Petition — Miller Brewing Co. v. Jos. Schlitz Brewing Co.

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Text

———- i

t-"" Supreme Court, U.

FILED

Nov 29 979

October Term, 1979

No. 279-837

MILLER BREWING COMPANY,

Petitioner,

v. ;

JOS. SCHLITZ BREWING COMPANY,

Respondent.

PETITION FOR WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

—— ——-——-

——- a

AntHony L. FLETCHER

20 Exchange Place

New York, New York 10005

AuLan W. LEISER

780 North Water Street

Milwaukee, Wisconsin 53202

Guen H. Kanwirt

One First National Plaza

Chicago, Illinois 60603

Attorneys for Petitioner

Consoy, Hewitt, O’Brien & BoarpMAN

QuarRLes & Brapy

Hopkins, Sutter, Munroy,

Davis & CROMARTIE

Of Counsel

TABLE OF CONTENTS

PAGE

occ issccsasensaccarnsrovsncersovee 1.

BEE 2

os ve osncicecncsvavssucccavcess 2

Constitutional Provisions and Statutes 0.000.000.0000... 3

EE 3

Reasons for Granting the Writ .........0.0000.00.0....0cce. 11

1. The decision below conflicts with principles estab-

lished in this Court as well as in other Courts of

Appeals by giving collateral estoppel effect to a

factual conclusion made on appeal of a motion in

which that factual question was neither at issue

a 12

A. Whether a term is ‘‘generic’’ involves a

factual inquiry, the burden of persuasion of

which is upon the challenger of the trademark 13

B. The prerequisites for collateral estoppel are

SLES SET I 15

C. The refutation of the underlying premises of

Miller’s case by the Court below is unwar-

sc onieeccsarsnneeesencs scenes 20

2. The trademark law articulated by this decision

and in Heileman is sufficiently important and er-

roneous to merit correction by this Court; the

error also constitutes further reason for denying

the opinion collateral estoppel effect ..........0.00.000... 24

A. The issue is important and the law erroneous

B. Failure to grasp the essential issue in the

entopping GOCksION 0.0.2... Ausesiecscesseonsttasecnses

3. Cancellation of Miller’s registrations of LITE pre-

sents sufficiently serious questions concerning the

workings of statutory trademark registration to

NE IIE soos cnvsinn te ep I

yn SRIMUES Peter nem ae hy Ramee rence eRe ae cctv) a who

Appendices :

A. Opinion in Miller v. Schlitz (7th Cir. 1979) ......

B. Opinion in Miller-v. Schlitz, 449 F.Supp. 852

5 RR | Ran emeacepmanrin paene aor Spent

(. Opinion in Miller v. Heileman, 561 F.2d 75 (7th

COR BE eh ete ene icet ete

D. Opinions in Miller v. Heileman, 427 F.Supp.

RIDE, TORR CFE w. WI BED skeet

ee en en eae

F. Excerpts from Gilson, Trademark Protection

anu Practice (1978 Cum. Supp.) ..............:

G. Excerpts from Arthur J. Greenbaum, The

Thirty-First Year of Administration of the

Lanham Trademark Act of 1946, 68 The Trade-

mark Reporter No. 6 (B76) «......0:...-...c..scssees.

H. Excerpts from Kleinman Supplement to Call-

man, The Law of Unfair Competition Trade-

marks and Monopolies (1978) ...................ccc00

PAGE

16a

23a

35a

62a

70a

73a

III

TABLE OF AUTHORITIES

PAGE

Cases:

Abercrombie & Fitch Co. v. Hunting World, Inc., 537

pe ok! Og | RDN an ene 25, 26, 27

Aloe Creme Laboratories, Inc. v. Aloe 99, Inc., 188

U.S.P.Q. 316 (Trdmk. Tr. & App. Bd. 1975) ....... 37

Aloe Creme Laboratories, Inc. v. Milsan, 423 F.2d 845

(5th Cir.), cert. denied 398 U.S. 928 (1970) .......... 38

Aluminum Fab. Co. of Pittsburgh v. Season-All W.

Corp., 259 F.2d 314 (2d Cir. 1958) «0.0.0.0... 14, 35

American Aloe Corp. v. Aloe Creme Laboratories,

Inc., 420 F.2d 1248 (7th Cir.), cert. denied 398

ie SS Bie Be: ee 37, 38

Armstrong Co. v. Nu-Enamel Corp., 305 U.S. 315

(1938)

Barbasol Co. v. Jacobs, 160 F.2d 336 (7th Cir. 1947)... 35

Bayer Co. v. United Drug Co., 272 Fed. 505 (S.D.N.Y.

pe AAC eer sc SIAR IO pee Ne SE AR aN eR OPE Io) RR 13, 21

Blonder-? sngue Laboratories, Inc. v. University of

Illinois Foundation, 402 U.S. 313 (1971) ........ 11, 15, 16,

17, 33

Carter v. Kubler, 320 U.S. 243 (1943)

Dallas Cowboys Cheerleaders, Inc. v. Scoreboard

Posters, Inc., 600 F.2d 1184 (5th Cir. 1979) ............ 18

DuPont Cellophane Co. v. Waxed Products Co., 85

Be re rs ons roses ei ecereceinacaeancg ee ocivas 22, 23

Feathercombs, Inc. v. Solo Products Corporation, 306

F.2d 251 (2d Cir. 1962)

International Ass’n. of Mach. & Aero. Wkrs. v. Nix,

SES We BES COG Che, TOTG) oncacnccncecccccccisssessscascicss. 17

PAGE

Kellogg Co. v. Nat. Biscuit Co., 305 U.S. 111 (1938) ....24, 25

Mishawaka Rubber & Woolen Mfg. Co. v. 8.8. Kresge

Co., 316 U.8. 3B (R988): ..:........ eee 37

Nationwide Amusements, Ine. v. Nattin, 452 F.2d 651

(4th Cig. 2902). -.....vcccnc. ccc 18, 19

Parklane Hosiery Co. v. Shore, 439 U.S. 322 (1979)... 15

Philip Morris, Inc. v. R.J. Reynolds Tobacco Co., 188

U.S.P.Q.:269 (B.DA.E. SOPRP .5554-. oe 14

Singer Mfg. Co. v. Briley, 207 F.2d 519 (5th Cir. 1953) 28

Sperry Rand Corporation v. Sunbeam Corporation,

443 F.2a 979 (CAPM. BORED nel canes 37

Standard Paint Co. v. Rubberoid Roofing Co., 224 Fed.

G96 (7th Cis. MURR 3.6. eee 38

Standard Paint Co. v. Trinidad Asphalt Mfg. Co., 220

U.S. 406 (2088) | .63. cig 38

State of N.C. v. Chas. Pfizer & Co., Inc., 537 F.2d 67

(4th Cir. 1096). «......cccn eee ee 18

Stix Products, Inc. v. United Merchants and Manufac-

turers, Inc., 295 F.Supp. 479 (S.D.N.Y. 1968) ...... 26

Union Carbide Corp. v. Ever-Ready, Ine., 531 F.2d

366 (7th Cir.), cert. den’ 2d 429 U.S. 836 (1976) .... 35

United States v. Dilman, 146 F.2d 572 (5th Cir. 1944),

cert. denied 325 U.S. 870 (1945) 2.0... 16

In re Warren Petroleum Corp., 192 U.S.P.Q. 405

(Trdmk. Tr. & Asp. Bb. RGB gic... cddec cree 37

PAGE

Statutes and Rule:

Lanham Trademark Act of 1946

Sections—

Pa I 520s can scvenianvapsedaseoerstevcatees 26, 35, 36

esc scssucrasvannnassbveleernesiscserssare: 35

cov ecasvanecasiacousvaizeyreveiosceacse 35

Bs MI 0555 scans cacvacsecansssussccsecopsccssdssccessauns 35

ps cucu sasanctansscevacssivsesdoccessy 25, 35

RR Se 1 ) 0 ae ee 36

I, eae da.o.scsssnnedseeesecvsbeseneees 8, 26, 35, 39

OB SCR OS re

I I ia csasvpiiansccinesanssdssennovcvisdindvsacdesses 3

a Te coy fore ch nav ig (a dodasededncateven 6

IA I MDD 650 co0isscnkscxentcasncdscacscvacesveseveviocesess 7

Other Authorities:

Callman, Unfair Competitiun Trademarks & Monopo-

I oi csis, Rcaghas veshabscesiessveseuctey.dslnces 13

Kleinman 1978 Supplement 00.0000... 30, 31, 32

Gilson, Trademark Protection and Practice (1978)... 18,

28, 32

Greenbaum, The Thirty-First Year of Administration

of the Lanham Trademark Act of 1946, 68 The

Trademark Reporter No. 6, (1978) .............. 28, 29, 30, 32

McCarthy, Trademarks and Unfair Competition

RR TIERS tn eR A ie eal eR 13

Pattishall & Hilliard, Trademarks, Trade Identity and

Unfair Trade Practices (1974) 000. 13

Seidel-Dubroff-Gonda, Trademark Law and Practice

RESIS RODRIG SRB T “Oe NS ea Oe 13

IN THE

Supreme Court of the United States

October Term, 1979

No.

$$$ —t

Mitten Brewinc Company,

Petitioner,

Jos. Scuuitz Brewrne Company,

Respondent.

PETITION FOR WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

Petitioner Miller Brewing Company (‘‘Miller’’) re-

spectfully prays that a writ of certiorari be issued to

review the judgment of the United States Court of Ap-

peals for the Seventh Circuit entered in the above pro-

ceeding.

Opinions Below

The Opinion by the Court of Appeals is unreported

as of this writing. It is printed in Appendix A hereto.

The Opinion of the District Court which was reviewed

in the Opinion below is reported at 449 F.Supp. 852 and

is printed in Appendix B hereto.

The Opinion of the Court of Appeals in Miler v. Heile-

man, which the Opinion below held to be a collaterally

estopping decision, is reported at 561 F.2d 75 and is

printed in Appendix C hereto. The Opinions of the Dis-

trict Court which were reviewed in Miler v. Heileman are

reported at 427 F.Supp. 1192 and 1204 and are printed in

Appendix D hereto.

Jurisdiction

The Judgment of the Court of Appeals was dated and

entered September 6, 1979. The Jurisdiction of this Court

is invoked under 28 U.S.C. §1254(1).

Questions Presented

1. Whether the erroneous reversal of the grant of a

preliminary injunction, on factual grounds neither liti-

gated before nor considered by the District Court, col-

laterally estops litigation of that factual issue in another

suit.

2. Whether, as a matter of collateral estoppel or other-

wise, the conclusion can be justified that a brand name is

‘‘generic’’ (and not a valid trademark) rather than ‘‘de-

scriptive’’ (and thus subject to being a valid trademark)

because it has been used extensively in a descriptive

manner,

en ee

3. Whether, even if the adjective-noun combination

‘‘light beer’’ is generic, seven- and nine-year old registra-

tions of the phonetic equivalent of the adjective alone,

LITE, continuously used and relied upon by its owners,

should be cancelled.

Constitutional Provisions and Statutes

The Fifth Amendment to the Constitution of the

United States provides, insofar as it is pertinent here,

that ‘‘No person shall ... be deprived of .. . property,

without due process of law.”’’

The following statutes and their official citations are

printed in Appendix E hereto: Lanham Trademark Act

Sections 2(d), (e) and (f), 7(b), 10, 12(a), 13, 14, 32(1),

33(a), 33(b)(4) and 43(a), respectively 15 U.S.C. Sections

1052(d), (e) and (f), 1057(b), 1060, 1062(a), 1063, 1064,

1114(1), 1115(a), 1115(b)(4) and 1125(a).

Statement of the Case

The commercial background underlying these litiga-

tions is both critical and undisputed.

Meister Brau, Inc., a Chicago brewer, began brewing

and selling reduced calorie beer under the brand name

LITE in May, 1967. Meister Brau subsequently obtained

registrations on the Principal Register of the United

States Patent Office of LITE as a trademark for beer with

no available carbohydrates.’

1. Those Registrations which remain have been since amended to

cover “beer with reduced caloric content.”

In 1972, Meister Brau, shortly prior to its bankruptcy,

sold its LITE trademarks, their registrations and accom-

panying good will to Miller, which continued selling LITE

beer for a time in Meister Brau’s marketing area. Concur-

rently, beginning in 1973, Miller began test marketing a

reformulated LITE in new packaging (reproduced below)

promoted by new advertising.

i i ;

In its now familiar label, LITE quickly attained a pub-

lic acceptance unprecedented for reduced calorie beer.

Sales rose from 100,000 barrels in 1973, LITE’s first year

in test markets, to more than four million barrels in 1976,

only its second year of nationwide distribution. Advertis-

ing support rose from $500,000 in 1973 test markets to

more than twelve million dollars in 1976. (Since then, an-

nual sales volume and advertising investment have more

than doubled again.)

A Miller survey showed ‘‘that between December, 1975

and March, 1976, a substantial percentage of beer drinkers

perceived LITE (43%), Miller LITE (11%) or LITE

from or by Miller (1%) as a distinct brand name indicative

of a low-calorie or less filling beer.’ See Miller v. Heile-

mam, 561 F.2d 75, 77, Appendix C p. 25a (7th Cir. 1977),

cert, demed 434 U.S. 1025 (1978).

Success bred imitation. On October 21, 1975, less than

ten months after Miller’s nationwide introduction of LITE,

this action was commenced in the Eastern District of Wis-

consin to enjoin Jos. Schlitz Brewing Co. (‘‘Schlitz’’) from

introducing its reduced-calorie beer under the labelling

shown below.

2. Indeed, as early as 1969, a Schlitz Executive Vice President

had acknowledged in writing that “Everyone in the beer business is

well aware that ‘LITE’ is the distinctive brand name for beer intro-

duced by Meister Brau.” Appellant’s Record on Appl. A-8.

Trademark infringement, false representation of origin

(15 U.S.C. §1125(a)) and unfair competition were alleged.

Jurisdiction was founded on 28 U.S.C. $1338.

One year later, on November 1, 1976, Miller filed a sim-

ilar action in the Western District of Wisconsin against

G. Heileman Brewing Co. (‘‘Heileman’’), simultaneously

moving for a preliminary injunction.

(The opinion below incorrectly states that at the time

Heileman was commenced, Miller had previously sued

Schlitz and ‘‘six . . . other competitors’’—Appendix A

p. 2a°; it also states that Miller sought a preliminary

injunction against Heileman ‘‘despite the extensive prepa-

ration that had already gone into the Schlitz case’’—Ap-

pendix A p. 4a‘.)

Miller’s motion for a preliminary injunction against

Heileman was heard on supporting and answering affida-

vits, briefs and oral argument. The hearing was not

consolidated with a trial on the merits as is permitted by

Fed. R. Civ. P. 65(a)(2), and the District Court, in mak-

ing its finaings of fact, carefully limited them as being

3. On October 31, 1975, Miller also filed suits against Genesee

Brewing Company of Rochester, New York (S.D.N.Y. 75 Civ. 5443)

and Peter Hand Brewing Company of Chicago (N.D. Ill. 75C 3573).

By November 1, 1976, Genesee had significantly modified its labelling,

and Peter Hand was an insignificant brewer (that since has gone out

of business). Subsequent to the commencement of Heileman, Miller

filed suits against Pittsburgh Brewing Co. and 9-0-5 Stores, Inc.

(E.D. Mo. 77-0104-C(4)), Erie (Penna.) Brewing Co. (W.D. Pa.

77-18 Erie), Olympia Brewing Company of Olympia, Washington

(W.D. Wash. C. 77 65T), Rheingold Breweries, Inc. of Orange, New

Jersey (D.N.J. 77-1405), Rainier Brewing Company of Seattle (W.D.

Wash. C77-519) and General Brewing Company of San Francisco

(N.D. Cal. C 79 0797 AJZ) and was sued for a declaratory judgment

by Anheuser-Busch, Inc. in St. Louis (E.D. Mo. 77-0100(c) (2) ).

4. The “short record” certified to the Court below shows that on

November 1, 1976, when Heileman was commenced, 4 sets of inter-

rogatories had been answered, there had been responses to 3 sets of

requests for admissions, and 12 depositions had been taken in Schlitz.

After November 1, 1976, there were responses to 8 more sets of

requests for admissions, and 31 more depositions were taken. While

there had been extensive discovery in Schlitz by the time Heileman

was commenced, more remained than had been completed.

The lingering concern of the Court below as to why Miller chose

to seek preliminary relief against Heileman instead of Schlitz is easily

answered. When Heileman broke the status quo in the industry,

while Schlitz was moving toward trial, Miller believed itself entitled

to protection pending the Schlitz determination. Miller’s burden was

not to try its case against Heileman, but to establish probability of

success based on the case as it then stood. As will be seen, Miller met

that burden to the satisfaction of the District Court.

‘‘[fjor purposes of this motion only.’’ 427 F.Supp. at

1195, Appendix D p. 36a.

Among the issues (preliminarily) assessed on the mo-

tien for preliminary injunction was what kind of terms

LITE and ‘‘light’’ are for beer.

Despite some semantic confusion, all parties and courts

below agree upon four possible categories and their at-

tendant trademark consequences, if not on the precise

nomenclature for them. See Appendix A pp. 6a-8a, foot-

notes 7, 8.

(1) generic [e.g. ‘‘beer’’ or ‘‘ale’’], in which event

a term is not susceptible to protection as a trade-

mark;

(2) descriptive [e.g. ‘‘delicious’’ or ‘‘sparkling’’] in

which event a term is susceptible to limited pro-

tection as a trademark only if it has acquired dis-

tinctiveness or ‘‘secondary meaning’”;

(3) suggestive, normally of a desirable characteristic

[eg. BLUE RIBBON—suggesting a prize win-

ner—or RHEINGOLD—suggesting the ‘‘golden’’

fruit of the Rhine] in which case a term is sus-

ceptible to trademark protection at the outset;

and

5. The limits of protection afforded such trademarks are spelled

out in Section 33(b) (4) of the Trademark Act, 15 U.S.C. §1115(b)

(4), which permits others to use words comprising registered trade-

marks if such use is (i) non-trademark, (ii) good faith, (1ii) descrip-

tive use. Miller conceded that Schlitz and Heileman could use “light”

within those parameters ; but the uses in issue plainly constitute trade-

mark (brand name) use, and may well fall outside the good faith

descriptive requirements also.

(4) arbitrary [eg. ROLLING ROCK or TECH],

which carries the same consequences as (3).

It was the District Court’s (and Miller’s) understand-

ing that ‘‘ Defendant [Heileman] contend[ed] that Miller’s

trademark [LITE] is defective because it is merely descrip-

tive.’? 427 F. Supp. at 1199, Appendix D p. 44a.° The Dis-

trict Court held LITE and ‘‘light’’ to be suggestive for re-

duced calorie beer (albeit ‘‘light’’ was recognized to be de-

scriptive of other types), but found that even if they were

descriptive, secondary meaning in LITE had been shown.

427 F'. Supp. 1199-1201, Appendix D pp. 46a-49a. For these

and other reasons, the District Court granted Miller’s mo-

tion for a preliminary injunction against Heileman.

Heileman appealed. On appeal, the Court of Appeals

reversed the grant of the preliminary injunction issued

‘‘To]n the basis of affidavits and other written material’’

(561 F.2d at 78, Appendix C p. 26a), stating, inter alia:

6. We recognize that the Opinion below states: “Miller also

argues that whether ‘LITE’ was generic was not focussed upon in the

district court in Heileman. This is belied by the description of the

‘district court’s holding in the brief Miller submitted to this court in

that case.” Appendix A p. 8a, note 8. What the District Court

“focussed upon” in Heileman is best shown by its opinion, not upon

what Miller (or anyone else) may have said about it subsequently.

That opinion (Appendix D) reflects no focus whatever on the question

whether LITE or “light” is generic. (For that matter, the Court’s

vague reference to Miller’s brief, which it quotes and cites by page for

other purposes, is baffling upon a rereading of that brief. Had the

Court searched the Heileman record, it would have discovered that

Heileman counsel, before the District Court, conceded that LITE

was the type of mark that could, upon acquisition of secondary mean-

ing, acquire trademark status—true of descriptive terms, but not of

generic names.) Only on rehearing, did the District Court (or Miller)

recognize any attempt by Heileman to raise the issue that “light” was

generic, and then it was in the context that users (and defendants in

other suits, such as Schlitz) had caused the term to become generic,

not that it was generic ab initio. This contention was rejected as un-

proven by Heileman on the then-extant record. 427 F.Supp. 1206-07,

Appendix D pp. 58a-59a.

because ‘‘light’’ is a generic or common descriptive

word when applied to beer, neither that word nor its

phonetic equivalent may be appropriated as a trade-

mark for beer. 561 F.2d at 77, Appendix C p. 24a.

Three considerations are critical to evaluating the sig-

nificance of that Heileman opinion: First, the criterion for

determining a term is generic is basically factual—the fact

of public understanding of the meaning of the term’;

Second, the stated bases for the Appellate Court’s deter-

mination in Heileman that ‘‘light’’ is generic for beer bear

almost no relation to that factual question of public under-

standing’; Third, the authorities expressing an opinion

of Heileman agree unanimously that it is wrong.’

Miller sought certiorari of the Court of Appeals’

reversal of the preliminary injunction. Certiorari was

denied without disclosure of any reason. 434 U.S. 1025

(1978). At that time, however, it was not certain that the

judgment reversing a preliminary injunction was intended

as a final determination of the merits in Heideman or else-

where, and the authorities had yet to condemn the decision.

Schlitz moved for summary judgment on Miller’s trade-

mark infringement and unfair competition claims’® and

sought cancellation of Miller’s registrations of LITE on

the ground that Heileman collaterally estopped Miller from

7. See p. 13, infra.

8. See pp. 13-14, infra.

9. See pp. 28-32, infra.

10. There was also a disparagement claim based on early Schlitz

advertising for its LIGHT brand of beer. ©

<n acts ian ioe niall

asserting any trademark rights in LITE." Conceding the

applicability of the principles established in Blonder-

Tongue Laboratories, Inc. v. University of Illinois Founda-

tion, 402 U.S. 313 (1971), the District Court granted the

motion. 449 F.Supp. 852, Appendix B.

Miller appealed. The author of the Heileman appel-

late decision wrote the opinion affirming the District

Court’s decision in Schlitz as to Miller’s trademark in-

fringement claims, but remanding for possible prosecu-

tion of amended unfair competition claims based upon

something other than Miller’s trademark rights in LITE.

Appendix A. In affirming, the Court below (1) held that

Miller had been afforded a full and fair hearing in Heile-

man on the issue of whether ‘‘light’’ is generic, (2) that

the Heileman reversal of a preliminary injunction was suf-

ficiently ‘‘final’’ for collateral estoppel purposes, and (3)

that its Heileman decision not only grasped the issues in-

volved, but resolved them correctly.

Reasons for Granting the Writ

The basic reason why this writ should be granted is

that otherwise Miller, without fair opportunity for a

factual hearing, will be deprived of valuable property by

misapplication of substantive law in a fundamental area

in which this Court has not spoken for more than forty

years, over thirty of which have passed since the current

statute came into force.

11. Schlitz also moved, on massive papers, for summary judg-

ment, on the ground that the record proved “light” to be generic ; both

the District Court and Court of Appeals declined to entertain any such

motion for summary judgment.

1. The decision below conflicts with principles

established in this Court as well as in uther Courts of

Appeals by giving collateral estoppel effect to a factual

¢onclusion made on appeal of a motion in which that

factual question was neither at issue nor subject to

proof.

The conclusion of the Court below is that Miller must

lose its trademark claims against Schlitz because ‘‘light’’

is ‘‘generic’’ for beer. The determination that a term is

‘‘generic’’ is a factual one, the burden of proof of which

rests upon the defendant (see Reason 1. A., infra). The

basis for that factual determination that ‘‘light’’ is ‘‘gen-

eric’’ is not the record in Schlitz; it is the collateral estop-

pel effect of the same Court’s—indeed, the same Judge’s

—earlier decision to that effect in Heileman. The Heile-

man determination that ‘‘light’’ was ‘‘generic’’ was

reached on appeal; that factual issue had not been consid-

ered by, or even recognized as being addressed to, the

trial court which granted Miller’s motion for a prelim-

inary injunction.’ During the preliminary injunction pro-

ceedings in Heilemam, which comprised affidavits and argu-

ments of law, both oral and written, Miller had introduced

evidence to overcome Heileman’s anticipated defense that

‘“‘light’’ was unprotectable because it was descriptive, evi-

dence that even the appellate Court conceded was suffi-

cient.*

12. See p. 9, supra, at footnote 6.

13. 561 F.2d at 80, n.6; Appendix C p. 30a, n.6.

A ON 28 ee

MBit win

A. Whether a term is “generic” involves a factual

inquiry, the burden of persuasion of which is

upon the challenger of the trademark.

In determining whether a term is generic, Judge

Learned Hand’s criterion has been uniformly accepted for

more than half a century:

The single question, as I view it, in.all these cases,

is merely one of fact: What do the buyers understand

by the word for whose use the parties are contending?

Bayer Co. v. Umted Drug Co., 272 Fed. 505, 509

(S.D.N.Y. 1921), emphasis added.

It is still aecepted law that the fact of public understand-

ing is the test. See 3 Callman, Unfair Competition Trade-

marks and Monopolies, §74.2, p. 237 at text prior to n.71

(3d ed. 1969) ; 1 McCarthy, Trademarks and Unfair Com-

petition §12.2(A), pp. 406-7 (1973); Gilson, Trademark

Protection and Practice §2.02 (1), p. 2-11 (1978) ; Pattishall

& Hilliard, Trademarks, Trade Identity and Unfair Trade

Practices, §3.23(1), p. 3-25 (1974); Seidel-Dubroff-Gonda,

Trademark Law and Practice $6.04, p. 174 (1963).

The stated criteria relied upon by the Appellate Court

in Hetleman to ascertain that ‘‘light’’ is ‘‘generic’’ rather

than descriptive shed notably little light on the factual

issue of public understanding. (See 561 F.2d at 80-81,

Appendix C pp. 3la-33a.) They comprise: (1) the ob-

servation that ‘‘light’’ had long been used to describe vari-

ous characteristics of beers; (2) dictionary definitions, as

well as unidentified and undescribed references on chem-

ical terminology, industry publications and magazines and

newspapers; (3) use of ‘‘light’’ in various state statutes

(mostly for wine rather than beer); (4) descriptive use

of ‘‘light’’ in other contexts; and (5) an earlier decision,

involving Miller’s corporate parent, holding ‘‘lights’’ de-

scriptive of (but not generic for) cigarettes.”

That a would-be trademark is generic is a matter of

affirmative defense. This is clear from Section 33(a) of

the Trademark Act, 15 U.S.C. §1115(a), which provides, in

pertinent part, that

Any registration . . . of a mark registered on

the principal register [Miller owns two such registra-

tions of LITE] ... and owned by a party to an action

shall be admissible in evidence and shall be prima facie

evidence of registrant’s exclusive right to use the

registered mark in commerce on the goods . . . speci-

fied in the registration ..., but shall not preclude

an opposing party from proving any legal or equitable

defense or defect which might have been asserted if

such mark had not been registered.”

14. Philip Morris, Inc. v. R.J. Reynolds Tobacco Co., 188

U.S.P.Q. 289 (S.D.N.Y. 1975).

15. See also:

“In the Lanham Act Congress made it clear that weight should be

accorded to the actions of the Patent Office. The Act provided that

‘A certificate of registration of a mark * * * shall be prima facie evi-

dence of the validity of the registration * * *.’ 15 U.S.C.A. §1057(b).

We are of the opinion that this means not only that the burden of

going forward is upon the contestant of the registration but that there

is a strong presumption of validity so that the party claiming invalidity

has the burden of proof and in order to prevail it must put something

more into the scales than the registrant.” Aluminum Fab. Co. of

Pittsburgh v. Season-All W. Corp., 259 F.2d 314, 316 (2d Cir. 1958).

Here, Miller owned registrations (dismissed as irrelevant, on grounds

no longer valid, by the Court of Appeals in Heileman—supra p. 3,

note 1 and see Appendix C pp. 27a-28a). Heileman, before the

District Court, put virtually nothing into the scales on the question

whether “light” is generic; Miller responded by doing likewise. It

was only on appeal, after Miller’s opportunity to introduce much of

its evidence on this point and have it weighed had passed, that the

Court marshalled its “evidence” and decided that it tipped the balance.

iiss tte ise sie ste aes

Thus while the Court below observes ‘‘Miller was not

foreclosed from offering any evidence it chose in support

of its motion for preliminary injunction in the Heileman

case’’ (Appendix A p. 9a), the ‘‘generic’’ question was one

of affirmative defense which neither the trial Court nor

Miller understood Heileman to be raising. So while Miller

theoretically had the opportunity, in Heilemam, to introduce

evidence rebutting the generic defense (or any of the myriad

of other factual or legal defenses that conceivably could

have been raised) it had no occasion to do so.

B. The prerequisites for collateral estoppel are not met.

This fundamental unfairness of condemning Miller to

eternal defeat on factual grounds it had no occasion to

litigate conflicts with well established safeguards built into

the law of collateral estoppel.

Collateral estoppel is designed to preclude a party’s

relitigation of an issue ‘‘fully litigated and lost’’ so that he

will not have ‘‘more than one full and fair opportunity for

judicial resolution of the same issue.’’ Parklane Hosiery

Co. v. Shore, 439 U.S. 322, 328 (1979) quoting Blonder-

Tongue Laboratories, Inc. v. University of Illinois Founda-

tion, 402 U.S. 313, 328-29 (1971). Collateral estoppel is

not designed, or feirly employed, to preclude the litigation

of factual issues that initially seem unpromising to a Court

before they have been tried.

One of the safeguards repeatedly recognized in the land-

mark Blonder-Tongue decision is that the collaterally es-

topped party must have received a ‘‘full and fair opportu-

nity’’ to be heard in the first proceeding.

. . . the requirement of determining whether the

party against whom an estoppel is asserted had a full

and fair opportunity to litigate is a most significant

safeguard. 402 U.S. at 329.

Due process, it is explained, prohibits estopping those who

never had a chance to present their evidence or arguments

(in that instance, non-parties to the earlier suit). Id.’

As was explained in Blonder-T ongue—

. . we should keep firmly in mind that we are con-

sidering the situation where the patentee was plaintiff

in the prior suit and chose to litigate at that time and

place. Presumably he was prepared to litigate and to

litigate to the finish agaist the defendant there in-

volved. Patent litigation characteristically proceeds

with some deliberation and, with the avenues for dis-

covery available under the present rules of procedure,

there is no reason to suppose that plaintiff patentees

would face either surprise or unusual difficulties in

getting all relevant and probative evidence before the

court in the first litigation.

Determining whether a patentee has had a full

and fair chance to litigate the validity of his patent

in an earlier case is not a simple matter. In addition

to the considerations . . . mentioned above, certain

other factors immediately emerge. For example,...

whether without fault of his own the patentee was de-

16. “. .. The basic elements of such a [fair and full] hearing

include the right of each party to be apprized of all the evidence upon

which a factual adjudication rests, plus the right to examine, explain

or rebut ali such evidence.” Carter v. Kubler, 320 U.S. 243, 247

(1943). Similarly see United States v. Dillman, 146 F.2d 572, 574

(5th Cir. 1944), cert. denied, 325 U.S. 870 (1945). These cases dealt

with factual determinations made on the basis of extra-judicial evi-

dence ; here, the principle is no different.

OE CE Re aOR:

weer 6

eae

prived of crucial evidence or witnesses in the first

litigation. 402 U.S. at 332-33.

By these criteria, Miller did not have a full and fair hear-

ing in Heileman on the question of whether ‘‘light’”’ is ge-

neric. Heileman did not, at its preliminary injunction stage,

proceed with the deliberation characteristic of patent liti-

gation. There was no discovery. There was no occasion

to place before the Court ‘‘all relevant and probative evi-

dence’? on the generic issue. Miller has never had an

opportunity to ‘‘examine, explain or rebut’’ considerable

of the ‘‘evidence’’ relied upon by the Appellate Court in

Heileman to conclude that ‘‘light’’ was generic.

Other Courts of Appeals also have established safe-

guards for the application of collateral estoppel that were

not met here.

International Ass’n. of Mach. & Aero. Wkrs. v. Nia,

512 F.2d 125 (5th Cir. 1975) sets forth three requirements

for the application of collateral estoppel: ‘‘(1) the issue

to be concluded must be identical to that involved in the

prior action; (2) in the prior action the issue must have

been ‘actually litigated’; and (3) the determination made

of the issue in the prior action must have been necessary

and essential to the resulting judgment.’’ 512 F.2d at 132.

While there is no doubt as to the ‘‘identity of issue’’ be-

tween the Heileman and Schlitz cases, the question whether

‘‘light’’ is generic for beer was not ‘‘actually litigated,’’

only argued (for the first time) on appeal in Heileman.

Nor was determination on appeal that ‘‘light’’ is generic

‘‘necessary and essential’’ to the appellate reversal of the

preliminary injunction; merely raising the question and

holding that it made likelihood of success uncertain on the

merits would have sufficed, remanding the question for

later determination on the basis of evidence.”

By the standards of another Court of Appeals, then,

Heileman cannot be afforded preclusive effect in this case.

See also State of N.C. v. Chas. Pfizer & Co., Inc., 537 F.2d

67 (4th Cir. 1976) in which a prior F.T.C. determination of

fraud in patent procurement, affirmed by a Court of Ap-

peals, was denied collateral estoppel effect in a subsequent

civil suit because the F.T.C. hearing did not afford the re-

spondent a ‘‘fair opportunity procedurally, substantively

and evidentially’’ to litigate the issue. If an extended ad-

ministrative hearing, with different burdens of proof and

different procedural and evidentiary rules, could not serve

as a basis for collateral estoppel, then the reversal, based

largely on judicial notice, of a summary preliminary in-

junction proceeding in which the ground for reversal was

neither litigated nor decided, can hardly do so.

Nationwide Amusements, Inc. v. Nattin, 452 F.2d 651

(4th Cir. 1971) reversed the dismissal of an action after

the hearing of a preliminary injunction motion.

17. See and compare: Dallas Cowboys Cheerleaders, Inc. v.

Scoreboard Posters, Inc., 600 F.2d 1184 (5th Cir. 1979), a recent

review of preliminary injunctions contrary to that of the Court below

in explaining the impact of its review in Heileman:

A preliminary injunction may issue, however, despite the

existence of a plausible defense as long as the movant demon-

strates a substantial likelihood of success... . Our appellate func-

tion is not to try this case in the first instance but to review the

discretion of the district judge in light of what was put before

him. [Our holding that the district court was correct in deter-

mining that the plaintiffs enjoyed a substantial likelihood of suc-

cess on the merits in no way intimates any view concerning the

correct outcome of this litigation when it is fully tried.] 600

F.2d at 1188-89,

Re eS.

WE ECS oC ia RR De ON

SS a De ee es

6 Ah nan 9 ht) rte *

ich an Lieto

AAR IMA OE DIA

wees ea ede

eS alla etn. AIEEE tae oats =~

..+ We believe that under the circumstances of this

case the district court erred in dismissing the suit on

the merits when it was before the court only on a mo-

tion for preliminary injunction. We realize that a

number of witnesses appeared for appellant, that the

case was developed in some detail, and that the issues

presented by the motion for preliminary injunction

were similar if not the same as those raised for final

determination. Nevertheless, we are concerned that

appellant may have been denied his full day in court

on his federal claim . . Nowhere in the record is

there any indication that appellant knew its case was

to be decided finally after the preliminary injunction

hearing. 452 F.2d at 652.

Here, as in Nationwide Amusements, there was no con-

solidation of the hearing of the motion with the trial of the

action, and Miller was never apprised that its ‘‘final day

in.Court’’ had come.'® Unlike Nationwide Amusements,

however, here no witnesses appeared and the critical issue

was not developed during the preliminary injunction

18. We recognize that the Court below expressed the opinion that

Miller’s decision to seek preliminary relief in Hetleman “entailed the

risk, familiar to any experienced litigation lawyer, that the decision on

the preliminary injunction might have the effect of determining the

merits, either as a practical matter or legally, through law of the case.”

Appendix A p. 4a, emphasis added. To this there are two answers:

(1) Miller, of course, accepted the “practical” risks that its evidence

or arguments would prove unconvincing to the court hearing the

motion (neither of which “practical” risks materialized) ; it hardly

foresaw, particularly at the outset, that ultimately a preliminary in-

junction would be reversed on factual grounds neither presented to

nor passed upon by the court hearing the motion. (2) The foresee-

able “law of the case” risk was aptly summarized in the Opinion below

where it noted “such a judgment [in an appeal from a preliminary

injunction order] will ordinarily not foreclose subsequent litigation on

the merits.” Appendix A p.10a. Thus, the risk “familiar to any

experienced litigation lawyer” that Miller faced was, by the Court’s

own admission, the extraordinary risk that a preliminary, non-evi-

dentiary hearing would produce the kind of binding factual conclusion

normally established by trial.

proceedings. Both differences weigh heavily against the

result reached here.

By the standards of this Court or other Courts of Ap-

peals, then, this case is not a proper one for the application

of collateral estoppel.

C. The refutation of the underlying

premises of Miller’s case by the

Court below is unwarranted.

Miller, of course, made the same points below. The

Opinion deals with them as follows: (1) ‘‘Miller was not

foreclosed from offering any evidence it chose in support

of its motion for preliminary injunction in the Hetleman

case.’”? Appendix A p. 9a. As noted earlier, Miller had

no occasion to delve into the generic defense at that point.

See supra pp. 14-15. (2) Miller’s argument that whether

LITE was generic was not focused upon by the District

Court in Heileman ‘‘is belied by the description of the dis-

trict court’s holding in the brief Miller submitted to this

court in that case.’?’ As demonstrated at p. 9 n.6 supra,

that is an irrelevant authority on that point (which is mis-

characterized).

The Court below deals more obliquely with the prop-

ositions that (3) whether a term is generic is a factual ques-

tion of public understanding, and (4) there is pertinent

evidence on this point not heard in Heileman. Miller, in

this case, offered proof that it had conducted a post-Heve-

man survey. Among other things, the survey showed that

nearly three times as many beer drinkers regard the generic

ay On ee ae

name of LITE to be ‘‘beer’’ as regard it to be ‘‘light

beer,’’!®

In discussing this, the opinion below states:

The survey evidence could have only two purposes:

to prove the meaning of the word ‘‘light’’ or to prove

that consumers have come to associate that word with

Miller’s product. As for the first purpose, the mean-

ing of a familiar English word of Anglo-Saxon her-

itage can hardly be established by a survey of 988

beer drinkers who had endured long exposure to Mil-

ler’s advertising of the word in connection with the

Miller name. When Judge Learned Hand said that

whether a word is generic depends on what ‘‘buyers

understand by the word’’ [citing Bayer], he was re-

ferring to a coined word for a commercial product that

was alleged to have become generic through common

usage. He was not suggesting that the meaning of a

19. Beer drinkers, of course, were not asked for “the generic

name” of LITE. They were shown four beverage labels, including

that for LITE. Respondents first were advised:

A label generally has the brand name, which the manufacturer

uses to differentiate his product from similar products made by

other manufacturers.

A label also usually has some words or phrases which tell what

the product is—regardless of manufacturer.

For example: Ivory is the brand name; toilet soap is the product.

Jack Daniels is the brand name; bourbon is the product. Have

I made myself clear?

Then they were asked :

What word or words on this label—if any—do you consider

to be the brand name?

What word or words on this label—if any—do you consider

to be those which tell you what the product is?

Results showed that of those viewing the LITE label, the “brand

name” identifications were LITE (51%), Miller (23%) and Miller

LITE (13%); more important for present purposes, “What the

product is” was identified as “beer” by 63%, “light beer” by 23%.

familiar, basic word in the English vocabulary can de-

pend on associations the word brings to consumers as

a result of advertising.*® Appendix A pp. 9a-10a.

The Court’s analysis of the survey’s ‘‘purposes’’ is

plainly inaccurate. The principal purpose, as explained

above (and to the Court below) was to establish what the

beer drinking public considers to be the generic name for

the product in question—LITE. It shows that the public’s

perception is different from that of the Heilemam appeal

court’s.

The notion that the meaning of ‘‘a familiar English

word of Anglo-Saxon heritage’’** cannot be established by

a survey of the pertinent public conflicts squarely with both

common sense and decided law. As a matter of common

sense, a Court’s ex cathedra pronouncement of meaning

can hardly be as determinative of public understanding as

is the public’s expressed understanding.” As a matter of

decided law, it long has been the rule that public under-

standing is the test. (See p. 13, supra.)

The District Court erred in concluding that ‘‘the

trade-mark cellophane does not depend upon what was

in the customer’s mind’’ and in deciding the case on

the theory that the public understanding as to the

20. How the Court below ascertained Judge Learned Hand’s

intended meaning fifty-eight years after the fact—and ascertained that

he did not mean what other authorities unanimously conclude that he

did mean—is unexplained.

21. Which “familiar” word the Court saw fit to define by refer-

ence to chemical dictionaries, state liquor control statutes and a ciga-

rette trademark litigation.

22. Especially is this so when one considers that the Hetleman

appeal court’s bases for concluding “light” to be generic were dic-

tionary, statutory and technical definitions, meaning in other contexts,

and a previous litigation holding “lights” to be descriptive of (not

generic for) cigarettes. See supra, pp. 13-14.

eat ae

meaning of the word was immaterial. Such a theory

is out of accord with the essence of the law of trade-

marks. DuPont Cellophane Co. v. Waxed Products

Co., 85 F.2d 75, 81 (2d Cir. 1936).

Forty years later, a Court of Appeals repeats the mistake.

The suggestion that the long established consumer un-

derstanding test applies only to ‘‘a coined word for a com-

mercial product’’ is amply rebutted by Feathercombs, Inc.

v. Solo Products Corporation, 306 F.2d 251 (2d Cir. 1962),

in which the mark under consideration was FEATHER-

COMBS, hardly a coined word such as ‘‘aspirin.”’

In order to become generic the principal significance

of the word must be its indication of the nature or class

of an article, rather than an indication of its origin.

(306 F.2d at 256, emphasis in original).

Whether the public perception was meaningfully in-

fluenced by ‘‘long exposure to Miller advertising’’ (or by

massive counter-advertising tending to ‘‘genericize’’ the

word ‘‘light’’) admittedly is a fair subject for factual and

testimonial inquiry; however, it is a poor one’ for judicial

omniscience.

Furthermore, the suggestion that Miller’s advertising

and sale of LITE could not remove ‘‘light’’ from the public

domain is squarely contrary to the holding approved in

Singer Mfg. Co. v. Briley, 207 F.2d 519 (5th Cir. 1953) that

by continuous and wide advertising to consumers, the once-

generic term SINGER was ‘‘recaptured from the public

domain.’’ 207 F.2d at 521, n.3.

Miller has been deprived of property—its trademark

LITE (and registrations thereof) for beer. It has been

deprived of that property on the basis of a factual deter-

mination—‘‘light’’ is generic. That factual determination

Was made on appeal of a case in which the question was not

originally at issue or the subject of evidence—the Heialeman

case. From these propositions there can be no escape.

The device employed to accomplish this result was col-

lateral estoppel. Such an application of the doctrine is

contrary to safeguards established by this and other courts.

The holding that factual matters can conclusively be estab-

lished without trial, or even dispute of the issue at trial

level, urgently requires correction by this Court.

2. The trademark law articulated by this decision

and in Heileman is sufficiently important and erroneous

to merit correction by this Court; the error also consti-

tutes further reason for denying the opinion collateral

estoppel effect.

A. The issue is important and the law erroneous.

Forty-one years ago, during the October, 1938 term,

this Court decided two cases defining what is, or is not,

protectable as a trademark. In Kellogg Co. v. Nat. Biscuit

Co., 305 U.S. 111 (1938) it was held that ‘‘Shredded

Wheat’’ could not be exclusively appropriated for a

shredded wheat breakfast cereal.

... For that is the generic term of the article,

which describes it with a fair degree of accuracy; and

it is the term by which the biscuit in pillow-shaped

form is generally known by the public. Since the term

is generic, the original maker of the product acqnired

no exclusive right to use it. (305 U.S. at 116).

i iii ic ce atc

It is contended that the plaintiff has the exclusive

right to the name ‘‘Shredded Wheat’’, because those

words acquired the ‘‘secondary meaning’’ of shredded

wheat made at Niagara Falls by the plaintiff’s pred-

ecessor. There is no basis here for applying the

doctrine of secondary meaning. (305 U.S. at 118).

In Armstrong Co. v. Nu-Enamel Corp., 305 U.S. 315 (1938),

NU-ENAMEL was upheld as a trademark for a presum-

ably new type of enamel.

‘‘Nu-Enamel’’ is descriptive of the enamels in is-

sue... But a mark which is descriptive is not a

good trade-mark at common law.

. . . Here we have a secondary meaning to the

descriptive term, ‘‘Nu-Enamel.’’ This establishes,

entirely apart from any trade-mark act, the common

law right of the Nu-Enamel Corporation to be free

from the competitive use of these words as a trade-

mark or trade name. (305 U.S. at 334-35).

Since those decisions, a new trademark act has been

enacted (in 1946) and the law of what is or is not pro-

tectable under what conditions has developed without

guidance from this Court. Articulation of the theoretical

framework developed by consensus probably reached its

high point in Abercrombie & Fitch Co. v. Hunting World,

Inc., 5387 F.2d 4 (2d Cir. 1976) which identified ‘‘four dif-

ferent categories of terms with respect to trademark pro-

tection.’? These were ‘‘(1) generic, (2) descriptive, (3)

suggestive and (4) arbitrary or fanciful.’’ As the case

explained, (1) The generic term ‘‘is one that refers, or has

come to be understood as referring, to the genus of which

a particular product is a species.’’ It is identified in the

Lanham Trademark Act as ‘‘the common descriptive name

of an article or substance.’’ 15 U.S.C. §1064(c). A generic

term cannot be protected, and protection of a term which

has become generic must be denied, because one ‘‘cannot

deprive competing manufacturers of the product of the

right to call an article by its name.’’ (2) The ‘‘descrip-

tive’’ term, called ‘‘merely descriptive’’ in the Trademark

Act (15 U.S.C. §1052(e)), can be registered” and protected

at common law™ upon acquisition of distinctiveness and

secondary meaning.

... In the latter case the law strikes the balance,

with respect to registration, between the hardships to

a competitor in hampering the use of an appropriate

word and those to the owner who, having invested

money and energy to endow a word with the good will

adhering to his enterprise, would be deprived of the

fruits of his efforts. 537 F.2d at 10.7

Abercrombie & Fitch explains that (3) Suggestive (those

‘‘neither exactly descriptive on the one hand nor truly

fanciful on the other’’*) and (4) Arbitrary (or fanciful)

terms?’ are registrable and protectable without a showing

of secondary meaning. 537 F.2d at 9-11.

23. 15 U.S.C. §1052(f).

24. Armstrong Co. v. Nu-Enamel Co., supra.

25. Section 33(b) (4) of the Act, 15 U.S.C. §1115(b) (4), pre-

serves this “balance” by insulating the good faith, non-trademark,

descriptive use of descriptive terms from charges of infringement.

26. One of the more oft-cited tests for distinguishing “descriptive”

from “suggestive” terms is that if a term forthwith conveys an imme-

diate idea of the ingredients, qualities or characteristics of the product

it is descriptive; if it requires imagination, thought and perception to

reach a conclusion as to the nature of the goods, it is suggestive. This

test, generally attributed to Stix Products, Inc. v. United Merchants

and Manufacturers, Inc., 295 F. Supp. 479 (S.D.N.Y. 1968), has been

endorsed in Abercrombie & Fitch and elsewhere.

27. Arbitrary terms are existing words, irrelevant to the product,

that are used as a trademark; CAMEL is such a trademark for ciga-

rettes. Fanciful terms are invented ones, such as KODAK.

The calamity of this case and of Heileman, upon which

it inescapably rests and which it endorses (Appendix A

pp. 6a-8a), is that while Abercrombie & Fitch and the con-

sensus of prior learning it articulates purportedly were

followed (Appendix A pp. 7a-8a, n.7), they were not. As

Abercrombie & Fitch teaches, there are two sets of ter-

minology for the same concepts:

Common Law Lanham Trademark Act

(1) Generic Common descriptive name of

an article or substance

(2) Descriptive Merely Descriptive

Heileman creates, and Schlitz endorses, the novel cate-

gories:

(1) Generic or common descriptive terms

(2) Merely descriptive.

The consequences of this semantic sloppiness (or ledger-

demain) snowball. For in Heileman and Schlitz, ‘‘A ge-

neric or common descriptive term is one which is commonly

used as the name or description of a kind of goods.’’ 561

F.2d at 79, Appendix C p. 29a, emphasis added. (Compare

with Abercrombie ¢ Fitch’s explanation of what is a generic

term, supra.) A ‘‘merely descriptive’’ term is said to be

one that ‘‘specifically describes a characteristic or ingredi-

ent of an article.’’ 561 F.2d at 79, Appendix C p. 29a. In-

deed, in Heileman and Schlitz, ‘‘light’’ is concluded to be

‘‘generic’’ (rather than to be ‘‘descriptive’’ or ‘‘merely de-

scriptive’’) because ‘‘it has been widely used in the beer

industry for many years to describe a beer’s color, flavor,

body or alcoholic content, or a combination of these or

similar characteristics.’’ 561 F.2d at 80, Appendix C p. 31a,

emphasis added.

The impossibility of rationalizing Heidleman with exist-

ing law has been recognized by three independent scholars

on trademark law.

1. Jerome Gilson (1 Trademark Protection and Prac-

tice, Dec. 1978 Cum. Supp. pp. 22-23) described the Heile-

man analysis as ‘‘unprecedented and extremely tortured.’’

The court did not attempt to draw a bright line

between the two types of descriptive terms [‘‘common

descriptive’’ and ‘‘merely descriptive’’] . Indeed,

there seems to be no objective way to distinguish be-

tween them. The distinction in Miller Brewimg ap-

pears based on a visceral reaction that certain descrip-

tive terms are so commonplace and so widely used that

it would be against public policy to enforce them, no

matter how extensively they are advertised or pro-

moted.

In the opinion of the author, the distinction is so

vague as to be unworkable in terms of its application

to future trademark infringement cases. If it were

applied by many courts it could place a large number

of valuable secondary meaning trademarks in jeopardy

of being found ‘‘common descriptive terms,’’ irrespec-

tive of the degree to which the public relies on them

in purchasing products or services.

Mr. Gilson concludes with the observation that the Hevde-

man opinion involves ‘‘the creation of an altogether arti-

ficial distinction which, one assumes, will plague courts and

trademark counsel for years to come.”’

2. Arthur J. Greenbaum (The Thirty-First Year of

Administration of the Lanham Trademark Act of 1946, 68

The Trademark Reporter No. 6 (1978) at pp. 783-85) wrote

of the opinion:

The Court defined a generic or common descriptive

term as ‘‘one which is commonly used as the name or

description of a kind of goods.’’ [Footnote omitted. ]

While there is no question that the name of a kind of

goods is a good definition of a generic term, confusion

creeps in when one speaks about a description of a kind

of goods.

* * *

There is no question but that ‘‘light’’ is descriptive

of various qualities of beer... . However, simply be-

cause a term has been used descriptively does not make

it generic, ie., the name of the product. Here, the

name of the product appears to be beer. An appro-

priate description of it could be ‘‘light.’’

The court does not clearly explain why it concluded

that ‘‘light’’ is generic. The reason that generic terms

are not protectable is, as stated by the court, that such

protection would preclude a competitor from stating

what his goods are....

However, no such problem exists with respect to

descriptive terms. <A descriptive term, such as ‘‘pure’’

for oil, can be a trademark when used as a trademark

and can be an ordinary adjective when used in copy

or on labels as an ordinary descriptive term. Put an-

other way, an adjective can be both a trademark (its

secondary meaning) and remain a descriptive term

(its primary meaning) available to others...

* * *

This problem of the difference between a generic

term and a merely descriptive one has long been with

us. Courts have not been terribly successful in grap-

pling with the distinction. Here, the Seventh Circuit

has managed to define a generic term in such a manner

that almost any descriptive term could be deemed to

be generic. Hopefully, this unfortunately worded de-

cision will not now set off more years of confusion and

controversy as to what is protectable and what is not.

[Footnotes omitted. ]

3. Seymour Kleinman (3 Callman, The Law of Unfair

Competition Trademarks and Monopolies, 1978 Cum. Supp.

§74.4, pp. 36-48) begins his extensive analysis of the opinion

with: ‘‘An awesome augury of genericide appears to be

threatening a broad category of marks, registered or not.

It started with the relatively recent ‘discovery’ of a hither-

to unidentified trademark substratum—the generic or ‘com-

mon descriptive’ term—which now appears to have been

lying dormant as a fault beneath the common law of trade-

marks and the legislative structure of the Lanham Act.”’’

Subsequently, he states: ‘‘In ‘light’ (no pun intended) of

the forbidding significance of the decision on trademark

law generally, as well as the Lanham Act specifically, its

premises require careful analysis and its result calls for

limited application.’’ In the course of his analysis, Mr.

Kleinman observes:

.. . Without reference to that all-important acid

test—the public perception of ‘‘Lite’’ for beer—the

court took judicial notice of the fact that ‘‘alcoholic

content and caloric content go hand in hand.’’ On the

strength of its premise that ‘‘light’’ was widely used

in the beer industry to ‘‘describe a beer’s color, flavor,

body or alcoholic content’’ (which by itself might

qualify it as ‘‘merely descriptive’’ of some function

or ingredient under the decisions quoted above), the

court proceeds to its conclusion: ‘‘light’’ being a

‘‘generic or common descriptive term as applied to

beer’’ [by whose perception is nowhere indicated] it

could ‘‘not be exclusively appropriated by Miller as a

trademark’’....

Logically, the court’s syllogism lacks another prem-

ise: i.e., ‘‘light’’ is a generic or common descriptive

term only because the public perception accords with

the court’s premise, intuitive or otherwise. True or

false, it is that missing link which converts the coart’s

conclusory finding of ‘‘genericness’’ from one of fact

(which it should be) to one of law (which is erroneous).

Whatever the intuitive reason or illogic (especially

surprising after the court below had determined other-

wise), the Miller court christened the new substratum

‘*Generica’’ and consigned both ‘‘Lite’’ and ‘‘light’’

to its dark and dismal depths. Dictum thus became

gospel and the decision, if carried to its drily logical

extreme, can seriously undermine the structure of the

Lanham Act and impair some fundamental concepts

of trademark law.

. Kleinman concludes:

Antagonism to the registration of ‘‘descriptive’’

or ‘‘merely descriptive’’ terms stems, of course, from

the festering fear, which the Miller court openly ad-

mits, that a registrant may thereby acquire an exclu-

sive right to the use of the words in the lexicon which

should be equally available for use by his competitors.

The short and simple therapy for such monopolopho-

bia is contained, of course, in §33(b)(4), which pro-

vides that any good faith fair use of descriptive

words ...is a complete defense to a charge of infringe-

ment. With such protective cover, one wonders why

the Miller court resorted to the blunderbuss. Hunting

small game with an elephant gun has never been

regarded as good sportsmanship.

. . » Genericide is ‘‘cruel and unusual punishment’’

and it is to be hoped that the invocation of that ex-

treme sanction, as the Miller court conceived it, will

be an enigma to be pondered rather than a precedent

to be applied. [Footnote omitted].

The reason the commentators refer to Heileman, which

this case embraces, as ‘‘this unfortunately worded deci-

sion,’’® ‘which, one assumes, will plague courts and trade-

mark counsel for years to come’ and express the hope

that it ‘‘will be an enigma to be pondered rather than a

precedent to be applied’ is that it imperils the pro-

tectability of scores of well known trademarks.

That is easily seen in a society whose best-selling

magazines are TV GUIDE and READER’S DIGEST, that

smokes billions of KOOL cigarettes, eats countless boxes of

RICE KRISPIES cereal, feeds vast quantities of KEN-L-

RATION dog food to its pets, jets about the country on

AMERICAN AIRLINES, and includes among its favorite

recent entertainments STAR WARS and SUPERMAN

(soon probably to be seen on numerous COLORTRAK

television sets).

B. Failure to grasp the essential issue

in the estopping decision.

Moreover, the very error of Heileman is ground for

denying it collateral estoppel effect.

Determining whether a patentee has had a full and

fair chance to litigate the validity of his patent in an

28. Messrs. Giilson’s, Greenbaum’s and Kleinman’s observations

are reprinted with permission, in their entireties, in Appendices G, H

and I, respectively.

29. Greenbaum, supra.

30. Gilson, supra.

31. Kleinman, supra.

ee ee eee |

See Re

earlier case is of necessity not e -unple matter. In

addition to the considerations . . . »entioned above,

certain other factors immediately emerge. For ex-

ample, . . . whether the opinions filed by the District

Court and the reviewing court, if any, indicate that

the prior case was one of those relatively rare in-

stances where the courts wholly failed to grasp the

technical subject matter and issues in suit.... But

as so often is the case, no one set of facts, no one col-

lection of words or phrases, will provide an automatic

formula for proper ruling on estoppel pleas. In the

end, decision will necessarily rest on the trial courts’

sense of justice and equity. Blonder-Tongue Labora-

tories, Inc. v. University of Illinois Foundation, 402

U.S. 313, 333-34 (1971).

As has been shown, Heileman failed to ‘‘grasp the tech-

nical subject matter and issues in suit.’? The decisions

below can be read to deprive Miller of its right to its trade-

32. To this, the Court below has three answers (Appendix A pp.

6a-8a). (1) The “technical matter” referred to in Blonder-Tongue is

limited to “issues so complex that legal minds, without appropriate

grounding in science and technology, may have difficulty in reaching

decision.” Appendix A p. 3a, n.3. Conceding that it is more probable

one will err when the underlying technology is baffling, common expe-

rience teaches that judges, like the rest of mankind, are not immune

to conceptual errors on comparatively simple subjects. Whether a

would-be trademark is generic or descriptive is as “technical” an

aspect of trademark law—a subject which fills treatises and is gen-

erally not very familiar to the Federal Courts—as molecular structure

is to chemical engineering. There is no reason why the rule ought to

apply only to errors that are difficult to perceive; the unfairness of

being bound by error is the same whether the mistake is esoteric or

simple. (2) The rule does not apply when the result is wrong, only

when the Court failed to comprehend what it was doing in reaching the

wrong result. As independent trademark authorities affirm quite

clearly, in their own distinctive styles, Heileman represents funda-

mental misunderstanding, not a simple choice of wrong result; that

is its deformity. (3) Heileman was correct. Again three independent

authorities, whose familiarity with and mastery of this branch of law

presumably equals that of the Judge who wrote both Heileman and

Schlitz, emphatically disagree.

mark LITE, registered in the U.S. Patent and Trademark

Office, acquired for valuable consideration and promoted

at a cost of tens of millions of dollars. From 1967 to mid

1975, LITE was a valid brand name nobody sought to

imitate. What Schlitz, Heileman and others have sought

to do by marketing their copies of Miller’s runaway suc-

cess, LITE, as ‘‘LIGHT,”’ is perfectly obvious from a

glance at their labels. If a ‘‘sense of justice and equity”’

is a component of collateral estoppel, Miller will not be

forever bound by the erroneous Heileman decision.

3. Cancellation of Miller’s registrations of LITE

presents sufficiently serious questions concerning the

workings of statutory trademark registration to merit

review.

This case and Hetleman do not hold that ‘‘light’’ per

se is generic for beer. :

... Although the Act refers to a common descriptive

name, we believe, as explained in the Heileman opinion

561 F.2d at 80 [Appendix C pp. 30a-31a], that a com-

mon descriptive adjective that is part of the common

descriptive name is governed by the same principle.

Appendix A p. 8a, n.7.

Thus ‘‘light’’ was considered generic only because it is part

of the generic term ‘‘light beer,’’ not because it is itself

generic for beer. This case is not about ‘‘light beer’’; it

is about what the consumer sees as “LIGHT

BEER.??

While this alone presents a novel issue for this Court,

the cancellation of the LITE registrations presents fur-

ther, serious issues, since it undermines the workings of the

statutory trademark registration scheme embodied in the

Lanham Act.

LITE was first used by Meister Brau, Inc. in May, 1967.

By February, 1972, it was twice registerea as a trademark

on the Principal Register of the United States Patent and

Trademark Office.** The certificates of registration were

‘‘nrima facie evidence of the validity of the registrations’’

(15 U.S.C. §1057(b)), were ‘‘constructive notice of the reg-

istrant’s claim of ownership thereof’’ (15 U.S.C. §1072),

and were ‘‘prima facie evidence of [Meister Brau and, sub-

sequently, of assignee Miller’s*] exclusive right to use the

registered mark in commerce on the goods . . . specified in

the registration . . .’’, subject to possible defenses (15

U.S.C. §1115(a)).

Before the enactment of the present act, it was recog-

nized that ‘‘the registration of a trade-mark raises a strong

presumption of its validity.’ Since the modern (1946)

Act made registration prima facie evidence of its own

validity, courts have recognized that Patent [and Trade-

mark] Office decisions granting registration must be recog-

nized as prima facie correct.

33. Schlitz, Heileman or any other brewer was free to oppose

these registrations upon publication of the marks in The Official

Gazette (15 U.S.C. §1063) or, after registration, to petition to cancel

the registrations (15 U.S.C. §1064). Nobody took either step prior

to Miller’s suits for infringement.

34. 15 U.S.C. §1060 permits an assignment of a registration and

of all consequential rights of the original registrant.

35. Barbasol Co. v. Jacobs, 160 F.2d 336, 338 (7th Cir. 1947).

36. Aluminum Fab. Co. of Pittsburgh v. Season-All W. Corp., 259

F.2d 314, 316 (2d Cir. 1958) ; Union Carbide Corp. v. Ever-Ready,

Inc., 531 F.2d 366, 378 (7th Cir.), cert. denied 429 U.S. 830 (1976).

Those presumptively valid registrations of LITE were,

by statute, insulated against registration by another of any

trademark that

. consists of or comprises a mark which so re-

sembles a mark registered in the Patent and Trade-

mark Office . . . as to be likely, when applied to the

goods of the applicant, to cause confusion, or to cause

mistake, or to deceive.... 15 U.S.C. §1052(d).

Those presumptively valid registrations, by statute, also

were subject to protection against the

... use in commerce [of] any reproduction, counter-

feit, copy or colorable imitation [thereof] in connec-

tion with the sale, offering for sale, distribution or

advertising of any goods or services on or in connec-

tion with which such use is likely to cause confusion,

or to cause mistake, or to deceive. 15 U.S.C. §1114

(1) (a).

It was this bundle of prima facie presumptions and

rights Miller obtained when it acquired Meister Brau’s

registration of LITE. It was this bundle of prima facie

presumptions and rights Miller held when it built LITE

from a modestly successful regional brand into a nation-

wide brewing phenomenon. It was this bundle of prima

facie presumptions and rights of which Miller will be

stripped by cancellation of its registrations of LITE, be-

cause an appellate court has concluded that ‘‘light beer’’

is generic.

LITE and ‘‘light’’ are not the same; they are phonetic

equivalents, but there are differences. To the extent that

there are differences, there is no reason to deprive Miller

of its registration right to LITE.

Even if ‘‘light’’ must be available to all, there is no

need for others to utilize LITE. Indeed, once LITE has

been recognized by the public as a trademark for Miller’s

beer, even if it be for Miller’s ‘‘light beer,’’ there can be

but one reason for a competitor to appropriate LITE—

to take unto himself ‘‘the drawing power of a congenial

symbol’’** established by Miller. (As noted at the outset,

there is persuasive evidence that LITE has come to sym-

bolize a particular brand of beer. Supra, pp. 4-5 at n.2.)

It is for these reasons that registration has been al-

lowed, for such ‘‘phonetic equivalent’? marks as LHK-

TRONIC for electric shavers,** XTRA for gasoline station

services® and ALO- for aloe products.*° ‘‘Electronic,’’

‘‘extra’’ and ‘‘aloe,’’ like ‘‘light’’ may well be unprotect-

able for various reasons; but LEKTRONIC, XTRA, ALO

and LITE are not identical to ‘‘electronic,’’ ‘‘extra,’’

‘‘aloe’”’ and ‘‘light.’’ In those differences, smal! though

they may be, there can reside a measure of trademark

validity and protection. Particularly should this be so

when, as here, the trademark has been registered and reli-

ance has been placed upon those presumptively valid regis-

trations.

The authorities cited by the Court below are not per-

suasive to the contrary. In American Aloe Corp. v. Aloe

37. Mishawaka Rubber & Woolen Mfg. Co. v. S.S. Kresge Co.,

316 U.S. 203, 205 (1942).

38. Sperry Rand Corporation v. Sunbeam Corporation, 442 F.2d

979 (C.C.P.A. 1971).

39. In re Warren Petroleum Corp., 192 U.S.P.Q. 405 (Trdmk.

Tr. & App. Bd. 1976).

40. Aloe Creme Laboratories, Inc. v. Aloe 99, Inc., 188 U.S.P.Q.

316 (Trdmk. Tr. & App. Bd. 1975).

Creme Laboratories, Inc., 420 F.2d 1248 (7th Cir.), cert.

denied 398 U.S. 929, 400 U.S. 820 (1970), cited in Heile-

man (561 F.2d at 79, Appendix C p. 29a), the issue was

whether the owner of various marks which encompassed

‘‘Alo’’ for cosmetics whose principal ingredient was

‘faloe’’ could prevent a competitor from using ‘‘aloe’’

for its products; the question of protecting the variant

was not in issue.*? (Moreover, the case is squarely at odds

with Heileman and Schlitz insofar as it recognizes that

generic terms may become valid trademarks upon ac-

quisition of secondary meaning.) Standard Paint Co. v.

Trinidad Asphalt Mfg. Co., 220 U.S. 446 (1911), cited

below (Appendix A p. 12a) held that since RUBEROID

was descriptive of a rubber-like roofing compound, it could

not serve as the basis for enjoining the use of ‘‘Rubbero’’

for a similar compound. This was before it was recognized

that descriptive terms were protectable upon acquisition of

secondary meaning. Four years later, however, rights in

RUBEROID were held sufficient to preclude use of RUB-

BEROID as a brand name for such roofing. Standard

Paint Co. v. Rubberoid Roofing Co., 224 Fed. 695 (7th Cir.

1915). The analogy here is that while LITE may not pre-

clude use of ‘‘light,’’ it would preclude use by a competitor

of ‘‘Lite.’’

Nor is the logic for cancelling registrations of LITE

compelling. Indeed, the only reason the Court has offered

—in Heileman—is that ‘‘Other brewers whose beers have

qualities that make them ‘light’ as that word has commonly

41. Another Court of Appeals was pointed in its refusal to follow

the rationale of this case. Aloe Creme Laboratories, Inc. v. Milsan,

423 F.2d 845 (5th Cir. 1970), cert. denied 398 U.S. 928 (1970).

been used [must] remain free to call their beer ‘light.’ ’’”

561 F.2d at 81, Appendix C pp. 33a-34a. Other brewers,

of course, would remain free to call their beer ‘‘light,’’

even if LITE remains registered. It is LITE—Miller’s

distinctive, enormously successful, trademark—that there

is no reason to encourage others to copy.

42. This is not a proposition with which Miller has quarrelled,

whether “light” be descriptive or generic. Indeed, 15 U.S.C. $1115

(b) (4) compels such a result as long as such use is non-trademark,

good faith descriptive use.

43. One brewer has appropriated LITE, General Brewing Com-

pany. Suit is pending. While Heileman presumably cannot be col-

laterally applied in that suit, because the possibility of another’s use

of LITE was never in issue, cancellation of Miller’s registrations of

LITE undoubtedly will present a needless obstacle to successful

prosecution of that suit.

Conclusion

For the reasons stated, the petition for a writ of

certiorari should be granted.

Respectfully submitted,

Antuony L. FLETCHER

20 Exchange Place

New York, New York 10005

Autan W. LEISER

780 North Water Street

Milwaukee, Wisconsin 53202

Guen H. Kanwir

One First National Plaza

Chicago, Illinois 60603

Attorneys for Petitioner

Consoy, Hewirt, O’Brien & BoaRDMAN

Quar_Les & Brapy

Hopkins, Sutrer, Munroy,

Davis & CRoMARTIE

Of Counsel

a la

APPENDIX A

in the

United States Court of Appeals

Bor the Seventh Cirrnit

No. 78-2011

MILLER BREWING COMPANY,

Plaintiff-Appellant, ~

JOS. SCHLITZ BREWING COoO., : ;

Defendant-A ppellee.

Appeal from the United States District Court for the

Eastern District of Wisconsin.

No. 75-C-636—Myron L. Gordon, Judge.

ARGUED NOVEMBER 8, 1978—DECIDED SEPTEMBER 6, 1979

Before FAIRCHILD, Chief Judge, SWYGERT and TONE,

Circuit Judges.

TONE, Circuit Judge. Two years ago we reversed a

meg ani injunction order against infringement of

iller Brewing Company’s trademark “LITE” for beer.

We did so on the ground that “because ‘light’ is a’ generic

or common descriptive word when applied to beer,

neither that word nor its agwng equivalent may be ap-

propriated as a trademark for beer.” Miller Brewing Co.

v. G. Heileman Brewing Co., 561 F.2d 75, 77 (7th Cir.

1977), cert. denied, 434 U.S. 1025 (1978). The principal

question before us now is whether that determination in

an interlocutory appeal should be given preclusive effect

in another trademark action by Miller to enforce the

same trademark against a different defendant, Jos.

2 Appendia A No. 78-2011

Schlitz Brewing Company. Holding that it should, the

district court entered a summary judgment against

Miller, Miller Brewing Co. v. Jos. Schlitz Brewing Co.,

449 F.Supp. 852 (E.D. Wis. 1978). The judgment is af-

firmed with respect to the trademark claims and

vacated with respect to a joined unfair competition

claim, and the case is remanded for further proceedings.

The present action was filed by Miller one year earlier

than the Heileman action, and extensive discovery and

other trial preparation took place during that year.

Nevertheless, Miller chose to seek a preliminary injunc-

tion in the Heileman case rather than in this or any of

six other cases it had earlier filed against other com-

petitors. After our decision reversing the preliminary in-

junction in Heitleman, Schlitz, which had filed a brief

amicus curiae in this court in Heileman, moved in this

case for summary judgment on the ground of collateral

estoppel..with respect to all claims of the complaint ex-

cept those for knowingly false disparagement of a com-

petitor’s product.

The district court granted the motion, holding that the

doctrine of collateral estoppel was applicable under

Blonder-Tongue Laboratories, Inc. v. University of Il-

linois Foundation, 402 U.S. 313 (1971), to preclude

Miller from litigating further, because this court in

Heileman, although deciding an interlocutory appeal,

had “found an_ insuperable obstacle to Miller's

maintenance of the litigation.” Therefore, under the

principles laid down in Mast, Foos & Co. v. Stover Mfg.

Co., 177 U.S. 485 (1900), and CES Publishing Corp. v.

St. Regis Publications, Inc., 531 F.2d 11 (2d Cir. 1975), a

final judgment without further litigation was ap-

propriate. Miller’s argument that it had not had a full

and fair opportunity in Heileman to litigate the question

whether “light” or “LITE” is generic was rejected. 449

F.Supp. at 855. In granting summary judgment the dis-

trict court ordered the Commissioner of Patents and

Trademarks to cancel the trademark registrations of the

mark, and, acting pursuant to Rule 54(b), Fed. R. Civ.

P., found no just reason for delay and made the judg-

ment final with respect te all claims that depended on

ee) RNC ORs

No. 78-2011 Appendia A 3

the validity of the trademark. 449 F.Supp. at 855-856.

This appeal followed.

Availability of Collateral Estoppel

to a Non-Party to the Prior Case.

The fact that Schlitz was not a party to the Heileman

case will not preclude giving collateral estoppel effect to

a determination necessarily made in that case, if Miller

had a full and fair TS to litigate on the issue

determined. Blonder-Tongue Laboratories, Inc. v. Uni-

versity of Illinois Foundation, supra, 402 U.S. at 332-

334. Whether a full and fair opportunity to litigate was

afforded in the other action depends, Blonder-Tongue

teaches, upon several factors, including who chose the

forum, incentive to litigate, whether (speaking of the pa-

tent issues before the court in that case) “the prior case

was one of those relatively rare instances where the

court wholly failed to grasp the technical subject matter

and issues in suit,” and “whether without fault of his

own the [party against whom preclusion is sought] was

deprived of crucial evidence or witnesses in the first

litigation.” Jd. at 333. And, “{iln the end, decision will

necessarily rest on the trial courts’ sense of justice and

equity.” Id. at 334.

Although the opinion in Blonder-Tongue demonstrates

that the reasons for eliminating the doctrine of mutuali-

ty of estoppel weigh especially heavily in patent cases,

they are se generally. E.g., Samuel C. Ennis &

Co. v. Woodmar Realty Co., 542 F.2d 45, 49 (7th Cir.

1976). The Restatement (Second) of Judgments § 88 (Tent.

Draft No. 3, 1976) states,

A party precluded from relitigating an issue with

an opposing party, . . . is also precluded from doing

so with another person unless the fact that he lack-

ed full and fair opportunity to litigate the issue in

the first action or other circumstances justify afford-

ing him an opportunity to relitigate the issue.

The “other circumstances to which consideration

should be given” are those applicable in deciding

4 Appendia A No. 78-2011

whether the opposing party in the prior case should be

allowed to relitigate, id. § 68.1, and additional ones

applicable when mutuality of estoppel is lacking, id.

Bes Because of the nature of Miller’s suits against

eileman and Schlitz and the identity of the central

issue in both, none of these “other circumstances”

described in the Restatement are present in the case at

bar, so the test to be applied is whether Miller had a full

and fair opportunity to litigate, which is to be deter-

mined by applying the factors stated in Blonder-Tongue.

See also Restatement, supra, § 68.1, Comment 3, § 88,

Comment 0.!

A. Who Chose the Forum

Miller chose the forum in the Heileman case.

Moreover, when Miller sued Heileman the instant action

against Schlitz had been pending for one full year, dur-

ing which extensive discovery and trial preparation had

been conducted by both Miller and Schlitz. Never-

theless, Miller had not sought a preliminary in-

junction against Schlitz. Simultaneously with the filing

of the Heileman complaint, however, Miller moved for a

reliminary injunction against Heileman. Whatever the

itigation strategy that motivated Miller’s decision to

seek a preliminary injunction and to seek it against

Heileman rather than Schiitz despite the extensive

preparation that had already gone into the Schlitz case,

that decision entailed the risk, familiar to any ex-

perienced litigation lawyer, that the decision on the

preliminary injunction might have the effect of deter-

mining the merits, either as a practical matter or legal-

ly, through law of the case. In addition, Miller assumed

' There is arguably a difference of degree between the

Blonder-Tongue standard of whether the court “wholly failed

to grasp the technical subject matter and issues in suit” and

the “plainly wrong” standard of the Restatement, Comment )

(Tent. Draft No. 3, p. 169). Any distinction that may exist is

immaterial in this case, not only because Blonder-Tongue is

the standard to be applied of a federal court if there is a

difference but because we believe our earlier decision to be

correct.

Oe ee

No. 78-2011 Appendia A 5

the risk that the decision might determine the results of

its other “LITE” beer cases through stare decisis or,

since decisions on preliminary injunctions may have a

preclusive effect, see Part II, infra, through collateral

estoppel. The effect of an adverse determination on other

cases could not have come as a surprise to Miller.”

B. Incentive to Litigate

The factor of incentive to litigate requires little discus-

sion. Miller had the same incentive to litigate in the

Heileman case that it has in the case at bar, an incentive

that must have been enhanced by the knowledge that

what it had selected as its pilot proceeding, a

eige goer injunction motion against Heileman, would

e of critical importance to the case at bar and all its

other pending “LITE” cases against competitors. See

note 2, supra.

C. The Court’s Grasp of the Subject

Matter and Issues in Heileman

The next factor to be considered is whether “the prior

case was one of those relatively rare instances where the

courts wholly failed to grasp the technical subject

matter and issues in suit ....” Blonder- e

Laboratories, Inc. v. University of Illinois Foundation,

supra, 402 U.S. at 333. Miller contends that it was.

* Shortly before the oral argument in Heileman, Miller filed

a brief with the Judicial Panel on Multidistrict Litigation in

prance it referred to the interlocutory appeal in Heileman and

stated,

The decision on that appeal could_be a major step in

resolving many or all of the “Lite Beer” cases.

After our decision, the Panel sustained Miller’s position that

the cases should not be transferred to a single district, noting

in its opinion that the Heileman decision “could have a dis-

positive effect upon all other actions, at least regarding the

issue of trademark validity, because of the likelihood that par-

ties in the remaining actions” would assert collateral estoppel

under Blonder-Tongue.

* ett Cn ential a ates cl Raat

ae cB I tt Wa a lc

6 Appendix A No. 78-2011

The kind of judicial failure described in Blonder-

Tongue is not merely reaching a wrong result and is, we

hope, unlikely to occur except when a court is faced with

esoteric and complex subject matter beyond its ex-

perience and comprehension, which the Supreme Court

thought might occur in some patent cases.’ It did not

occur in the Heileman case.‘ 403 U.S. at 333. The subject

matter was not “technical,” see note 3, supra, and was

rasped by the court. The controlling issue was simple.

th parties agreed that the applicable law was correct-

ly stated by hea Friendly in Abercrombie & Fitch Co.

v. Hunting World, Inc., 537 F.24 4, 9-11 (2d Cir. 1976).5

In taking this position, the parties made no distinction

between the statutory and common law standards. In

summarizing that applicable law, Miller expressly

acknowledged® that if “light” was generic no trademark

3 The failure-to-grasp factor, which refers to “technical” sub-

ject matter and issues, can be appreciated only by placing it

within the context of the Blonder-Tongue opinion. In that case

the defendant asserted the doctrine of collateral estoppel to

a sina relitigation of the validity of a patent. The Court,

fore stating the factor in question, noted “that some courts

have frankly stated that patent litigation can present issues so

complex that legal minds, without pa lg grounding in

science and technology, may have difficulty in emg 50 eci-

sion.” 402 U.S. at 331 (footnote omitted). See Kaiser Industries

Corp. v. Jones & Laughlin Steel Corp., 515 F.2d 964, 983-984

(3d _Cir.), cert. denied, 423 U.S. 876 (1975). The “LITE”

trademark litigation does not involve comparably technical

subject matter and issues.

4 Perhaps in recognition of the difficulty of persuading the

same court that decided the earlier case that it had failed to

grasp the ‘ie <* subject matter and issues in suit, Miller's

presentation blurs the distinction between failure to grasp

and incorrect decision and argues that the Heileman decision

was wrong rather than discussing any failure to grasp subject

matter or issues.

° In its brief Miller not at length and indorsed as “setting

forth the law applicable to this case with precision, scholarship

and clarity” the explanation of the four categories of terms in

the Abercrombie & Fitch opinion.

6 After indorsing the Abercrombie & Fitch summary, Miller

stated that the first category of trademarks “is the generic,

(Footnote continued on following page)

nena ale

— semtate Ade ono

No. 78-2011 Appendix A 7

protection could be acquired for it.’ The issue then

which Miller as well as Heileman represented to be con-

trolling and which we treated accordingly was whether

5 continued

called ‘common descriptive name’ in the Lanham Act, which

can never become a trademark.” [Appellee’s Brief in No. 77-

1246, pp. 13-14.] Then, after listing the other three categories

and noting that the district court had held “LITE” to be

“suggestive for less filling, reduced calorie beer, phone

descriptive of certain beers in certain other respects,” while

the Patent and Trademark Office had held the word to be

descriptive in 1968 [id. at 14-15], Miller stated,

What matters, however, is not whether LITE is

suggestive or descriptive; either way it is susceptible of

appropriation as a trademark for less filling, reduced

calorie beers. The question is whether it is generic for

such beer.

[Jd. at 15.]

Similarly, in a brief in this court opposing Heileman’s mo-

tion for stay pending appeal, Miller quoted the same passage

from Abercrombie itch and then stated,

To summarize, very simply, if LITE (the phonetic

equivalent of “light”) for less-filling, low calorie beer is

generic, Heileman may use LIGHT for such product in

any manner it chooses. If LITE is descriptive then it ma

be protected only if it has acquired secondary meaning. If

LITE is mare: it may be protected... . If LITE is

arbitrary—which nobody suggests that it is—Heileman

could not use it, or, presumably, LIGHT, at all.

’ This was in conformity with the Abercrombie & Fitch ex-

position of the law, in the course cf which Judge Friendly

states that “even proof of secondary meaning, by virtue of

which some ‘merely descriptive’ marks may be registered,

cannot transform _a generic term into a subject for a

trademark.” 537 F.2d at 9. Accord, Henry Heide, Inc. v.

George Ziegler Co., 354 F.2d 574, 576 (7th Cir. 1965). See also

CES Publishing Corp. v. St. Regis Publications, Inc., supra,

531 F.2d at 13, cited in Abercrombie & Fitch:

To allow trademark protection for generic terms . . . even

when these have become identified with a first user,

would grant the owner of the mark a monopoly, since a

competitor could not describe his goods as what they are.

Cf. Telechron, Inc. v. Telicon Corp., 198 F.2d 903, 906 (3d Cir.

1952); see also 3 Restatement of Torts § 721, Comment a (1938);

(Footr ste continued on following page)

8 Appendia A No. 78-2011

“light” is generic. The court in Heileman did not fail to

grasp the subject matter and the issue in suit.’

continued

cf. Kellogg Co. v. National Biscuit Co., 305 U.S. 111, 116-117,

121-122 (1938), with which compare id. at 118-119.

We note that a literal reading of the Lanham Act might

lead to the conclusion that a generic name that has acquired a

secondary meaning is entitled to registration. Section 2, 15

U.S.C. § 1052, provides that no trademark “shall be refused

registration on the principal register on account of its nature,”

og in four described circumstances stated in paragraphs

(a) through (d), none of which is pertinent for present pur-

poses, or in circumstances described in paragraph (e), which

include that the trademark “when oy oer to the goods of the

applicant is merely descriptive or deceptively descriptive of

them.” The section then, in clause (f), provides that ‘elscent

as expressly excluded in paragraphs (a), (b), (c) and (d) of this

section,” nothing in the Act shall prevent the registration of a

mark that “has become distinctive of the applicant’s goods in

commerce.” Abercrombie & Fitch interprets this language as

only allowing registration of merely escriptive terms that

have acquired secondary meaning but not of “generic marks.”

537 F.2d at 9. That opinion relies for this conclusion on § %c),

15 U.S.C. § 1064(c), which provides for cancellation of a

registered mark that “becomes the common descriptive name

of an article or substance,” og Hc), 15 U.S.C. § 1064(c). The

word “becomes” is not viewed in either Abercrombie & Fitch

or J. Kohnstam, Ltd. v. Louis Marx and Co., 280 F.2d 437, 440

(C.C.P.A. 1960), on which the former relies, as excluding a

word that is already generic before the applicant uses it.

Elsewhere the Act 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,” § 15(4), 15

U.S.C. § 1065(4). Although the Act refers to a common

descriptive name, we believe, as explained in the Hetleman

opinion, 561 F.2d at 80, that a common descriptive adjective

that is a part of the common descriptive name is governed by

the same principle.

8 Miller also argues that whether “LITE” was generic was

not focused upon in the district court in Heileman. This is

belied by the description of the district court’s holding in the

brief Miller submitted to this court in that gues. Lage?

Auer Brewing Co. v. G, Heileman Brewing Co., No.

te ae OE a em La Ue Nal,

Sater A

No. 78-2011 Appendix A 9

D. Deprivation of Crucial Evidence

The last factor mentioned in Blonder-Tongue is

whether Miller was deprived of crucial evidence or

witnesses in the prior case.

Miller was not foreclosed from offering any evidence

it chose in support of its motion for preliminary injunc-

tion in the Heileman case. While Miller now complains

that there was no evidentiary hearing in that case, it did

not seek one, choosing rather to present its case by af-

fidavits, which of course allowed counsel to participate

in the composition of the testimonial statements. Indeed,

when Heileman referred in its brief in this court to the

absence of an evidentiary hearing, Miller responded in

its brief that “Heileman . . . has yet to suggest what

such a hearing would have produced; there is no signifi-

cant fundamental fact in dispute.” [Appellee’s Brief in

No. 77-1246, p. 53.] Miller also disagreed with the argu-

ment in Schlitz’ brief amicus curiae in that case that

“more evidence on the use of ‘light’ in the past is re-

quired.” [/d. ]

The only specific evidence Miller points to as not hav-

ing been in the Heileman record is a report of a survey

of “988 beer drinkers” taken in March 1978, after our

decision and while the motion for summary judgment

was pending in the case at bar. A similar, earlier con-

sumer survey was before us in Heileman, 561 F.2d at 77,

but, even assuming that the new survey is somehow

better than the old, it is irrelevant.

The survey evidence could have only two purposes: to

prove the meaning of the word “light” or to prove that

consumers have come to associate that word with

Miller’s product. As for the first purpose, the meaning

of a familiar English word of Anglo-Saxon heritage can

hardly be established by a survey of 988 beer drinkers

who had endured long exposure to Miller’s advertising

of the word in connection with the Miller name. When

Judge Learned Hand said that whether a word is

generic depends on what “buyers understand by the

word,” Bayer Co. v. United Drug Co., 272 F. 505, 509

(S.D.N.Y. 1921), he was referring to a coined word for a

a I IY aR Nas en

10a

10 Appendia A No. 78-2011

commercial product that was alleged to have become

generic through common usage. He was not suggesting

that the meaning of a familiar, basic word in the

English vocabulary can depend on associations the word

brings to consumers as a result of advertising.

This brings us to the second possible purpose of

Miller’s new survey evidence, to prove that consumers

have come to associate the word with Miller’s product.

Proof of that fact would not advance Miller’s trademark

claim, because, as Miller acknowledged in Heileman, if

a word is generic it “can never become a trademark.”

See note 8; see also 561 F.2d at 79. The March 1978 sur-

vey is therefore not essential evidence of which Miller

was deprived in the earlier proceeding.

As we noted above, the Supreme Court said in

Blonder-Tongue that the decision, to be made through

the application of the foregoing factors, of whether a

party has had a full and fair chance to litigate in the

earlier case “will necessarily rest on the trial court’s

sense of justice and equity.” 402 U.S. at 334. Having

carefully reviewed the trial court’s decision in light of

the relevant factors, we conclude that it is correct.

II.

The Interlocutory Form of the Heileman Decision

The fact that our judgment in Heileman was rendered

in an appeal from a preliminary injunction order does

not preclude application of collateral estoppel. Although

such a judgment will ordinarily not foreclose subsequent

litigation on the merits, Berrigan v. Sigler, 499 F.2d 514,

518 & n.11 (D.C. Cir. 1974); 11 Wright & Miller, Federal

Practice and Procedure, § 2962 at 630-631 & n.29 (1973),

it will be given preclusive effect if it is necessarily based

upon a determination that constitutes an insuperable

obstacle to the plaintiff's success on the merits, cf. Mast,

Foos & Co. v. Stover Mig. Co., supra, 177 U.S. at 495;

Deckert v. Independence Shares Corp., 311 U.S. 282, 287

(1940); CES Publishing Co. v. St. Regis Publications,

Inc., supra, 531 F.2d at 15; Wright & Miller, Federal

Practice and Procedure, supra, § 2962 at 629 & n.27; 7

lla

No. 78-2011 Appendia A 11

Moore's Federal Practice 165.21 at 65-156 to 65-157 (2d

ed. 1978).

To be “final” for purposes of collateral estoppel the

decision need only be immune, as a practical matter, to

reversal or amendment. “Finality” in the sense of 28

U.S.C. § 1291, is not required. Judge Friendly said in

Lummus Co. v. Commonwealth Oil Refining Co., 297

F.2d 80, 89 (2d Cir. 1961), cert. denied, 368 U.S. 986

(1962),

Whether a judgment, not “final” in the sense of 28

U.S.C. § 1291, ought nevertheless be considered

“final” in the sense of precluding further litigation

of the same issue, turns upon such factors as the

nature of the decision (i.e., that it was not avowedly

tentative), the adequacy of the hearing, and the op-

portunity for review. “Finality” in the context here

relevant may mean little more than that the litiga-

tion of a particular issue has reached such a stage

that a court sees no really good reason for permit-

ting it to be litigated again.

Zdanok v. Glidden Co., 327 F.2d 944, 955 (2d Cir.), cert.

denied, 377 U.S. 934 (1964). See also Kurlan v. Com-

missioner, 343 F.2d 625, 628-629 n.1 (2d Cir. 1965);

United States ex rel. DiGiangiemo v. Regan, 528 F.2d

1262, 1265 (2d Cir. 1975), cert. denied, 426 U.S. 950

(1976).

Restatement (Second) of Judgments § 41 (Tent. Draft

No. 1, 1973) has adopted the view of the Second Circuit.

See id. § 41, Reporter’s Note to Comment g. Section 41

states:

The rules of res judicata are applicable only when

a final judgment is rendered. However, for pur-

poses of issue preclusion (as distinguished from

merger and bar), “final judgment” includes any

rior adjudication of an issue in another action

etween the parties that is determined to be suf-

ficiently firm to be accorded conclusive effect.

Restatement, supra, § 41, Comment g, discusses the fac-

tors relevant to the determination of “firmness” called

for in § 41 as follows:

Oe eR ht el a

12a

12 Appendia A No. 78-2011

[T]he court should determine that the decision to be

carried over was adequately deliberated and firm

even if not final in the sense of forming a basis for a

gr se already entered. This preclusion should

refused if the decision was avowedly tentative.

On the other hand, that the parties were fully

heard, that the court yo its decision with a

reasoned opinion, that the decision was subject to

appeal or was in fact reviewed on appeal, are fac-

tors supporting the conclusion that the decision is

final for the purpose of preclusion.

These standards are satisfied by the Heileman deci-

sion. For purposes of the law of collateral eke that

decision was a final determination that “LITE” is

generic and therefore not entitled to trademark protec-

tion. See Restatement, supra, § 41, Comment g, Illustra-

tion 1. That determination is an insuperable obstacle to

Miller’s claims based upon its ownership of trademark

rights in “LITE” in that case, CES Publishing — v.

St. Regis Publications, Inc., supra, 531 F.2d 11, and all

other cases.

III.

Cancellation of Registration

Miller argues that even if “light” is generic its

trademark registrations of “LITE” should not be

ordered cancelled, because the misspelled version is not

generic. Heileman is said to have determined “at most,”

only that “light” is generic, since Heileman only used the

latter spelling. Moreover, only Miller and its predecessor

Meister Brau have used “LITE,” so it cannot be generic,

says Miller.

As we pointed out in Heileman, however, 561 F.2d at

79, a generic term cannot be appropriated through the

device of misspelling it. This rule has been applied to a

word registered under an earlier trademark statute,

Standard Paint Co. v. Trinidad Asphalt Mfg. Co., 220

U.S. 446, 455 (1911), and no reason has been suggested

why it should be inapplicable to a word registered under

the Lanham Act. The district court did not err in order-

ing the registrations cancelled.

Pe eS ee eee

13a

No. 78-2011 Appendix A 13

IV.

Protection from Unfair Competition

In addition to alleging trademark infringement,

Miller included in its somes, as amended, a claim

that Schlitz is “palming off [its] product as Miller’s.”

The district court dismissed this claim as well as the

trademark claims on the ground of collateral estoppel.

In its brief before us Miller ties its unfair competition

argument to its trademark claim, arguing that, even if

generic, “LITE” is entitled to some protection if it can

be shown that some consumers associate that word with

Miller. In three of the cases on which Miller relies, a

formerly exclusive trademark right to a proper name or

a coined word had been lost ause the name had

become generic, and the court required a latecomer us-

ing that word to state the source of the product. Singer

Myy. Co. v. June Mfg. Co., 163 U.S. 169, 186 (1896); King-

Seeley Thermos Co. v. Aladdin Industries, Inc., 321 F.2d

577, 581 (2d Cir. 1963); DuPont Cellophane Co. v. Waxed

Products Co., 85 F.2d 75, 82 (2d Cir.), cert. denied, 299

U.S. 601 (1936), 304 U.S. 575 (1938). The other case,

Kellogg Co. v. National Biscuit Co., 305 U.S. 111, 118-

119 (1938), does contain a statement supporting the

argument that, even in the case cf a common generic

name, if many le have come to associate the name

with the plaintiff, the defendant, in exercising its right

to use that name, should be required to “use reasonable

care to inform the public of the source of its product.”

Id. at 119. In the case at bar, the only alleged Schlitz

use, “Schlitz Light Beer,” identifies Schlitz as the source

of the product.

The absence of trademark protection does not mean

that Miller must submit to a competitor’s palming off of

its product as the product of Miller. The difficulty with

its palming off claim, as presently alleged, is that it is

based upon the same facts as the trademark infringe-

ment claims. These facts are in substance that Miller

sold large quantities of light beer under the trademark

“LITE,” expended large sums to promote that

trademark, and thereby succeeded in gaining recogni-

tion for the word among beer drinkers as the name for

eee ee er ae

14a

14 Appendix A No. 78-2011

Miller’s light beer; and that Schlitz intends to sell a beer

labelled “Schlitz Light Beer,” which will cause consumer

confusion because of the similarity of “LITE” and

“Light,” which are pronounced identically. Miller does

not allege that consumer confusion or a likelihood

thereof arises from failure of Schlitz adequately to iden-

tify itself as the source of its beer; from a confusingly

similar dress used by Schlitz for its beer, which might

result from such factors as the label’s style, the relative

size of words in the label, the configuration and color of

the label, and even the misspelling of “light” in the

label; from Schlitz’ use of advertising calculated to lead

to confusion; or from any cause except Schlitz’ use of the

word “light” in the product name “Schlitz Light Beer.”

Since Schlitz is entitled to use that word in describing

its beer, that use alone cannot give rise to an unfair

competition claim. Cf. Kellogg Co. v. National Biscuit

Co., supra, 305 U.S. at 116-117, 121-122. Accordingly,

in view of the facts on which the nalming off claim is

based, the district court correctly -oncluded that what

had been alleged was not sufficient to constitute unfair

competition.

Nevertheless, in view of general allegations concern-

ing customer confusion incorporated by reference into

the a off allegations of the amended complaint,

the liberal rules of federal pleading, and the fact that

certain claims are still pending in the district court and

presumably must be tried, we think it would be unjust

to foreclose Miller from amending to state an unfair

$ For examples of facts not establishing trademark infringe-

ment but nevertheless held to amount to unfair competition,

see Kentucky Fried Chicken Corp. v. Diversified Packaging

Poa 549 F.2d 368, 382-386 (5th Cir. 1977); American Safet

Table Co. v. Schreiber, 269 F.2d 255, 275-276 (2d Cir. 1959); of

Midwest Plastics Corp. v. Protective Closures Co.. 285 F.2d

747, 750 (10th Cir. 1960).

Compare Standard Paint Co. v. Trinidad Asphalt Co., 220

U.S. 446, 461 (1911) (decided under Trademark Act of 1905),

with Armstrong Paint & Varnish Works v. Nu-Enamel .~

305 U.S. 315, 335 n.24 (1938) (decided under 1920 Act). The

Nu-Enamel case involved a term the Court viewed as

“descriptive.” See Abercrombie & Fitch Co. v. Hunting World,

Inc., supra, 5387 F.2d at 9 n.10.

lida

No. 78-2011 Appendia A 15

competition claim if it has one. Such a claim would

presumably require little if any additional discovery and

could be tried with the claims that are still pending in

the district court.!! Accordingly, with respect to the

palming off claim alleged in the amended complaint, the

summary judgment is vacated and the case is remanded

for further proceedings.

The judgment of the district court is affirmed in part

and vacated in part, and the case is remanded for any

further proceedings required by this opinion.

AFFIRMED IN PART; VACATED AND REMANDED IN PART.

A true Copy:

Teste:

Clerk of the United States Court of

Appeals for the Seventh Circuit

'!_ As to jurisdiction, § 43(a) of the Lanham Act, 15 U.S.C.

§ 1125(a), creates a limited federal remedy for unfair competi-

tion. See L’Aiglon Apparel, Inc. v. Lana Lobell, Inc., 214 F.2d

649, 650-651 (3d Cir. 1954); Alfred Dunhill Ltd. v. Interstate

Cigar Co., 499 F.2d 232, 236 (2d Cir. 1974). To the extent that

conduct is alleged that would not be actionable under § 43(a

but would be under state law, pendent jurisdiction woul

presumably exist. We express no definitive opinion on these

matters or concerning choice of law over any state law claim

that might be alleged, as to which, see 1A Moore's Federal

Practice 40.326 (2d ed. 1978).

USCA 4412—Midwest Law Printing Co., Inc., Chicago—9-6-79—300

16a

APPENDIX B

—_—EEE

Minter Brewine Company,

Plaintiff,

Jos. Scuuitz Brewine Co.,

Defendants.

No. 75-C-636.

United States District Court,

EK. D. Wisconsin.

April 6, 1978.

DECISION AND ORDER

Myron L. Gorpon, District Judge.

The defendant has filed a motion for partial summary

judgment dismissing those counts of the plaintiff’s com-

plaint which depend upon the plaintiff’s ownership of the

trademark ‘‘Lite’’ for its beer. The defendant’s motion

also seeks an order directing the Commissioner of Patents

and Trademarks to rectify the register by cancelling the

plaintiff’s registrations of ‘‘Lite.’’ The defendant has also

filed a motion to amend its answer. The motion to amend

is not opposed by the plaintiff and will therefore be

granted. The plaintiff has requested leave to file a

rebuttal brief to answer new matters raised in the defend-

ant’s reply brief. Such request is granted, and the rebuttal

nh Pte inal Ko

17a

Appendix B

brief, which has been received by the court, will be consid-

ered in the instant decision.

The portions of the amended complaint to which the

defendant’s motion is directed include the first two claims

for relief, seeking injunctive relief and damages, respec-

tively, for the defendant’s alleged infringement of the

plaintiff’s registered trademark ‘‘Lite;’’ the third and

fourth claims for relief, seeking injunctive relief and dam-

ages, respectively, for the defendant’s alleged violation of

the Lanham Trademark Act, 15 U.S.C. §1125(a); and

parts of the fifth and sixth claims for relief, which seek in-

junctive relief and damages, respectively, for various

forms of common law unfair competition. The only claims

of the amended complaint which would survive the defend-

ant’s motion, if granted, are the portions of claims 5 and 6

which seek injunctive relief and damages for knowingly

false disparagement of the plaintiff’s product.

The defendant’s motion is based on alternative grounds.

First, relying on the collateral estoppel doctrine of

Blonder-Tongue v. University of Illinois Foundation, 402

U.S. 313, 91 S.Ct. 1434, 28 L.Ed.2d 788 (1971), the defend-

ant contends that the decision of the court of appeals for

the seventh circuit in Miller Brewing Co. v. G. Heileman

Brewing Co., 561 F.2d 75, cert. denied, 434 U.S. 1025, 98

S.Ct. 751, 54 L.Ed.2d 772 (1977), forecloses all of the plain-

tiff’s claims which depend upon the plaintiff’s ownership

of the trademark ‘‘Lite.’’ Second, the defendant argues

that it is entitled to partial summary judgment even with-

out the benefit of the collateral estoppel doctrine based on

the record in this case.

Although the plaintiff opposes summary judgment on

both grounds, the parties agree that if summary judgment

is granted because ‘‘Lite’’ is a generic term, the defend-

ant’s request for an order cancelling the plaintiff’s trade-

18a

Appendix B

mark registration nos. 905,236, 929,276, and 929,277, should

be granted.

In my judgment, the defendant is entitled to partial

summary judgment based on the doctrine of collateral

estoppel and the Heileman case.

The plaintiff’s position is that the court of appeals’

decision in Heileman only reversed the district court’s

grant of a preliminary injunction and therefore did not

foreclose a trial in either the Heileman case or, a fortiori,

in this case. From a submission of the defendant dated

February 16, 1978, it appears that Heileman is pending

before the district court on an order to show cause why

judgment should not be entered for the defendant.

As a general rule, the decision of a district court

or court of appeals at the preliminary injunction stage

does not preclude further litigation of the merits of the

case. However, if the court reviews the merits of the case

and discovers an insuperable obstacle to the plaintiff’s ac-

tion, the action may be dismissed without a trial. Mast,

Fous & Co. v. Stover Manufacturing Co., 177 U.S. 485, 20

S.Ct. 708, 44 L.Ed. 856 (1900).

In CES Publishing Corp. v. St. Regis Publications, Inc.,

531 F.2d 11 (2d Cir. 1975), the court of appeals reviewed a

district court’s denial of a motion for a preliminary injunc-

tion in a trademark action. The district court had held

that the trademark ‘‘Consumer Electronics,’’ as applied to

a trade magazine for consumers of electronic equipment,

is a generic term incapable of trademark protection. The

district court denied the plaintiff’s motion for a prelim-

inary injunction but declined to grant the defendant’s mo-

tion to dismiss, believing that proof of secondary meaning

might sustain the plaintiff’s trademark claims. Finding

the latter determination to be erroneous, the court of Ap-

19a

Appendia B

peals instructed the district court t. dismiss the complaint

with prejudice as to the federal cla..ns, stating:

‘‘Although we have no jurisdiction of defendant’s

cross-appeal since the denial of its motions to dismiss

was not a final judgment, 28 U.S.C. § 1291, it has been

clear since Smith v. Vulcan Iron Works, 165 U.S. 518,

17 S.Ct. 407, 41 L.Ed. 810 (1897), that, as stated in

Metropolitan Water Co. v. Kaw Valley Draimage Dis-

trict, 223 U.S. 519, 523, 32 S.Ct. 246, 248, 56 L.Ed. 533

(1912), ‘on appeal from a mere interlocutory order,

the cireuit court of appeals might direct the bill to be

dismissed if it appeared that the complainant was not

entitled to maintain its suit.’ See also Meccano, Ltd.

v. John Wanamaker, 253 U.S. 136, 140-41, 40 S.Ct. 463,

64 L.Ed. 822 (1920).’’ 531 F.2d at 15.

Unquestionably, a dismissal under such circumstances

is a drastic remedy and must be employed only where clear-

ly appropriate. The question, therefore, is whether the

court of appeals in Heileman reviewed the merits of the

plaintiff’s claim and found an insuperable obstacle to Mil-

‘ler’s maintenance of the litigation.

The court’s unambiguous holding confirms that Miller’s

trademark claims predicated on its ownership of the mark

‘‘Lite’’ are fatally flawed:

‘*We hold that, because ‘light’ is a generic or common

descriptive word when applied to beer, neither that

word nor its phonetic equivalent may be appropriated

as a trademark for beer.’’ 561 F.2d at 77.

In its summary of trademark law the court noted that a

generic or common descriptive term ‘‘cannot become a

trademark under any circumstances.’’ 561 F.2d at 79.

Thus, the court’s unequivocal categorization of ‘‘light’’

20a

Appendia B

and its phonetic equivalent ‘‘Lite’’ as generic or common

descriptive terms created an insuperable obstacle to Mil-

ler’s successful prosecution of its suit.

It is significant that the court of appeals reached the

merits while recognizing that the factual record in the

Heileman suit was less expansive than the record in the

case at bar:

‘‘The record before us (although less complete than

that in at least one of the other pending cases [refer-

ring, in a footnote, to this case]) and facts of which

we may take judicial notice, including generally ac-

cepted English usage, enable us to conclude that ‘light’

is a generic or common descriptive term when used

with ‘beer.’ ’’ 561 F.2d at 80.

Furthermore, the court did not state that probability of

success has not been established by Miller, but rather

stated that ‘‘probability of success cannot be established.”’

561 F.2d at 81 (emphasis supplied). I am persuaded that

the court of appeals did not merely find the district court’s

grant of a preliminary injunction to be erroneous, but,

rather, it proceeded to reach the merits and to find a fatal

impediment to the plaintiff’s trademark claims predicated

on the mark ‘‘Lite.’’

The plaintiff argues that the court of appeals in Heile-

mam could not have intended to foreclose further litigation

of the trademark claims without expressly dismissing those

claims in its mandate. However, the mandate in Heileman,

a copy of which has been supplied in an affidavit submitted

by the defendant, reversed the district court’s order ‘‘in ac-

cordance with the opinion of this court.’’ The absence of

an express order for dismissal in the court of appeals’

mandate does not prevent dismissal under these circum-

stances. Metropolitan Water Co. v. Kaw Valley Drainage

District, 223 U.S. 519, 523, 32 S.Ct. 246, 56 L.Ed. 533 (1912).

84 Pe ee ‘ =

21a

Appendix B

The remaining question, thus, is whether Miller is

bound by the Heileman decision as to its claims in this ac-

tion under the standards set forth in Blonder-Tongue Lab-

oratories v. Unwersity of Illinois Foundation, 402 U.S. 313,

91 §.Ct. 1434, 28 L.Ed.2d 788 (1971). Miller contends that

it is not estopped because it did not have a ‘‘full and fair

opportunity to litigate’’ the question in Heileman whether

‘‘light’’ or ‘‘Lite’’ are generic terms. Blonder-Tongue, su-

pra, 402 U.S. at 329, 91 S.Ct. 1434. It is urged that because

the Heileman proceedings were at the preliminary injunc-

_ tion stage, Miller could not have had a full opportunity to

litigate the question.

I am not convinced that the plaintiff has not had a

full opportunity to present its claim. To the extent that

the plaintiff’s argument is premised on the purported im-

propriety of a dismissal of its case at the preliminary in-

junction stage, the argument is defeated by what has pre-

viously been stated in this decision. Moreover, the plain-

tiff had a full opportunity to place its position before the

court of appeals in Heileman through briefing, oral argu-

ment, and a petition for rehearing. For these reasons, I

believe that the plaintiff is estopped from maintaining the

trademark claims in this action. In view of the court of

appeals’ determination that ‘‘light’’ is a generic term in-

capable of trademark protection, the defendant’s request

for an order directing the Commissioner of Patents and

Trademarks to cancel the plaintiff’s registrations of

‘‘Lite’’ will be granted pursuant to 15 U.S.C. § 1119.

There being no just reason for delay, an order will be

made directing the entry of final judgment at this time.

Therefore, Ir Is OrnpERep that the defendant’s motion

for leave to file an amended answer be and hereby is

granted.

Sounaaeanane?

228

Appendix B

Ir Is Atso Orperep that the defendant’s motion for

partial summary judgment be and hereby is granted.

It Is FurtHer Orpverep that the Commissioner of Pat-

ents and Trademarks rectify the register by cancelling

trademark registration nos. 905,236, 929,276, and 929,277.

Ir Is FurtHer Orperep that judgment be entered dis-

missing the first four claims for relief and the portions of

the fifth and sixth claims for relief which depend on the

plaintiff’s ownership of the trademark ‘‘Lite.’’

23a

APPENDIX C

Opinion of the United States Court of Appeals

for the Seventh Circuit

IN THE

UNITED STATES COURT OF APPEALS

For tHe SEventH Circuit

No. 77-1246

Mruter BrEwrna Company,

Plaintiff-Appellee,

G. Hememan Brewine Company, Inc.,

Defendant-Appellant.

a ee

Appeal from the United States District Court for the

Western District of Wisconsin

No. 76-C-584—James E. Doyle, Judge.

Arauep Apri 26, 1977—Dercwerp Aveust 17, 1977

Before Tonz, Baver and Woon, Circuit Judges.

Tong, Circuit Judge. This appeal presents the ques-

tion whether a misspelled version of the word ‘‘light’’

can become a trademark for a ‘‘less filling, low-calorie

24a,

- Appendia C

beer.’’ The District Court answered the question affirm-

atively and, based on that determination, granted a pre-

liminary injunction, which this court has stayed pending

appeal. We hold that, because ‘‘light’’ is a generic or

common descriptive word when applied to beer, neither

that word nor its phonetic equivalent may be appropriated

as a trademark for beer. We therefore reverse the pre-

liminary injunction order.

_ In May of 1967 a now defunct Chicago brewer, Meister

Brau, Inc., began making and selling a reduced calorie,

reduced carbohydrate beer under the name ‘‘LITE.”’

Late in 1968 that company filed applications for registra-

tion of ‘‘LITE”’ as a trademark on the principal register

in the United States Patent Office, which ultimately ap-

proved three registrations’ on the principal register of

labels containing the name ‘‘LITE”’ for ‘‘beer with no

available carbohydrates.’’? Meister Brau continued pro-

ducing and selling beer under the brand name ‘‘LITE’’ in

the Chicago area during 1970 and 1971. In 1971 it changed

the label used on cans and bottles to eliminate the words

‘‘Meister Brau,’’ which had’ appeared above the word

‘“LITR.’’

In 1972, with its demise iminent, Meister Brau sold

its interest in the ‘‘LITE”’ trademarks, the registrations

thereof, and the accompanying goodwill to the plaintiff

1. All three applications were filed in November 1970. The

first, Registration No. 905,236, showing a label with only the word

“LITE,” written in script, was registered December 29, 1970. The

second, Registration No. 929,276, showing the words “Meister Brau”

in capital letters and underneath the word “LITE” in script similar

to the first registration, was registered February 15, 1972. The third,

Registration No. 929,277, showing only the word “LITE,” writien in

script similar to that used in the other two registrations, was also

registered February 15, 1972.

2. “Available” in this sense means “capable of being utilized by

tS igri — Webster's Third New International Dictionary

1 :

25a

Appendiz C

Miller Brewing Company. For a time Miller continued

selling beer under that brand in the Meister Brau market-

ing area in somewhat smaller quantities than Meister Brau

had distributed.

Miller then decided to expand its marketing of beer

under the brand ‘“‘LITE.’’ It developed a modified recipe,

which resulted in a beer lower in calories than Miller’s

regular beer but not without available carbohydrates. The

label was revised and one of the registrations was amended

to show ‘‘LITE”’ printed rather than in script.’ In addi-

tion, an extensive advertising campaign was undertaken.

From 1973 through 1976, Miller expanded its annual sales

of **LITE”’ from 50,000 barrels to 4,000,000 barrels and

increased its annual advertising expenditures from $500,000

to more than $12,000,000. In support of its motion for a

preliminary injunction in this case, Miller submitted the

results of a survey which, as the District Court noted in

its opinion and order, showed ‘‘that between December,

1975 and March, 1976, a substantial percentage of beer

drinkers perceived LITE (43%), Miller LITE (11%) or

LITE from or by Miller (1%) as a distinct brand name

indicative of a low-calorie or less-filling beer.’’

Since early 1975 a number of other brewers have in-

troduced reduced calorie beers labeled or described as

‘light.’ One of these, although not the first, was the

defendant G. Heileman Brewing Company, Inc., which

began using the name on a beer low in calories but con-

taining available carbohydrates in five test markets in

1976. Heileman had long been engaged in the production

3. Registration No. 929,277 was so amended in June 1975.

4. The beer industry apparently has refrained from describing

any of its products as “low-calorie” since 1955, pursuant to the re-

quest of the Alcohol and Tohacco Tax Division of the Internal

Revenue Service. [Affidavit of James Van Santen, J9 (Feb. 8,

1977).]

26a

Appendia C

and sale of other brands of beer, among which were ‘‘Old

Style’? and ‘‘Special Export.’’ The small print on the

label Heileman has used for many years for its ‘‘Old

Style’’ beer describes that product as ‘‘light lager beer.’’

Miller began filing trademark infringement actions

against competitors to enjoin the use of the word ‘‘light’’

at least as early as October 1975, but none of the cases

has yet come to trial. Miller did not seek a preliminary

injunction against any competitor until the filing of the

instant action in November 1976. Two of the seven other

brewers against whom actions are pending, Jos. Schlitz

Brewing Co. and Peter Hand Brewing Company, have

filed briefs amici curiae in this action.

On the basis of affidavits and other written material,

the District Court in the case at bar enjoined Heileman

from continuing to sell, advertise, and distribute beer

‘fanywhere in the United States, under the brand name

incorporating the word ‘Light’ in the manner of the label

attached to the complaint herein ... and under any color-

able imitation of’’ the labels which had been registered

with the Patent Office. This interlocutory appeal is taken

from that order as later modified. The label used by

Heileman at the time the injunction was entered featured

the word ‘‘Light’’ in print much larger than the name

‘‘Heileman.’’ As an alternative to its motion in the

District Court to vacate the injunction order, Heileman

filed a declaration of intent to change its label to a form

in which the name ‘‘Heileman’’ and the word ‘‘Light’’

appeared in the same size print and a motion for a de-

termination that the new label would not be a ‘‘colorable

imitation’’ of the registered labels. The District Court

declined to decide the alternative motion, noting that Heile-

man apparently intended to proceed with the change in

labels only if the court declared that the new label was not

a colorable imitation of the registered trademarks. Heile-

27a

Appendia C

man nevertheless proceeded to change its label to the new

form and, after the appeal had been docketed, filed in this

court a ‘‘notification of label change’’ reciting that, effec-

tive no later than April 15, 1977, it ‘‘will have wholly aban-

doned use of the word ‘Light’ in the form of the [old]

**label.’’

Mootness

Before reaching the merits, we must consider the effect

of Heileman’s formal abandonment of the old label. Assum-

ing without deciding that this act deprived Heileman of

standing to challenge the part of the injunction directed

against that label or rendered moot any issue as to that

label, the appeal is nevertheless not moot. The injunction

also runs against ‘‘any colorable imitation’’ of three regis-

tered labels, two of which consist simply of the misspelled

word ‘‘lite.’’ This added proscription must be read in the

coutext, first, of the prohibition against use of the old label,

which was not a colorable imitation of the registered labels

in any sense except its prominent use of the word ‘‘light,’’

spelled correctly, and, second, of the district judge’s mem-

orandum and supplements thereto, which make it clear that

he believed Miller would probably prevail on its claim to

the exclusive use of the word ‘‘lite’’ and its phonetic

equivalent on low-calorie beer. So read, we believe the

colorable imitation clause is intended to enjoin the use of

the word ‘“‘light’’ in any prominent way on a label for

low-calorie beer. Therefore, the case is not moot.

The Effect of Registration

Miller claims the benefit of 15 U.S.C. §1115(a), which

provides that registration on the principal register

‘*shall be prima facie evidence of registrant’s exclusive

right to use the registered mark in commerce on the

28a

Appendia C

goods or services specified in the registration subject

to any conditions or limitations stated theerin. .. .’*

The three registrations on which Miller relies specify

‘‘beer with no available carbohydrates’’ as the goods on

which the registered mark is to be used. This limitation

came about because the Patent Office refused registration

on the applications as initially filed, which described the

goods as ‘‘beer,’’ on the ground that ‘‘LITE”’ was ‘‘merely

descriptive’’ and therefore not registrable because of 15

USC $1052(e)(1). In response to this action, Meister Brau

offered evidence of secondary meaning, but in addition its

attorney stated that ‘‘the beer in connection with which Ap-

plicant uses this mark is no-available carbohydrates beer

...’ and also had ‘‘one-third less calories than ordinary

draft beer,’’ and that ‘‘LITE’’ was suggestive rather than

merely descriptive of these qualities. The examiner then

required that the applications be amended to describe the

goods to which the mark applied as ‘‘beer with no available

carbohydrates’’ and they were so amended. We hold that

the statute means what it says. The registrations are prima

facie evidence of Miller’s exclusive right to use the word

‘‘LITE’’ for beer with no available carbohydrates, not for

any beer, a breadth of coverage which the applicant dis-

claimed by amending its applications. Inasmuch as the beer

marketed by Heileman as its ‘‘Light’’ beer contains avail-

able carbohydrates, as indeed does Miller’s ‘‘LITE,’’ the

registrations are not prima facie evidence of Miller’s ex-

clusive right to use the mark on that beer. Thus, although

we think the result would be the same whether or not

§1115(a) applied, Miller’s brand name ‘‘LITE’’ must be

evaluated under the common law of trademarks without the

benefit of registration.

5. Miller does not argue that the mark is incontestable. It could

acquire that status only through the filing of an affidavit in the Patent

Office under 15 U.S.C. §1065 (Supp. V 1975).

ee ee

29a

Appendia C

General Principles

The basic principles of trademark law which are applica-

ble here have often been stated, e.g., Abercrombie & Fitch

Co. v. Hunting World, Inc., 537 F.2d 4, 9-11 (2d Cir. 1976) ;

Union Carbide Corp. v. Ever-Ready, Inc., 531 F.2d 366, 378-

379 (7th Cir.) cert. denied, 97 S. Ct. 91 (1976), and may be

briefly summarized. A term for which trademark protec-

tion is claimed will fit somewhere in the spectrum which

ranges through (1) generic or common descriptive and (2)

merely descriptive to (3) suggestive and (4) arbitrary or

fanciful. As the ease with which hues in the solar spectrum

may be classified on the basis of perception will depend upon

where they fall in that spectrum, so it is with a term on

the trademark spectrum.

A generic or common descriptive term is one which is

commonly used as the name or description of a kind of

goods. It cannot become a trademark under any circum-

stances. Wiliam R. Warner & Co. v. Eli Lilly & Co., 265

U.S. 526, 528 (1924); Henry Heide, Inc. v. George Ziegler

Co., 354 F.2d 574, 576 (7th Cir. 1965) ; CES Publishing Corp.

v. St. Regis Publications, Inc., 531 F.2d 11, 13 (2d Cir. 1975).

Using the phonetic equivalent of a common descriptive

word, 7.e., misspelling it, is of no avail. American Aloe

Corp. v. Aloe Creme Laboratories, Inc., 420 F.2d 4248, 1252-

1253 (7th Cir.), cert. dened, 398 U.S. 929, 400 U.S. 820

(1970).

A merely descriptive term specifically describes a char-

acteristic or ingredient of an article. It can, by acquiring a

secondary meaning, i.e., becoming ‘‘distinctive of the ap-

plicant’s goods’’ (15 U.S.C. §1052(f)), become a valid

trademark. See Abercrombie & Fitch Co. v. Hunting World,

Inc., swpra, 537 F.2d at 10.

A suggestive term suggests rather than describes an

ingredient or characteristic of the goods and requires the

observer or listener to use imagination and perception to

30a

Appendia C

determine the nature of the goods. Such a term can be

protected without proof of a secondary meaning. Id. at 11.

An arbitrary or fanciful term enjoys the same full pro-

tection as a suggestive term but is far enough removed from

the merely descriptive not to be vulnerable to possible attack

as being merely descriptive rather than suggestive. Id.

Miller’s Position

Although Miller argued in ‘the District Court that

‘‘LITE’’ was suggestive, and persuaded the District Court

that this was so with respect to the quality of being reduced

in calories, it conceded in oral argument before us that the

choice is between (1) generic or common descriptive and

(2) merely descriptive.* Miller argues that light beer is not

a ‘‘genus,’’ indeed that ‘‘light,’’ as an adjective, cannot be

a generic or common descriptive term, and that it is a

merely descriptive term that has acquired a secondary

meaning.

An Adjective as a Generic Term

The fact that ‘‘light’’ is an adjective does not prevent it

from being:a generic or common descriptive word. See 1

J.T. McCarthy, Trademarks and Unfaw Competition §12 :2

at 409 (1973) ; Application of Preformed Line Products Co.,

323 F.2d 1007 (C.C.P.A. 1963); Application of Helena

Rubinsteim, Inc., 410 F.2d 438 (C.C.P.A. 1969). See also

3 Callman, The Law of Unfair Competition, Trademarks

and Monopolies §§70.4, 74.1 (2d ed. 1969), which Miller calls

‘‘the leading treatise.’’ This must be the law, given the

6. In its brief it says that it does not matter whether the term is

suggestive or merely descriptive because “either way it is susceptible

of appropriation as a trademark for less filling, reduced calorie beers.”

On this record, this is probably correct, because even if the mark is

merely descriptive there is enough evidence of secondary meaning to

support the District Court’s order. If it were suggestive, proof of

secondary meaning would be. unnecessary.

eee |

3la

Appendia C

reason for the rule that precludes appropriation of a com-

mon descriptive word, viz., otherwise ‘‘a competitor could

not describe his goods as what they are.’’ CES Publishing

Corp. v. St. Regis Publications, Inc., supra, 531 F.2d at 13.

Ordinarily, as here, the adjective which is sought to be

appropriated in its generic sense’ as a trademark will be a

part of aname. See, e.g., Roselux Chemical Co. v. Parsons

Ammonia Co., 299 F.2d 855, 863 (C.C.P.A. 1962) (‘‘sudsy”’

ammonia). If ‘‘light beer’’ is a generic name, then ‘‘light’’

is a generic word when used as part of that name.

*‘Tight’’ Is Generic

The record before us (although less compiete than that

in at least one of the other pending cases*) and facts of

which we may take judicial notice, including generally

accepted English usage, enable us to conclude that ‘‘light’’

is a generic or common descriptive term when used with

**beer.’’

‘*Light’’ has been widely used in the beer industry for

many years to describe a beer’s color, flavor, body, or

alcoh ‘ic content, or a combination of these or similar

characteristics.’ The use of that word by Heileman and

other brewers long antedated either Miller’s or Meister

7. Of course a word that is generic when used in its ordinary

sense can be classified at the other end of the spectrum, arbitrary or

fanciful, if used in an arbitrary or fanciful sense. Abercrombie &

Fitch Co. v. Hunting W orld, Inc., 537 F.2d 4, 10 (2d Cir. 1976).

8. So we are informed by Jos. Schlitz Brewing Co., defendant in

that case, and amicus curiae here.

9. E.g., cited by the Patent Examiner against Meister Brau’s

original applications for registration was Storz Brewing Company's

registration (circa 1954), “America’s Light Refreshing Beer.” When

Heileman sought to register “America’s Great Light Beer,” which it

had used for its Blatz brand beer since 1970, the Patent Office re-

quired a disclaimer of “light beer” as a condition to granting regis-

tration. ;

Fi ie ee ee

32a

Appendia C

Brau’s use of ‘‘LITE.’’ The definition given in Webster’s

Third New International Dictionary, supra, at 1308, of

‘*light’’ as an adjective includes the following:

**10 of a beverage a: having a comparatively low

alcoholic content ([light] wines and beers) b: having

a low concentration of flavoring congenerics : char-

acterized by a relatively mild flavor : not heavy lla:

capable of being easily digested (a [light] soup) ....’’

The comparable definition in the previous, and for many

the classic, edition of the same dictionary is as follows:

‘*3.... a Easy to be digested; not oppressive to

the stomach; as, ight food... .’’

‘*11. Of wines, beers, etc., not heavy or strong;

having a relatively small percentage of alcohol.’’

Webster’s New International Dictionary 1429 (2d ed.

1940). The definition of ‘‘pilsner’’ or ‘‘pilsener’’ in Web-

ster’s Third New International Dictionary, supra, at

1716, is:

‘*1. a: light Bohemian beer with a strong hop flavor

b: a beer of a similar type... .”’

Similar definitions and usage are found in reference works

on chemical technology, industry publications, and maga-

zines and newspapers generally. Indeed, state statutes

even use ‘‘light beer’’ as a generic or common descriptive

term.” ‘‘Light’’ is clearly a common descriptive word

when used with beer.

10. 37 Okla. Stats. §506(12), (13) (1951); Utah Stats.

§§32-4-10, 32-4-14 through 32-4-17 (1953). The word “light” is

also used to describe wine with a low alcohol content. 1947 Ark.

Stats. §48-503 ; D.C. Code §25-103(c), 25-111, as amended (1977) ;

La. Rev. Stats. §26:71.1 (1975); 1957 Ann. ‘Code of Md., Article

2B, §§2(c), 3, 1 ~ 13 through 16, as amended (1976) ; 1972 Ann.

Code of Mississippi. §§67-3-1, 7-3-5, 67-3-13.

33a

Appendia C

‘‘Light’’ is also a common descriptive word in other

similar contexts. Miller’s president testified by deposi-

tion in this case that Miller chose the word ‘‘LITE”’ for

its low-calorie beer because of its desire to capitalize on

the trend of ‘‘consumer products going lighter all over

the world, be it foods, be it whiskeys, be it cigarettes,’’

as well as to ‘‘convey the message that it would be lighter

in taste’’ and to communicate ‘‘the conception of a less

filling product.’’ Miller’s parent company, Philip Morris,

Inc., registered ‘‘Light’’ (Registration No. 878-062) and

used that word as a brand name for cigarettes (Marlboro

Light). Judge Stewart held the word to be descriptive

and ordered the registration cancelled in Philip Morris,

Inc. v. R. J. Reynolds Tobacco Co., 188 U.S.P.Q. 289

(S.D.N.Y. 1975), a decision from which no appeal was

taken. The word is also used by Pepsico, Inc. for ‘‘ Pepsi

Light’’ a soft drink described as having ‘‘half the calories

out.’’

Miller argues that it uses the word as the name for

‘*less filling, low-calorie’ beer, and that ‘‘light’’ has not

heretofore been used in that sense. This argument fails

for two reasons. First, ‘‘less filling’? means essentially

light in body and taste and not oppressive to the stomach,

which is a common descriptive meaning of ‘‘light’’; and,

as Miller conceded in its brief, the caloric content of beer

depends primarily on alcoholic content.’ Second, even if

Miller had given its light beer a characteristic not found

in other light beers, it could not acquire the exclusive

right to use the common descriptive word ‘‘light’’ as a

trademark for that beer. Other brewers whose beers have

qualities that make them ‘‘light’’ as that word has com-

11. Miller attempted at oral argument to qualify this concession,

Heileman having pointed out in its reply brief that “low in calories”

adds nothing to “low in alcoholic content.” In any event, we can take

judicial notice that alcoholic and caloric content go hand in hand.

34a

Appendia C

monly been used remain free to call their beer ‘‘light.’’

Otherwise a manufacturer could remove a common descrip-

tive word from the public domain by investing his goods

with an additional quality, thus gaining the exclusive right

to call his wine ‘‘rosé,’’ his whiskey ‘‘blended,’’ or his

bread ‘‘white.’’

The word ‘‘light,’’ including its phonetic equivalent

‘‘lite,’? being a generic or common descriptive term as

applied to beer, could not be exclusively appropriated by

Miller as a trademark, ‘‘despite whatever promotional

effort [Miller] may have expended to exploit it.’’ Henry

Heide, Inc. v. George Ziegler Co., supra, 354 F.2d at 576;

see Abercrombie & Fitch Co. v. Hunting World, Inc., supra,

537 F.2d at 9-10. Because probability of success cannot be

established, other issues argued by the parties need not be

decided, and the preliminary injunction must be reversed.

REVERSED.

A true Copy:

Teste:

Clerk of the Umted States Court of

Appeals for the Seventh Circuit

Pedeiae!5 > sats aaa

Se ee ve Sa,

Be i ge See

35a

APPENDIX D

Opinion and Order of James E. Doyle,

District Judge, Dated January 21, 1977

UNITED STATES DISTRICT COURT

W. D. Wisconsin

Mrer Brewine Company,

Plaintiff,

G. Hememan Brewine Co., Inc.,

Defendant.

No. 76-C-584

Jan. 21, 1977

John D. Winner, Winner, McCallum & Hendee, Madison,

Wis., Anthony Fletcher, Conboy, Hewitt, O’Brien & Board-

man, New York City, Allen W. Leiser, Quarles & Brady,

Milwaukee, Wis., for plaintiff.

James Van Santen, Hill, Gross, Simpson, Van Santen,

Steadman, Chiara & Simpson, Chicago, Ill., Steven E.

Keane and John S. Skilton, Foley & Lardner, Milwaukee,

Wis., for defendant.

James EB. Doyiz, District Judge.

This is an action for trademark infringement, false

designation of origin, and unfair competition by plaintiff

(Miller). Miller seeks a preliminary injunction to prevent

defendant’s (Heileman’s) continued sale, advertising, and

distribution of beer under a brand name incorporating the

word ‘‘LIGHT,’’ the word ‘‘LITE,’’ or any colorable

36a

Appendix D

imitation of either word. For the purposes of this motion

only, I make the findings of fact set forth hereinafter under

the heading ‘‘Facts.’’

Jurisdiction exists for the trademark infringemert

cause of action under 15 U.S.C.A. §1121 (1974) and 28

U.S.C.A. §1338(a) (1976).

Facts

Miller and Heileman are brewers and sellers of beer.

Miller distributes its beer nationally ; Heileman, in several

regions. As of the end of 1975, Miller was the nation’s

fourth largest brewer, selling 12.8 million barrels of beer

in 1975; Heileman was seventh, selling 4.5 million barrels

of beer.

About May 1967, Meister Brau, Inc. (Meister Brau),

a Chicago brewer, began brewing and selling a reduced

calorie beer which it sold under the trademark (MEISTER

BRAU) LITE.

In November 1968, Meister Brau applied to register

LITE as a trademark for beer on the principal register

in the United States Patent Office. The Patent Office

initially refused registration under 15 U.S.C. §1052(e) on

the ground that LITE was ‘‘merely descriptive’? and

might cause confusion with similarly registered trade-

marks of other non-beer products. Meister Brau over-

came this objection by demonstrating to the satisfaction

of the Patent Office that the mark had acquired a ‘‘dis-

tinctiveness’’ in the commerce of beer and thus was entitled

to registration under id. §1052(f). The evidence sup-

porting this finding of distinctiveness consisted of affidavits

by Meister Brau executives showing sales of over 60 mil-

lion bottles and cans of this brand of beer, extensive ad-

vertising of the brand on television and in the print media,

and letters from five competing beer producers recognizing

ee Ee Oe ee ee eS %,

37a

Appendix D

LITE as a distinct brand name cultivated by Meister

Brau.'

On the basis of Meister Bran’s showing, the Patent

Office approved three registrations on the principal register

for beer with no available carbohydrates.

Reg. No. Date \ Trademark

905,236 Dec. 29, 1970 LITE label (Color blue)

929,276 Feb. 15, 1972 Meister Brau Lite

design (color blue)

929,277 Feb. 15, 1972 LITE design (no color)?

Meister Brau continued producing and marketing LITE

beer during the time these trademark registrations were

pending, changing the labeling by 1971 to eliminate the

Meister Brau designation above LITE. In 1970 and 1971,

Meister Brau sold over 75,000 and 65,000 barrels of LITE,

respectively.

Facing bankruptcy in 1972, Meister Brau sold several

of its recipes, trademarks and other indicia of good will

to Miller. Included in the sale was the assignment of

Meister Brau’s entire interest in its LITE trademarks

and the registrations thereof, and the good will. Miller

continued the brand in the core of the Meister Brau mar-

keting area, with its and Meister Brau’s (earlier) sales

exceeding 55,000 barrels in 1972, and Miller’s sales ex-

ceeding 50,000 barrels in 1973 and 40,000 barrels in 1974.

Concurrently, Miller re-examined the LITE brava and

its marketing, concluding a broader market might exist if

several aspects of the brand could be improved. First

was taste; Miller believed it could improve the taste quality

of LITE, and after a year or more of experimentation,

1. The five companies were P. Ballantine & Sons, Falstaff Brew-

ing Corporation, Pabst Brewing Company, Jos. Schlitz Brewing Com-

pany, and the Stroh Brewing Company.

2. Amended by Miller on June 3, 1975.

38a

Appendix D

adopted a modified recipe for LITE. Second was packag-

ing; a revised more vigorous label was designed. Third

was advertising; a new, straightforward, ‘‘more mascu-

linely’’ oriented campaign was developed.

Miller tested its revised recipe, packaging and adver-

tising approach, found them successful, expanded its mar-

keting of LITE (replacing the former packaging with the

new in the old Meister Brau marketing areas in 1974) and

by early 1975 was distributing the brand nationally. The

label Miller adopted had the word ‘‘LITE”’ in the most

prominent position, the words ‘‘A Fine Pilsner Beer’’ in

a somewhat less prominent position, and the Miller name

in relatively very smali letters.

Miller introduced the revised LITE in four markets in

July of 1973, selling over 50,000 barrels (and spending

over $500,000 advertising the brand). More than a dozen

more markets were added during 1974; sales exceeded

400,000 barrels, advertising expenses, $4,000,000. With

national distribution and advertising in 1975, sales ex-

ceeded two and one-half million barrels, advertising ex-

penses, $10,000,000. In 1976, more than four million

barrels were expected to be sold with more than $12,000,000

to be spent on advertising.

The effect of this advertising has been that between

December, 1975 and March, 1976, a substantial percentage

of beer drinkers perceived LITE (43%), Miller LITE

(11%), or LITE from or by Miller (1%) as a distinct

brand name indicative of a low-calorie or less-filling beer.*

In August, 1975, The Peter Hand Brewing Company,

a small brewery in Chicago, launched a reduced calorie

beer under a label which included the words: ‘‘Peter

Hand’’; ‘‘ A Special Pilsner extra Light Beer’’; ‘‘Smoother

Less-Filling.’? The word ‘‘Light’’ was by far the most

3. The percentages are based upon the results of a survey, the

validity of which I accept in these findings. However, of course, I

find that the percentages are approximations of consumer perceptions.

39a

Appendix D

prominent word on the label, much more prominent than

the Peter Hand designation. An overwhelming majority*

of beer-drinking consumers who were allowed to view three

different cans of beer—including Péter Hand (extra)

Light—for 15 seconds each, identified the Peter Hand

product as ‘‘LIGHT”’ or ‘‘LITE”’ and not as a Peter Hand

product when asked to identify the beers which they had

just seen but were no longer in view. Suit has been brought

by Miller against Peter Hand for trademark infringement

and is pending in the United States District Court for the

Northern District of Illinois.

In November, 1975, the Jos. Schlitz Brewing Company,

the nation’s second largest brewer, launched a reduced

calorie beer bearing a generally yellow label that displayed

the word ‘‘Light’’ in by far the most prominent position.

The words ‘‘Schlitz,’’ ‘‘Beer,’’ and ‘‘Special Lager’’ were

in the proximity of the word ‘‘Light’’ but were consider-

ably less prominent. There have been numerous examples

of actual confusion on the part of consumers between

“LITE”? and (Schlitz) ‘‘Light.’’ Suit was brought by

Miller against Schlitz and is pending in the United States

District Court for the Eastern District of Wisconsin.

Now, Heileman has introduced a reduced calorie beer

in five scattered test markets bearing a label (Exhibit E

to the complaint herein) which also prominently displays

the word ‘‘LIGHT.’’ While this word appears on the

‘‘House of Heileman’’ seal and the word ‘‘Heileman’’

appears three times in the immediate vicinity of the word

‘“‘LIGHT,’’ the word ‘‘LIGHT’’ is by far the most prom-

inent and eye-catching word on the label. Heileman has

4. The survey upon which this statement is based employed the

methodology of intercepting and interviewing 284 beer drinkers in

two shopping malls in the Chicago metropolitan area. Since the

sample upon which this survey is based was somewhat narrowly

drawn, the results could be used for determining the existence of atti-

tudes although not for quantifying them.

PS ee

se:

40a ae

Appendix D

expended considerable resources in preparation for the

introduction of its low-calorie beer under the ‘‘LIGHT”’

label:

Production Costs

Cases produced through November 11, 1976 $113,007.00

Beer in tanks 8,405.00

Manufacturing Supplies in Inventory

as of November 11, 1976

Cans 29,352.00

Can Trays 1,157.00

Tray Die Changes 404.00

Can Die Changes 400.00

Media Advertising

Television production 18,500.00

Print production 3,500.00

Purchase of television time 114,938.00

Purchase of print space 23,932.00

Point of Sale Advertising

Embossagraph Company 100,558.00

Inland Printing Company 9,710.00

Total $423,863.00

Heileman has been engaged for some time, and intends to

continue to engage, in the production and sale of other

brands of beer, notably ‘‘Old Style’’ and ‘‘Special Ex-

port.’? Unless enjoined, Heileman will proceed to market

its ‘‘Light’’ beer under its mark in competition with

Miller’s ‘‘LITE.’’

The respective beers of plaintiff and defendant which

bear the trademarks in dispute are similar products, and

4la

Appendix D

the parties will be attempting to sell them to the same con-

suming public through the same general channels of dis-

tribution, employing the same general means and media

for advertising and promotion. Beer is a relatively in-

expensive commodity (as compared with automobiles,

clothing, or household furnishings and appliances, for ex-

ample) and expenditures for it are likely to be made by

consumers with less care than expenditures for more ex-

pensive items. Although prior to purchase, purchasers of

packages of beer in retail stores may see the rival beers

in their respective containers, side by side or in close

proximity, this will often not be true. It will seldom be

true of purchasers of single glasses, bottles, or cans of

beer in taverns, restaurants, and night clubs, where orders

are placed orally by the customers to the bartenders or

waiters. That ‘‘LITE”’ and ‘‘LIGHT”’ are phonetically

identical means, of course, that they cannot be distin-

guished in conversation among members of the public, in

radio advertising, or in oral communication betwen cus-

tomers and waiters or bartenders.®

OPINION

In order to succeed in its motion for a preliminary in-

junction, plaintiff must demonstrate: (I) that it will prob-

ably succeed on the merits; (II) that there is a significant

threat of irreparable harm to the plaintiff if the injunction

is not granted; (III) that the balance of harms to the de-

fendant and plaintiff if an injunction is or is not issued

favors issuance; and (IV) that the public interest will not

be disserved by issuance of the injunction. See generally

Doeskin Products v. United Paper Co., 195 F.2d 356, 358-59

5. The findings in this paragraph are made by the exercise of ju-

dicial notice of matters of common knowledge.

42a

Appendix D

(7th Cir. 1952) ; Selchow ¢ Righter Co. v. Western Printing

& L. Co., 112 F.2d 430, 431-32 (7th Cir. 1940).

I. The Probability or Improbability that Plaintiff

Will Succeed on the Merits

In order for plaintiff ultimately to prevail on its trade-

mark infringement cause of action it must show both that

it has a right to the exclusive use of the trademark and that

the defendant’s use infringes upon that right.

A. Plaintiff’s right or lack thereof to

the exclusive use of the trademark

A trademark is defined as:

. . . any word, name, symbol, or device or any

combination thereof adopted and used by a mannfac-

turer or merchant to identify his goods and distinguish

them from those manufactured or sold by others.

15 U.S.C.A. §1127 (1976).

The registration of trademarks is governed by certain

statutory provisions, especially 15 U.S.C.A. §§1051, 1052

(1976). The purpose of this registration scheme is not to

create a trademark right but simply to provide for trade-

mark publication. Nashville Syrup Co. v. Coca Cola Co.,

215 F. 527, 529 (6th Cir. 1914), and to allocate burdens of

proof in the trial of an action for infringement.

The fact of Meister Brau’s (Miller’s assignor’) registra-

6. The owner of a trademark may register his trademaik with

the United States Patent Office upon a minimal showing of first-use

in commerce. 15 U.S.C.A. §1051 (1976). No trademark shall be re-

fused registration on the principal register on account of its nature

except when certain fairly specific conditions are met. Jd. §1052.

7. The assignment of the trademarks by Meister Brau to Miller is

valid given that Meister Brau assigned its entire interest in the mark

and the goodwill. See E. F. Prichard Co. v. Conswmers Brewing Co.,

136 F.2d 512, 518-19, 521-22 (6th Cir. 1943), cert. denied, 321 U.S.

763, 64 S.Ct. 486, 88 L.Ed. 1060 (1944).

43a

Appendiz D

tion® of the marks will be admissible in evidence at trial

and ‘‘shall be prima facie evidence of registrant’s exclusive

right to use the registered mark in commerce on the goods

. specified in the registration ....’’ Jd. §1115(a).°

Upon showing at trial Meister Brau’s registration and the

assignment to it, Miller will be entitled to the presumption

that the registration is valid, that Miller is the owner of

the mark, and that Miller has exclusive right to use the mark

in commerce under the specified conditions and limitations

of the registration, but Heileman is free to challenge on

its merits Miller’s right to the exclusive use of the ‘‘LITE”’’

trademark. Union Carbide Corp. v. Ever-Ready, Inc., 531

F.2d 366, 378 (7th Cir. 1976), cert. denied, 429 U.S. 830, 97

S.Ct. 91, 50 L.Ed. 2d 94 (1976).

8. Leaving aside the question of descriptiveness and secondary

meaning, there is no indication in the record that the trademark was

not registered according to proper procedures. However, Heileman

aileges that the registration of plaintiff's mark is invalid because it in-

fringes the previously registered Storz trademark: ‘America’s Light

Refreshing Beer.” But since this trademark uses “Light” descrip-

tively and in combination with other words, it is not in conflict with

plaintiff’s mark. See generally Tisch Hotels, Inc. v. Americana Inn,

Inc., 350 F.2d 609, 611 (7th Cir. 1965); Nashville Syrup Co. v.

Coca Cola, 215 F. 527, 530 (6th Cir. 1914).

9. Plaintiff does not argue that the mark has obtained incontest-

able status under 15 U.S.C.A. §1065. Such status would limit the

alleged infringer to a few defenses explicitly outlined in 15 U.S.C.A.

§1115(b) (1974). In particular, if Miller’s “LITE” mark had

achieved incontestable status, Heileman would be foreclosed from

arguing that Miller did not have exclusive rights to the mark because

the mark was merely descriptive. /d. There is some question

whether a trademark which has been found to be merely descriptive

but to have acquired distinctiveness can ever acquire incontestable

status. Compare Flavor Corporation of America v. Kemin Industrics,

Inc., 493 F.2d 275, 281-82 (8th Cir. 1974), with Union Carbide v.

Ever-Ready, Inc., 531 F.2d 366, 375-76 (7th Cir. 1976). However,

because the parties did not address this question in their briefs, I make

no determination of the likelihood that the trademark has achjeved i in-

contestable status.

a a IE BS OC OE RS PUENTE

44a

Appendix D

1. The Merits of Miller’s ‘‘LITE”’

Trademark Claim: Descriptiveness

Given that Miller almost certainly will be entitled to the

above-mentioned presumption at trial, the defendant will

have the burden of going forward and proving that the

trademark is defective in some manner. Defendant con-

tends that Miller’s trademark is defective because it is

merely descriptive. If this contention is sound (and unless,

as will be discussed below, Miller can then show that the

mark has acquired a secondary meaning), Miller’s action

for trademark infringement will be defeated. Union Carbide

Corp. v. Ever-Ready, Inc., supra, at 378. I am not called

upon to resolve definitely the question as to whether

‘‘LITE’’ is merely descriptive; only whether Heileman is

likely to be successful at trial in showing that it is. On the

evidence before me, there is a strong likelihood that Heile-

man will be unable to prove at trial that Miller’s mark is

merely descriptive.

The case law appears to recognize a continuum of types

of trademarks falling into three categories: the merely

descriptive, the suggestive, and the purely fanciful or arbi-

trary. Union Carbide Corp. v. Ever-Ready, Inc., supra,

at 378-79. Marks in the latter two categories are subject to

the exclusive appropriation of a producer, whereas marks

in the former category are not. It could hardly be said that

‘“‘LITE”’ is a purely fanciful or arbitrary name for a low-

calorie, less-filling beer product at least in the same way that

‘The American Girl’’ is a purely fanciful or arbitrary name

when applied to women’s shoes. See Hamilton Shoe Co. v.

Wolf Brothers, 240 U.S. 251, 256-57, 36 S.Ct. 269, 60 L.Ed.

629 (1916). Thus, the important question is whether

‘“‘LITH’’ actually describes the ingredients, qualities, or

characteristics of the beer or merely suggests the existence

of some attribute or effect of the beer.

45a

Appendix D

The line between descriptive and suggestive marks is

not vivid. The court of appeals for this circuit has quoted

approvingly the distinction between these two terms stated

by A. Seidel, S. Dalroff, and E. Gonda, Trademark Law and

Practice, §4.06 at 77 (1963):

Generally speaking, if the mark imparts information

directly, it is descriptive. If it stands for an idea which

requires some operation of the imagination to connect

it with the goods, it is suggestive.

Union Carbide Corporation v. Ever-Ready, Inc., supra,

at 379.

The court of appeals for this circuit has indicated, al-

though not held, that ‘‘Holeproof’’ as applied to stockings

and ‘‘EVEREADY’”’ as applied to batteries are not descrip-

tive but rather suggestive terms. See Independent Nail &

Packing Co., Inc. v. Stronghold Screw Products, Inc., 205

F.2d 921 (7th Cir. 1953), cert. denied, 346 U.S. 886, 74 S.Ct.

138, 98 L.Ed. 391 (1953), citmg Holeproof Hosiery Co. v.

Wallach Bros., 172 F. 859 (2d Cir. 1909); Union Carbide

Corp. v. Ever-Ready, Inc., supra, at 379. See also General

Shoe Corp. v. Rosen, 111 F.2d 95, 98-99 (4th Cir. 1940)

(‘‘Friendly’’ as applied to shoes is suggestive of shoes

which are friendly to the feet). Both ‘‘Holeproof’’ and

‘““EVEREADY’”’ seem to impart some information about

the products to which they are appended, but to impart it in-

directly, and to require some operation of the imagination

to connect the terms to the products.

Likewise, the mark ‘‘LITE’’ does not describe a beer

which is light in weight or color, but rather connotes one

which is lower in calories or less-filling than regular beer.’®

10. It is commonly known that “light” has been used widely and

for many years in the beer industry to connote the quality of light-

ness in color or the quality of lightness in body, or both. Such use

has undoubtedly been descriptive, rather than suggestive, of those

qualities. It appears that Meister Brau was the first to use the word,

in a corrupted form (LITE), to connote a third and distinct quality

(footnote continued on next page)

FO Se en eee as Bisons.

46a

Appendix D

It requires some operation of the imagination to connect

the term ‘‘LITE’’ with a beer which would cause its con-

sumers to weigh less, all else being equal, than those who

consume regular beer.

Thus, it appears unlikely that Heileman will meet its

burden of showing that ‘‘LITE”’ is a descriptive term.”

2. The Merits ef Miller’s ‘‘LITE’’ Trademark

claim: Secondary Meaning

In the event that Heileman does prove at trial that

‘“‘LITE’’ as applied to beer is descriptive, Miller will be

entitled to prevail, nevertheless, if it can show that the

mark has acquired a secondary meaning in identifying the

product of a particular producer. Union Carbide Corp. v.

Ever-Ready, Inc., supra, at 380." Although it would be

of its new brand of beer, namely, its low caloric content. It may well

be unusual that a word which is well established as descriptive of two

qualities of a beer is claimed to be merely suggestive of a third quality.

But, as I have concluded, “LITE” is indeed no more than suggestive

of this third quality. I can discern no basis in precedent, and none in

public policy, to deny suggestiveness to a word which is no more than

suggestive of one quality of a product simply because it is obviously

descriptive of other qualities of the same product.

11. Defendant also argues that “LITE” is deceptively misde-

scriptive. However, there has been absolutely no showing as to how

the public would be misled as to the ingredients of “LITE” beer

from the trademark. See e.g., Nashville Syrup Co. v. Coca Cola Co.,

215 F. 527, 531-32 (6th Cir. 1914).

12. The fact that Meister Brau (Miller) has already demon-

strated to the Patent Office that “LITE” had acquired a certain dis-

tinctiveness does not entitle Miller to any procedural or substantive

advantage on the issue of secondary meaning in the instant case—al-

though there is some overlap in the type of evidence used to prove dis-

tinctiveness, on the one hand, and secondary meaning, on the other.

Distinctiveness refers to the consumer popularity and acceptance of

the mark whereas secondary meaning refers to consumer identifica-

tion of a unique product from a single producer. Alfred Dunhill of

London, Inc. v. Ease Distillers Products Corp., 350 F.Supp. 1341,

1359-60 (E.D.Pa. 1972), aff'd, 480 F.2d 917 (3d Cir. 1973). But

see Flavor Corp. of America v. Kemin Industries, Inc., 493 F.2d 275,

282 (8th Cir. 1974).

47a

Appendia D

necessary for Miller to show that consumers are aware that

‘‘LITE”’ beer comes from a single source, it need not show

that consumers are aware of the actual name of that source.

Union Carbide Corp. v. Ever-Ready, Inc., supra, at 380;

Spangler Candy Co. v. Crystal Pure Candy Co., 353 F.2d

641, 647 (7th Cir. 1965), citing Shredded Wheat Co. v.

Humphrey Cornell Co., 250 F’. 960, 963 (2d Cir. 1918), mod-

ifying 244 F. 508 (D.C.Conn.1917).

Thus, whether ‘‘ LITE’’ has acquired a secondary mean-

ing is basically a factual question regarding consumer per-

ceptions. Carter-Wallace, Inc. v. Procter & Gamble Co.,

434 F.2d 794, 802 (9th Cir. 1970). Clearly, the most direct

evidence on this issue is consumer testimony and consumer

surveys. Other evidence of some consequence, in order of

importance, would be the volume of sales, the length and

manner of use of the mark, and the amount and manner of

advertising. Umon Carbide Corp. v. Ever-Ready, Inc.,

supra, at 380-81.

Miller has provided fairly persuasive evidence in the

form of a national consumer survey that a substantial per-

centage of consumers perceived LITE (43%), Miller LITE

(11%), or LITE from or by Miller (1%) as the product

of a particular producer, that is, as a distinct brand name

indicative of a low-calorie or less-filling beer. The timing

of this survey (December, 1975 to March, 1976) is partic-

ularly noteworthy since it came at a time when Peter Hand

and Schlitz were just beginning to market their own low-

calorie beers under ‘‘Light’’ trademarks but after Miller

had marketed LITE nationally for one year (1975) and

regionally for several years prior to 1975. At this time, the

confounding effect, if any, o

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