Appendix — Association of Co-Operative Members, Inc. v. Farmland Industries, Inc.

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APPENDIX “A”

IN THE UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF TEXAS

SAN ANTONIO DIVISION

ASSOCIATION OF COOPERATIVE

MEMBERS, INC.,

Plaintiff,

V.

FARMLAND INDUSTRIES, INC.,

Defendant,

and CIVIL ACTION NO. SA-79-CA-188

YARMLAND INDUSTRIES, INC. and

FARMLAND LIFE INSURANCE COMPANY,

Counter-Plaintiffs,

V.

ASSOCIATION OF COOPERATIVE

MEMBERS, INC., ELMER GIBSON

and ASSOCIATED AGENCIES, INC.

Counter-Defendants.

Filed May 28, 1981

ORDER GRANTING PARTIAL SUMMARY

JUDGMENT FOR FARMLAND INDUSTRIES, INC.,

and FARMLAND LIFE INSURANCE COMPANY

On the 28 day of May, 1981, came on to be heard the

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Motion for Partial Summary Judgment of Defendant and

Counter-Plaintiff Farmland Industries, Inc. (‘‘Farmland”’)

and Farmland Life Insurance Company ( Farmland Life“).

All parties appeared by and through their respective at-

torneys of record, and the Court heard the arguments of

counsel, considered Farmland’s and Farmland Life’s Mo-

tion, the affidavits attached thereto, and the pleadings,

depositions and answers to interrogatories on file herein,

and, being of the opinion that there are no genuine issues of

material fact presented by the pleadings, affidavits,

depositions and answers to interrogatories as they relate to

said Motion, and that as a matter of law Partial Summary

Judgment should be entered for Farmland and Farmland

Life, the Court finds that Farmland and Farmland Life are

entitled to Partial Summary Judgment as prayed for in

said Motion.

IT IS THEREFORE ORDERED, ADJUDGED

AND DECREED that Counter-Plaintiffs’ Farmland and

Farmland Life Motion for Partial Summary Judgment

against Counter-Defendants Association of Cooperative

Members and Elmer Gibson be, and hereby is, granted, and

the Court does hereby ORDER, ADJUDGE AND

DECREE as follows:

FIRST, that Farmland Industries, Inc. owns and has

a common law trademark in the form attached hereto as

Exhibit A for all goods and services it produces, markets,

sells or renders, and that the Association of Cooperative

Members, Inc. and Elmer Gibson have wilfully and inten-

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tionally infringed upon this trademark;

SECOND, that the Association of Cooperative

Members, Inc. and Elmer Gibson, their agents, servants,

employees, officers, directors, attorneys, and all persons or

entities in active concert and participation with them are

hereby enjoined

(a) om using, directly or indirectly, in the United

States the logos attached hereto as Exhibit B, or

any other trademark or logo that is similar to or is

likely to cause confusion with the trademark

pictured in Exhibit A;

(b) from applying for registration of trademark

for any logo or trademark that is similar to, or

likely to cause confusion with, the trademark

pictured in Exhibit A;

(c) to deliver to the Court for eventual destruction

all stationery, business cards, or other materials

bearing the infringing logos; and

(d) to withdraw and cancel any and all applica-

tions and/or registrations of trademarks filed in

the United States ard any state thereof for any of

the logos pictured in Exhibit B or any other logo

that is similar to or likely to cause confusion with

the trademark pictured in Exhibit A;

THIRD, that Farmland Industries. Inc. and Farm-

land Life Insurance Company have been damaged by the

following acts of the Association of Cooperative Members,

Inc. and Elmer Gibson:

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(a) the wilfull and intentional infringement upon

Farmland Industries, Inc.’s trademark as de-

picted in Exhibit A;

(b) the false representation and designation of

origin in connection with goods and services

placed in the stream of commerce; and

(c) the procurement by false or fraudulent means

of certificates of registration for trademarks con-

fusingly similar to the trademark owned by

Farmland Industries, Inc., which is depicted in

Exhibit A;

FOURTH, that Farmland Industries, Inc., and

Farmland Life Insurance Company do have and recover

from the Association of Cooperative Members, Inc. and

Elmer Gibson, jointly and severally, all damages, including

but not limited to, attorneys’ fees, resulting from the acts

listed in the immediately preceding paragraph, and costs of

court;

FIFTH, that the Certificates of Registration at-

tached as Exhibits D through G to Farmland Industries,

Inc. and Farmland Life Insurance Company’s First

Amended Counterclaim be and hereby are canceled, and

that Farmland Industries, Inc. and Farmland Life

Insurance Company do have and recover from the Associa-

tion of Cooperative Members, Inc. and Elmer Gibson, all

attorneys’ fees and costs incurred in this cause; and

SIXTH, that Elmer Gibson account to Farmland

Industries, Inc. for all profits attributable to the use of any

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of the logos attached hereto as Exhibit B.

SIGNED AND ENTERED this 28 day of May,

1981.

/S/ FRED SHANNON

FRED SHANNON

United States District Judge

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EXHIBIT A

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EXHIBIT B

ASSM. OF

ASSN. OF

Co-Operative

MEMBERS

MEMBERS

Co-Crerciive

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APPENDIX “B”

ASSOCIATION OF CO-OPERATIVE

MEMBERS, INC.,

Plaintiff-Appellant,

V.

FARMLAND INDUSTRIES, INC.,

Defendant-Third Party

Plaintiff-Appellee,

V.

Elmer GIBSON, Third Party

Defendant-Appellant.

No. 81-1260.

United States Court of Appeals,

Fifth Circuit.

Sept. 3, 1982.

Action for common-law infringement of trademark

was brought. The United States District Court for the

Western District of Texas, Fred Shannon, J., entered an in-

terlocutory order granting partial summary judgment, and

appeal was taken. The Court of Appeals, Wisdom, Circuit

Judge, held that inclusion of another’s trademark. CO-

OP,” in farmers’ association’s mark which enclosed CO-

OP“ in double circle did not render association's mark in-

valid as common-law trademark where CO-OP“ was not

dominant element of association’s trademark.

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Appeal dismissed in part, affirmed in part.

1. Federal Courts 542

Neither waiver nor agreement of parties can confer

jurisdiction Court of Appeals otherwise lacks.

2. Federal Courts 767

Appellate review under statute giving Court of Ap-

peals jurisdiction over appeals from interlocutory orders

granting injunctions ordinarily extends only to those parts

of interlocutory order that relate to grant of injunction. 28

U.S.C.A. § 1292(a)(1).

3. Federal Courts 767

On appeal from interlocutory order granting injunc-

tive relief in trademark infringement action, Court of Ap-

peals could not consider issues relating to award of

monetary relief. 28 U.S.C.A. § 1291(a)(1).

4. Trade Regulation 251

Although federal law recognizes cause of action for

trademark infringement, relief is available only to owners

of federally registered trademarks. Lanham Trade-Mark

Act, § 43(a), 15 U.S. C. A. § 1125(a).

5. Federal Courts 573

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On appeal from interlocutory order granting injunc-

tive and monetary relief in trademark infringement action,

district court’s determination that infringement was

willful was not reviewable under statute giving Court of

Appeals jurisdiction over interlocutory orders granting in-

junctions where there was no showing that willfulness was

condition of injunctive relief in action for infringement of

common-law trademark. 28 U.S.C.A. § 1292(a)(1).

6. Trade Regulation 235

Right of renewal of federal trademark extends only

to original registered mark and not to any specimen used in

renewal application.

7. Trade Regulation 262

Farmers’ cooperative was not precluded from claim-

ing common-law trademark in word ‘‘CO-OP” surrounded

by double circle even though owner of trademark CO-OP“

included mark in its application for federal registration and

renewal of trademarks for CO-OP“ where double circle

format was included in renewal and registration applica-

tions only as specimen and not as subject of registration

and where owner of CO- OP made no trademark claim to

double circle.

8. Trade Regulation 45

Common words in which no one may acquire trade-

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mark becau they are descriptive or generic may, when

used in combination, become valid trademark.

9. Trade Regulation 42

Mark containing common words which are descrip-

tive or generic can be appropriated as trademark if they are

part of arbitrary or fanciful design or device.

10. Trade Regulation 262

Inclusion of another’s trademark, “CO-OP,” in

farmers’ association’s mark which enclosed CO-OP“ in

double circle did not render association’s mark invalid as

common-law trademark where word “CO-OP” was not

dominant element of association's trademark.

11, Trade Regulation 546

Licensor of trademark is usually treated as neces-

sary or indispensable party in infringement action by its

licensee.

12. Trade Regulation 546

Owner of trademark CO-OP“ was not necessary

party to licensee’s common-law action for infringement

where licensee’s action was for infringement of mark

enclosing word CO-OP“ in double circle and CO-OP“

trademark owner claimed no trademark rights in double

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circle, Fad, Rules Civ, Proc, Rule 19(a)(2), 28 U. S. C. A.

Appeal from the United States District Court for the

Western District of Texas.

Before WISDOM, POLITZ and TATE, Circuit

Judges.

WISDOM, Circuit Judge:

This is an appeal from an interlocutory order

granting partial summary judgment in favor of Farmland

Industries, Inc. (Farmland) and its wholly owned sub-

sidiary, Farmland Life Insurance Co. (Farmland Life), on

their trademark infringement claim against the Associa-

tion of Co-operative Members, Inc. (Association) and

Elmer Gibson.! In their appeal, Gibson and the Associa-

tion raise several issues over which this Court does not ex-

ercise appellate jurisdiction, and to that extent, we dismiss

the appeal. Finding, with respect to the remaining issues,

that there are no disputed questions of material fact and

that the district court's disposition was sound in law, we

affirm.

1 The precise nature of Gibson's relationship, if any, with the

Association is not clear from the record. The respective roles of Gibson

and the Association in the activities giving rise to Farmland's claim are

described at p. 4434, infra.

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I. Statement of the Case

The background to this case and most of the basic

facts are undisputed. Farmland submitted numerous af-

fidavits and deposition exerpts in support of its motion for

partial summary judgment, and neither Gibson nor the

Association filed affidavits disputing the contents of

Farmland’s filings. Our summary of the background and

undisputed facts therefore relies heavily on Farmland's

sworn submissions to the district court.

Farmland is a cooperative organization, owned and

controlled by the 2,300 local farmers’ cooperative associa-

tions throughout the country that make up its member-

ship. It provides a full line of goods and services to its

members and attempts to supply all the basic needs of the

farming community. Among the services Farmland pro-

vides its members is insurance, which it sells through

Farmland Life.

Since 1958, Farmland has used the double circle“

mark, pictured below, in connection with the goods and ser-

vices it provides. The mark has appeared on Farmland's

advertising, stationery, annual reports, buildings, and

labels, although Farmland has obtained neither a state nor

a federal registration of it. Farmland has spent millions of

dollars, more than 45 million dollars in the past decade

alone, on advertising associated with the mark. People

throughout the area in which Farmland operates associate

the mark with Farmland exclusively.

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Farmland is a member of Universal Cooperatives,

Inc, (Universal), which holds various registrations for trade

and collective marks consisting of or including the word

“CO-OP”. Universal's by-laws permit its members, in-

cluding Farmland, to use its marks. It is Farmland's rela-

tionship with Universal that, according to Gibson and the

Association, raises disputed questions of material fact.

Farmland claims the right to include the word CO- OP“ in

its mark by virtue of Universal's by-laws. The appellants,

however, relying on a statement by counsel for Farmland

at the district court hearing, argue that Farmland's right

to use Universal's marks derives from a licensing agree-

mont. The appellants also maintain that Universal owns

the double circle format used by Farmland, and they have

submitted copies of several of Universal's trademark

registration and renewal applications, which include

reproductions of this mark as specimens. Farmland main-

tains that Universal has registered only the word CO- OP“

and that the registration and renewal applications included

the double circle only as an example of the use of CO- OP“.

The Association is a corporation organized, accord-

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ing to its pleadings, ‘‘to promote the general interests of

members of co-operatives and also promote agricultural in-

terests”. To solicit membership, the Association mass-

mailed letters to residents of rural communities in Texas,

advertising insurance as well as membership. The letters

and envelopes bore the Association's logo, reproduced

below. The Association and Gibson, who handled the mass

mailing, were apparently aware of Farmland’s use of the

double circle. Farmland has submitted affidavits of several

consumers who were misled by the Association’s logo and

responded to the mailing in the belief it was from

Farmland,

The mailings contained forms that consumers who

were interested could complete and return. Gibson sold

these responses to General Life and Accident Insurance

Co. (General) for $18.50 each, and General agents then call-

ed on those who responded. The agents tried to sell both in-

surance and membership in the Association. Consumers

choosing to join the Association subsequently received

catalogues bearing its logo and advertising farm and

household supplies and equipment that the Association

would sell to its members. Much of the merchandise was of

the same type Farmland markets.

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In April 1979, Farmland learned of the Association's

activities and wrote the Association and General, notifying

them of what it considered a trademark infringement and

demanding that they cease using the infringing logo. In

May 1979 the Association filed for registration of its

trademark in several states, including Texas, and sued

Farmland in state court in Texas, alleging fraud, restraint

of trade, and defamation.

Farmland removed the action to the United States

District Court for the Western District of Texas, relying

for subject matter jurisdiction on diversity of citizenship.

Farmland then moved to dismiss and, with Farmland Life,

filed a counterclaim against the Association and General

for trademark infringement. In December 1980, Farmland

and Farmland Life amended their counterclaim, suing the

Association, Gibson, and Gibson’s alleged alter-ego,

Associated Agencies, Inc., for trademark infringement

under Texas law, false representation and false designation

of origin under § 43(a) of the Trademark Act of 1946, 15

U.S.C. § 1125(a), false procurement of trademark registra-

tions, and unjust enrichment.” Farmland sought injunc-

tive relief, cancellation of any registrations of the infring-

ing trademark, damages, and attorney fees.

Early in 1981, Farmland and Farmland Life moved

for partial summary judgment, as did the Association. The

district court denied the Association's motion and granted

that of Farmland and Farmland Life. The court held that

"2 When it amended its counterclaim, Farmland moved to dismiss

General from the case. The district court granted the motion.

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Farmland owns a common law trademark in the double cir-

cle and that the Association and Gibson had willfully and

intentionally infringed it. It enjoined the Association and

Gibson from using or registering any logo likely to cause

confusion with Farmland’s trademark and ordered them to

deliver to the court for destruction all materials bearing

the infringing logo and to withdraw and cancel any applica-

tion to register a logo infringing Farmland’s trademark.

The court also found that the actions of Gibson and the

Association amounted to “false representation and

designation of origin in connection with goods and services

placed in the stream of commerce” and that they had

fraudulently procured trademark registrations. On these

grounds, as well as that of trademark infringement, the

court awarded Farmland and Farmland Life damages and

attorney fees. In addition, the court cancelled existing

registrations of the Association's infringing trademarks

and ordered Gibson to account to Farmland and Farmland

Life for profits attributable to the use of infringing logos.

The district court withheld consideration of the measure of

damages and of the Association’s defamation claim pen-

ding our disposition of this appeal.

The appellants, Gibson and the Association, argue

that Farmland’s rights in the double circle do not amount

to a common law trademark but are dependent on Farm-

land’s relationship with Universal, and that this relation-

ship is subject to disputed questions of material fact. They

also argue that Universal is a necessary party to this litiga-

tion. As we discuss below, we find these arguments with-

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out merit. In their reply brief, the appellants argue, in addi-

tion, that a disputed question of material fact exists con-

cerning the willfulness of any infringement they commit-

ted and that Farmland Life is not entitled to relief because

it does not own a common law trademark in the double cir-

cle. As to these issues, our appellate jurisdiction is doubt-

ful. To the extent we may have appellate jurisdiction of

these issues, we decline to exercise it and dismiss the ap-

peal. We discuss appellate jurisdiction first.

II. Appellate Jurisdiction

III Farmland does not dispute the right of Gibson

and the Association to appeal from the district court's in-

terlocutory order. At the hearing on Farmland’s motion for

partial summary judgment, the parties apparently agreed

not to raise the question of appellate jurisdiction. Neither

waiver nor agreement of the parties, however, can confer

jurisdiction we otherwise lack, and this Court has frequent-

ly considered the issue of appellate jurisdiction on its own

motion. E. g., Oswalt v. Scripto, 5 Cir. 1980, 616 F.2d 191,

192; United States v. Beasley, 5 Cir. 1977, 558 F.2d 1200

(per curiam). Since we have serious doubts about the ap-

pealability of parts of the district court’s order, it is ap-

propriate to consider the question.

[2,3] Our inquiry centers on 28 U.S.C. f 1292(a)(1),

which gives the Courts of Appeals jurisdiction of appeals

from liljnterlocutory orders .. granting injunctions“. 3

J We have also considered the applicability to this case of 28

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Since the order appealed from granted an injunction, §

1292(a)(1) is applicable on its face. Appellate review under §

1292(a)(1), however, ordinarily extends only to those parts

of an interlocutory order that relate to the grant of an in-

junction. Teamsters Local Union 745 v. Braswell Motor

Freight Lines, Inc., 5 Cir. 1970, 428 F.2d 1371, 1373 & n.3,

cert. denied, 1971, 401 U.S. 937, 91 S.Ct. 926, 28 L. Ed. 27

217; 11 C. Wright & A. Miller, Federal Practice & Dro-

cedure § 2962 at 629-30 (1973); 16 id., § 3921 at 16 (1977).

But see Myers v. Gilman Paper Corp., 5 Cir. 1977, 544 F.2d

837, cert. dismissed, 434 U.S. 801, 98 S.Ct. 28, 54 L.Ed.2d

59. The district court’s order in this case awarded

monetary as well as injunctive relief and, accordingly,

granted summary judgment on some questions that have

no bearing on the issuance of a permanent injunction.

Some of these questions are not before us and thus present

no problem of appellate jurisdiction. To the extent the ap-

pellants raise others of these questions, however, we dis-

miss their appeal, without prejudice as to those issues in

case of an appeal from final judgment.

(Footnote 3 continued)

U.S.C. § 1292(b), which gives this Court discretion to permit appeal from

an interlocutory order if the district judge is of the opinion that such

order involves a controlling question of law as to which there is substan-

tial ground for difference of opinion and that an immediate appeal from

the order may materially advance the ultimate termination of the litiga-

tion. At the hearing on Farmland’s motion for partial summary judg-

ment, the district court stated its intention to permit an appeal. Section

1292(b), however, applies only if the district court has certified in writing

that the criteria for appealability of an interlocutory order are met.

United States v. Beasley, 5 Cir. 1977, 558 F.2d 1200 (per curiam); Cobb u.

Chevron U.S.A., Inc., 5 Cir. 1977, 558 F.2d 236 (per curiam). Since the

district court has provided no such certification, § 1292(b) cannot serve

as a basis for jurisdiction of the appeal.

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The restriction of appellate review to the injunctive

aspects of the district court’s order has been described

both as a jurisdictional limitation, Teamsters Local Union

745, 428 F. ad at 1373, and as a rule of judicial administra-

tion, Western Electric Co., Inc. u. Milgo Electronic Corp., 5

Cir. 1978, 568 F.2d 1203, 1208, cert. denied, 439 U.S. 895,

99 S.Ct. 255, 58 L.Ed.2d 241. We need not decide which of

these characterizations is the more apt. To the extent we

may have power to consider issues that do not pertain

directly to the injunction granted in this case, we decline to

exercise it.

[4] We thus do not consider Farmland’s federal claim

under § 43(a) of the Trademark Act of 1946, 15 U.S.C. §

1125(a). Section 43(a) establishes a cause of action for

“false designation of origin“. This Court has held that infr-

ingement of an unregistered trademark can constitute a

violation of § 43(a) and that injunctive relief is available in

such a case, if the plaintiff shows that the unregistered

trademark is so associated with its goods that the use of

the same or similar marks by another company constitutes

a representation that its goods come from the same

source“. Boston Professional Hockey Association, Inc. v.

Dallas Cap & Emblem Mfg., Inc., 5 Cir. 1975, 510 F.2d

1004, 1010 (quoting Joshua Meier Co. v. Albany Novelty

Mfg. Co., 2 Cir. 1956, 236 F.2d 144), 1013, cert. denied, 423

U.S. 868, 96 S.Ct. 132, 46 L.Ed.2d 98; see also 1A R.

Callman, Unfair Competition, Trademarks, & Monopolies §

5.04 (4th ed. 1981). Although the district court determined

that Gibson and the Association had committed false

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representation and designation of origin“, however, it ex-

pressly made this determination a basis only for monetary

relief and did not rely on it in deciding to issue an injunc-

tion. We therefore consider the appeal only to the extent

that it calls into question the district court’s disposition of

Farmland’s state-law claims. This conclusion does not re-

quire dismissal of any part of the appeal, because the ap-

pellants have not raised any issues relating specifically to

the federal claim. It does, however, have the important ef-

fect of requiring us to decide all issues before us only by

reference to Texas law. See El Chico, Inc. v. El Chico Cafe,

5 Cir. 1954, 214 F.2d 721, 724.

[5] The appellants raise two issues over which we do

not exercise jurisdiction. First, they challenge the district

court’s determination that their infringement of Farm-

4 Farmland asserts a claim for trademark infringement only under

Texas law. Although federal law does recognize a cause of action for

trademark infringement, 15 U.S.C. § 1114(1), relief is available only to

owners of federally registered trademarks, see El Chico, Inc. v. El Chico

Cafe, 5 Cir. 1954, 214 F.2d 721, 724 (quoting Pecheur Lozenge Co. v. Na-

tional Candy Co., 1942, 315 U.S. 666, 667, 62 S.Ct. 853, 853-54, 86 L.Ed.

1103, 1104-05 (per curiam)). As noted above, see p. 4433, supra.

Farmland has not registered the double circle.

Farmland’s claim for false procurement of trademark registration

under Texas law was part of the basis for monetary relief but was not

mentioned in the injunctive portion of the district court’s order. False

registration was, however, the ostensible basis for the district court’s

cancellation of the Association’s registrations. We need not decide

whether this form of relief would be considered injunctive for purposes

of appellate jurisdiction, because the appellants have not raised any

issues that relate to the cancellation remedy specifically. All the issues

on which we affirm the district court concern the injunction based on

trademark infringement, whether or not they also concern cancellation

of the Association’s registrations.

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land’s mark was willful and intentional. The appellants

a. gue that they ceased to use the infringing logo as soon as

Farmland notified them of its position and that the ques-

tion of willfulness is thus in dispute. The appellants have

referred us to no authority, however, that a showing of

willfulness is a condition of injunctive relief in an action for

infringement of a common law trademark, and the Tezas

authority is to the contrary. See Western Grocer Co. v. Caf-

farelli Bros., Tex.Civ.App. 1908, 108 S.W. 413, Western

Grocer Co. v. Caffarelli Bros., Tex.Civ.App. 1908, 108 S.W.

413, 414, rev'd on other grounds, 1908, 102 Tex. 104, 127

S. W. 1018; cf. Tex. Bus. & Com. Code Ann. §§ 16.26(a), (b)

(Vernon 1968) (same for registered trademarks). We

therefore dismiss the appeal to the extent it challenges

summary judgment on the question of willfulness.

We similarly dismiss the appeal insofar as it con-

cerns the relief granted Farmland Life. The appellants

argue that Farmland Life has never used the double circle

and therefore cannot claim a common law trademark in it,

even if Farmland itself can. The district court however, did

not find that Farmland Life has a common law trademark

in the double circle, and its finding that Farmland itself

does own a trademark (which we affirm below) is sufficient

to justify the injunction. We do not consider whether the

award of monetary relief to Farmland Life would be ap-

propriate.

Having delineated the scope of our jurisdiction as we

exercise it in this case, we now turn to those issues that

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fall within it: whether Farmland owns a common law

trademark in the double circle and whether Universal is a

necessary party to the action.

III. Farmland’s Rights in the Double Circle

The central question in this case is whether Univer-

sal’s rights in its registered trade and collective marks af-

fect Farmland’s right to claim a common law trademark in

the double circle. The appellants do not dispute that

Farmland’s appropriation and use of the double circle are

sufficient, absent any conflicting rights in Universal, to

establish ownership of a common law trademark. Nor do

they deny that the Association’s logo is likely to be confus-

ed with Farmland’s and would be an infringement if

Farmland owned the trademark. They argue, rather, that

Farmland cannot claim a common law trademark in the

double circle, because Universal owns it and licenses it to

Farmland. They also argue that Universal’s ownership and

registration of the trademark CO-OP“, which is a promi-

nent element of Farmland’s double circle, preclude

Farmland from claiming a common law trademark. We re-

ject both arguments.

[6,7] The appellants have neither established that

Universal owns a trademark in the double circle nor put the

question sufficiently in dispute to withstand a motion for

summary judgment. In support of their position, the ap-

pellants submitted to the district court certified copies of

several applications by Universal and its predecessor

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National Cooperatives, Inc., for federal registration and

renewal of trademarks in the word CO-OP“. These ap-

plications include, among the specimens of ‘“‘CO-OP’’,

Farmiand’s double circle. To show that Universal claims

rights in the double circle, the appellants have also submit-

ted a copy of a complaint Universal filed against the

Association in the United States District Court for the

District of Columbia in 1979. The complaint alleged that

the Association’s logo, at issue here, infringed Universal’s

trademark. But these submissions do not sustain the ap-

pellants’ position. Registration or renewal concerns only

the mark registered and does not extend to the specimens

submitted with an application. The inclusion of the double

circle among different specimens creates no presumption

that Universal owns a trademark in it.5 And Universal’s

complaint in the District of Columbia alleged infringement

only of the word CO- OP“; it did not claim any rights in

the double circle.

5 The appellants submitted to the district court copies of one ap-

plication for registration (No. 872,627) and two applications for renewal

(Nos. 357,727 and 537,472). The application in No. 872,627 included five

specimens, but the appellants submitted a copy of only one, a facsimile

of the double circle. The application itself does not refer to the double cir-

cle, and we cannot assume that the specimens the appellants have

chosen not to introduce all consisted of the double circle. The application

for renewal of No. 357,727 included numerous specimens consisting of

the word “CO-OP” in different designs and cannot be taken as evidence

of a trademark in any one of these designs. The renewal application in

No. 537,472 included only one specimen, a facsimile of Farmland's dou-

ble circle. But the right of renewal extends only to the original registered

mark, see Ex parte Richards, Comm v Pat. 1967, 153 U.S.P.Q. 853, 854,

not to any specimen used in the renewal application. The appellants have

produced no evidence that the mark originally registered in No. 537,472

included the double circle.

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The appellants’ filings, although they cannot

establish that Universal owns the double circle, might,

standing alone, be enough to put the matter in dispute. But

Farmland has countered the appellants’ contentions with

the sworn affidavit of Floyd E. Grabiel II, a Universal of-

ficial personally familiar with and responsible for Univer-

sal’s trademarks. Grabiel’s affidavit states that Univer-

sal has no claim and makes no claim to Farmland’s Double

Circle trademark. With regard to Farmland’s Double Circle

trademark, Universal claims ownership of only the word

‘COOP’.” The affidavit also states that the double circle

format was included in renewal and registration applica-

tions only as a specimen and not as the subject of any

trademark registration. Since the appellants have submit-

ted no sworn statement disputing Grabiel’s ability to

speak authoritatively on Universal’s position, and their fil-

ings can be explained consistently with Grabiel's affidavit,

those filings do not put any material question of fact in

dispute. Universal makes no claim to the double circle, and

Farmland’s use of the mark cannot be subject to a license

by Universal.

The question we are left with, then, is whether

Farmland’s inclusion in its mark of a prominent element it

concedes to belong to Universal prevents it from asserting

a valid common law trademark in the entire composite. As

we have observed, see p. 4436, supra, Farmland's infringe-

ment claim is governed by state law, and we must decide

the issue as a Texas court would. The Texas courts have

apparently not had occasion to consider the question. We

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conclude, however, that they would adhere to the general

common law principles that other courts have uniformly

applied. See Blue Bell, Inc. v. Farah Manufacturing Co., 5

Cir. 1975, 508 F.2d 1260, 1264.

[8,9] The whole, in trademark law, is often greater

than the sum of its parts. Common words in which no one

may acquire a trademark because they are descriptive or

generic may, when used in combination, become a valid

trademark. E. g., In re Colonial Stores, Inc., 1968, 394 F.2d

549, 55 CCPA 1049; Scientific Applications v. Energy Con-

servation Corp., N.D.Ga.1977, 436 F.Supp. 354, 360; Na-

tional Trailways Bus System v. Trialway Van Lines, Inc.,

E.D.N.Y.1963, 222 F.Supp. 143, 145. See also 1 J. Gilson,

Trademark Protection and Practice g 2.02[5] (1982).

Similarly, a mark containing such words can be ap-

propriated as a trademark if they are part of an arbitrary

or fanciful design or device. Estate of Beckwith u. Com-

missioner of Patents, 1920, 252 U.S. 538, 541, 40 S.Ct. 414,

415, 64 L.Ed. 705, 706. Cf. Quabaug Rubber Co. v. Fabiano

Shoe Co., 1 Cir. 1977, 567 F.2d 154 (color alone cannot con-

stitute valid trademark, but color in combination with

distinctive shape can). As the Supreme Court has said,

“The commercial impression of a trademark is derived

from it as a whole, not from its elements separated and con-

sidered in detail. For this reason it should be considered in

its entirety ...."" Beckwith, 252 U.S. at 545-46, 40 S.Ct. at

416-17, 64 L.Ed. at 708 (citation omitted).

This principle is not restricted to composites includ-

A-27

ing descriptive or generic elements but extends to a mark

that, like Farmland’s, contains an element that cannot

itself belong to the user of the composite because it

belongs, or might belong, to someone else. In In re

Franklin Press, Inc., Cust. & Pat.App.1979, 597 F.2d 270,

the Court of Customs and Patent Appeals allowed registra-

tion of the applicant’s composite mark, which included the

words Employees Represented By ITU, IPPU & GCU, &

GAIU”. The applicant had, pursuant to § 6 of the

Trademark Act of 1946, 15 U.S.C. § 1056, disclaimed any

interest in this language apart from its use in the com-

posite mark. The Trademark Trial and Appeal Board of the

Patent and Trademark Office (PTO) had upheld an ex-

aminer’s decision finding the disclaimer insufficient to

render the mark registrable and refusing to register the

mark unless the language was deleted. The Board found

that since the phrase containfed] proprietary indica of

origin of parties other than applicant, the registration

thereof as a part of a composite mark would be inimical and

contrary to the rights of ownership possessed therein by

these parties. 597 F. ad at 272. The Court of Customs and

Patent Appeals reversed the Board’s decision, holding that

the applicant’s disclaimer of the phrase in question ade-

quately addressed the Board’s concerns. The court found

that the PTO had not shown what harm registration of the

mark would cause the proprietary rights of the labor

organizations named in the disputed phrase. The court

held that the PTO lacked power to assert the unions’ rights

sua sponte and that those rights could be asserted only by

the affected unions in an opposition to the registration.

Id. at 274.

[10] Several grounds might be advanced for

distinguishing the present case from Franklin Press, but

none persuades us that the principle of that case is inap-

plicable here. First, the court in Franklin Press noted that

the examiner had expressly found that the mark in ques-

tion did not so resembleſl any registered mark as to be

likely to cause confusion...’’. Id. at 273. The district court

in the present case did not determine that Farmland’s dou-

ble circle is unlikely to be confused with Universal’s

registered trademark. The appellants, however, have not

established, or even argued, that Farmland’s trademark is

invalid because it so resembles Universal’s. They argue on-

ly that inclusion of Universal’s mark in the composite dou-

ble circle automatically renders the latter invalid as a

trademark. Franklin Press establishes that inclusion of

another’s mark in a composite does not automatically

preclude trademark status and does not of its own force

establish likelihood of confusion. See also Armstrong Cork

Co. v. World Carpets, Inc., 5 Cir. 1979, 597 F.2d 4916,

501-04, cert. denied, 444 U.S. 932, 100 S.Ct. 277, 62

L.Ed.2d 190; 3 R. Callman, Uniform Competition,

Trademarks, & Monopolies § 82.1(g) at 656 (3d ed. 1969). 8

5 Our holding on this point is narrow. We conclude only that the

appellants’ legal arguments in this case do not establish that Farmland’s

mark so resembles Universal's as to be invalid. We need not decide

whether Universal (if it sought to) could show, by means, for example, of

evidence of actual confusion on the part of consumers, that the double

circle does in fact infringe on its registered mark. Neither need we now

consider what effect Universal's by-laws or any license of the word CO-

OP“ to Farmland. if one exists, would have on such a showing.

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In this connection, we note that the word CO- OP“ in

Farmland's mark is obviously more prominent than the

disputed language in Franklin Press. If CO-OP“ is the

dominant element of Farmland’s trademark, its inclusion

might be enough to render the latter invalid as an infringe-

ment of Universal's rights. See 3 Callman § 82.1(g) at 656-57.

The appellants, however, have not established that the CO-

OP” element so dominates the double circle, and visual pro-

minence alone does not make an element dominant. The

dominant element of a trademark is the element most readi-

ly associated with the products or services it identifies. Id.

at 659-60. And when a composite includes both words and a

design, the design element is likely to dominate if it is more

conspicuous or well known to the purchasing public. See

Crown Overall Mfg. Co. v. Chahin, W.D.Tex.1951, 96

F.Supp. 805, aff'd, 5 Cir. 1953, 200 F.2d 935; Caffarelli Bros.

v. Western Grocery Co., 1908, 102 Tex. 104, 127 S.W. 1018;

3 Callman § 82. 10800) at 703-05. It is thus significant that,

as Farmland has established by uncontradicted affidavits,

the farming community associates the double circle design

with Farmland, and Farmland members are known by the

words double circle”. More important, the appellants’ own

flings in this case (specifically, exhibits 4-8 to their original

complaint) establish that the word “Co-op” is widely used as

a trademark in numerous industries and thus that it is a

relatively weak mark. See 1 J. Gibson, Trademark Protec-

tion and Practice § 2.01 at 2-3 (1982). A word that may be

subject to lessened trademark protection because of its

popularity and lack of distinctiveness’ is not likely, when in-

7 See 3 Callman § 82.1(b) at 755-56.

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cluded in a composite, to be the element that attracts the

public’s attention. C/ Sun Banks of Florida, Inc. u. Sun

Federal Savings and Loan Assoc., 5 Cir. 1981, 651 F.2d

311, 317 (because the word sun“ is commonly used by

Florida businesses, its inclusion in the trademarks of two

banks does not create confusing similarity). In the light of

these considerations, we cannot hold that “‘CO-OP”’ is the

dominant element of Farmland’s trademark.

It might also be argued that the procedure for op-

position to trademark registration, by which the unions

could have protected their interests in Franklin Press, is

unavailable in a common law infringement action. But it is

obvious from the affidavits filed in this case that Universal

has known of Farmland’s double circle for years and that it

recognizes Farmland’s common law trademark rights in it.

Moreover, because Universal is not a party in this case,

nothing we decide would preclude it from asserting, in a

future infringement action against Farmland, that

Farmland’s mark is likely to cause confusion with its own.8

Finally, the applicant in Franklin Press had, pur-

suant to § 6 of the Trademark Act of 1946, formally

disclaimed the language in question, apart from its use in

the mark to be registered. By contrast, no statute specifi-

N We need not decide whether the Grabiel affidavit filed in this

case might result in an estoppel against Universal on such a claim. See

note 10, infra. Whatever the legal effect of the affidavit, our decision in

this case does not enhance it. What matters for present purposes is that,

if Universal is precluded from raising this claim, that preclusion does not

result from sy holding in this case.

A-31

cally provides for any such formal disclaimer in the present

infringement action. But while disclaimer may be required

for registration, it cannot be a condition of common law

rights in a trademark. As the court stated in Franklin

Press, common law rights in the composite mark .. re-

main unaffected without regard to ... disclaimer of the

phrase in question... 597 F. ad at 273. More fundamental-

ly, however, Farmland has effectively disclaimed any

rights in the word CO- OP“ apart from its use in the dou-

ble circle. Its filing of the Grabiel affidavit, which claims

those rights for Universal, is sufficient disclaimer for all

practical purposes.

We thus conclude that the presence of Universal's

registered mark in Farmland’s composite does not defeat

the latter’s validity as a common law trademark. This is so

whether Farmland uses the word CO-OP“ by virtue of

Universal’s by-laws or by virtue of a licensing agreement;

it would be so if the relationship between Farmland and

Universal consisted of nothing more than the latter’s

failure to prosecute a successful infringement action

against the former. Thus, even if the appellants have suc-

ceeded in raising a disputed question of fact concerning

Farmland’s authority to use CO- OP“, the question is not

material.?

common law rights in the double circle. The doctrine precludes the

licensee of a mark from asserting rights in it contrary to those of the

licensor. See 3 Cullman § 78.2 at 454 (3d ed. 1969); 1 J. Gibson,

Trademark Protection and Practice § 6. 0807] (1982). The appellants have

referred us to no case, however, in which the doctrine operated in favor of

A-32

IV. Universal as a Necessary Party

The appellants argue that Universal is a necessary

party to this action and that partial summary judgment

for Farmland without the joinder of Universal was error.

The appellants’ argument rests, however, on the premise

that Farmland licenses the double circle from Universal, a

premise we have rejected, see pp. 4437-4438, supra. We

thus find no error in the district court’s granting of partial

summary judgment in the absence of Universal.

[11] The licensor of a trademark is usually treated as

a necessary or indispensible party in an infringement ac-

tion by its licensee. Pure Food Products, Inc. v. American

Bakeries Co., N. D. III. 1972, 176 U.S.P.Q. 233. Sound

reasons support this rule. Even if Farmland’s use of the

word CO-OP“ is under license from Universal, however,

those reasons do not apply in this case because no rights in

the word CO-OP“ itself are in dispute.

Rule 19(a)(2), Fed. R. Civ. P., requires joinder of a par-

ty if

he claims an interest relating to the subject of

(Footnote 9 continued)

anvone other than the licensor, and our research has led us to

no case in which a third party invoked it. See id. 58. 1210].

More fundamentally, we have already established that the

double circle does not belong to Universal, and Universal

therefore cannot have licensed it to Farmland. Since

Farmland claims no rights in Universal's mark “CO-OP”,

apart from its use in the double circle, it asserts no rights in-

consistent with Universal's.

A-33

the action and is so situated that the disposition

of the action in his absence may (i) as a practical

matter impair or impede his ability to protect

that interest or (ii) leave any of the persons

already parties subject to a substantial risk of in-

curring double, multiple, or otherwise inconsis-

tent obligations by reason of his claimed

interest.!

The licensor of a trademark that is the subject of an infr-

ingement action by a licensee falls squarely within the

language and policy of this rule. As owner of the mark, the

licensor has a legally protected interest in the subject mat-

ter of the action. See 3A J. Moore & J. Lucas, Moore’s

Federal Practice 1 19.07-1[2] at 19-129, 1 19.14[2.-2] at

19-276 (1982); 7 C. Wright & A. Miller, Federal Practice &

Procedure § 1614 at 154-55 (1972). A judgment for the

alleged infringer, whether based on a finding that the

licensed mark is not a valid trademark or that the defen-

dant’s mark does not infringe it, may prejudice the licen-

sor’s rights in his own mark. A judgment for the plaintiff-

licensee could result in double obligations for the defen-

dant, should the licensor subsequently sue on his own.

[12] This is not the case where, as here, the rights

asserted in the trademark derive not from a license agree-

ment but from the common law. It is irrelevant that the

mark is a composite, an element of which belongs to a third

10 Clause (1) of rule 19(a) is clearly inapplicable. It requires joinder

of a party if in his absence complete relief cannot be accorded among

those already parties. The appellants have not attempted to show, nor

can we see, how Universal’s absence from the case could affect the

district court’s ability to grant the relief Farmland has sought.

A-34

party and might be the subject of a license agreement. In

the present case, Universal claims no rights in the double

circle. A judgment for Gibson and the Association would

not prejudice Universal’s rights in its registered marks; it

would only deny Farmland the right to prevent the

Association from using the allegedly infringing logo.!1

Judgment for Farmland will not subject the appellants to

multiple or inconsistent obligations, since Universal does

not claim ownership of the infringed trademark. 12

II This conclusion is especially appropriate in the present case.

Because Farmland’s composite includes a prominent element that

belongs to Universal, it might be argued that a determination that the

Association’s logo does not so resemble Farmland’s as to cause confu-

sion creates a presumption that it does not so resemble Universal’s mark

either. The appellants do not dispute the resemblance between the

Association’s mark and Farmland’s, however, see p. 4437, supra, and a

judgment for the appellants could thus be based only on a finding that

Farmland lacks a valid trademark. Obviously. a judgment on this basis

could not have any bearing on Universal's rights in its marks.

12 We are mindful that Universal, although claiming no interest in

the double circle, might sue the Association on the theory that its logo

infringes the simple mark CO-OP“ as well as farmland’s composite.

Universal apparently raised precisely this claim in its 1979 complaint in

the District of Columbia. See p. 4437, supra. It is possible, however, that

Universal's position on this claim has changed or that Universal would

be estopped to make it. According to affidavits filed in the present ac-

tion, Universal recognizes Farmland’s common law trademark. This

recognition entails the concession that Farmland’s mark does not in-

fringe Universal's. In view of the similarity between the Association's

mark and Farmland’s, Universal may be unable to argue successfully

that one infringes while the other does not.

We need not decide, however, whether Universal may have any

rights against the present appellants. We now review only the grant of

injunctive relief and the determination of issues necessary to the is-

suance of an injunction. See pp. 4435-4436, supra. The injunction in this

case would not impose inconsistent obligations on the appellants, even if

Universal could obtain a similar injunction or recover damages.

A-35

CONCLUSION

The district court’s determination that Farmland

owns a common law trademark in the double circle rested

on no disputed factual question. That an element of the

composite mark might have been the subject of a license

agreement is irrelevant to this determination. The district

court also acted properly in granting partial summary

judgment without requiring the joinder of Universal in the

action. The district court’s findings that the infringement

in this case was willful and intentional and that Farmland

Life was damaged by the appellants’ actions, however,

were not necessary to the grant of injunctive relief. Review

of these findings is therefore beyond the scope of the ap-

pellate jurisdiction we exercise under 28 U.S.C. §

1292(a)(1).

For these reasons, the appeal is DISMISSED IN

FART, and the order of the district court is AFFIRMED

IN PART.

A-36

APPENDIX “‘C”

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

NO. 81-1260

ASSOCIATION OF CO-OPERATIVE

MEMBERS, INC.,

Plaintiff-Appellant,

versus

FARMLAND INDUSTRIES, INC.,

Defendant-Third Party Plaintiff-Appellee,

versus

ELMER GIBSON,

Third Party Defendant-Appellant.

Appeal from the United States District Court for the

Western District of Texas

ON PETITION FOR REHEARING

(October 4, 1982)

Before WISDOM, POLITZ and TATE, Circuit Judges.

A-37

PER CURIAM:

IT IS ORDERED that the petition for rehearing fil-

ed in the above entitled and numbered cause be and the

same is hereby denied.

ENTERED FOR THE COURT:

United States Circuit Judge

A-38

APPENDIX “D”

AFFIDAVIT

STATE OF Minnesota §

8

COUNTY OF Hennepin§

My name is Floyd E. Grabiel II. I am the Asst.

Secretary of Universal Cooperatives, Inc. (‘‘Universal’’). I

am personally familiar with and responsible for Universal's

trademarks.

Universal is a national cooperative whose members

are various regional cooperatives. One of its members is

Farmland Industries, Inc. (“ Farmland“).

Universal is the holder and owner of numerous

trademark registrations for the word CO-OP“. These

registrations are listed below.

Mark Reg. No.

“CO-OP” 303,450

“CO-OP” 310,340

“CO-OP” 357,727

“CO-OP” 358,787

“CO-OP” 361,160

“CO-OP” 366,016

“CO-OP” 374,276

“CO-OP” 375,085

“CO-OP” 377.781

XRMG DEX NAX

“CO-OP” 377,942

“CO-OP” 378,447

A-39

“CO-OP” 379,235

“CO-OP” 379,838

“CO-OP” 379,852

“CO-OP” 380,280

“CO-OP” 386,373

“CO-OP” 386,642

“CO-OP” 389,580

“CO-OP” 396,454

“CO-OP” 531,883

“CO-OP” 537,472

“CO-OP” 537,473

“CO-OP” 537,904

“CO-OP” 703,543

“CO-OP” 872,627

By usage through the years, Farmland has acquired

a common law trademark in the mark attached hereto as

Exhibit A. Universal has no claim and makes no claim to

Farmland’s Double Circle trademark. With regard to

Farmland’s Double Circle trademark, Universal claims

ownership of only the word COOP“. Universal has licens-

ed Farmland to use the word COOP in Farmland's Double

Circle trademark, and Universal has no objection to

Farmland’s use of the word COOP“ in Farmland's Double

Circle trademark.

In various renewal applications for Universal's CO-

OP trademark, Universal has provided the Commissioner

of Patents and Trademarks with examples of current use of

the word CO-OP. For example, with regard to trademark

registration No. 357,727, in an application for second

renewal filed February 24, 1978, in the United States Pa-

tent and Trademark Office (Trademark Office), Universal

A-40

submitted as an example of use by is licensee Farmland of

a label including Universal's registered mark CO-OP along

with Farmland’s Double Circle logo design trademark.

Also, in regard to trademark registration No. 537472 in an

application for renewal filed November 10, 1970, in the

Trademark Office, National Cooperatives, Inc., (National),

predecessor in interest to Universal, submitted an example

of use by its licensee Farmland of a label used on fertilizer

which included Universal's registered mark CO-OP accom-

panied by Farmland’s Double Circle logo design

trademark. With regard to trademark registration No.

872,627 in an application for trademark registration filed

August 19, 1968, in the trademark office, National submit-

ted as an example of use a picture of two Farmland

employees wearing Farmland shirts bearing the registered

CO-OP mark of Universal and Farmland’s Double Circle

logo design trademark. In all of these instances, the only

mark that Universal or National was claiming was the

word CO-OP. In none of these instances did Universal or

National claim any proprietary right to Farmland’s Double

Circle logo design trademark as pictured in Exhibit A or as

submitted as an example of current use of the word CO-OP

in the above referenced filings. Universal submitted only

evidence of the use of the registered mark CO-OP by one of

its licensees which inured to the benefit of Universal.

/S/Floyd Grabiel

of Universal

Cooperatives, Inc.

A-41

SUBSCRIBED AND SWORN TO before me the

undersigned authority on this 7th day of May, 1981.

ELEANOR HANSON

Notary Public in and for

Hennepin County, Minnesota

ELEANOR HANSON

Notary Public,Hennepin County, Minn.

My Commission Expires July 21, 1983

(Printed or stamped name of Notary)

A-42

EXHIBIT “A”