Petition — International Order of Job's Daughters v. Lindeburg & Co.

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MAY 4 1981

ALEXANDS L. STEVAS,

CLERK

In The

Supreme Court of the United States

October Term, 1981

fy

Vv

INTERNATIONAL ORDER OF JOB’S DAUGHTERS,

Petitioner,

vs.

LINDEBURG AND COMPANY,

Respondent.

°

PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

°

Dennis L. THOoMTE

ZaRLEY, McKee, THoMTE, VoorHees & SEASE

945 Commercial Federal Tower

Omaha, NE 68124

Attorney for Petitioner

CUCKLE PRINTING CO., 2311 Douglas St., Omaha 68102

QUESTIONS PRESENTED

1. Whether the name and/or emblem of a fraternal

organization can function as a trademark to identify the

maker, sponsor or endorser of the product upon which the

name and/or emblem appears.

2. Whether the Court of Appeals for the Ninth Cir-

cuit erred in rejecting the reasoning of Boston Profes-

sional Hockey Ass’n, Inc. v. Dallas Cap & Emblem Mfq.,

Inc., 510 F.2d 1004 (5th Cir.), cert. den., 423 U.S. 868

(1975) by holding that petitioner’s emblem was a functional

part of the product upon which it appeared and that func-

tional use of a trademark does not violate the Lanham Act.

3. Whether the unauthorized, intentional duplication

of a fraternal organization’s emblem on merchandise vio-

lates any legal right of the fraternal organization to the

exclusive use of that emblem.

ii

TABLE OF CONTENTS

Pages

Opinion Below 2

Jurisdiction 2

Statement of the Case 2

Reasons for Granting the Writ 5

Appendix:

Exhibit A App. 1

Exhibit B App. 18

Exhibit C ww... App. 19

Exhibit D App. 29

NE TE ceinsessersssicsnsenioenaptl App. 30

TABLE OF AUTHORITIES

CASES

Boston Professional Hockey Ass’n, Inc. v. Dallas

Cap & Emblem Mfg., Inc., 510 F.2d 1004 (5th

Cir.), cert. den., 423 U.S. 868 (1975) 4,5,7,8

National Football League Properties, Inc. v. Con-

sumer Enterprises, Inc., 185 USPQ 550 (IIl.

App. Ct., 1975) 8

Siegel v. Chicken Delight, Inc., 448 F.2d 43 (9th

Cir., 1971) 7

Zippo Mfg. Co. v. Rogers Imports, Inc., 216 F.

Supp. 670 (DC SNY, 1963) 6

ili

TABLE OF AUTHORITIES—Continued

STATUTE

Pages

28 U.S. C. 1254 (1) a

TEXT

Restatement of Torts, Section 742, comment A ........... ae Oe

ME inline

°o

In The

Supreme Court of the United States

October Term, 1981

ray

Vv

INTERNATIONAL ORDER OF JOB’S DAUGHTERS,

Petitioner,

vs,

LINDEBURG AND COMPANY,

Respondent.

o

PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

°

Petitioner, International Order of Job’s Daughters,

respectfully prays that a Writ of Certiorari issue to review

the judgment and opinion of the United States Court of

Appeals for the Ninth Circuit entered in this proceeding on

December 10, 1980.

°

OPINION BELOW

The opinion of the United States Court of Appeals for

the Ninth Circuit is included in the Appendix as Exhibit

A. The Order dated February 11, 1981 denying petition-

er’s Petition for Rehearing is included in the Appendix as

Exhibit B. The opinion of the United States District

Court, Northern District of California, is included in the

Appendix as Exhibit C.

fy.

i

JURISDICTION

Jurisdiction in this cause is premised upon 28 U.S.C.

1254 (1) for review by certiorari of the judgment and opin-

ion of the United States Court of Appeals for the Ninth

Circuit. A written opinion was issued by that court on

February 10, 1980. The petitioner, International Order of

Job’s Daughters, timely filed a Petition of Rehearing and

suggestion for rehearing in bane. That petition was denied

on February 11, 1981.

Ly.

VU

STATEMENT OF THE CASE

Petitioner, International Order of Job’s Daughters, is

a non-profit, fraternal organization organized in 1921.

Petitioner began using the trademarks “JOB’S DAUGH-

TERS”, “TYOB FILIAE”, “DAUGHTERS OF JOB” and

an emblem substantially identical to the trademarks of

Exhibits D and E, appended hereto, in 1921 on jewelry and

non-jewelry items. The trademarks have also been- used

to indicate membership in petitioner.

Respondent is a fraternal jeweler who advertises and

sells jewelry and non-jewelry items, bearing petitioner’s

trademarks, to members of petitioner and to those persons

desiring to present gifts to members of petitioner.

Through the rears, petitioner has licensed “official”

suppliers and jewelers to sell merchandise bearing the

name and/or emblem of petitioner. The specific trademark

of Exhibit D was adopted by petitioner in 1923 and the

trademark of Exhibit E was adopted in 1964 and is still

in use as a trademark on goods and as a collective member-

ship mark to indicate membership in petitioner. The em-

blem of Exhibit D was federally registered as United States

Registration No. 672,316 on January 6, 1959 and was

amended to the emblem of Exhibit E in 1964. A clerical

oversight by petitioner resulted in the federal registration

itself becoming abandoned even though the trademarks in

question were not abandoned but were continuously used.

When petitioner learned of the cancellation of its federal

registration by the United States Trademark Office, ap-

plication was again made to formally register the mark and

the Trademark Office indicated that the trademark would

be registered.- The proceedings in the Trademark Office

relating to that application have been stayed pending the

outcome of this litigation. A subsequently filed trademark

application has issued as Registration No. 1,124,504 but it

is not involved in this litigation since the registration is-

sued subsequent to the decision in the lower court.

4

Petitioner filed suit against respondent in November

1977 alleging four counts of common law trademark in-

fringement and one count of unfair competition. The

United States District Court for the Northern District of

California found-that petitioner owned the trademarks of

“JOB’S DAUGHTERS”, “ITYOB FILIAE”, “DAUGH-

TERS OF JOB” and the trademarks of Exhibits D and E

and that the trademarks had been continuously used since

1921 on jewelry and non-jewelry items. The District Court

further found that respondent had used petitioner’s trade-

marks in its catalogs and on its merchandise and that such

use created a likelihood of confusion in the public mind as

to the relationship between respondent and petitioner. The

District Court concluded that respondent had infringed pe-

titioner’s trademarks and had committed acts of unfair

competition.

The United States Court of Appeals for the Ninth

Cireuit reversed the District Court and held that respond-

ent had not infringed petitioner’s trademarks since peti-

tioner’s trademarks were a functional part of the product

upon which the trademarks appeared. In ruling that em-

blems of organizations such as petitioner were a functional

part of the product upon which they appeared, the Court

of Appeals for the Ninth Circuit expressly rejected the

reasoning of Boston Professional Hockey Ass’n., Inc. v.

Dallas Cap & Emblem Mfg., Inc., 510 F. 2d 1004 (5th Cir.),

cert. den., 423 U.S. 868 (1975).

ft.

Vv

5

REASONS FOR GRANTING THE WRIT

The decision below is in conflict with the decision of

the Court of Appeals for the Fifth Circuit in Boston Pro-

fessional Hockey Ass’n., Inc. v. Dallas Cap & Emblem Mfq.,

Inc., 510 F.2d 1004 (5th Cir.), cert. den., 423 U.S. 868

(1975). The Fifth Circuit in Boston Pro Hockey held that

the emblems or symbols of organizations such as profes-

sional sports teams do function as trademarks to identify

the maker, sponsor or endorser of the product upon which

the emblems appear. In this case, the Ninth Circuit ex-

pressly rejected the reasoning of Boston Pro Hockey and

held that petitioner’s trademarks were a functional part

of the product upon which they appeared and that a com-

petitor’s use of the trademarks upon merchandise did not

constitute trademark infringement. In so holding, the

Court of Appeals for the Ninth Cireuit incorrectly held

that the names and emblems of petitioner were funtional

aesthetic components of the jewelry upon which the trade-

marks appeared. The Court of Appeals apparently over-

looked the fact that petitioner’s names and emblems are

not only used on jewelry by petitioner as well as respond-

ent but that respondent has used petitioner’s trademarks

in its catalogs and on merchandise such as scrapbooks,

charms, writing paper, ete.

This case presents a serious and significant question

regarding the emblems and trademarks of an organiza-

tion such as that of petitioner and such organizations as the

National Football League, National Hockey League, Amer-

ican Baseball League, National Baseball League, Lions

Club, Elks Club, ete. The primary question herein is

whether petitioner’s name and/or emblem, when placed on

merchandise, becomes a “functional” part of the merchan-

dise. If the emblem is a functional part of the merchandise,

6

the trademark owner cannot prevent an infringer from

placing the trademark owner’s emblem upon the infringer’s

merchandise. If the emblem is not a functional part of

the merchandise, the trademark owner can prevent its un-

authorized use.

The Restatement of Torts, Section 742, comment A,

articulates the key policy relating to the functionality of

trademarks:

“The determination of whether or not... features

are functional depends upon the question of fact

whether prohibition of imitation by others will de-

prive the others of something which will substantially

hinder them in competition.”

As stated in Zippo Mfg. Co. v. Rogers Imports, Inc.,

216 F. Supp. 670 (DC SNY, 1963) :

“Weighing all of these factors—particularly the

need for and benefit of competition—it seems to me

that the narrowest definition of functionality should

be rejected as the sole test, and that functionality

should be defined more broadly. I believe that the

applicable test under the decisions in this Circuit is,

and should be, that a feature of goods is functional at

least if it affects their purpose, action, or performance,

or the facility of economy of processing, handling, or

using them, and possibly also if it affects the buyer’s

choice because of its pleasing appearance.”

The respondent in this case, if prohibited from using

petitioner’s trademarks, will not be hindered in competi-

tion, under the guidelines of the Restatement and Zippo

Mfg. Co. v. Rogers Imports, Inc., 216 F. Supp. 670 (DC

SNY, 1963), since it can continue to sell all the merchan-

dise it previously sold as long as the merchandise does

not bear the trademarks of petitioner. If the trademarks

are the reason that the merchandise is purchased, the only

conclusion that can be reached is that the purchasers be-

7

lieve that the merchandise is somehow sponsored by peti-

tioner. The Court of Appeals also overlooked the fact that

persons other than members of petitioner purchase the

goods as gifts. Persons who are not members of petitioner

and who are purchasing the goods of the respondent will

certainly believe that the goods somehow have the sponsor-

ship of petitioner if the respondent has placed the trade-

marks of petitioner on the merchandise.

The trademarks of petitioner, when placed upon mer-

chandise such as scrapbooks, stationery, pens and pencils,

napkins, ete. are certainly non-functional and cannot be

said to affect the purpose, action, performance, facility or

economy of processing the goods. The trademarks of peti-

tioner serve to indicate the source or sponsorship of the

item and are not functional.

In expressly rejecting the reasoning of Boston Pro

Hockey, the Court of Appeals stated that the strict function

of a trademark is to indicate the source of the product

rather than sponsorship or affiliation. In fact, the Court

of Appeals, in its Opinion, cited cases which were decided

before the Trademark Act was amended in 1962 to elimi-

nate “source” as the basis or test for “likelihood of con-

fusion.” As stated in Siegel v. Chicken Delight, Inc., 448

F’. 2d 43 (9th Cir., 1971):

“The historical conception of a trademark as a

strict emblem of source of the product to which it

attaches has largely been abandoned.”

The purchaser, when seeing petitioner’s trademarks

on goods, probably will not reach the conclusion that peti-

tioner itself actually manufactured the goods but will cer-

tainly believe that the goods somehow have the sponsor-

ship of petitioner. That is the very function of a trace-

8

mark in modern society. The Court of Appeals, in holding

that the names and emblems of petitioner are not trade-

marks, has opened the floodgates to permit every com-

petitor to market products bearing replicas of petitioner’s

trademarks thereby preventing petitioner from exercising

any quality control over the use of its trademarks and the

products upon which they appear.

The Court of Appeals, in its Opinion of reversal, im-

properly rejected the reasoning of Boston Professional

Hockey Ass’n., Inc. v. Dallas Cap & Emblem Mfg., Inc.,

510 F.2d 1004 (5th Cir.), cert. den., 423 U.S. 868 (1975).

If the decision of the Ninth Circuit is not reversed, peti-

tioner would presumably have valid trademarks in the

Fifth Cireuit but would not have valid trademarks in the

Ninth Cireuit. Would petitioner have valid trademarks in

the other circuits? The reasoning expressed in Boston

Pro Hockey is proper and such reasoning was also ex-

pressed in National Football League Properties, Inc. v.

Consumer Enterprises, Inc., 185 USPQ 550 (Ill. App. Ct.,

1975). In fact, the Illinois Appellate Court made its deter-

mination that the emblems of the National Football League

were trademarks even before the Fifth Circuit reversed

the lower court in Boston Pro Hockey.

The decision in Boston Pro Hockey is well reasoned

and the complete rejection of Boston Pro Hockey by the

Court of Appeals is in error and represents a serious con-

flict between the Fifth and Ninth Circuits.

Respectfully submitted,

Dennis L. THOMTE

ZaRLEY, McKez, THomTe, VoorHees & SEease

945 Commercial Federal Tower

Omaha, Nebraska 68124

Attorney for Petitioner

App. 1

APPENDIX

EXHIBIT A

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

NO. 78-1674

D.C. No. CV-77-0185 GBH

INTERNATIONAL ORDER OF JOB’S DAUGHTERS,

Plaintiff-Appellee,

vs.

LINDEBURG AND COMPANY,

Defendant-A ppellant.

OPINION

(Filed December 10, 1980)

Appeal f om the United States District Court

for the Northern District of California

George B. Harris, District Judge, Presiding

Argued and submitted May 13, 1980

BEFORE: TRASK and FLETCHER, Circuit Judges, and

BLUMENFELD,* District Judge

FLETCHER, Circuit Judge:

Appellee, the International Order of the Daughters of

Job (Job’s Daughters), sued appellant Lindeburg and Co.

(Lindeburg), for trademark infringement arising out of

* Honorable M. Joseph Blumenfeld, Senior United States Dis-

trict Judge for the District of Connecticut, sitting by designa-

tion.

App. 2

Lindeburg’s manufacture and sale of jewelry bearing the

Job’s Daughtérs insignia. The district judge granted judg-

ment for Job’s Daughters. Lindeburg appeals, invoking

appellate jurisdiction under 28 U.S.C. §1291. We reverse

and remand.

Job’s Daughters is a young women’s fraternal organi-

zation. Since its establishment in 1921 it has used its

name and emblem! as collective marks.’ Since its incep-

tion Job’s Daughters has licensed at least one jeweler to

produce jewelry for it. Job’s Daughters sells some of the

licensed jewelry directly to its members. Jewelry bearing

the name or emblem is also sold by approximately 31,000

retailers across the nation. Most of these retailers pre-

sumably have no connection with the Job’s Daughters or-

ganization. Some sell jewelry manufactured by Job’s

Daughters’ licensees; others sell jewelry manufactured by

jewelers not licensed by the organization.

Lindeburg makes and sells fraternal jewelry. In 1954

it began selling jewelry and related items bearing the Job’s

Daughters insignia. In 1957 Lindeburg asked the Job’s

Daughters trademark committee to designate it an “official

jeweler.” The committee refused and in 1964 and 1966

asked Lindeburg to stop manufacturing and selling un-

licensed jewelry. Lindeburg did not comply with this re-

quest. In 1973 Lindeburg again sought permission to act

as an official jeweler for Job’s Daughters. Permission was

granted for one year and then withdrawn.

In 1975 Job’s Daughters brought this suit against

Lindeburg, alleging that he had infringed their “common

law trademark” rights. The district court granted judg-

ment for Job’s Daughters after an extensive trial and

App. 3

enjoined Lindeburg from further use of the name or em-

blem. The court held, however, that Job’s Daughters’ long

acquiescence in Lindeburg’s infringement barred the award

of damages. ;

I

JURISDICTION?

In its complaint Job’s Daughters did not invoke any

particular jurisdictional statute, but did recite the factors

establishing diversity jurisdiction under 28 U.S.C. § 1332:

diverse citizenship and a sufficient amount in controversy.

Lindeburg did not contest this implicit jurisdictional asser-

tion, and the district court expressly held that diversity

jurisdiction was present. The parties, however, relied ex-

clusively on cases decided under federal trademark stat-

utes and never referred to state law. Because the asser-

tion of diversity jurisdiction would ordinarily be appropri-

ate where the right asserted is grounded in state law, the

‘invocation of cases decided under federal law creates con-

fusion about the applicable law and sparks our inquiry.

The source of the right sued upon, not the ground on

which federal jurisdiction is invoked, determines whether

federal or state law applies. Maternally Yours, Inc. v. Your

Maternity Shop, Inc., 234 F.2d 538, 540-41 n.1 (2d Cir.

1956). We must, therefore, determine the source of the

right upon which this lawsuit is based.

The parties have apparently assumed the existence of

a general common law governing all trademark infringe-

ment cases brought in federal court.4 This assumption is

incorrect. Save as an outgrowth of federal statutory or

constitutional law, there is no federal common law. Com-

App. 4

pare Erie -R. R: Co. v. Tompkins, 304 U. 8. 64, 78 (1938)

(“Except in matters governed by the Federal Constitution

or by Acts of Congress, the law to be upplied in any case

is the law of the state.... There is no federal general com-

mon law.”), with Hinderlider v. La Plata River & Cherry

Creek Ditch Co., 304 U.S. 92, 110 (1938) (applying “federal

common law” to resolve a controversy regarding an inter-

state stream). See generally, P. Bator, P. Mishkin, D.

Shapiro, & H. Wechsler, The Federal Courts ¢ The Federal

System, 756-832 (2d ed. 1973). Accordingly, to succeed,

Job’s Daughters must assert rights found either in state

law or federal statutory law.

This seemingly simple proposition is rendered difficult

by the complex relationship between state and federal

trademark law. In general, the common law has been

understood as protecting against the broad business tort

of “unfair competition.” Trademark infringement is a

species of this generic concept. See New West Corp. v.

NYM Co. of California, 595 F. 2d 1194, 1201 (9th Cir. 1979).

The Lanham Act created a federal protection against two

types of unfair competition, infringement of registered

trademarks, 15 U.S.C. § 1114 and the related tort of false

designation of the origin of goods, 15 U.S.C. § 1125 (a).5

Federal courts have jurisdiction to hear suits invoking

these protections. In addition, many states by statute or

judge-made law protect against trademark infringement

and other types of unfair competition, such as misappro-

priation of the fruits of another’s labor, see Zacchini ».

Scripps-Howard Broadcasting Co., 483 U.S. 562 (1977);

theft of trade secrets, see Pachmayr Gunworks, Inc. v. Olin

Mathieson Chemical Corp., 502 F.2d 802, 807-08 (9th Cir.

1974); and trade disparagement, see Kemart Corp. v.

App. 5

Printing Arts Research Laboratory, Inc., 269 F.2d 375,

388-94 (9th Cir.), cert. denied, 361 U.S. 893 (1959). These

protections need not track those provided by the Lanham

Act. See Sears, Roebuck & Co. v. Stiffel, Co., 376 U.S.

225, 232 (1964); John Wright, Inc. v. Casper Corp., 419

F.Supp. 292, 317 (E.D. Pa. 1976), modified sub nom.

Donsco, Inc. v. Casper Corp., 587 F. 2d 602 (3rd Cir. 1978) ;

Markel v. Scovill Mfg. Co., 471 F. Supp. 1244, 1249 (W. D.

N.Y.) aff'd, 610 F.2d 807 (2d Cir. 1979). If diversity

factors exist, federal courts of course have jurisdiction to

heey suits asserting these state law protections.® Thus,

a plaintiff complaining of trademark infringement in fed-

eral court may invoke either federal or state protections,

or both.’

Confusion as to the source of the substantive law is

understandable because federal and state laws regarding

trademarks and related claims of unfair competition are

substantially congruent. See K-S-H Plastics, Inc. v. Caro-

lite, Inc., 408 F. 2d 54, 59 n.2 (9th Cir.), cert. denied, 396

U. S. 825 (1969); Keebler Co. v. Rovira Biscuit Corp., 624

F.2d 366, 372 (1st Cir. 1980); Kentucky Fried Chicken

Corp. v. Diversified Packaging Corp., 549 F.2d 368, 382

n.14 (5th Cir. 1977); La Societe Anonyme des Parfums le

Galion v. Jean Patou, Inc., 495 F. 2d 1265, 1270 n. 5 (2d Cir.

1974) ; Maternally Yours, Inc. v. Your Maternity Shop, Inc.,

934 F. 2d 538, 540 n. 1 (2d Cir. 1958). Therefore the choice

of federal or state law frequently has no impact on the out-

come, leading courts to avoid the issue. See, e.g., K-S-H

Plastics, Inc. v. Carolite, Inc., 408 F. 2d 54, 59 n. 2 (8th Cir.

1969); Keebler Co. v. Rovira Biscuit Corp., 624 F.2d 366,

372 (1st Cir. 1980). This does not, however, alter the fact

that there are distinct federal and state rights.

App. 6

Neither of the litigants before us has distinguished

between state and federal law. Job’s Daughters has

brought what might best be characterized as a hybrid action

by relying on federal substantive law but apparently in-

voking the district court’s diversity jurisdiction. Our ex-

amination of the pleadings, trial transcript, and briefs

persuades us that, despite the invocation of diversity juris-

diction, Job’s Daughters intended to assert its federal

rights under 15 U.S.C. § 1125.8 Therefore, we shall treat

this case as within the jurisdiction of the district court

pursuant to 28 U.S.C. § 1338. See Vukonich v. Civil Serv-

ice Comm’n, 589 F. 2d 494, 496 n.1 (10th Cir. 1978).

II

INFRINGEMENT

This court held in New West Corp. v. NYM Co. of

California, 595 F.2d 1194 (9th Cir. 1979), that section 43

of the Lanham Act, 15 U.S.C. § 1125 (a), created a federal

remedy against the deceptive use of unregistered trade-

marks to designate falsely the origin of goods (“passing

off”). 595 F.2d at 1198, 1201. New West also held that

the test for false designation of origin was similar to that

for infringement of a registered trademark under 15

U.S.C. §1114. Both statutes preclude the use of another’s

trademark in a manner likely to confuse the public about

the origin of goods. 595 F.2d at 1201. Thus, we must

decide whether Lindeburg is likely to confuse the public

about the origin of its jewelry by inscribing the Job’s

Daughters name and emblem on it.

Resolution of this issue turns on a close analysis of

the way in which Lindeburg is using the Job’s Daughters

App. 7

insignia. In general, trademark law is concerned only with

identification of the maker, sponsor, or endorser of the

product so as to avoid confusing consumers. Trademark

law does not prevent a person from copying so-called “func-

tional” features of a product which constitute the actual

benefit that the consumer wishes to purchase, as distin-

guished from an assurance that a particular entity made,

sponsored, or endorsed a product.

The distinction between trademarks and functional

features is illustrated in Pagliero v. Wallace China, Co.,

198 F.2d 339 (9th Cir. 1952), where plaintiff, Wallace

China, claimed trademark infringement on account of the

use by others of the design it used on its china. The court

found no trademark infringement because the design served

primarily as a functional part of the product:

Imitation of the physical details and designs of a

competitor’s product may be actionable, if the par-

ticular features imitated are “non-functional” and

have acquired a secondary meaning. But, whee the

features are “functional” there is normally no right to

relief. “Functional” in this sense might be said to

connote other than a trade-mark purpose. If the par-

ticular feature is an important ingredient in the com-

mercial success of the product, the interest in free

competition permits its imitation in the absence of a

patent or copyright. On the other hand, where the

feature or, more aptly, design, is a mere arbitrary

embellishment, a form of dress for the goods primarily

adopted for purposes of identification and individ-

uality and, hence, unrelated to basic consumer demands

in connection with the product, imitation may be for-

bidden. . . . Under such circumstances, since effective

competition may be undertaken without imitation, the

law grants protection.

App. 8

198 F.2d at 343 (citation omitted). See also Famolare,

Inc. v. Melville Corp., 472 F. Supp. 738, 742-45 (D. Hawaii

1979); Boston Professional Hockey Ass’n, Inc. v. Dallas

Cap & Emblem Mfg., Inc., 360 F. Supp. 459, 463-64 (N. D.

Tex. 1973), rev’d, Boston Professional Hockey Ass’n, Inc.

v. Dallas Cap & Emblem Mfg., Inc., 510 F.2d 1004 (5th

Cir.), cert. denied, 423 U.S. 868 (1975); Restatement of

Torts § 742, comment (a) (1938).

Application of the Pagliero distinction to this case has

a special twist because the name “Job’s Daughters” and

the Job’s Daughters insignia are indisputably used to iden-

tify the organization, and members of Job’s Daughters

wear the jewelry to identify themselves as members. In

that context, the insignia are trademarks of Job’s Daugh-

ters. But in the context of this case, the name and emblem

are functional aesthetic components of the jewelry, in that

they are being merchandised on the basis of their intrinsic

value, not as a designation of origin or sponsorship.

It is not uncommon for a name or emblem that serves

in one context as a collective mark or trademark also to be

merchandised for its own intrinsic utility to consumers.

We commonly identify ourselves by displaying emblems

expressing allegiances. Our jewelry, clothing, and cars are

emblazoned with inscriptions showing the organizations we

belong to, the schools we attend, the landmarks we have

visited, the sports teams we support, the beverages we

imbibe. Although these inscriptions frequently include

names and emblems that are also used as collective marks

or trademarks, it would be naive to conclude that the name

or emblem is desired because consumers believe that the

App. 9

product somehow originated with or was sponsored by the

organization the name or emblem signifies.

Job’s Daughters relies on Boston Professional Hockey

Ass’n, Inc. v. Dallas Cap & Emblem Mfg., Inc., 510 F. 2d

1004 (5th Cir.), cert. denied, 423 U.S. 868 (1975), in which

the Boston Bruins and other National Hockey League clubs

brought a trademark infringement suit against a company

that sold replicas of the NHL team emblems. The Fifth

Cireuit, applying the Lanham Act infringement test and

focusing on the “likelihood of confusion,” found infringe-

ment:

Th2 confusion or deceit requirement is met by the fact

that the defendant duplicated the protected trade-

marks and sold them to the public knowing that the

public would identify them as being the teams’ trade-

marks. The certain knowledge of the buyer that the

source and origin of the trademark symbols were the

plaintiffs satisfies the requirement of the act. The

argument that confusion must be as to the source of the

manufacture of the emblem itself is unpersuasive,

where the trademark, originated by the team, is the

triggering mechanism for the sale of the emblem.

510 F.2d at 1012.° Job’s Daughters asserts that Boston

Hockey supports its contention that even purely functional

use of a trademark violates the Lanham Act. We reject

the reasoning of Boston Hockey.

Interpreted expansively, Boston Hockey holds that a

trademark’s owner has a complete monopoly over its use,

including its functional use, in commercial merchandising.'°

But our reading of the Lanham Act and its legislative

history reveals no congressional design to bestow such

broad property rights on trademark owners. Its seope is

much narrower: to protect consumers against deceptive

App. 10

designations of the origin of goods and, conversely, to enable

producers to differentiate their products from those of

others. See Smith v. Chanel, Inc., 402 F.2d 562, 566-70

(9th Cir. 1968). See also HMH Publishing Co., Inc. v.

Brincat, 504 F. 2d 713, 716 (9th Cir. 1974) ; Developments in

the Law-T'rademarks and Unfair Competition, 68 Harv. L.

Rev. 814, 816-17 (1955). The Boston Hockey decision trans-

mogrifies this narrow protection into a broad monopoly.

It does so by injecting its evaluation of the equities between

the parties and of the desirability of bestowing broad prop-

erty rights on trademark owners." <A trademark is, of

course, a form of business property. See J. McCarthy,

Trademarks and Unfair Competition §§ 2:6-2:7 (1973).

But the “property right” or protection accorded a trade-

mark owner can only be understood in the context of trade-

mark law and its purposes. A trademark owner has a

property right only insofar as is necessary to prevent con-

sumer confusion as to who produced the goods and to

facilitate differentiation of the trademark owner’s goods.

See Id. The Boston Hockey court decided that broader

protection was desirable. In our view, this extends the

protection beyond that intended by Congress and beyond

that accorded by any other court. Cf. Kentucky Fried

Chicken Corp. v. Diversified Packaging Corp., 549 F.2d

368, 389 (5th Cir. 1977) (rejecting the “notion that a trade-

mark is an owner’s ‘property’ to be protected irrespective

of its role in the operation of our markets”).

Indeed, the court in Boston Hockey admitted that its

decision “may slightly tilt the trademark laws from the

purpose of protecting the public to the protection of the

business interests of plaintiffs.” 510 F.2d at 1011. We

App. 11

think that this tilt was not slight but an extraordinary ex-

tension of the protection heretofore afforded trademark

owners. It is an extension we cannot endorse. See General

Mills, Inc. v. Henry Regnery Co., 421 F. Supp. 359, 362 &

n. 2 (N. D. Ill. 1976). Instead, we agree with Judge Water-

man of the Second Circuit, who recently said that under the

Lanham Act “one can capitalize on a market or fad created

by another provided that it is not accomplished by con-

fusing the public into mistakenly purchasing the product

in the belief that the product is the product of the com-

petitor.” American Footwear Corp. v. General Footwear

Co. Ltd., 609 F. 2d 655, 662 (2d Cir. 1979), cert. denied, 100

S. Ct. 1601 (1980) (finding that the manufacturer of a

“Bionie Boot” did not infringe the trademark of the pro-

ducers of the “Bionic Woman” television program).

Our holding does not mean that a name or emblem

could not serve simultaneously as a functional component

of a product and a trademark. See Dallas Cowboys Cheer-

leaders, Inc. v. Pussycat Cinema, Ltd., 604 F. 2c 200, 204

(2d Cir. 1979). That is, even if the Job’s Daughters’ name

and emblem, when inscribed on Lindeburg’s jewelry, served

primarily a functional purpose, it is possible that they

could serve secondarily as trademarks if the typical custo-

mer not only purchased the jewelry for its intrinsic fune-

tional use and aesthetic appeal but also inferred from the

insignia that the jewelry was produced, sponsored, or en-

dorsed by Job’s Daughters. See generally, Grimes & Bat-

tersby, The Protection of Merchandising Properties, 69

TMR 431, 441-45 (1980). We recognize that there is some

danger that the consumer may be more likely to infer en-

dorsement or sponsorship when the consumer is a member

of the group whose collective mark or trademark is being

App. 12

marketed. Aecordingly, a court must closely examine the

articles themselves, the defendant’s merchandising prac-

tices, and any evidence that consumers have actually in-

ferred a connection between the defendant’s product and

the trademark owner.

The trial court made comprehensive findings of fact

that provide an adequate record for this court to review

the trial court’s conclusion of law that the names and em-

blems were trademarks. See Alpha Indus., Inc. v. Alpha

Steel Tube & Shapes, Inc., 616 F.2d 440, 443-44 (9th Cir.

1980); AMF Ine. v. Sleekcraft Boats, 599 F. 2d 341, 346-47

(9th Cir. 1979)."

We conclude from our examination of the trial judge’s

findings and of the underlying evidence that Lindeburg was

not using the Job’s Daughters name and emblem as trade-

marks. The insignia were a prominent feature of each

item so as to be visible to others when worn, allowing the

wearer to publicly express her allegiance to the organiza-

tion. Lindeburg never designated the merchandise as “of-

ficial” Job’s Daughters’ merchandise or otherwise affirma-

tively indicated sponsorship. Job’s Daughters did not

show a single instance in which a customer was misled

about the origin, sponsorship, or endorsement of Linde-

burg’s jewelry, nor that it received any complaints about

Lindeburg’s wares. Finally, there was evidence that many

other jewelers sold unlicensed Job’s Daughters jewelry,

implying that consumers did not ordinarily purchase their

fraternal jewelry from only “official” sources. We con-

clude that Job’s Daughters did not meet its burden of

proving that a typical buyer of Lindeburg’s merchandise

would think that the jewelry was produced, sponsored, or

App. 13

endorsed by the organization. The name and emblem were

functional aesthetic components of the product, not trade-

marks. There could be, therefore, no infringement.

The judgment of the district court is reversed and the

ease is remanded for the entry of judgment in favor of ap-

pellant Lindeburg.

FOOTNOTES

1 The emblem consists of a representation of three girls

within a double triangle. The girls carry a dove, an

urn, and a cornucopia. Between the bases of the two

triangles are the words “Tyob Filiae,” the Latin trans-

lation of “Daughters of Job.”

2 A collective mark denotes membership in an organiza-

tion. A trademark, in contrast, identifies goods pro-

duced, sponsored, or endorsed by a particular organi-

zation and distinguishes them from goods originating

from others. Compare 15 U.S.C. §1127, 713 with

15 U.S. C. § 1127, 710. See J. McCarthy, Trademarks

dé Unfair Competition § 4:4 (1973). The distinction

has no import in this case, and we have used the terms

interchangeably.

3 The parties have not raised this issue, but we must,

sua sponte, inquire into the precise nature of our

jurisdiction. Louisville € Nashville R. R. Co. v. Mot-

ley, 211 U. S. 149, 152 (1908).

4 By the phrase “common law” we mean rules of deci-

sion which do not expressly derive from a constitu-

tional or statutory source, as distinguished from

judge-made rules formulated in the course of consti-

App. 14

tutional or statutory interpretation. See P. Bator, P.

Mishkin, D. Shapiro, H. Wechsler, The Federal Courts

and the Federal System, 769-70 (2d ed. 1973).

In Stauffer v. Exley, 184 F.2d 962 (9th Cir. 1950),

this court stated that section 44 of the Lanham Act,

15 U.S. C. § 1126, created a federal protection against

unfair competition. See also Pagliero v. Wallace

China Co., 198 F. 2d 339 (9th Cir. 1952). The Stauf-

fer language intimates the existence of federal law

extending well beyond the categories of trademark

infringement and false designation of the origin of

goods. Several commentators have criticized the Stauf-

fer language, J. McCarthy, Trademarks & Unfair Com-

petition § 32:2E (1973); Developments in the Law—

Trademarks and Unfair Competition, 68 Harv. L. Rev.

814, 878-81 (1955), and most circuits have rejected

the idea of such a broad federal protection. See, e. g.,

Royal Lace Paper Works, Inc. v. Pest-Guard Prods.,

Inc., 240 F. 2d 814, 816-20 (5th Cir. 1957); L’Aiglon

Apparel, Inc. v. Lana Lobell, Inc., 214 F. 2d 649, 651-

54 (3d Cir. 1954); American Auto. Ass’n, Inc. v. Spie-

gel, 205 F. 2d 771, 774-75 (2d Cir.), cert. denied, 346

U. S. 887 (1953).

We do not read Stauffer so broadly. The case

did not involve the whole range of business torts

that are generally thought to be treated under state

law, but rather involved the narrower tort of falsely

designating the origin of goods. Other circuits have

applied 15 U.S.C. § 1125 in such situations. See

Boston Professional Hockey Ass’n v. Dallas Cap &

Emblem Mfg., Inc., 510 F. 2d 1004, 1010 (5th Cir.)

cert. denied, 423 U. S. 868 (1975). Moreover, some of

App. 15

the language in Stauffer seems to limit its applicabil-

ity to false designations of origin: “[TJ]he protec-

tion granted by the Lanham Act against unfair. com-

petition ... is limited .. . to ‘the remedies provided

in this chapter for infringement of marks... .’” 184

F’. 2d at 965. This court has previously suggested that

this language makes the Stauffer opinion “self-limit-

ing.” Kemart Corp. v. Printing Arts Research Labor-

atories, Inc., 269 F. 2d 375, 389-90 n.9 (9th Cir. 1959).

See also Wells Fargo & Co. v. Wells Fargo Express

Co., 358 F. Supp. 1065, 1081-84 (D. Nev. 1973), vacated

on other grounds, 556 F. 2d 406 (9th Cir. 1977).

In any event, Job’s Daughters’ only claim is

grounded in false designation of origin. That claim

clearly is actionable under section 1125(a), as inter-

preted in New West Corp. v. NYM Co. of California,

595 F. 2d 1194 (9th Cir. 1979).

Accordingly, federal courts ordinarily apply state law

in diversity cases alleging infringement of an unreg-

istered trademark. See Norm Thompson Outfitters,

Inc. v. General Motors Corp., 448 F. 2d 1293, 1295 &

n. 2 (9th Cir. 1971) ; Blue Bell, Inc. v. Farah Mfg. Co.,

508 F. 2d 1260, 1264 & n. 4 (5th Cir. 1975) ; La Societe

Anonyme des Parfums le Galion v. Jean Patou, Inc.,

495 F. 2d 1265, 1270 n. 5 (2d Cir. 1974); Int’l Soc. of

Krishna Consciousness, Inc. v. Stadium Auth. of Pitts-

burg, 479 F. Supp. 792, 797-98 & n. 2 (W. D. Pa. 1979).

Unfair competition claims under state law may be ap-

pended to federal trademark claims. 28 U.S.C. § 1338

(b).

10

11

12

App. 16

In order for protection to arise under 15 U.S.C.

§1125(a), the goods involved must have been used

in commerce within the control of Congress. New

West Corp. v. NYM Co. of California, 595 F. 2d 1194,

1199 (9th Cir. 1979). It is clear from undisputed facts

that Lindeburg’s jewelry was so used.

Similar conclusions were reached in Rolls Royce Mo-

tors, Lid. v. A d A Fiberglass, Inc., 428 F. Supp. 689

(N. D. Ga. 1977), and Nat'l Football League Proper-

ties, Inc. v. Consumer Enterprises, Inc., 26 Ill. App.

38rd 814, 327 N. E. 2d 242 (1975), cert. denied, 423 U. S.

1018 (1975).

The Fifth Circuit itself has apparently retreated from

a broad interpretation of Boston Hockey. In Ken-

tucky Fried Chicken Corp. v. Diversified Packaging

Corp., 549 F. 2d 368 (5th Cir. 1977), the court began

its analysis of Kentucky Fried Chicken’s infringement

claim by noting that it “reject[ed] any notion that a

trademark is an owner’s ‘property’ to be protected ir-

respective of its role in the protection of our markets,”

and described the Boston Hockey holding as prem-

ised on a finding that consumers were likely to believe

that the emblems somehow originated from the hockey

clubs. 549 F. 2d at 389.

We express no opinion about whether Job’s Daugh-

ters could prevent Lindeburg from using its name and

emblem under federal patent law, federal copyright

law, or state unfair competition law.

The trial court concluded:

Defendant has used plaintiff’s trademarks in its

catalogues and on merchandise and such use cre-

App: 17

ates.a likelihood.-of.confusion in-the public-mind

as to the relationship between plaintiff and de-

fendant. See [Boston Hockey). ;

13 See Rolls Royce Motors, Ltd. v. A & A Fiberglass,

Inc., 428 F'. Supp. 689 (N. D. Ga. 1977) ; Coca-Cola Co.

v. Gemini Rising, Inc., 346 F. Supp. 1183 (E. D. N. Y.

1972). A more sensitive evaluation was made in Girl

Scouts of America v. Personality Posters Mfg. Co.,

Inc., 304 F. Supp. 1228, 1231 (S. D. N. Y. 1969).

App. 18

EXHIBIT B

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

No. 78-1674

INTERNATIONAL ORDER OF JOB’S DAUGHTERS,

Plaintiff-Appellee,

vs.

LINDEBURG AND COMPANY,

Defendant-A ppellant.

ORDER

(Filed February 11, 1981)

Before: TRASK and FLETCHER, Circuit Judges, and

BLUMENFELD,* District Judge

The panel as constituted in the above case has voted

to deny the petition for rehearing and to reject the sug-

gestion for a rehearing en banc.

The full court has been advised of the suggestion for

en banc rehearing, and no judge of the court has requested

a vote on the suggestion for rehearing en banc. Fed. R.

App. P. 35(b).

The petition for rehearing is denied and the sugges-

tion for a rehearing en banc is rejected.

* The Hon. M. Joseph Blumenfeld, Senior United States District

Judge for the District of Connecticut, sitting by designation.

App: .19

_——— 2.

- EXHIBIT 0

INTERNATIONAL ORDER OF JOB’S DAUGHTERS,

Vs.

LINDEBURG AND COMPANY,

No. 75-0185 Decided July 6, 1977

Harris, District Judge.

Foliowing the trial of this matter to the court sitting

' without a jury, and upon the memoranda of law submitted

by the parties hereto, the court hereby makes its Findings

of Fact and Conclusions of Law.

FINDINGS OF FACT

1. The plaintiff and counterdefendant, International

Order of Job’s Daughters (Job’s Daughters), is a fraternal

organization whose membership consists of girls between

the ages of 12 and 20. Membership is limited to daughters

or other close relatives of members of adult Masonic Organ-

izations. Job’s Daughters was founded in 1921, at which

time it adopted an emblem including a representation of

three girls carrying a dove, urn and cornucopia respectively

and the words IYOB FILIAE, the Latin translation of

DAUGHTERS OF JOB. The emblem was adopted so

that Job’s Daughters and its members could use the emblem

to indicate membership in the Job’s Daughters -organiza-

tion. The emblem was changed in 1923 to show the three

girls within a double triangle, and the emblem has remained

substantially unchanged to the present date, although the

emblem has been modernized from time to time, most

recently in 1964.

App. 20

2. Job’s Daughters presently has approximately 73,-

500 members in the United States and foreign countries.

The young girls are organized into local bethels which are

ordinarily under the jurisdiction of state level Grand

Guardian Councils. The Grand Guardian Councils and

bethels not under Grand Guardian Councils are under the

jurisdiction of the Supreme Guardian Council which is

governed by some 20 officers and five trustees assisted by

some 30 ccinmittees.

3. Job’s Daughters appointed Carson Banks as its

official jeweler in 1921. In 1927, Job’s Daughters licensed

Spies Brothers to furnish official jewelry and non-jewelry

items to Job’s Daughters and its members.

4. Since 1921, Job’s Daughters has had at least one

official jeweler and/or supplier which sold jewelry and

non-jewelry items bearing the emblem of Job’s Daughters

to the members of Job’s Daughters.

5. Since 1921, Job’s Daughters has had at least one

official jeweler and/or supplier which sold jewelry and

non-jewelry items bearing the words “IYOB FILIAE” to

the members of Job’s Daughters.

6. Since 1921, Job’s Daughters has had at least one

official jeweler and/or supplier which sold jewelry and

non-jewelry items bearing the words “JOB’S DAUGH-

TERS” to the members of Job’s Daughters.

7. At present, plaintiff has agreements with some five

official jewelers and/or suppliers who furnish merchandise

bearing plaintiff’s emblem to plaintiff and its members.

8. Since 1927, the official jewelers and/or suppliers

of Job’s Daughters have paid Job’s Daughters approxi-

App: 21

mately $500,000 in royalties for permission to'use the em-

blem of Job’s Daughters on merchandise.

9. The Supreme Secretary of the Supreme Guardian

Council sells and/or furnishes merchandise bearing the

trademark of Job’s Daughters to Grand Guardian Secre-

taries and to Bethel Secretaries and has done so over the

years.

10. Merchandise, offered for sale by the official

jewelers, bearing plaintiff’s trademark is normally ordered

by members of Job’s Daughters through the Bethel Secre-

tary who forwards an order form to the official jeweler and

sends a copy thereof to the Supreme Secretary.

11. The by-laws of Job’s Daughters include provi-

sions or guidelines for the use of its emblem. The by-laws

of Job’s Daughters also provide for the appointment of a

trademark chairman who oversees the use of plaintiff’s

emblem.

12. The defendant and counterclaimant, Lindeburg

and Company (Lindeburg), is a California corporation

which specializes in the manufacture and sale of fraternal

merchandise to the various Masonic orders. Lindeburg

was founded in 1917 by the current president’s father and

remains family owned and operated, having eleven em-

ployees outside of the four members of the Lindeburg

family active in the business. Lindeburg also sells its mer-

chandise by mail order through the distribution of cata-

logues. Lindeburg manufactures and/or sells hundreds of

items of merchandise bearing the emblems of various

fraternal organizations including Job’s Daughters. Some-

time between 1952 and 1954, defendant first began to use

App. 22

plaintiff’s emblem on merchandise which it was advertising

and selling. Merchandise bearing the Job’s Daughters em-

blem comprises a substantial portion of Lindeburg’s busi-

ness. Lindeburg is not licensed by any fraternal organiza-

tion, Job’s Daughters included, to manufacture and sell

merchandise bearing the organization’s emblem.

13. Of the merchandise which Lindeburg sells bearing

the Job’s Daughters emblem, approximately 20% of such

merchandise is manufactured by Lindeburg, 30% is as-

sembled by Lindeburg from stock merchandise and emblem

representations provided by others, and 30% is simply

purchased from other suppliers and resold by Lindeburg

without further processing or alteration by Lindeburg.

14. At first Lindeburg simply purchased its merchan-

dise from catalogue suppliers for resale. Lindeburg’s cus-

tomers would simply pick the merchandise they wanted to

purchase in the catalogues of such third party suppliers

which Lindeburg would then order wholesale. Lindeburg

soon initiated a regular product line of Job’s Daughters

merchandise, which has grown to the present date and in-

cludes nearly 300 separate items, most of them non-jewelry.

Lindeburg sells such merchandise to members of the Job’s

Daughters organization, their relatives and friends, and

also has widely sold to hundreds of local chapters (Bethels),

and to at least 31 state or province chapters (Ground Coun-

ceils) (Defendant’s group exhibits BBB and CCC).

15. Since at least 1958 Lindeburg has widely dis-

tributed catalogues of its merchandise, including catalogues

featuring Job’s Daughters merchandise (Defendant’s group

exhibit FFF).

App. 23.

16. Lindeburg has never attempted to conceal: its

activities from Job’s Daughters. Various members of the

present Board of Trustees of Job’s Daughters have known

of Lindeburg’s activities for many years. One of Job’s

Daughters’ witnesses, Doris Finley, Grand Secretary of

the Supreme Council, testified that she has known of Linde-

burg’s activities since about 1958. Sharlot Swem, a 1922

charter member of a local Bethel, and who throughout the

years has held virtually every office in Job’s Daughters on

the local, state and supreme levels, testified she personally

had known about Lindeburg for approximately 25 years.

17. As early as 1957, Lindeburg disclosed to the Job’s

Daughters Board his then complete line of products bear-

ing the Job’s Daughters emblem. This disclosure was by

way of letter (Exhibit B) in which Lindeburg requested to

be designated as an “official jeweler” for Job’s Daughters

merchandise in the west. Although then fully informed of

Lindeburg’s sale of merchandise bearing the Job’s Daugh-

ters emblem, Job’s Daughters simply declined to appoint

him an “official jeweler” and did not inform Lindeburg or

indicate in any manner that his sale of Job’s Daughters

emblematic items was considered in violation of Job’s

Daughters’ rights.

18. In 1964 and again in 1966 Job’s Daughters sent

letters to defendant requesting that he cease and desist in

the sale and advertising of merchandise bearing plaintiff’s

emblem. William Lindeburg, president of defendant, -in-

vestigated the matter and concluded in each instance that

plaintiff had no enforceable rights and consequently de-

fendant continued to develop and vend merchandise with

the Job’s Daughters’ emblem thereon.

App. 24

19. In 1973, defendant requested permission from

Job’s Daughters to use the “registered symbol” of Job’s

Daughters. There is a conflict in the evidence as to wheth-

er defendant sought permission to use the Job’s Daughters’

emblem or merely the r in a circle thereon, but in any event

permission to use the “registered symbol” for a period of

one year was granted to defendant in 1973. On September

19, 1973, defendant wrote to Job’s Daughters Novelties in

British Columbia and stated that they had been given per-

mission to use the “registered trademark” of Job’s Daugh-

ters.

20. Job’s Daughters has brought this suit based upon

its asserted common law trademark rights, and jurisdiction

of the complaint is founded solely on diversity. Job’s

Daughters obtained design patent protection for pins in

which the emblem was the sole distinguishing feature, U.S.

patent Nos. 75,983 (Ex. 102) and 136,723 (Ex. 101), both of

which are now expired. The Job’s Daughters emblem is not

protected under United States Copyright Law, and the em-

blem is not currently registered either as a collective mark

or as a trademark under the provisions of the Lanham Act,

15 USC 1050 et seq. Job’s Daughters once obtained a col-

lective membership mark registration for its emblem, reg-

istration No. 672,316 (Ex. 97) dated January 6, 1959, which

expired pursuant to 15 USC 1058(a) on January 6, 1965,

through an inadvertent failure to file the required affidavits

of continued use.

21. There are approximately 31,000 retail jewelry

stores located in the United States. It is the custom and

practice of the retail jewelry trade to supply customers with

fraternal as well as non-fraternal jewelry. Those retail

App. 25

jewelers who do not themselves also manufacture or make

the jewelry, can and often do order fraternal jewelry from

national fraternal jewelry manufacturers who in the nor-

mal course of business mail their catalogues to retail jew-

elers who can purchase at wholesale, and re-sell to the cus-

tomer at retail. Defendant’s group exhibit AAA contains

a large number of national fraternal manufacturing jewel-

er catalogues which Lindeburg has received over the years.

National fraternal jewelers also send their catalogues to

officers and functionaries of the various fraternal organ-

izations whose jewelry is displayed in the catalogues. Wil-

liam Lundquist testified that he and his wife have served

throughout the years as officers of several Masonic orders.

Lundquist further testified that he and his wife annually

have received an average of perhaps five to six different

manufacturers’ catalogues displaying emblematic jewelry

and other non-jewelry items, including Job’s Daughters

items. (See exhibit GR-1 received by Lundquist cataloging

fraternal items for 21 Masonic orders including Job’s

Daughters from the Harry Klitzman Company.) Plain-

tiff’s own witness, Mrs. Amelia Frank, testified that when

she first wanted to purchase an item bearing a Job’s Daugh-

ters emblem she simply looked in the telephone book under

“Retail Jewelers” (and possibly under the heading “Fra-

ternal Jewelers”) and randomly selected Lindeburg be-

cause of his “convenient location.” Audre Stevens, owner

and operator of a retail jewelry store in the Los Angeles

area, has personally visited at least 200 other retail stores

throughout some 30 states over the years, who have offered

Job’s Daughters items for sale.

App. 26

CONCLUSIONS OF LAW

1. This court has jurisdiction of the parties and the

subject matter of this case and venue is proper.

2. Plaintiff and counterclaim defendant, Internation-

al Order of Job’s Daughters, is a non-profit organization

organized under the laws of Nebraska.

3. Defendant and counterclaimant, Lindeburg and

Company, is a corporation organized under the laws of

California.

4. Plaintiff owns the trademarks “JOB’S DAUGH-

TERS,” “TYOB FILIAE,” “DAUGHTERS OF JOB,” and

the trademarks of Exhibits 1 and 2 to the Complaint.

5. Plaintiff’s trademarks have been continuously used

since 1921 to indicate membership in plaintiff.

6. Plaintiff’s trademarks have also been continuously

used on jewelry and non-jewelry items since 1921.

7. Defendant has used plaintiff’s trademarks in its

catalogues and on merchandise and such use creates a like-

lihood of confusion in the public mind as to the relationship

between plaintiff and defendant. See Boston Pro Hockey

Ass’n v. Dallas Cap & E. Mfg., Inc., 510 F.2d 1004, 185

USPQ 364 (9th Cir. 1975), cert. den., 423 U.S. 868, 187

USPQ 480 (1975), reh. den., 423 U.S. 991 (1975).

8. Defendant has infringed plaintiff’s trademarks.

[1] 9. Plaintiff’s failure to take any action to enforce

its common-law rights to the exclusive use of its trademarks

prior to filing the case at bar constitutes laches which bars

this court from awarding damages to plaintiff for defend-

App. 27

ant’s infringement. Such finding of laches, however, does

not bar the award of injunctive relief as made hereinafter.

E. g., Menendez v. Holt, 128 U.S. 514, 523 (1888) ; Safeway

Stores v. Dunnell, 172 F.2d 649, 656, 80 USPQ 115, 120

(9th Cir. 1949); Reid, Murdoch & Co. v. H. P. Coffee Co.,

48 F.2d 817, 820, 8 USPQ 420, 422-423 (8th Cir. 1931);

Rolls-Royce Motors Lid. v. A & A Fiberglass, Inc., 428

F. Supp. 689, 696, 193 USPQ 35, 43-44 (N. D. Ga. 1977);

G. D. Searle & Company v. MDX Purity Pharmacies, Inc.,

275 F. Supp. 524, 532-533, 157 USPQ 301, 306-307 (C. D. Cal.

1967); Gillette Company v. Ed Pinaud Inc., 178 F. Supp.

618, 622, 123 USPQ 531, 533-534 (S. D. N. Y. 1959).

[2] 10. The existence of third-party infringers does

not preclude defendant’s being enjoined from continuing

the infringement of plaintiff’s trademarks nor from con-

tinuing its unfair competition. See United States Jaycees

v. San Francisco Jr. Cham. of Com., 354 F. Supp. 61, 67, 73,

175 USPQ 525, 529, 533-534 (N. D. Cal. 1972), affirmed, 513

F, 2d 1226, 185 USPQ 257 (9th Cir. 1977); Rolls-Royce

Motors Ltd. v. A & A Fiberglass, supra; 4 Callmann, Un-

fair Competition, Trademarks and Monopolies § 87.3 (e) at

152 (1969).

11. Defendant has committed acts of unfair competi-

tion by using plaintiff’s trademarks in its catalogues and

on its merchandise.

12. Plaintiff has not committed acts which violate the

antitrust laws of the United States and defendant is not

entitled to the relief sought in its counterclaim.

13. Plaintiff is entitled to equitable protection in the

form of permanent injunctive relief from defendant’s trade-

mark infringement and unfair competition.

App. 28

14. Said permanent injunctive relief shall be effective

from and after January 1, 1978. Plaintiff is hereby di-

rected to submit a form of permanent injunction consistent

with the foregoing.

App. 29

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