standard ot its own devising. App. 18a n.

. Baglin v. Cusenier Co., 221 U.S. 880, 897-98. 31 S. Ct.

669. 6 4. 53 L. Ed. 863 (1911), this Court emphasized

efeheonment Was not a penalty to be imposed for nonuse. but

a matter of intent:

The loss of the right of property in trade-marks upon th

ground of abandonment is not to be viewed as a penalt\

aot har tor

wee eee aM? h

non-user or tor the creation and use of new

1]

devices. There must be found an intent to abandon or the

property is not lost. . . . (emphasis in original).

The Court noted that plaintiff stopped use of the trademarks

because of a liquidation of assets and loss of the trademarks in

France to another party. This did not constitute an abandon-

ment, the Court said, because there was no ‘‘consent’’ to the

abandonment, as shown by the plaintiff’s continuous protec-

tion of its trademarks:

‘

Abandonment in industrial property is an act by which

the public domain originally enters or reenters into the

possession of the thing (commercial name, mark, or sign,)

by the will of the legitimate owner. The essential condition

to constitute abandonment is, that the one having a right

should consent to the dispossession. Outside of this there

can be no dedication of the right, because there cannot be

abandonment in the juridical sense of the word.’

. The attitude of [plaintiffs] in their efforts here and

in other countries to prevent the use of the old marks

shows clearly that there has been no intention to abandon.

221 U.S. at 598, 31 S. Ct. at 674.

Thus, there can be no question that this Court has declared

abandonment to be a matter of subjective intent of the trade-

mark owner, determined by the volition of the owner. There is

no doubt that CBS did not, by ‘‘will’’ or ‘‘consent,’’ abandon

the trademarks. Contrary to the dictates of Baglin, abandon-

ment was imposed by the Second Circuit here as a ‘‘penalty

. for non-user.’’ 221 U.S. at 597-98, 31 S. Ct. at 674.

The Supreme Court has not spoken on this issue since before

the enactment of the Lanham Act in 1945. While the Court of

Customs and Patent Appeals has held that the Lanham Act

‘evidences a more lenient attitude toward nonuse’’ than prior

law, the Second Circuit has obviously gone in the opposite

direction. Compare American Lava Corp. v. Multronics, Inc.,

461 F.2d 836, 839 (C.C.P.A. 1972) with App. 15a n. We

respectfully submit that it is time for this Court to revisit the

12

issue Of abandonment under federal law and reestablish the rule

of actual intent to abandon, which is now being ignored.

B. There Is Confusion Among The Circuits As To The Stan-

dards For Determining Trademark Abandonment

In voiding CBS’s trademarks, the Second Circuit rejected not

only this Court’s prior holdings but also its own and those of

sister circuits. The decision below, and other circuit court deci-

sions, have created a split in the circuits requiring resolution.

The standard enunciated by this Court, requiring an actual

intent to abandon, has been the rule applied by a number of the

Courts of Appeals, including the Second Circuit, until very

recently. See Citibank, N.A. y. Citibanc Group, Inc., 724 F.2d

1540, 1545 (11th Cir. 1984); Skippy, Inc. v. CPC International,

Inc., 674 F.2d 209, 216 (4th Cir.), cert. denied, 459 U.S. 969

(1982) (‘To prove abandonment, a party must show intent to

abandon.”’); United States Javcees y. Philadelphia Jaycees, 639

F.2d 134, 138 (3d Cir. 1981) (quoting Saxlehner and noting

“twin requirement of non-use and intent to abandon is

embodied in section (a) of the [Lanham Act] statutory defini-

tion of abandonment’); Saratoga Vichy Spring Co., Inc. y.

Lehman, 625 F.2d 1037, 1044 (2d Cir. 1980) (quoting Saxlehner

and stating ‘‘objective facts can satisfactorily explain non-use

to the point where an inference of intent to abandon is unwar-

ranted’’); Miller Brewing Co. v. Oland’s Breweries [1971] Lim-

ited, 548 F.2d 349, 352 (C.C.P.A. 1976) (quoting Saxlehner);

Wallace & Co. v. Repetti, Inc., 266 F. 307, 308 (2d Cir.), cert.

denied, 254 U.S. 639 (1920) (quoting Saxlehner).

The requirement of an actual intent to abandon is also consis-

tent with the well-established principle that abandonment,

being in the nature of a forfeiture, must be Strictly proved. See

Citibank, N.A., 724 F.2d at 1545: Saratoga Vichy Spring Co.

Inc. v. Lehman, 625 F.2d 1037, 1044 (2d Cir. 1980); American

Foods, Inc. v. Golden Flake, Inc., 312 F.2d 619, 624-25 (Sth

Cir. 1963),

In 1983, the Fifth Circuit adopted a new standard for aban-

donment of a trademark through nonuse, a standard that

13

clearly conflicts with earlier Supreme Court precedent and deci-

sions in other circuits. In Exxon Corp. v. Humble Exploration

Co., Inc., 695 F.2d 96 (Sth Cir. 1983), the Fifth Circuit created

a distinction for the first time between ‘‘intent to abandon’”’ a

trademark and ‘‘intent not to resume’”’ use, the phrase used in

15 U.S.C. § 1127(a). It noted that an owner may not wish to

abandon its mark but may have no current intent to resume use.

The Fifth Circuit held that to retain a mark in the absence of

use, the trademark owner must prove an ‘“‘intent to resume

commercial use’’ of the mark, not simply an intent not to aban-

don. Id. at 102. The new standard enunciated by the Fifth Cir-

cuit was also adopted by the Eighth and Eleventh Circuits.

Ambrit, Inc. v. Kraft, Inc., 805 F.2d 974, 994 (11th Cir. 1986),

cert. denied, 107 S. Ct. 1983 (1987); Hiland Potato Chip Co. v.

Culbro Snack Foods, Inc., 720 F.2d 981, 984 (8th Cir. 1983).

The decision below departed even further from earlier prece-

dents than Exxon did, holding that an owner of a mark can

avoid a finding of abandonment only by ‘‘showing reasonable

grounds for the suspension and plans to resume use in the rea-

sonably foreseeable future when the conditions requiring sus-

pension abate’’ (emphasis added). The Second Circuit not only

adopted the Fifth Circuit standard of abandonment requiring

the trademark owner to show concrete plans to resume com-

mercial use; it also required, for the first time, that the plans

must be for the reasonably foreseeable future after the reason

for suspension of use of the mark ceases.

The standards for what constitutes abandonment of a trade-

mark adopted by the Second Circuit and the Fifth Circuit are in

direct conflict with earlier decisions of this Court and the

above-cited decisions in other circuits, all of which require an

actual intent to abandon, not an absence of plans to resume

use. This Court’s intercession is necessary to settle the issue.

Furthermore, contrary to the holdings in the Second and

Fifth Circuits, there is nothing in the Lanham Act that requires

‘“commercial’’ use to obtain or sustain a trademark ihe

Lanham Act only requires that a use be made **in commerce.”

15 U.S.C. § 1051. There is no question that trademarks can

14

subsist for non-commercial uses. Purcell v. Summers. 145 F.2d

979, 985 (4th Cir. 1944) (name of ‘‘eleemosynary or charitable

Organization’ protected; ‘‘The fact that a corporation is an

eleemosynary or charitable one and has no goods to sell, and

does not make money, does not take it out of the protection of

the law of unfair competition’). Accord, United States Javcees

. San Francisco Junior Chamber of Commerce, 354 F. Supp.

61, 71 (N.D. Calif. 1972), aff'd, 573 F.2d 1226 (9th Cir. 1975)

(“‘benevolent, religious, charitable or fraternal organiza-

tions’’); see also, N.A.A.C.P. vy. N.A.A.C.P. Legal Defense &

Education Fund, 753 F.2d 131. 137 n.§7 (D.C. Cir.), cert.

denied, 472 U.S. 1021 (1985) (non-profit organization):

National Board of YWCA vy. YWCA Of Charleston, S.C., 335

F. Supp. 615, 621 (D.S.C. 1971) (religious, benevolent or fra-

ternal organization),

Thus, the non-commercial uses to which CBS has put the

trademarks negate any claim of ‘*nonuse’’ and are sufficient to

preserve CBS’s rights. Here again, the Second Circuit’s decision

represents a contlict among the Circuits that Only this Court can

resolve.

C. The Second Circuit's New Abandonment Rule Is Inconsis-

tent With The Lanham Act

The requirement that there must be actual intent to abandon.

contrary to the decision below, is also apparent from the statu-

(ory treatment of abandonment. The Lanham Act provides that

a **mark shall be deemed to be ‘abandoned’—(a) When its use

has been discontinued with intent not to resume =

U.S.C. § 1127(a). The Lanham Act also refers to abandonment

In 15 U.S.C. § 1059. y hich permits the owner of a trademark to

renew its registration if “any nonuse is due to special circum-

stances which excuse such nonuse and it is not due to any inten-

tion to abandon the mark.”’

15

The use of the Phrase ‘intention to abandon” in § 1059,

Without any Suggestion that the standard js different from the

“intent not to resume”’ language in § 1127, shows that the

Lanham Act did not mean to change existing law, which the

15

Court below erroneously concluded. App. 14a-1]5a. During the

hearings on the Lanham Act, a representative of the American

Bar Association quoted the language defining abandonment

and then stated: ‘‘[t]hat, of course, is preseni law.”’ Hearings

on H.R. 82 Before a Subcomm. of the Senate Comm. on Pat-

ents, 78th Cong., 2d Sess. 24 (1944). The Lanham Act could not

have intended to create two separate abandonment standards:

one, harsher, to find abandonment under § 1127, and another,

under § 1059, more lenient, to determine when a mark’s regis-

tration may be renewed.

Thus the Court of Appeals erred when it held the phrase

‘‘intent not to resume”’ in § 1127 represented a stricter standard

than the preexisting ‘‘intent to abandon”’ standard. App. 1|4a-

15a. Indeed, the Lanham Act made it easier than before for

trademark owners to maintain their trademark rights despite

suspension of use. The C.C.P.A., in American Lava Corp. v.

Multronics, Inc., 461 F.2d 836 (C.C.P.A. 1972), held that the

petitioner in a trademark cancellation petition did not have to

show use of its own mark when it filed the cancellation proceed-

ing. The Court cited § 1059 and commented that the I anham

Act. ‘tevidences a more lenient attitude toward nonuse than the

1905 Act.”? Id. at 839.

D. The Rule In Other Circuits Is That An Outside Cause For

Suspension Of Use Of A Trademark precludes Abandon-

ment

The Second Circuit’s departure from the ‘‘intent to aban-

don’? rule is especially unjust and harmful here since, as the

District Court found, CBS ceased commercial use because *‘it

succumbed to societal pressures and pursued a course of con-

duct that it reasonably believes to be in the best interests of the

community.’’ App. 16a. That is, CBS’s nonuse was not the

result of a voluntary intent to abandon, but a response to hos-

tile external forces. Equity, as well as well-settled precedent,

forbids the voiding of trademark rights here.

There is a large body of law holding that a mark is not aban-

doned due to nonuse where external conditions cause or lead to

16

the cessation of use. Star-kist Foods, Inc. v. P.J. Rhodes &

Co., 769 F.2d 1393, 1396 (9th Cir. 1985) (period of unprofit-

ability of business); Defiance Button Mach. Co. v. C & C Metal

Products Corp., 759 F.2d 1053, 1056 (2d Cir. 1985), cert.

denied, 474 U.S. 844 (1985) (financial failure); Sterling Brew

ers, Inc. v. Schenley Ind., Inc., 441 F.2d 675, 680 (C.C.P.A.

1971) (strike); Poncy v. Johnson & Johnson, 460 F. Supp. 795,

802 n.4 (D.N.J. 1978) (conscientious reluctance to use possibly

misleading trademark); see Cusenier, 221 U.S. at 598, 31S. Ct.

at 674 (loss of rights in one foreign country). This body of law is

a necessary concomitant of the general rule that abandonment

depends upon the volition of the trademark owner. Nonuse due

to Outside causes cannot be voluntary.

The decision below departs from this well-established princi-

ple of law and holds that an external reason for nonuse alone is

not sufficient to rebut abandonment. The Second Circuit relied

on the Exxon case from the Fifth Circuit for this result, but

Exxon (on remand) expressly noted that that there was no ‘‘out-

side cause’’ for the nonuse there, unlike the line of cases cited

above. Exxon Corp. v. Humble Exploration Co., Inc., 592 F.

Supp. 1226, 1228, 1230 (N.D. Tex. 1984).

Thus, the Second Circuit’s decision creates a conflict in the

Circuits by its departure from the ‘‘external cause’’ line of

cases.

It is evident from the foregoing that a definitive ruling is

needed by this Court to unify the law as to what constitutes

abandonment of a trademark under the Lanham Act.

Il.

THE DECISION BELOW ERRONEOUSLY APPLIED FED-

ERAL LAW TO A QUESTION GOVERNED BY STATE

LAW

In reaching its decision below on CBS’s state law trademark

rights, the Second Circuit erroneously applied federal standards

regarding abandonment of trademarks. Furthermore, the stan-

17

dard applied by the Second Circuit conflicts with the standard

adopted by the New York Court of Appeals on the issue of

what constitutes abandonment of a trademark.

Whether or not CBS has abandoned its trademark rights

under state law must be determined by reference to state law.

Erie R. Co. Vv. sbogeciiah 304 U.S. 64 (1938); Saratoga Vichy

Spring Co., Inc. v. Lehman, 625 F.2d 1037, 1043 (2d Cir. 1980)

(state law governs the issue of abandonment insofar as that

issue affects plaintiff’s state law claim). Both because Silver-

man’s complaint sought a declaration that CBS had no rights

under any rule of law, and because CBS’s trademarks were

unregistered common-law trademarks, state law controlled the

abandonment issue.

Before the Second Circuit’s decision below, New York and

federal law were in accord—both required an actual intent to

abandon. See Saratoga Vichy, 625 F.2d at 1043. When the Sec-

ond Circuit diverged from this line, however, based on federal

cases and a misinterpretation of the legislative history of the

Lanham Act, it erroneously applied the new standard to a state

law issue. This was error.

The New York Court of Appeals has held in two decisions

that a trademark will not be held abandoned unless an actual

intent to abandon is demonstrated. Neva-Wet Corp. v. Never

Wet Processing Corp., 277 N.Y. 163, 173-74, 13 N.E.2d 755,

760 (1938) (**To constitute abandonment, there must be satis-

factory evidence of definite acts on the part of [the owner]

which indicate an actual intention permanently to give up the

use of the trade-mark’’); Rockowitz C. & B. Bent ai v. Madame

X Co., Inc., 248 N.Y. 272, 276, 162 N.E. 76, 78 (1928) (“To

constitute-an abandonment there must not ei be nonuser but

an intent to abandon.’’)

The standard applied by the decision below, which requires

the trademark owner to show ‘‘plans to resume use in the rea-

sonably foreseeable future when the conditions requiring sus-

pension abate’’ is in direct conflict with the state standard as to

what is required to prove abandonment of a trademark: /.e., an

18

actual intention to permanently give up use of the trademark.

Neva-Wet, 277 N.Y. at 173-74.

This Court should therefore review and reverse the decision

below, because the Court of Appeals failed to follow a decision

of the highest court of the state on an issue controlled by state

law, and instead adopted a standard directly in conflict with

state law. Under well-settled principles of federalism repre-

sented by the Erie line of cases, the Court of Appeals departed

from the accepted usual course of judicial proceedings so as to

call for an exercise of this Court’s power of supervision.

CONCLUSION

For the foregoing reasons, petitioner prays that a writ of cer-

tiorari issue to review the judgment of the United States Court

of Appeals for the Second Circuit in this case.

Respectfully submitted,

s/ DAVID RABINOWITZ

DAVID RABINOWITZ

Attorney for Petitioner,

CBS Inc.

1271 Avenue of the Americas

New York, New York 10020

(212) 246-3700

Of Counsel:

STANLEY ROTHENBERG

CYNTHIA S. KERN

May 5, 1989