Brief for the Respondents in Opposition — Holiday Inns of America, Inc. v. Zimmerman
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A. THE APPLICABLE DECISIONS OF THIS COURT
PRECLUDE THE CONSIDERATION OF ANY
TRADEMARK ACT QUESTION WHEN Nor Pro-
———— —
FEDERAL TRADEMARK ACT QUESTION. MusT
Hav BAN Ramm IN THE PLEADINGS AND
EVIDENCE IN THE TriaL Court TO HAVE
BEEN PROPERLY BEFORE THE STATE
Indez. :
C. Four Factors IN THe RecorD CoNcLUsIvE-
LY Eri THAT NO FEDERAL TRADE-
MARK ACT QUESTION Was EVER PROPERLY
Rum Or RN THe Stars Courts ....
1. A Review of the Pleadings Reveals
That No Federal Servicemark In-
fringement Question Was ase
2. The Record Demonstrates t No
‘ Proof Was Ever Offered to Support or
Establish A Claim of Federal Service-
3. A Very Important Portion of the Rec-
ord Demonstrates That Holiday Inns .
. Of America, Inc., Not Only Failed to.
Raise Any Federal Trademark Act
Question but They Eapressly Dis-
claimed the, Presence of Any Such
PRESSLY PRESERVES RIGHTS VALIDLY
CREATED UNDER STATE Lax
9
‘Table of Citations.
_ TABLE OF CITATIONS |
i Cases ran
Abrams Will, 419 Pa. 92 (1965) . 129
Altman v. Ryan, 435 Pa. 401 (1969) . 17
WI eee .
Anflick v. Gruhler, 353 Pa. 470 KW
Anderson, 326 U. S. 208, 90 L. Ed. 8
(1945), re rehearing denied 326 U.S. 601 90 L.
Ed. 407 (1945) er 16
Beck v. Washington, 369 US. 541, 8 L. Ed. 2d 98
. o biacat Xs 16
Bittner v. McGrath, 186 Pa. Super. 477 (1958) .. 17
Borough of Schuykill Haven v. Bolton, 190 Pa.
Super. 187 (186900) 18
Bowman v. Gum, Inc, 821 Pa. 516 (1936) e 18
Brown v. Massachusetts, 144 US. 573, 36 L. Ed.
... ⁵˙ - ¾-A oer oo. 16
Brunetto v. Ferraro, 167 Pa. Super. 568 (1950) . 17
Burger King of: Florida, Inc. v. Hoots, 408 F.2d
e inns dadk cs ca kc 32
Cardinale v. Louisiana, 304 U.S 437, 22 L. Ed 2d
. Mal —(êéêU— Mahidiehh cryacaies 15
Chicago, ago, Indianapolis & Louisville Railway Com-
pany v. Maguire, 196 U.S. 128, 49 L. Ed. 413
.. ͤ ee 17, 30
Cox v. Texas, 202 U.S. 466, 50 L. Ed. 1099 (1906) 17
Danovitz v. Portnoy, 309 Pa. 599 (1960) ........ 16
Dawn Donut Co. v. Hart’s Food Stores, Inc., 267
F. 2d 358 (2d Cir. 19590 / 36
ga 8 Vi G 18. Tope Mt. Co, 5
OO Ny MORES $e Ae ey ANN IIR
S
iv
7 6
8 f
CasEs PAGE
Eddy v. Ashley Borough, 281 Pa. 4 (1924) . ie eae |
1 — —
a Purdy, 185 U.S. 148, 46 L. Ed. 845
F. d. Sta ve v. Butler, 166 U.. 648,
41 L. 1149 ( . — 0
Food Fair Stores, Inc. v. Square Deal Market
206 F. ad 482 (D.C. Cir. 1953) ............ e.
Glover v. Philadelphia, 304 Pa. 466 (1931) .......
Grisbord v. Philadelphia, 148 Pa. Super. 91 (1942)
Haller Mount Lebanon Authority, 7
DAC. 24 146 (Allegheny Cty. . 1955) .....
Haviland & Co. v. Johann Haviland China Corpo-
ration, 269 F. Supp. 928 (S. D. N. T. 1967) ....
Henry v. Zurflieh, 208 Pa. 440 (190 8
Herndon v. Georgia, 205 U.S. 441, 79 L. Ed. 1580
(1934), rehearing denied 296 U.S. 661, 80 L. Ed.
.. 0.905 00.000006000000008
- Hornblower v. Austin, 112 Pa. Super. 90 (1934) .
Huffman Estate, 349 Pa. 50 (1944)...............
John R. Co. v. Holloway,/366 F.2d 108
(Sth Clr. 1008)... cee F
Kipley v. Illinois, 170 U.S. 182, 42 L. Ed. 998 (1898)
Kirshon v. Friedman, 349 Pa. 171 (1544)
Lane v. Smith, 108 Pa. 415 (1883) .......,......
Littman v. Bell Telephone Co., 315 Pa. 370 (1934)
. People's Bank, 226 261 (1910)
17
171
88
16
17
18
res n 16
Orth v. Consumers’ Gas Company, 280 Pa. 118
c een belied dn seen > sare
Pace v. Kroger Company, 210 Pa. Super. 139 (1967) 17 .
Page v. Simpson, 172 Pa. 288 (1896) .......:.... 25:
Railroad v. Illinois Brick
Company, 297 U.S. 447, 80 L. Ed. 796 (1938),
rehearing denied 297 U.S. 728, 80 L. Ed. 1011
(1986) ...... e Nn, 18, 17
8 18
f Association of Linen wm
ee 100 Pe W 8 pees 17
Protz v. Peoples National Gas Company, 94 PL. J.
„139 (Allegheny Cty. C.P. 1946) ............ 18, 19
_ Raley v. Ohio, 360 U.S. 423, 3 L. Ed. 2d 1344 (1950) 15
Reilly v. Magee, 272 Pa. 406 (1922) ........,..... 19
Rhode Island Textile Company v. Lincoln Lace &
Braid Co., 240 F. Supp. 97 (BRI. 1965) ..... 32
Roman Products . v. DiCrasto’Dairy and Food
- Products, Inc., F. 2d 599 (2d Cir. 1966)...
reece eee 5 ** !•2ũ2Q. . . Gay 38, 35
Fair of Inc. v. Sanders Co., 328
2d 496 (8th Cir. 1964) ......... . 1
v. The Tra 228 F.
. 288 (N. D. Ala. . „ 352 F. 2d
516 (Sth Cir. 1965) ........ „ . 82
Table of Citations.
oy CASES PAGE
Snyder v. Barber, 378 Pa. 877 (1954) ............ 19
Sproul v. Stein, 348 Pa. 269 (1944) .............. 17
Stembridge v. Georgia, 343 U.S. 841. 96 L. Ed.
— | rr ere enor es ‘ang 16
2 100 F Supp. Supp. 412 (De. d Spring Brewing 1951) . 36
Street v. New York, 394 U.S. 576, 22 L. Bd. 24 572
—.. ͤ . ²˙ A 15
— Solomon, 31% Pa. 236 (1984) .......... 19
waite v. Sunline, Inc., 380 F.2d 928 (8th Cir.
The Oakford Com v. The Kroger Company, 157
F. Supp. 453 (8 (S.D. Ui. PW ers 33
Tillamock County Creamery Association v.. Tilla-
mook Cheese and Dairy Association, 345 F. 2d
B 1965), cert. denied 382 U.S. 903 2
Whitehall Laboratories v. Wilber, Secretary of
Health, 73 Dauph. 234 (Dauphin Cty. C. P. 1959) 18
Wilson v. Cook, 327 U.S. 474, 90 L. Ed. 798 (1946) .. 15
Wolfe v. North Carolina, = 177, 4 L. Ed. 24
1650 Pr! 10
8 v. Holiday Inns of America, 123
U. S. P. Q. 86 (1959), reconsideration denied 126
RR e 11
Zorach v. Clauson, 343 U.S. 306, 96 L. Ed. 954 (1952) 16
Articles and Statutes.
ARTICLES
Trade Marks and Unfair Competition, 68 Harv. L.
— AWA
STATUTES
Title 15 — Trademark (Lanham) Act of 1946
Section 15 (15 U.S.C. §1065) ...............
Section 33(b) (15 U.S.C. § 1115(b)) ........
P lvania Business Corporation Law of 1933,
y 5, P.L. 364, as amended, §202, Title 15
Purdon’s Pa. Stat. Ann. §2852-202 ...........
P Ivania Fictitious Business Names Act of
1945, May 24, P. L. 967 §1, as amended, Title
54 Purdon’s Pa. Stat. Ann. §28.1.............
Pennsylvania Fictitious Corporate Name Act of
1957, July 11, P. L. 783, §5, Title 15 Purdon’s
/ 5 60 4c 6 000025 cae sannanaae
Index to Appendia.
INDEX TO APPENDIX
Title 15 — Trademark (Lanham) Act of 1946
Section 15 (15 U.S.C.
vania Business Corporation Law of 1933,
y 5, P.L. 364, as amended, § 202, Title 15
Purdon’s Pa. Stat. Ann. § 2852-202 ..........
vania Business Fictitious Names Act of
May 24, P.L. 967 § 1, as amended, Title
54 Purdon’s Pa. Stat. Ann. § 28.1 ............
vania Fictitious te Name Act of
7, July 11, P.L. 783, § 5, Title 15 Purdon’s
r ES ae
Zimmerman v. B. & C. Motel Corporation, 401 Pa.
% ũ »mm ia ae
Zimmerman v. Holiday Inns of America, Inc., 123
e eee
Plaintiffs’ Exhibit 292 — U. S. Patent Office Trade-
mark Registration 592, issued July 13,
PAGE
* „rr
__———8ESPONDENTS’ BRIEF IN OPPOSITION TO
PETITION FOR WRIT OF CERTIORARI TO THE
SUPREME COURT OF PENNSYLVANIA*
OPINIONS BELOW | @
The opinion of the Supreme Court of Pennsylvania
is reported at 438 Pa. 528, 266 A.2d 87. A prior opin-
ion by the Court of Common Pleas of Allegheny County,
Pennsylvania, Civil Division is unreported but is in the
printed Record of which certification was obtained by
Respondent. (R. 3161a) (It is also set out in Petitioner’s
Appendix at page 24a)
*Explanatory note:
References to Respondents’ Appendix herein are
e.g., (A. 1a).“
References to the printed Record in the Pennsyl-
vania Supreme Court are, e. g., (R. 1a).” (The Peti-
tioner, Holiday Inns of America, Inc., did not have
certified and transmitted to this Honorable Court the
7 Record in the Pennsylvania Supreme Court. The
pondents here did have such entire printed Record
in that Court certified and transmitted.)
Other page references —e. g., to the Petition filed
herein —are self-explanatory in their own context.
a
Jurisdiction. — .
N
JURISDICTION N
Respondents da not accept the statement of juris-
» diction in Petitioner’s Petition. It is respectfully sub-
mitted that this Court lacks jurisdiction under 28 U.S.C.
§ 1257 (3) because no question of any right, privilege or
immunity under the Constitution or laws of the United
States was ever timely and properly raised nor was
any State law ever timely and properly drawn in ques-
tion on the ground of its being repugnant to the Con-
stitution or laws of the,United States.
Counter-Statement of Questions Presented.
COUNTER-STATEMENT OF QUESTIONS
PRESENTED
Respondents do not accept the Statement of Ques-
tions Presented as set forth in the Petition (p. 2). In
lieu thereof, Respondents submit the following:
ee May the unsuccessful litigant in a state court
obtain certiorari by belatedly attempting to inject a
Federal question into the case, if no such question was -
raised in the pleadings or at trial in the state court, and
the case was pleaded and tried solely on the basis of that
state’s common law?
2. Has a state court interposed local law which
is contrary to the Federal Trademark Act in its de-
cision of an unfair competition case on the basis of the
existence of a valid state common law right to the use
of a service mark, when that very Act itself expressly
provides for the recognition of validly existing state
rights to the use of a service mark, and thus, compels
the same analysis and outcome as under state law?
3. Where it is uncontroverted that a state su-
preme court has determined that a party has acquired
property rights in a service mark by prior vse in a
limited area can such rights in that area be destroyed
by the subsequent Federal registration of that name
by another party?
Constitutional Provisions and Statutes Involved.
CONSTITUTIONAL PROVISIONS AND STATUTES
INVOLVED |
Respondents do not accept the statement of the
Petitioner with respect to constitutional en and
statutes involved.
. i ta,
constitution or laws of the United States, because it
was pleaded and tried solely on the basis of issues
under the common law of the Commonwealth of Penn-
sylvania. g Pa
However, in discussing the Petitioner’s belated at-
tempt to inject certain Federal service mark questions,
the following statutory provisions become relevant:
Title 15—Trademark (Lanham) Act of 1946
Section 15 (15 U.S.C. § 1065)
Section 33 (b) (15 U.S.C. 5 1115 (b))
Pw A
Counterstatement of the Case.
COUNTERSTATEMENT OF THE CASE ~
Respondents do not accept Petitioner’s statement
of the case, and in lieu thereof, submit the following.
Eugene W. Zimmerman and certain corporations
which he owns and which he authorized to use the name
“Holiday” are the Respondents in the present proceeding
before this Honorable Court. (They are. hereinafter
collectively referred to as “Zimmerman” ). They were ini-
tially the plaintiffs in the action which gives rise to it.
The Petitioner, Holiday Inns of America, Inc. and its
franchisees in Pennsylvania were initially the defend-
ants therein. In the statement filed under Rule 21, Holi-
day Inns of America, Inc., has indicated that the fran-
chisees are not parties in interest in this case (although |
they continue to use the name “Holiday” in Pennsyl-
vania ) .1. |
The case involves a lawsuit instituted in 1963 by
the first user — Zimm — (which use began in
1952), in the Commonwealth of Pennsylvania, of a
name having the 4 word “Holiday” for moteis or
hotels.
It was instituted to protect rights — which such
user had acquired under Pennsylvania law — against
1. The following corporations and individuals are
franchisees of Holiday Inns of America, Inc., operating
either motels or hotels in Pennsylvania the service
mark “Holiday”: Apico Inns of ' Pennsylvania, Ina,
Breezewood Motel ig ony ened Nev Stanton *
tit: Ie ae, e Pally
pu 0 C., Alex regory P
(R. 3164-3166). 5
Counterstatement of the Case.
impairment thereof by activities of the Petitioner here
and others which activities began in Pennsylvania in |
1958. This case is the reactivation of a law suit pre-
viously instituted in 1958 which reached the Pennsyl-
vania Supreme Court in 1960 (A. 21a). At that time
(1960) the Pennsylvania Supreme Court affirmed the
lower court’s dismissal of the case on the ground that
the contending parties were not operating in the same
market area. However, the Supreme Court of Pennsyl-
vania expressly affirmed the lower court’s leaving the
case open without prejudice so that a determination of
the rights of the parties could be obtained if their activi-
ties brought them into closer proximity from the market
standpoint. (A. 26a)
, Both the original suit and the reactivation of the
litigation proceeded on the basis of the common law of
Pennsylvania with respect to unfair competition. The
aim of both suits was to protect the name “Holiday”
for Zimmerman et al, the Respondents here (plaintiffs
initially), on hotel and motel facilities in Pennsylvania.
The action involved in the proceeding presently before
this Honorable Court was resisted by Holiday Inns of
America, Inc. and its franchisees — and Holiday Inns
of America, Inc. filed a counter-claim — under the
aforementioned common law of Pennsylvania. (R. 182a,
207a). The case was pleaded and tried exclusively and
explicitly uuder the common law of Pennsylvania.
Neither in the pleadings nor at trial was any claim of
any kind or any defense of any kind raised with respect
to Federal constitutional or statutory questions.
U The case resulted in a final decree\ en joining Holi-
day Inns of America, Inc., and its franchises from en-
croaching upon Zimmerman’s market area, which
oa
Counterstatement of the Case.
was completely within the Commonwealth of Pennsyl-
vania, — a radius of twenty-two miles from the center
of Harrisburg. (R. 3312a) Holiday Inns of America,
Inc. s counterclaim was dismissed. The Supreme Court of
Pennsylvania affirmed. (A. 9a, 11a) Neither the trial
-court nor the Pennsylvania Supreme Court discussed any
Federal question, because such issue had not been raised
in the pleadings or at trial.
Previous to the year 1950, Zimmerman had been in
the motel business in Pennsylvania, (R. 3169a) and dur-
ing the summer of that year decided to build a motel at
the Gettysburg Pike Interchange of the Pennsylvania
Turnpike. (R. 3170a)' At that time he selected the name
“Holiday” for that motel, choosing the name at his fam-
ily’s suggestion. (R. 3170a) His good faith is attested by
the fact that he did not learn until 1954 that Holiday
Inns of America, Inc. was using the name “Holiday Inn
Hotel Court” for a motel in Memphis, Tennessee. (R.
3171a) There was no motel or hotel with the name “Holi-
day” in Pennsylvania — other than Zimmerman’s —
until 1958, (R. 3168a) and there has never been a motel
or hotel with the name “Holiday” — other than Zimmer-
man’s — in the area which has been determined to be his
market area. (R. 3189a) He has continuously operated
his “Holidays” up to the present time. (R. 3172a, 3173a)
In 1952, Zimmerman actually began construction of
the Holiday Motel at the Gettysburg Pike Interchange
of the Pennsylvania Turnpike, and it went into opera-
tion in July of 1953. (R. 3170a) Its opening was heavily
publicized, and the “Holiday” name was from 1952 on
extensively advertised and publicized by Zimmerman.
(R. 317 2a) Zimmerman valued the name and intended to
preserve and develop his property right therein. This
motel was and is located west of the city of Harrisburg.
- Counterstatement of the Case.
* Zimmerman also owned and operated a motel east of
Harrisburg, and in 1957 changed the name of that motel
to “Holiday”, calling the motel west of Harrisburg
“Holiday Motel Hotel West”, or “Holiday West” and the
Holiday Motel east of Harrisburg “Holiday Motor Hotel
East” or “Holiday East”. (R. 3172a) At all times his
„Holidays 2 were endorsed by national travel guides (R.
623a-625a) and advertised in numerous media. (R. 662a-
712a)
Holiday Inns of America, Inc., began using the
word “Holiday” in its name about 1952 solely in the
Memphis, Tennessee area. (R. 3167a) In the spring of
1954, while Zimmerman was on a trip to Texas, he passed
through Memphis, where he discovered the existence of
Holiday Inns of America Inc. s first motel operating
under the name “Holiday Inn Hotel Courts”, and learned
that it was to be part of a chain which intended to ex-
pand. (R. 3171a).
Zimmerman had also planned for éxpansion of his
Holiday Motels along the Pennsylvania Turnpike. When
he returned to Pennsylvania from Texas, he took ac-
tion — on advice of counsel — to protect his property
right in the name “Holiday”. (R. 3171a) Qn such advice,
he incorporated under various corporate names, includ-
ing the key word “Holiday”, under the Business Corpo-
ration Law of Pennsylvania. (R. 3171a, A.12a).In this
connection, he actually purchased the corporate name
“Holiday Inn” from the persons who had incorporated
a bar under that name.2 He also registered fictitious
names pursuant to the requirements of the Pennsylvania
2. The of incorporaton refutes the asser-
tion of Petitioner that these were “dummy” corpora-
tions (P. 4).
9
Counterstatement of the Case.
Fictitious Business Names Act of 1945, May 24, P. L. 967
§1, as amended, 54 Purdon’s Pa. Stat. Ann. §28.1 (A. 64).
‘Under Pennsylvania law it was not possible for any-
one to. incorporate using the name “Holiday” there-
after: Pennsylvania Business Corporation Law of 1933,
May 5, P.L. 364, as amended, §202, Title 15 Purdon’s Pa.
Stat. Ann. §2852-202. (A. 5a)3
There is no evidence that Holiday Inns of America
Inc. or its franchisees ever complied with the require-
ments of the Pennsylvania Fictitious Corporate Name
Act of 1957, July 11, P.L. 783, §5, Title 15 Purdon’s Pa.
Stat. Ann. §55. (A. 8a) Thus they were not lawfully con-
ducting their activities in Pennsylvania.
Holiday Inns of America, Inc., which could not
qualify as a foreign corporation to do business in Penn-
sylvania under the name “Holiday” itself, however, em-
ployed the device of a wholly owned subsidiary, a Penn-
sylvania corporation known as H.I.0.A., Inc. to operate
in the Commonwealth of Pennsylvania. (R. 3163a,
3164a)
In 1953 Holiday Inns of America, Inc., offered fran-
chises for the entire United States. (R. 3168a) How-
ever in 1956 it signed an actual license agreement with
B. & C. Motel Corporation. As the Pennsylvania Su-
preme Court stated, in that year, the Petitioner was a
Tennessee corporation operating motels locally in
Memphis, but with ambition to establish by license and
uniform regulations a national string of motels”: Zim-
3. It is significant that all of petitioner’s fran-
chisees in Pennsylvania do business under the name
“Holiday”, even though their names are as indicated in
footnote i, (P. 5, supra). (The mentioned Act has been
further amended and renumbered but was effective as
above cited at the relevant time.)
TATE CRI ASE
10
Counterstatement of the Case.
merman v. B. & C. Motel Corporation, 401 Pa. 278 at
280 (A.21a, 22a). It was not until 1958, however, that
B. & C. Motel Corporation opened a “Holiday Inn” near
Allentown, Pennsylvania. (R. 3186a)
When that occurred, Zimmerman instituted action
on the theory of unfair competition under the common
law of Pennsylvania in the Court of Common Pleas of
Lehigh County, Pennsylvania e. No. 3 June Term, 1958.
No Federal question was litigated in that case and it
was dismissed by the trial court without prejudice.
(R. 3187a) The Supreme Court of Pennsylvania ex-
pressly said: We approve the lower court’s leaving thne
case without prejudice in case the parties extend their
facilities in this rapidly expanding industry“. (R. 3187a,
A. 26a). At the time of that decision (1960), the re-
spondent had one motel east of Harrisburg and one
motel west of Harrisburg. (R. 3172a) Holiday Inns of
America, Inc., had no motel in Pennsylvania, and its only
_ franchisee with a motel in Pennsylvania was B. & C.
Motel Corporation, with a facility in or near Allentown,
Pennsylvania. (R. 3186a)
Immediately following the aforementioned decision,
Holiday Inns of America, Inc., and its franchisees began
to expand their activities in the Commonwealth of Penn-
_- sylvania (R. 3190a) — apparently in order to establish
or test the geographical limits or concepts established
by the Supreme Court of Pennsylvania.
Zimmerman never expanded beyond his own market
area. In 1960 he announced and publicized plans for the
opening of a motel in the town or city of Harrisburg,
approximately midway between his facility west of Har-
risburg (Holiday West) and his facility east thereof
1
Counterstatement of the Case.
(Holiday East), i.e., in the heart of his previously es-
tablished market area, (R. 3172a) under the name of
Holiday Inn Town. Significantly, Holiday Inns of Amer-
ica, Inc., never took any legal action against this pro-
posed and publicized use of the name until its counter
claim was filed in this case on July 15, 1964, approxi-
mately four years later. Also, significantly, Holiday Inns
of America, Inc., never took any legal action to require
Zimmerman or any entity owned by him to discontinue
the use of the name “Holiday”.
The present suit was instituted on July 31, 1963.
The underlying questions based upon Pennsylvania law
which had been left open by the Pennsylvania Supreme
Court in 401 Pa. 278 (1960) (A. 21a) were reactivated
by the institution of the litigation presently involved
here. :
However, with respect to the matter of litigation of
Federal questions, in 1959 Zimmerman had brought an
action with the Patent Office Trade Mark Trial and Ap-
peal Board to cancel the registration of Holiday Inns of
America, Inc., service marks, because Zimmerman was
the prior user of the key part of the mark with regard
to motel facilities in his part of the United States. Holi-
day Inns of America, Inc.’s service mark registration was
not until July, 1954. (R. 35a) The Board dismissed the
action because Zimmerman allegedly was not in inter-
state commerce, whereas, Holiday Inns of America was.
However, the mentioned tribunal expressly noted that
Zimmerman could very well possess superior rights in
the name of “Holiday” for a single area in a state which
might be recognized and enforced in appropriate pro-
ceedings. Zimmerman v. Holiday Inns of America, Inc.,
12
Counterstatement of the Case.
123 U.S.P.Q. 86 (1959), reconsideration denied 123
U.S.P.Q. 549 (1959). (A. 27a).
Zimmerman was not a “latecomer” in the use of the
name “Holiday” but was the first and exclusive user
of that name for motel facilities in the Commonwealth
of Pennsylvania until 1958, and he chose it in good faith
and without knowledge of the use of the word “Holiday”
by Holiday Inns of America, Inc. Zimmerman v. B. & C.
Motel Corporation, supra at 280. The trial court ex-
pressly found that Zimmerman did not act in bad faith
or with unclean hands. (R. 3191a-3193a)
The relief granted to Zimmerman does not preclude
the operation by Holiday Inns of America, Inc., of facil-
ities within Zimmerman’s market area but only the oper-
ation thereof with the use of the key word “Holiday”.
WHEN AND HOW FEDERAL QUESTIONS
| WERE RAISED
Respondents do not accept the statement of the
Petitioner (p. 5) as to when and how Federal questions
were raised. On the contrary, Respondents submit that
there was never a timely and proper presentation of
any Federal question in this case. l
—— . —
Summary of Argument.
SUMMARY OF ARGUMENT
L
There is no basis for the grant of the petition for
certiorari here because the question now sought to be
presented to this Honorable Court was not properly
raised and considered in the state court. For a right of
review by this Honorable Court to be based upon the
refusal or omission of a state court to decide a Federal
question or apply a Federal law or effectuate a Federal
right, the question with respect thereto must have been
raised and presented at such time and in such manner as
to present it properly before the state court for consid-
eration. Where under state practice and procedure, a
question not raised at trial will not be considered on
appeal, a party must raise the Federal question on which
he relies at trial to preserve his right of review by this
Honorable Court. Furthermore, a party cannot raise a
Federal question by mere inference, but only by such
clear and precise averments as to place it beyond doubt
that he intended to assert a Federal right. Moreover,
where the highest state court is silent as to presence of a
Federal question and does not deal with such issues at all
in its Opinion, the inference is that the Federal question
was not properly raised.
Here, under Pennsylvania procedural requirements,
the Federal question would have had to be raised in the
pleadings and at trial. The pleadings reveal no Federal
question was raised. Th¢ record demonstrates that no
proof in that connection was offered. Contrariwise,
counsel for Holiday Inns of America, Inc. (Petitioner)
expressly disclaimed the presence of any Federal ques-
tion. The Opinions of the state courts are not merely
14
Summary of Argument.
silent as to the absence of a Federal issue, but explicitly
state that the issues raised were exclusively under state
common law. .
II.
There is no question in this case whatsoever con-
cerning Congressional intent to create a uniform na-
tional law for service mark registrants, nor is there any
question of Federal common law or pre-emption. The
findings of fact of the trial court, affirmed by the Penn-
sylvania Supreme. Court, are that Zimmerman, et al.
(Respondents here) were exclusive: and continuous prior
users of the name “Holiday” in a limited geographical
area in the Commonwealth of Pernsylvania, and the
Lanham Act expressly preserves the rights of prior
users in such a case. Accordingly, inasmuch as the Lan-
ham Act expressly protects such right under state law,
the result in any event, would be the same as reached by
the Pennsylvania courts here.
Argument.
ARGUMENT
N I.
The Pennsylvania Supreme Court did not interpose
local law in deciding a claim of infringement of a Fed
erally registered service mark, because such a question
was never properly raised.
A. THE APPLICABLE DECISIONS OF THIS COURT PRE-
CLUDE THE CONSIDERATION OF ANY FEDERAL
TRADEMARK ACT QUESTION WHEN Nor PROPER-
LY RAISED AND CONSIDERED IN THE STATE
CouRTS. :
It is respectfully submitted that for a right of re-
view by this Honorable Court to be based upon the re-
fusal or omission of a state court to decide a Federal
question or to apply Federal law or effectuate a Federal
right, such question must have been raised and pre-
sented at such time in such manner as to bring it prop-
erly before the state court for consideration. Cardinale
v. Louisiana, 394 U.S. 437, 22 L. Ed. 2d 398 (1969);
Street v. New York, 394 U.S. 576, 22 L. Ed. 2d 572
(1969) ; Raley v. Ohio, 360 U.S. 423, 3 L. Ed. 2d 1344
(1959) ; Edelman v. California, 344 U.S. 357, 97 L. Ed.
387 (1953); Stembridge v. Georgia, 343 U.S. 541, 96 L.
_ Ed. 1130 (1952); Wilson v. Cook, 327 U.S. 474, 90 L. Ed.
793 (1946) ; Herndon v Georgia, 295 U.S. 441, 79 L. Ed.
1530 (1934), rehéuring ö U.S. 661, 80 L. Ed.
471 (1935).
- Where under state practice and procedure a
question not raised in the trial will not be considered
on appeal — which is the rule of almost universal appli-
cation — a party must raise the Federal question on
which he relies at trial to save his right of review by
16
Argument.
this Honorable Court. Beck v. Washington, 369 U.S.
541, 8 L. Ed. 2d 98 (1962) ; Wolfe v. North Carolina, 364
US. 179, 4 L. Ed. 2d 1650 (1960), rehearing denied 364
US. 856, 5 L. Ed. 2d 80 (1961) ; Zorach v. Clausen, 343
USS. 306, 96 L. Ed. 954 (1952); Bailey v. Anderson, 326
US. 203, 90 L. Ed. 3 (1945), rehearing denied 326 U.S.
691, 90 L. Ed. 407 (1945); Memphis Natural Gas Com-
pany v. Beeler, 315 U.S. 649, 86 L. Ed. 1090 (1942);
Pennsylvania Railroad Company v. Minois Brick Com-
pany, 297 U.S. 447, 80 L. Ed. 796 (1936), rehearing de-
nied 297 U.S. 728, 80 L. Ed. 1011 (1936) ; First National
Bank of Estherville, Iowa v. Ci Council of Estherville,
215 US. 341, 54 L. Ed. 223 (1910); Erie Railroad v.
Purdy, 185 U.S. 148, 46 L. Ed. 847 (1902); Brown v.
Massachusetts, 144 U.S. 573, 36 L. Ed. 546 (1892).
A party cannot raise a Federal question by mere
inference, but only by such clear and precise averments
as to place it beyond doubt that the party attempting to
bring a case before this Honorable Court intended to
assert a Federal right. Michigan Sugar Company v. Diz,
185 U.S. 112, 46 L. Ed. 829 (1902); Kipley v. Minois,
170 U.S. 182, 42 L. Ed. 998 (1898); F. G. Oxley Stave
Company v. Butler, 166 U.S. 648, 41 L. Ed. 1149 (1897).
Where the highest state court is silent as to the
presence of a Federal question, and does not deal with
such issues at all in its opinion, this Honorable Court
has held that it will be inferred from the state supreme
court’s silence that the state court found the Federal
question not to have been properly raised in accord with
accepted state practice and procedure. Stembridge v.
Georgia, supra; Memphis Natural Gas Company v. Beeler,
supra; Pennsylvania Railroad Co. v. Illinois Brick
17
Argument.
Company, supra; Cox v. Texas, 202 U.S. 446, 50 L. Ed.
1099 (1906) ; Chicago, Indianapolis & Louisville Railway
Company v. Maguire, 196 U.S. 128, 49 L. Ed. 413 (1905).
Here, the Pennsylvania courts were not merely
silent they expressly stated that they were dealing with
state common law issues. (R. 3161a, et seq., A. 9a, et
seq:).
B. UNDER THE APPLICABLE REQUIREMENTS OF PENNSYL-
VANIA PRACTICE AND PROCEDURE A FEDERAL TRADE-
MARK ACT QUESTION MUsr HAVE BEEN RAISED IN
THE PLEADINGS AND EVIDENCE IN THE TRIAL COURT
TO HAVE BEEN PROPERLY BEFORE THE STATE COURTS.
The general rule in Pennsylvania, which has been
reiterated many times, is that a case will not be re-
viewed on appeal on a different theory from that on
which it was tried, nor will consideration be given to
questions other than those presented for determination
at trial. Altman v. Ryan, 435 Pa. 401 (1969); Abrams
Will, 419 Pa. 92 (1965); Sproul v. Stein, 348 Pa. 269
(1944) ; Huffman Estate, 349 Pa. 59 (1944); Montgom-
ery County Bar Association v. Rinalduchi, 329 Pa.
296 (1938); Orth v. Consumers’ Gas Company, 280
Pa. 118 (1924); Armstrong & Latta v. City of Phila-
delphia, 249 Pa. 39 (1915); Henry v. Zurflieh, 203 Pa.
440 (1902); Lane v. Smith, 103 Pa. 415 (1883); Pace v.
Kroger Company, 210 Pa. Super 139 (1967); Bittner v.
McGrath, 186 Pa. Super. 477 (1958); Brunetto v.
Ferraro, 167 Pa. Super. 568 (1950); Grisbord v. Phila-
delphia, 148 Pa. Super. 91 (1942) ; Philadelphia Associa-
tion of Linen Suppliers v. Philadelphia, 139 Pa. Super.
560 (1940); Hornblower v. Austin, 112 Pa. Super. 90
(1934).
Argument.
In Pennsylvania, the procedural requirements are
premised on the fact that Pennsylvania does not have
“notice” pleadings but has “strict fact” pleadings. The
probata must follow the allegata. Neither allegations
without proof nor proof without allegations, nor allega-
tions and proof which do not correspond, will entitle a
complainant to relief. Danovitz v. Portnoy, 399 Pa. 599
(1960); Anflick v. Gruhler, 353 Pa. 470 (1946); Kir-
shon v. Friedman, 349 Pa. 171 (1944); Pennsylvania
Railroad Company v. Pittsburgh, 335 Pa. 449 (1939);
Bowman v. Gum, Inc., 321 Pa. 516 (1936); Littman
v. Bell Telephone Co., 315 Pa. 370 (1934); Borough
of Schuykill Haven v. Bolton, 190 Pa. Super. 157 (1959),
appeal dismissed 365 U.S. 767, 6 L. Ed. 2d 189 (1961).
In the instant case the pleadings contain no reference
to a claim of infringement of a Federally registered
service mark, and during the trial, the presence of any
such issue was expressly disclaimed by the petitioners.
(R. 2594a) To permit the injection of such an issue into
the case after the trial, without any attempt by Peti-
tioners to amend their pleadings, would be a distortion
of Pennsylvania procedure.
It is patently unfair to review or reverse the judg-
ment of a lower court on the basis of matter which that ‘
court never had an opportunity to consider.
When a question is not raised in the pleadings or
evidence before the chancellor, it is too late to raise the
question for the first time to the court by exceptions
to the chancellor’s failure or refusal to make requested
findings and conclusions. Haller v. Mount Lebanon
Parking Authority, 7 D. & C. 2d 146 (Allegheny Cty.
C. P. 1955); Prot v. Peoples Natural Gas Company, 94
P. L. J. 139 (Allegheny Cty. C. P. 1946) affirmed 398 Pa.
Argument.
223 (1959). See also: Whitehall Laboratories v. Wilber,
Secretary of Health, 73 Dauph. 234 (Dauphin Cty. C.P.
1959). The Pennsylvania Supreme Court has reversed
final decrees in equity of courts where they have granted
relief beyond the scope of the pleadings and evidence
introduced before the chancellor. Snyder v. Barber, 378
Pa. 377 (1954) ; Stewart v. Solomon, 316 Pa. 236 (1934) ;
Glover v. Philadelphia, 304 Pa. 466 (1931); Eddy v.
Ashley Borough, 281 Pa. 4 (1924) ; Reilly v. Magee, 272
Pa. 406 (1922).
C. Four Factors IN THE RECORD CONCLUSIVELY Es-
TABLISH THAT NO FEDERAL TRADEMARK ACT QUES-
TION WAS EVER PROPERLY RAISED OR BEFORE THE
STATE COURTS.
1. A Review of the Pleadings Reveals That No
Federal Servicemark Infringement Question
Was Raised.
Plaintiffs’ complaint (R. 15a-37a) and amended
complaint (R. 91a-115a), as well as the answer and
counter-claim of Holiday Inns of America, Inc. (R. 182a-
216a) and plaintiffs’ reply thereto (R. 217a-236a) pro-
ceeded on the basis of a common law unfair competi-
tion theory. Nowhere in the pleadings was any men-
tion made of the “Lanham Act” or Federally registered
service marks as a basis for any claim for relief.
In its answer and counter-claim Holiday Inns of
America, Inc. alleged only that their mark had acquired
secondary meaning in Pennsylvania (R. 209a), and that
plaintiffs’ use of the word “Holiday” constituted unfair
competition with them. (R. 214a)
—
Argument.
2. The Record Demonstrates That No Proof Was
Ever Offered to Support or Establish A Claim
of Federal Servicemark Infringement.
Neither party offered any proof to support any
claim under the Federal Trademark (Lanham) Act. All
the evidence went to the proof of secondary meaning
and market area. There was no evidence at all to estab-
lish incontestability or any of the other elements neces-
sary to prove a Federal service mark infringement case.
As stated by counsel for the Petitioner, Holiday
Inns of America, Inc., (R. 2115a),
We don't believe they [Federal registrations]
are relevant. If these go in, then it opens up the
Federal trademark registration, and we will have to
go into the matter as to how they were obtained
and what procedures were involved and why you
do certain things in obtaining a Federal trademark,
or service mark registration, and the copyright
matters. We are getting far afielld.
No proof of the type referred to was ever intro-
duced by anyone. Significantly, however, in their peti-
tion (p. 8), Holiday Inns of America, Inc., now makes
the remarkable and revealing assertion that “Patent
Office records show that Holiday Inns’ registration of
‘Holiday Inn’ has become incontestable under Section
15 of the Act.”4 (Emphasis supplied)
4. There is no citation to the record to support
the Petitioner’s contention, and the only reference made
is to Petitioner’s Appendix (2a), which is merely a
recitation of Section 15 of the Lanham Act.
~
*
Pe
21
Argument.
RESPONDENTS EXPLICITLY OBJECT TO THIS
STATEMENT IN THE PETITION AND REQUEST
THAT IT BE TOTALLY DISREGARDED. What “Pat-
ent Office records” would show is not in the record in
this case. However the attempt of the Petitioner to in-
ject them into the case demonstrates the significance of
its failure to adduce proof at trial and corroborates the
proposition that the present proceeding is a belated at-
tempt to inject a Federal issue.
RESPONDENTS (ZIMMERMAN ET AL.) ALSO
EXPLICITLY OBJECT TO THE INCLUSION IN THE
PETITIONER’S APPENDIX (67a) OF WHAT PUR-
PORTS TO BE AN EXHIBIT DEMONSTRATING ITS
COMPLIANCE WITH SECTION 15 OF THE ACT. RE-
SPONDENTS REQUEST THAT THIS EXHIBIT BE
TOTALLY DISREGARDED. This purported exhibit is
not a part of the jointly-prepared printed record in the
Pennsylvania Supreme Court. Such jointly-prepared
printed record demonstrates that an exhibit was intro-
duced by the Respondents (Plaintiffs’ Exhibit 292) (R.
3514a) (A. 314) ko demonstrate that Holiday Inns of
America, Inc., considered the word “Holiday” to be the
key part of their name—(this was offered and admitted
for that limited purpose (R. 2113a, 2120a) — but there
were no handwritten notations on the document (in the
printed Record) such as appear in Petitioner’s Appen-
dix (at page 67a) evidently purporting to establish in-
contestability. Significantly, the precise exhibit of plain-
tiffs, as appears in the printed Record, (Plaintiffs’ Exhi-
bit 292) (R. 3514a, A. 394%), was available for inclusion
in the Appendix of the Petitioner, but Petitioner chose
to substitute its own version of the exhibit.
Also, significantly, Petitioner, (Holiday Inns of
America, Inc.) did not certify the printed record to this
Honorable Court, but Respondents have done so.
„„
Argument
3. ea, :
| Het Only Pale te Bae ny Deawel Pree
Failed to R Any Federal Trade.
Question bui They Expressly i
— —
Defendants’ (Holiday Inns of America, Inc.) cn
eel insisted throvghout the trial that no consideration
should be given to Federal service mark issues, because
_ they wore “pretty far afield” (R. 2138a).
Actually, the only evidence with respect to service
marks was introduced by plaintiff: (Zimmerman et al)
im the form of certificates ff m the “principal register”
of the United States Patent Office ‘Plaintiffs’ Exhibits
292-308) (R 3514a-3526a). These exhibits were offered
solely to demonstrate that defendants’ (Holiday Inns
of America, Inc.) registered marks taken as a whole
make it clear that defendants (Holiday Inns of America,
inc.) themseives considered the mark “Holiday” to be
the dominant aspect of their name — i.e. the “key word”.
The exhibits were offered and admitted for that limited
purpose. When the certificates were offered in evidence
by plaintiffs (Zimmerman et al.), the followiuy, colloquy
took place between Mr. counsel fer plaintiffs
(Zimmerman et al.), and Robinson end Living-
ston, counsei for defendants (Holiday lens of America,
Inc.), which demonstrates the accuracy of plaintiffs’
position here (R 2115e-2120a). [see also, R 21 14a):
_ “ir. Robinson:
. pussling because in Mr.
Schmidt's reply to the New Matter in Counter
ciaims, he makes the stutement that the plaintiffs
believe that the defendant's use of service marks is
irrelevant and immaterial, and reserves the right to
— RNC tert — —
~ — — — ꝛ ‚————ꝛiů— —
ae
Argument
object to relevancy and materiality of any evidence
of euch use of that evidence im the trial of this case.
To [R. 211] get into these Federal trademerke
aud service marks and copyrights, | think is getting
pretty fer afield. (Emphasis supplied]
ur. Schmidt.
As for the balance of these, for example plain-
tiffs’ Exhibit 286 is a registration by th: Hod
Inn of America, defendant, of the trademark, or
whatever it is — trademark Times”, that
ia for printing a p ziodical publication in the nature
of a house organ and quoted as to its activities and
of particular interest to its employees end u-
censees. This ia a recognition that the key word is
“Holiday”. This bes not the “Holiday Inn Town”. It
is the “Holiday Times”; Similariy, with reapect to
Plaintiffs’ Exhibit 288, th defendant Holiday Inne
of America registered the trademark “John Holi-
day” for anti-acid tablets, aspirins, lip balm, a first-
aid cream, and eye drops, and it states that John
Holiday is not the name of any particular individ-
wal, but it is wholly fictitious and does not refer to
eny living person. ... 5
(R. Antal For these reasons and because
these are all part of the Answers to the Interroga-
teries which wee filed in this Court we would offer
— plus the fact, and let me go back, pius the fact
that . ‘ates when the defendant Holiday Inns of
America ed nitted that they made the first use of
these [R 21180] in connection with the variations
in the nas» and presentation in whatever sign, we
believe that the exhibits are relevant and should
deo part of record in the case.
ar. Rebineen:
We don’t believe they a © relevant. if these zo
in, then it opens up the Pode: ai trademerk registre-
ivvolves and why you do certain things tn obtain.
%% . ederal trade mern. or service mark registre-
tion, and the copyright matters. We are getting fer
afield. This matter of cosmetics and candies, and #0
forth, I think that » getting extremely far afield. I
think ia getting extremely far afield. I submit
they are irrelevant and immaterial to the issues in
this case. Counsel himself in this repiy to New Mat-
der in Counter chm — I read the same before and
he believes that the use of service markr are irrele-
vant and immaterial to the issues in this case, and
he is now offering these at this time.
mMn 5
Mr. Robinson:
‘These are matters of public record wo. They
ere available at the United States Patent Office.
I am not very familiar — as a matter cf fect, I
am not familiar at all with the procedure down at
the Patent Office. feel inclined at the present time,
in view of the fact that they are part of the An-
ers to the Laterrogatories, to let them in IR.
2120) for what they might be worth. Maybe they
are not worth anything es fer as I am concerned.
I don’t know at the present time and I express no
opinion on it.
bs
tion and we will have to go into the matter as to
how they were obtained end whet procedures were
*
A
R
— onan
richt vou are
parpose you indicated, is that right’
Mr. Schmidt : 7
Yew N
Mr. Robinson:
No other purposes’
The Court:
Well it will appear in the record.
Mr. Robinson 3
Al right.
was not relevant to or involved ia the limited purpose
of the offer. The effect of plaintiffs’ (Zizomerman et al.)
limited offer was to restrict the evidence to the c e pur
pose assigned and it became part of the case for no her
Mellon Net. Bank v. People’s Bank, 236 Pa. 261 (1810):
Page v. Simpson, 172 Pa. 288 (1886).
As noted by defendants’ (Holiday Inns of america,
Inc.) counsel, to make the service marks, es such, an
ue in the case, would involve à full determination of
the validity of the marks and the propriety of the pro-
cedure involved in their registration. No evidence of the —
requisite proof of the validity and applicability of ser-
vice marks can be fownd any place in the record, particu-
larly im defendc nts’ testimony and evidence. To the ex-
tent that defendanty (Holiday Lins of America, Inc.
name. symboi, or design has a much greater connc-
tation than the question suggested by Mr. Schvuidt.
Now, if we are going to get into the legal aspec. + of
this thing we should bring an expert in tradema ks
as to vhether you can use it or not use it This wit-
mess is not a trademark expert. (Emphasis sup-
plied }.
— (Holiday Inns of “America, Inc.) not
only brought in no experts on service marks, they in-
troduced v evidence at all concerning them.
14 . Opinions of the State Trial end Appellate
ä Courts Demonstrate That No Federal Question
Was Involved in This Case.
The chancellor's “Statement of the Pleadings aad
— 2— of his — ,
„
Argument.
“This case ia an action in equity wherein the plain
tiffs seek to enjoir. the dei. dante from ged un-
fair competition by their use of the mame
Inn in rendering motel, hotel and restaurant sorv-
toes within a geographical sart of Pennayivenia. R
also invotves a counterclaim wherein th. ‘efendante
petition to restrain the plaintiffs from alleged un-
| fap competiien ... .” ,
“This is an action in equity,wherein the plain. —
tiffs seek to enjoin defendants from aged unfair |
competition by their use of the name ‘Holiday Inn’
im rendering reotel, hotel and restaurant services —
within a geographical avea of Pennaylvania. Relso
involves a counterclaim wherein the defendants
petition to restrain the plaintiffs from alleged unfair
competition through plaintiffs’ use of ‘Holiday lan-
es & Gominant feature of the name Solifay Ina
‘Town,’ one of the plaintiffs’ three motels.” .
There is no statement in the opinion of either court
an to the exiswace of any Federal Trademark Act quee-
tien, or any issue other than a state commen law claim
of unfair competition. In view of the record, the cnly
Pei conclusion is thet such a question simply wes
not presented to or properly before the state courts.
D. Concemon
Defendaris (Holiday Inns of America, Inc.) did not
properly n any Federal service mark questions in
their pleadings or proof, end any attempts to present
of a question relating to Congressional intent to create
a uniform national law for service mark registrants and
to raise the question of Federal common law or pre-emp-
tion is a specious attempt to create the impressioa that
this case invoives a question which does not exist in it
Section 33(b) (18° UR.C. § 1215(b)) ataten,
“(b) If the right to use the registered mark hes be-
come incontestible under section 1065 of this title,
_ the registration shall be conclusive evidence of the
% ‘That
charged as an
continuously used by such perty or those in privity
with him from a date prior to registration of the
mark under this chapter or publication of the regis- _
tered mark under subsection (c) of section 1062 of
this title: Provided, however, That this defense or
2 ea a
continucus prior use is proved;-or . .
Furthermore section 15 (15 und $1005) provides: ;
_ “Tizcept on a ground for which application tocancel ©
may be filed at any time under subsections (c) and —
le) of section 2084 of this title, anil except to the
extent, if eny, to which the use of « mark registered
on the principal register a valid right ac-
quired under the law of |
—— —v—ͤ—„—.
22
Argument.
ter of such registered mark, the right of the regis-
trant to use such registered merk in commurce for
the goods or services on or in connection with which
‘uch registered mark has been in continucus use
for five consecutive years subsequent to the date of
such registration and is still in use in commerce,
shall be incontestable: Provided, That.
923 (Sth Cir. 1967) ; Roman Products Corp . v. Di Crasto
———— 1 981 P24 O20 (2d Cir.
, 345 F. 2d 58 (9th
Cir. 1965), cert. denied 382 903 (1966) ; Food Fair
Stores, Inc. v. Square Deal Market: Ca,, 206 F.2d 482
(D.C. Cir. 1953) ; The Oakford Company v. The Kroger
Company, 157 V. Supp. 453 (8.D. Ill. 1957); Cf., Sira-
gan v. The Travelodge Corporation, 228 F. Supp. 238
N. D. Ala. 1964), affirmed $52 F.2d 516 (5th Cir.
1965) ; Rhode Island Textile Company v. Lincoln Lace
4 Braid Co., 240 F. Supp. 97 (D.R.1. 1965); “Trade
Marke and Unfair Competition,” 68 Harv. L. Rev. 814,
875 (1955).
Two of the above cited cases are indicative of
the approach the courts have taken in dealing with
Argument.
this question. In The Oakford Company v. The Kroger
Company, supra, the plaintiff had used the trademark
Blue Ribbon” on its products for many years before the
defendant registered the trademark. Following registra- |
tion of the mark the defendant souglit to use it in the
plaintiff's market area. The plaintiff sought an injunc-
tion against the defendant which was granted, however
only in the plaintiff's limited market area. The court held
that defendant's sale of its products within the plaintiff's
market area was a clear infringement of the plaintiff's
common law rights and that plaintiff was also entitied to
injunctive relief on the grounds that its trademark had
acquired a secondary meaning ideatifying the plaintiff
with its product. Another case where a similar result
‘was reached is Roman Products Corp. v. Di Crasto Dairy
and Food Products, Inc., 361 F. ad S89 (2d Cir. 1966),
wherein an injunction was denied a Federal registrant
who sought to keep the defendants from using their
common law trade mark in a limited geographic mar-
ket. On page 01 of its reported opinion the court
; yg
“The law (Lanham Act) anticipated the inequities,
which. might accrue to innocent users, who had
acquired valid property rights in the mark before
its lawful registration? The defendants’ good
faith in adopting and initially using the “Roma”
mark prior to the “Roman” registration id not
tainted by the subsequent awareness of the plain-
tiff's use after formal issuance.” }
On the basis of the edlvunnt Mofenel ctitutes ont
case law discussed above and the facts of this case as
determined by the state courts it is very obvious that -
the Petitioner is in error when it argues that it
Argument.
was denied relief due it as a Federal registrant under
the Lanham Act despite fact findings which, under Fed-
eral law, would entitle it to such relief. It is obvious
from an examinstion of the record and cases decided
under the Lanham Act that this conclusion is erroneous.
The Pennsylvania courts determined that Zimmerman
began doing business in Pennsylvania in the fall of 1952
using the name “Holiday” for motel. (R. 3170a) The
effective date of Petitioner’s registration was not until
July of 1954.5 (R. 3814) Furthermore, it was not until
1968 that Petitioner opened its first “Holiday Inn”
in Pennsylvania. (R 3186a) Thus, it was not until six
“Holiday” by his exclusive — and continuous until the
present — use of it in the Harrisburg area (R. 31722,
3173a, 3100a, 3192a, A. lia). Thus the Pennsylvania
courts established that Zimmerman had been a prior user
in good faith of the name “Holiday” in the motel business
in Pennsylvania, and that he had established a second-
ary meaning in the name. These are the facts as they
were found by the Pennsylvania courts and which the
Petitioner claims would achieve a different result under
Federal law. It should be recalled that section 1115 of the
Lanham Act provides that the rights of a prior user
_ Attempts by Petitioner to
' gs a “latecomer” are no doubt to convey to
this Honorable Court the notion that the Pennsylvania
courts awarded relief to a subsequent user as against
a Federal registrant. This simply is not the case. There
is no doubt that Zimmerman acquired rights in the
service me rk “Holiday” under Pennsylvania law by virtue
of both his regisration of the name and his prior use.
This fact was recognized by the Pennsylvania court
when it granted him exclusive use of the service mark in
the limited geographie area in which his service mark.
had become known. Also, as pointed out in the petition-
er’s argument, the Pennsylvania court found that Zim-
merman’s service mark had gained a secondary meaning
in this area by virtue of his prior use and therefore was
Supp. 212 (S.D.N.Y. 1957).
| Thus it would appear that the Federal courts in deal-
108 (Sth Cir. 1966); and Sterling Brewing, Inc. v. Cold
Spring Brewing Corp., 100 F. Supp. 412 (D.C. Mass.
1951), in support of its contention that a Federal
Petitioner also cites and relies upon the case of
Shoppers Fair of Arkansas, Inc. v. Sanders Co., 328 F. ad
496 (8th Cir. 1064), for its suggestion that Federal
law would have compelled a different result than that
reached by the Pennsylvania courts. However, all that
the court in Shoppers Fair said- was that long and ex-
clusive use of a mark can establish secondary meaning.
exclusive user of the name “Holiday” in connection with
„
Conclusion.
CONCLUSION
No question of any right, privilege or immunity
Federal Trademark (Lanham) Act of 1946
Sectie= 15 (15 U.S.C. $1065) Incentestability under
: certain conditions of right to use mark
Except on a ground for ~vhich application to an-
cel may be filed at any time under subsections (c) and
(e) of section 14 of this Act, and to the extent,
if any, to which the use of a mark on the prin-
cipal register infringes a valid right acquired under the
law of any State of Territory by use of a mark or trade
name continuing from a date prior to the date of pub-
lication under this Act of such registered mark, the right
of the registrant to use such registered mark in com-
merce for the goods or services on or in connection with
which such registered mark has been in continuous use
for 5 consecutive years subsequent to the date of such
vegistration and is otili in commeres, chal be insgutest-
able: Provided, That —
(1) there has been no final decision adverse to reg-
' {strant’s claim of ownership of such mark for such _
goods or services, or to registrant's right to reg- -
ter the sae ort ep the ume on the regi
and
(3) these is —— tnvelting eat sights
pending in the Patent Office or in a court and not
3 finally disposed of; aeg
(3) an affidavit is filed with the Commissioner
within 1 year after the expiration of any such 5
year period setting forth those goods or services
stated in the registration on or in connection with
which such mark has been in continuous use for
7
—
eo
>
such 5 consecutive years arid is still in use in com-
meses, and — specified in cubsce-
tions (1) and (2) hereof; and
(4) no incontestable right shall be acquired in a
mark which is the common descriptive name of
any article or substance, patented or otherwise.
Subject to the conditions shove specified in this section,
_ the incontestable right with reference to a mark rey.
istered under this Act shall apply to a mark registered
under the Act of March 3, 1881, or the Act of February
20, 1905, upon the filing of the required affidavit with
the Commissioner within 1 year after the expiration of
any period of 5 consecutive years after the date of pub-
lication of a mark under the provisions of subsection (c)
of section 12 of this Act.
ey: — eet ecttty eng eegfatnent che
: ee
Section 15 (USC. § 1065).
0 : =
. 05 U 4 11150)
ee Federal (Lanham) Act of 1946
} “Section 2800) (15 U.S.C. f 1115 (b) § W
_ conclusive evidence of exclusive right to use mark
If the right to use the registered mark has become :
incontestable under section 15 hereof, the registration
shall be conclusive evidence of the registrant’s exclu- )
_ sive right to use the registered mark in commerce on or,
in connection with the goods or services specified in the
affidavit filed under the provisions of said section 15
subject to any conditions or limitations stated therein
ea
established :
(1) That the registeation or the isisententabie right
to use the mark was obtained fraudulently; or
1) ‘The the mask hes heen ctantjuned ty the stg
istrant; or 7
(3) That the registered mark is being used, by or
with the permission of the registrant or a person
in privity with the registrant, so as to misreprésent
the source of the goods or services in connection
with which the mark is used; or
: (4) That the use of the name, term, or device
charged to be an infringement is a use, otherwise
“than as u trade or service mark, of the party’s in- a
dividual name in his own business, or of the in-
dividual name of anyone in privity with auch party,
| or of a term or device which is descriptive of and
ae : used fairly and in good faith only to users the goods
5 or services of such party, or their geographic
origin; or
(5) ‘That the mark whose use by a party is charged
as an infringement was adopted without knowledge
Section 83(b) (15 U.8.C. § 1115(b))
of the registrant’s prior use and has been contin-
_ wously used by such party or those in privity with
him from a date prior to registration of the mark
under this Act or publication of the registered mark
under subsection (c) of section 12 of this Act: Pro-
vided, however, That this defense or defect shall
apply only for the area in which such continuous
prior use is proved; or
(6) That the mark whose use is charged as an in-
fringement was registered and used prior to the
registration under this Act or publication under
subsection (e) of Section 12 of this Act of the
registered mark of the registrant, and not aban-
doned: Provided, however, That this defense or de-
fect shall apply only for the area in which the marx
was used prior to such registration or such publi-
cation of the registrant’s mark; or
(7) That the mark has been or is being used to
violate the antitrust laws of the United States.
:
|
:
Pennsylvania Business Corporation Law of ves
(TrT~z 15 Purpon’s Pa. Srat. ANN.
Section 2852 — 202]
B. The corporate name shall not be the same as, or
deceptively similar to:
(1) The name of any other domestic corpora-
tion, or of any foreign corporation authorized to do
business in this Commonwealth, or the name of any
unincorporated body whatsoever, voluntarily regis-
tered with the Department of State under any act
of Assembly, unless such other domestic or foreign
corporation or unincorporated body is about to
change its name, or to cease to do business, or to
withdraw from doing business in this Common-
wealth, and the written consent of such other do-
mestic or foreign corporation or unincorporated
body to the adoption of its name, or a deceptively
similar name, has been given and is filed with the
articles: Provided, That nothing herein contained
shall be construed to refer or apply to any assumed
or fictitious name required by law to be filed with
the Department of State.
(2) The name of any administrative depart-
ment, board, or commission or other agency of the
Commonwealth. ° 7 *
(3) A name the exclusive right to which is at
the time reserved by any other corporation what-
soever in the manner provided in this act or any
other act of Assembly.
C. Nothing in this section shall abrogate or limit
the law as to unfair competition or unfair practices, nor
derogate from the common law, the principles of equity,
6a
Pennsylvania Business Fictitious Names Act.
or the statutes of this Commonwealth with respect to
the right to acquire and protect trade names.
D. The assumption of a name in violation of this
section shall not vitiate or otherwise affect the cor-
porate existence, but the court of common pleas of Dau-
phin County may, upon the application of the Attorney
General, acting on his own motion or at the instance of
any administrative department, board, or commission of
any county having jurisdicton over the corporation may,
upon the application of any person, unincorporated body
or corporation adversely affected, enjoin the corporation
from using or continuing to use a name assumed in
violation of this section. |
Pennsylvania Business Fictitious Names Act
SESSION OF 1045.
No. 380
AN ACT
Making it unlawful for any individual or individuals
to carry on any business under an assumed or fictitious
name, style or designation, unless upon advertisement
and the filing of an application to that effect in the
office of the Secretary of the Commonwealth and of the
prothonotary; requiring nonresident applicants to have
a resident agent; prescribing the effect of failure to file
such application; providing that certificates of the Sec-
retary of the Commonwealth shall be admitted in evi-
dence; requiring county commissioners, at the expense
of the county, to provide books or other means of re-
production for the entry of such applications; requiring
the cancellation of such application or* the withdrawal
*“on” in original.
—
Pennsylvania Business Fictitious Names Act. 1
from the business; providing methods therefor; fixing
the fees of the Secretary of the Commonwealth and pro-
thonotary; and providing penalties. }
Fictitious names.
The General Assembly of the Commonwealth of
_ Pennsylvania hereby enacts as follows:
Application to Secretary of Commonwealth and
prothonotary.
Section 1. No individual or individuals shall here-
after carry on or conduct any business in this Common-
wealth under any assumed or fictitious name, style or
designation unless the person or persons conducting or
carrying on the same shall have first filed in the office
of the Secretary of the Commonwealth and in the office
of the principal office or place of business, including
number and street, if any.
re 2 — —— 2 —— — tee ee
„
A
ae —
Pennsylvania Fictitious Corporate Name Act of 1957.
Pennsyivana Fictitious Corporate Name Act of 1957
No. 374
*. ’ AN ACT
Making it unlawful for any corporation to carry on
any business under an assumed or fictitious name, style
or designation other than its proper corporate name,
unless an application is filed with the Secretary of the
Commonwealth and the prothonotary; providing for the
amendment of such application; fixing the fees of the
Secretary of the Commonwealth and the prothonotary;
providing penalties; and providing for the cancellation
of such application by the registrant or the Secretary of
the Commonwealth under certain circumstances.
Fictitious Corporate Name Act.
The General Assembly of the Commonwealth of
Pennsylvania hereby enacts as follows:
Section 5. Registration—No corporation alone, or
in combination with any other entity, shall hereafter
conduct any business in this Commonwealth under any
fictitious name unless such corporation shall have first
registered the fictitious name by filing in the office of
the Secretary of the Commonwealth, and in the office of
the prothonotary of the county wherein the registered
office of such corporation is located, an application on a
form supplied or approved by the Secretary of the Com-
monwealth, containing the following information:
(1) The fictitious name under which the business
is being or will be carried on or conducted.
(2) A brief statement concerning the character or
nature of the business to be conducted under the ficti-
tious name.
. *
a
th
i
2
1963 C,
1 ia
li
1.1 mt
al
ih
if
1
foi 15
Opinion of The Court
Filed: May 28, 1970
J.
This is an action in equity wherein the plaintiffs
seek to enjoin defendants from alleged unfair
competi-
tion by their use of the name “Holiday Inn” in
—
100
Opinion of the Court.
plaintiffs from alleged unfair competition through p’ain-
tiffs’ use of “Holiday Inn” as a dominant feature of the
name “Holiday Inn Town,” one of the plaintiffs’ three
The action was filed on July 31, 1963. In the com-
plaint the plaintiffs (hereinafter called Zimmerman be-
cause Eugene W. Zimmerman is the real party in interest
as he controls all of the identified plaintiffé) originally
asked that defendants be enjoined from using the mark
“Holiday Inn” within a one hundred mile radius of Har-
risburg and a Corridor above and below the Pennsyl-
vania Turnpike from the Ohio State line to the New
Jersey State line. Further, Zimmerman contended that
defendants willfully and deliberately planned and con-
spired to divert business away from him and to weaken
and destroy whatever rights he had in the name “Holi-
day.” Zimmerman alleged that this conspiracy and plan
used an interlocking reservation and advertising system.
Zimmerman’s claims were denied by the defendants.
The defendants alleged that Zimmerman was not entitled
to relief because he was guilty of unclean hands and un-
fair competition. Defendants also counterclaimed, seek-
ing an injunction against Zimmerman’s use of the words
“Holiday Inn” in his “Holiday Inn Town” motel.
‘ After a thirty-one day trial, concluded on February
18, 1965, over seventy witnesses and six hundred ex-
hibits, the chancellor rendered his adjudication on May
9, 1968. The chancellor found that Zimmerman had es-
tablished a secondary meaning to the name “Holiday”
in the immediate area of Harrisburg, which area he did
not define. The chancellor dismissed defendants’ coun-
terclaim, finding that Zimmerman’s use of the name
—
lla
Opinion of the Court.
“Holiday Inn Town” since 1960 was not done deliberately
to pass off his motel as one of those of defendants.
Exceptions were argued to the court en banc on
June 27, 1968, and an amended adjudication was peti-
dered on February 24, 1969. The final decree was issued
on February 24, 1969, and it enjoined the defendants
from encroaching upon Zimmerman’s market area,
‘which was found to be a twenty-two mile radius from the
center of Harrisburg. Zimmerman and the defendants
As between Zimmerman and the defendants, he was
the first user of the word “Holiday” for a motor hotel
in the Commonwealth of Pennsylvania. Zimmerman de-
cided in August, 1952, to use the name “Holiday” at his
fifty-five unit motel at the Gettysburg Pike Interchange
of the Pennsylvania Turnpike, which opened in 1953. Be-
tween July 8, 1953, and September 16, 1954, an additional
thirty-five units were built, making the “Holiday” into
ninety units. Zimmerman also owned and operated a
fifty-unit motel at the East Harrisburg Interchange of
the Turnpike. ‘Originally called “Motel Harrisburg,”
since 1957 this motel has been designated as “Holiday
East” and the motel at the Gettysburg Interchange has
been identified as “Holiday West.” In 1960 Zimmerman
built an additional motel in downtown Har:isburg, mid-
ee a ee ene
named “Holiday Inn Town.”
The chairman of the ‘defendant Holiday Inns of
America, Inc., Mr. Kemmons Wilson, began his first
thotel in July of 1952, when he opened a Holiday Inn in
Memphis, Tennessee. His first motel attracted a good
deal of attention and was an immediate success. It be-
Opinion of the Cort.
came apparent to Mr. Wilson that he himself did not
have sufficient financial resources to carry out his plans
for a national system of motels. Therefore, he contacted ;
Wallace E. Johnson, now president of Holiday Inns of
America, Inc., who at that time was a well-known home-
builder in the Memphis area. Mr. Wilzon succeeded in
convincing Mr. Johnson to join with him in his plan to
create a national system of motels.>,
9 in March of 1958, Mensa. Johnson and Wilson wrote
letters to various homebuilders around the country and
asked them to come to Memphis, Tennessee, for a con-
ference regarding their plan to create a national system
of franchise motels. This conference and the concept of a
national system of motels gained significance and na-
tional notoriety. Articles relating to this. conference ap-
peared in publications having national distribution such
as “Hotel Management,” “Business Week,” “St. Louis
Post Dispatch,” Wall Street Journal,” and “Barrons.”
This meeting of homebuilders was! March, 1088,
and was the beginning of the national system of “Holi-
day Inn” motels: At this meeting franchises were
cc
United States. N
Wb e ee
_ Memphis, was informed that a motel under the name of
Holiday existed there as part of a chain that intended
to expand. Immediately upon return to Harrisburg, Zim-
merman, in an effort to protect the name, on advice of
counsel, formed various corporations, using the key word
. “Holiday.” Osh 79
.
7
= e * n
é — :
Opinion of the Court.
known as “Holiday Hotel West,” had expanded by
2964 to three hundred air-conditioned rooms, with tele
vision and telephone. It also has a restaurant, gas sta-
tion, three-hole golf course, large ballroom, fully
equipped with a revolving stage for presentations and
Aimmerman's motel at the Harrisburg Hast Inter-
change, now known as “Holiday Motor Hotel Hast,” had
expanded by 1964 to one hundred fifty air-conditioned
rooms, a swimming pool, a restaurant, television and
telephone in every room, and banquet and many other
facilities. Zimmerman’s Holiday Inn Town has four
During this same period, the defendants’ dreams of
a national chain of motels had become a reality. By
1964 the chain had grown to five hundred twenty-five
(the words “Holiday Inn” written in script), known as
the “Great Sign,” and each with television, air condi-
_ tioning, swimming pool, 24-hour telephone service, uni-
form operating procedures and an interlinking advance
Inevitably, these two motel empires had to clash.
On June 30, 1958, the defendant Holiday Inns of Amer-
ica, Inc., reached Pennsylvania, where a licensee, BA C
‘Motel Corporation opend a motel known as “Holiday
Inn” near Allentown, Pennsylvania, about eighty miles
from Zimmerman’s “Holiday East” and about ninety
miles from his “Holiday West.”
A.
14
45 Opinion of the Court.
On July 26, 1958, Zimmerman brought an action to
restrain alleged unfair competition by the Holiday Inn
chain. Judge Henninger of the Court of Common Pleas
al Lehigh County granted the defendant’s motion for
us and we found that Zimmerman had not then proved
the requisite secondary meaning of the Holiday name
in the Allentown area. Zimmerman v. B 4 C Motel
Corp., 401 Pa. 278, 168 A.2d 884 (1960). The opinion by
Justice Bok ended with this paragraph:
“We approve the lower court's leaving the case
without prejudice, in case the parties extend their
facilities in this rapidly expanding industry.”
Since the B & C Motel case, the defendant Holiday
Inn system has expanded to the point where, as of 1965,
when this case came to trial, there were fifteen “Holi-
day Inns” in Pennsylvania. Thus, the fact situation is
quite different from what it was the last time a dispute
between these same parties came before this court.
However, the law is the same. In order to prove
that he is entitled to relief from the courts in the.form
of an injunction to protect his use of the name “Holi-
day,” from a competing use by the defendants, Zim-
merman must prove that he has a legal right to exclu-
sive use of the word “Holiday,” that the defendant
Holiday Inn is using a name or mark confusingly sim-
ilar to Zimmerman’s name or mark, and that defend-
amen use of the name is likely to cause confusion in
- Zimmerman's competitive area.
‘Zimmefman sought to enjoin the Holiday
Inn system from operations all along the Pennsylvania
‘Turnpike and in an ares within one hundred miles of
15a
Opinion of the Court. if
Harrisburg, the court found 2
titled to protection only in an area defined as twenty-
two miles from the center of Harrisburg. In argument,
-counsel for Zimmerman took the position that this area
was too limited in size and scope to afford him the full
measure of relief to which he was entitled. f
The Holiday Inn system contended that the court
erred in finding that Zimmerman was entitled to any
relief because, they contended, he had failed to prove he
was entitled to exclusive use of the name “Holiday” and
he was not entitled to relief in any case because he had
been guilty of unclean hands through the use of the
name “Holiday Inn Town” for his third motel. More-
over, they urged that if we found Zimmerman was en-
_ titled to some protection, we should find that his area’
does not extend a distance of more than fifteen miles
from the center of Harrisburg. It appears that a twenty-
two mile radius would include a proposed Holiday Inn
in York, Pennsylvania. However, the record supports
a finding that Zimmerman established a secondary
meaning in the greater Harrisburg area, including York.
In order to have an exclusive right to the use of a
common word like “Holiday,” Zimmerman must prove
that the name has taken a secondary meaning.
The term “secondary meaning” encompasses the
situation where people in the trade or purchasing public
come tw thtek: of 0, Seed or Sesto an stunting Ser the
business of a particular owner, here, “Holiday” stand
ing for the motel business of Zimmerman. —
v. B & O Motel Corporation, supra, Kool Vent Metal
Awning Co. v. Price, 368 Pa. 528, 84 A.2d 296 (1951).
The chancellor found that although Zimmerman had
16a
Opinion of the Court.
failed to prove that he had acquired a secondary mean-
ing in “Holiday” throughout the state of Pennsylvania,
he had established a secondary meaning in the word
Holiday“ in the greater Harrisburg area.
The record amply supports this finding. Greater
Harrisburg is the only area in which Zimmerman has
rendered motel and restaurant services under the name
“Holiday.” Zimmerman has done extensive advertising
of his Holiday motels, but most of this advertising was
confined to the Harrisburg area. The witnesses, whose
testimony carried the most weight with the chancellor
in establishing that Zimmerman had achieved a secon-
dary meaning for his use of the word “Holiday,” were
people whose business brought them frequently to Har-
risburg, such as George Bloom, former Secretary of
the Commonwealth of Pennsylvania and now Chairman
of the Public Utility Commission, and George M. Leader,
former Governor of the State, both of whom testified
that the generally accepted meaning of the word “Holi-
day” when used in relation to a motel or motor hotel
_ among all people in: government in Harrisburg with
whom they had come in contact was one of Zimmer-
man's motels.
However, the chancellor did not find the testimony
persuasive on the question of establishing a secondary
meaning for Zimmerman’s use of Holiday anywhere in
Pennsylvania outside of Harrisburg. There was ample
evidence in this case concerning extensive use of the
word “Holiday” for motels and restaurants in Penn-
sylvania which were not connected with either Zim-
merman or the Holiday Inn System. In addition, al-
though many of Zimmerman’s witnesses testified that
Daal
17a
Opinion of the Court. g
they had seen Holiday Inns” operated by the defen-
dant system and they testified that they believed that
the motels of both plaintiffs and defendants were all
part of the same system, there was often no indication
that Zimmerman’s use of the name “Holiday” had ac-
quired a secondary meaning in the minds of these wit-
nesses, before these witnesses had seen or heard of the
motels of the defendant system. Moreover, the witnesses
chosen by Zimmerman’s counsel to give testimony were
not chosen at random or by any scientific method. Only
thirty witnesses were brought in, seven from the Phila-
delphia area, twenty-two from the Pittsburgh area and
one from Harrisburg. There was no indication that they
were representative of the estimated 5 to 8 million
people who live along the Pennsylvania Turnpike. There
was no indication of the total number of people who use
the Pennsylvania Turnpike, and the geographic source
for these travelers. Surely they do not all stem from
within Pennsylvania. In view of the extensive adver-
tising done by the defendant system, many of these
travelers have probably heard of the defendant's sys-
tem’s motels first rather than Zimmerman’s motels in
Harrisburg. See for a discussion of surveys, American
Luggage Works v. United States Trunk Co., 158 F.Supp.
50 (D. Mass. 1957) ; Humble Oil & Refining Co. v. Stand-
ard Oil Co. (Kentucky), 229 F.Supp. 586 (S.D. Miss.
1964).
We agree with the chancellor. Only within a twenty-
two mile radius of Harrisburg has Zimmerman’s use of
the name “Holiday” acquired a secondary meaning.
The defendant Holiday Inn Systems also contends
that there is no confusion because their Holiday Inn
18a
Opinion of the Court.
sign does not conflict with Zimmerman's Holiday sign.
The chancellor found that there was conflict because
Holiday was the key. word. We agree with the chan-
cellor. Many witnesses testified that they did not re-
member whether the word “Holiday” was followed by
the word “Inn” or either Zimmerman’s or the defend-
ants’ motel. There were many instances of confusion
in marking and in registration of guests. Moreover, var-
ious advertising done by the defendant Holiday Inns of
America System clearly indicated that they, too, con-
sidered “Holiday” the key word. 1
Zimmerman’s argument that the area described by
the court order, a twenty-two mile radius from the cen-
ter of Harrisburg, does not mark the full scope of his
motel trading area is not relevant. We agree that a mo-
tel’s trading area, in these days of high speed traffic,
covers a wide range. However, Zimmerman is entitled to
protection only where his use of the name has acquired
secondary meaning, not in all parts of his trading area.
The case of Travelodge Corporation v. Siragusa, 228
F. Supp. 238 (N.D. Ala. 1964) and the case of Quality
Courts United v. Quality Courts, 140 F. Supp. 341 (M.D.
Pa. 1956), both cited in the brief for Zimmerman, can
be distinguished from the instant case.
In both of those cases the plaintiffs had established
secondary meaning for their names throughout the area
1. For example, billboards advertising “Go Gulf,
Go Holiday,” an advertising symbol named “Johnny
Holiday,” and a national magazine campaign featuring
the Holiday Inns and the Oldsmobile Holiday auto-
mobile.
peers *
Opinion of the Court.
where defendant was operating its motel, Here, such
secondary meaning was confined to the Harrisburg area.
We find no merit to defendant Holiday Inns of
America’s contention that Zimmerman’s claim to relief
is barred by his alleged act of unclean hands in using
Holiday Inn Town for his third motel. The record sup-
ports the chancellor’s finding that Zimmerman’s use of
the name “Holiday Inn Town” since 1960 was not done
deliberately to pass off his motel as one of defendants’.
Zimmerman's use of the words “Holiday Inn” for
the Holiday Inn Town motor hotel is but an extension of
the name Holiday which we have already identified as
_ the key word in the name Holiday Inn.
Moreover, there was no attempt to copy the “Holi-
day Inn” mark. The advertising of Zimmerman’s Holi-
day Inn Town is quite different from the script lettering
and “Great Sign” of the Holiday Inns of defendants’
system. In no sense can the doctrine of unclean hands be
applicable. Therefore, we agree with the chancellor.
Zimmerman is entitled to relief and the counterclaim of : .
the defendant system should be dismissed.
One more issue remains. The wording of the final
decree prohibits the Holiday Inn system from “en-
croaching” on the area defined within a twenty-two mile
radius of Harrisburg. Zimmerman contends that the
word “encroaching should include advertising as well as
actual operation of motels. We disagree. As we have
already said, Zimmerman is only entitled to protection
within the zone of a circle with a radius of twenty-two
miles of Harrisburg. If we barred the Holiday Inn Sys-
tem from advertising within that twenty-two mile ra-
Opinion of the Court.
dius, we would, in effect, be enlarging Zimmerman’s
zone of protection by diminishing the effective market
area cf the Holiday Inns which are outside that zone.
This we will not do.
Decree affirmed. Each party to bear own costs.
Mr. Justice Cohen dissents.
a
Zimmerman v. B. & OC. Motel Corporation.
Zimmerman v. B. & C. Motel Corporation.
3 401 Pa. 278
OPINION BY Mn. JusTICE Box, September 26, 1960:
This complaint in equity asking for an injunction
was nonsuited, under Pa. R. C. P. 1512, and plaintiff
appealed after his rule to strike off the nonsuit was dis-
charged and his complaint dismissed. The court's final
action was taken without prejudice.
Plaintiff owns and operates two motels, both at the
Pennsylvania Turnpike in the Harrisburg area, one at
Exit 15 and the other at the Route 230 by-pass. Both
have been variously named, but all designations con-
tained the key word “Holiday” until they are now es-
tablished as “Holiday West” and “Holiday — West
was opened in 1953, East in 1957.
———ů — Shi
tels together represent an investment of over two mil-
lion dollars and have all modern facilities such as res-
taurants and swimming pools. One has a revolving
stage. Plaintiff advertises them extensively in trade is-
sues and maintains road signs within fifty miles of the
Turnpike and adjacent highways. He wus the first in
the State to use the word Holiday for a motel.
n 1958 defendant opened “Holiday Inn”, also a
motel, on U.S. Route 22 near the Lehigh Valley Inter-
change of the Northeast Extension of the Turnpike, in
the Allentown area. It is 75 to 80 miles distant from
“Holiday East” and 85 to 90 miles from “Holiday West“.
Two years before, defendant signed a license agreement
with Holiday Inns of America, Inc., a Tennessee corpora-
tion then operating motels locally in Memphis but with
ambition to establish by license and uniform.regulations
22a
„ v. B. &C. Motel Corporation.
a national string of motels. Defendant maintains bill-
boards on the Turnpike Extension but not near the
plaintiff's locations.
WWW
tomobile.
The complaint being one of unfair 8 the
question is whether the parties are competing in the
same market, and, if they are, whether plaintiff has a po-
sition that he can defend against invaders.
There come to mind at once the many National,
Grand, Palace, Congress, Station, Railroad, Ambassador,
and Mayflower Hotels that dot the nation, and it is like-
ly that the public does not confuse them because the ef-
fective distinction is one of locality. The same hospitality
is not necessarily expected in the Congress Hotel in Port-
land Maine, as in the Congress Hotel in St. Louis, Mis-
souri. The plaintiff suggests that it is different with
modern turnpikes and long-distance driving, and founds
his case on long-haul competition only: to the traveler
from Arizona to Maine, he mentions as example, the dis-
tance between Harrisburg and Allentown is negligible
and the competition for his patronage real. Plaintiff does
eee as the basis
for relief. 7
We agree with the plaintiff that proof of fraudulent
intent in the defendant is not essential nor is proof of fi-
nancial loss or damaged reputation, or proof of actual
deception, tendency to deceive being enough in a proper
case: American Clay Manufacturing Co. v. American
Clay Manufacturing Co., 198 Pa. 189 (1901), 47 A. 936;
Thomson-Porcelite Co. v. Harad, 356 Pa. 121 (1947), 51
A. 2d 605; Golden Slipper Square Club v. Golden Slipper
Zimmerman Appellant, v. B. & C. Motel O
Restaurant & Catering, Inc., 371 Pa. 92 (1952), 88 A. 2d
784; Goebel Brewing Co. v. Esslingers, Inc., 378 Pa. 384
(1958), 95 A. 2d 523,
Here our agreement with the plaintiff ceases.
We are not dealing with a trademark or a trade
name, like Kool-Vent (KoolVent Metal Awning Corp. v,
Price, 368 Pa. 528 (1951), 84 A. 2d 206) or Porcelite (su-
pra, 356 Pa. 121), where we must determine whether
there is sufficient similarity in the competing sign to
amount to unfairness. Here we have a straight English
word, holiday, and to decide whether its repetition by a
competitor is unfair we must apply a different rule.
There is no question of what this rule is. It is set
forth in the KoolVent case, supra, (368 Pa. 528) as
follows: “Descriptive, geographical and generic words,
as well as words of common or general usage belong to
the public and are not capable of exclusive appropriation .
by anyone. This general principle is subject to the lim-
itation or exception that if a trade name or trade-mark
or other word or words have acquired, in the rade and
in the minds of the purchasing public, a special or so-
called secondary meaning, i.e., have come to mean that
the article is the product of a certain manufacturer or
cal a particular individual or corporation, such trade
name or trade-mark or word or words will be protected
against infringement Pa
It is obvious that a secondary meaning cannot ap-
pear unless there is evidence of it, and ‘there is none
before us except a charge of $5 rent once by a utility
company to plaintiff by mistake. Ag the court below
indicated, one swallow does not make a summer. Since
plaintiff began suit five years after opening Holiday
2 — S 92 v 99 1 r
Zimmerman Appellant, v. B. & CO. Motel Oorporation
West, is it interesting to note that in Quaker State Ou
Refining Co. v. Steinberg, 325 Pa. 273 (1937), 189 A.
473, five years of marketing and national advertising
was held not enough to associate the plaintiff’s name
with his product. We said: “The only evidence from
which it could be inferred that the name of complain-
ant’s product had acquired a secondary meaning prior
to 1919 is that its product has been marketed and had
been nationally advertised for five years under this
name. There is no other evidence from which it could
be inferred that the public associated ‘Quaker State’ or
‘Quaker’ with the complainant’s product at that time.
‘The mere adoption and use of words in advertisements,
circulars and price lists and on signs and stationery
give no exclusive right to their use’: Delong Hook &
Eye Co. v. Hump Hairpin. Mfg. Co., 297 Ill. 359, 364,
130 N.E. 765. See also Continental Corp. v. National
Union Radio Corp., 67 F. (2) 938, 942. It is an ac-
cepted principle of the common law that mere adver-
tising is insufficient to establish trade-mark use’;
Derenberg, supra, p. 505.”
There are other cases where dictionary words have
been used. In Peters v. Machikas, 378 Pa. 52 (1954),
105 A. 2d 708, the plaintiff used “Majestic Restaurant”
and the defendant “Majestic Grille“, and an injunction
issued: he plaintiff had used the key word for over
thirty years. In Hartman v. Cohn, 350 Pa. 41 (1944),
88 A. 2d 22, plaintiff for twenty-six years had used
“Dundee” in connection with his clothing and success-
fully enjoined the defendant who advertised as “Dun-
dee Clothing Factory Sales Room”. In the Quaker State
case, supra (325 Pa. 273), we said, quoting from Nims,
Unfair Competition and Trade-Marks (2nd ed.), p. 106:
a
Zimmerman Appellant, v. B. & C. Motel Corporation.
through use of it by someone else. Only evidence of a
secondary meaning could aid him. To credit his är
gument, anyone could corner common English words
simply by using them, and that has never been the
law. The words do not confer meaning on the enter-
prise; the enterprise must confer meaning on the words.
Beyond this, we agree with the court below that
the parties are not operating in the same market. The
motels in question are too far apart for realistic com-
petition, and we note that the letters and telegrams
offered by the plaintiff as addressed to him are all but
one addressed to “Holiday Inn“, which rather puts
him unfairly in competition with defendant if the evi-
dence is to be credited at all. As for the mythical
motorist from Arizona, he can be reduced to absurdity
by starting him from Alaska and asserting that all
Holiday motels on the eastern seaboard are in com-
petition for him.
Zimmerman Appellant, v. B. & C. Motel Corporation.
We need not reach the question of what protection,
_ if any, defendant has achieved by contracting with the
Tennessee corporation. Suffice it to say that plaintiff
has not met his burden of proof, and hence must fail.
We approve the lower court’s leaving the case without
prejudice, in case the parties extend their facilities in
this rapidly expanding industry. The decree is affirmed,
costg-to be paid by the appeilant. 0
Mr. Justice BELL dissents.
} 2a
Patent Office Trademark Trial and Appeal Board.
PATENT OFFICE TRADEMARK TRIAL AND
"APPEAL BOARD
128 U.S. P. Q. 549 2
ZIMMERMAN v. Hol mar INNS OF AMERICA, INC.
Decided Sept. 24, 1959
TRADEMARKS _
1. Acquisition of marks—In general (§ 67.071)
Cancellation—Mark and use of parties—In general
($ 67.1771) © N
Cancellation — Pleading and practice — In general
($ 67.1811)
Territorial limitations (§ 67.83)
, Ownership of mark depends upon priority of use
whether in intrastate commerce or interstate or other
commerce which lawfully may be regulated by Congress;
inasmuch as cancellation petitioner does not question
registrant’s ownership of its mark through priority of
use in intrastate commerce, although it alleges that
registrant had not used mark “in commerce,” it is with-
out standing to challenge registrant’s right of registra-
tion; it may be that petitioner possesses superior rights
in its mark for an area within a single state which may
be recognized and enforced in appropriate proceeding,
but registrant’s registration is not inconsistent with
any such rights as may exist; their possession can
afford no basis for relief sought; petition is dismissed
for failure to state facts on which relief can be granted.
Y
ae
9
28a
Patent Office Trademark Trial and Appeal Board.
Trademark cancellation No. 7,294 by Eugene W.
Zimmerman against Holiday Inns of America, Inc., Reg-
istration Nos. 592,539, 592,540, and 592,541, issued *
13, 1954. Petition dismissed.
On reconsideration, 123 USPQ 549.
SYNNESTVEDT & LECHNER, Philadelphia, Pa., for Zim-
merman.
MASON, FENWICK & LAWRENCE, Washington, D. . for
Holiday Inns of America, Inc.
Before LEEDS, Assistant Commissioner, and BAILEY and
LEFKOWITZ, Members.
BAILEY, Member.
Eugene W. Zimmerman has petitioned to cancel
registration of “HOLIDAY INN” alone,! and associ-
ated with a design, 2 for the service of providing lodg-
ings and meals in mitels, issued to Holiday Inns of
America, Inc.
Petitioner alleges that it has used the name “THE
HOLIDAY MOTEL” in connection with the rendering
of motel services in the State of Pennsylvania since
July 9, 1953, and that neither respondent nor any com-
pany related to respondent used the term “HOLIDAY
INN” in connection with the rendering of motel serv-
ices “in commerce” either on July 1, 1952, the date of
first use set forth in the registrations, or on December
8, 1952, or March 19, 1953, the dates of filing of the
1. Regs. Nos. 502,530 and 592,540, issued July 13,
1954 on applications filed Dec. 8, 1952 and Mar. 19, 1953,
respectively.
2. Reg. No. 502,541, issued July 13, 1954.
28a
Patent Office Trademark Trial and Appeal Board.
applications which resulted in the registrations sought
to be canceled.
Petitioner further alleges that on or about July 1,
1958, respondent licensed B & C Motel Corporation,
located at Allentown, Pennsylvania, to use the term
“HOLIDAY INN” in connection with its motel services
and that there is an ever-present danger to petitioner
that respondent will grant additional licenses to others
operating at locations in close proximity to petitioner’s
motels to the damage of petitioner.
Respondent moved to dismiss the petition for fail-
ure to state facts on which relief can be granted. In a
decision of the Board dated August 7, 1959, the motion
was denied on the ground that the petition sets forth a
general claim of prior rights in commerce with respect
to the assertedly conflicting trade designations of the
parties, and hence states facts on which relief might be
granted. 5
Respondent has petitioned for reconsideration, as-
serting that in its previous decision the Board over-
looked petitioner’s allegation of failure of respondent
to “use in commerce“, and there is nothing in the plead-
ing which suggests that respondent did not use its mark
intrastate prior to petitioner’s first use. Petitioner has
answered the request for reconsideration by stating
that his right to use “THE HOLIDAY MOTEL” (and
“HOLIDAY EAST” and “HOLIDAY WEST” which
designate particular operations of petitioner in Penn-
sylvania) in his trading area is superior and adverse to
any right of respondent to use “HOLIDAY INN” in
that area and that respondent is interfering with such
30a
Patent Office Trademark Trial and Appeal Board.
superior right of petitioner: by licensing others to use
“HOLIDAY INN” in petitioner’s trading area.
[1] Ownership of a mark depends upon priority
of use whether in intrastate commerce or interstate or
other commerce which lawfully may be regulated by
Congress.3 Inasmuch, therefore, as petitioner does not
question respondent’s ownership of its mark through
priority of use in intrastate commerce, it is without
standing to challenge respondent’s right of registration.
It may be that petitioner possesses superior rights in
its mark for an area within a single state which may
be recognized and enforced in an appropriate proceed-
ing. Respondent’s registrations, however, are not in-
consistent with any such rights as may in fact exist,
and their possession can afford no basis for the relief
sought here.
Decision
The denial of respondent’s motion to dismiss is
vacated; the motion is granted; and the petition is dis-
3. See: Hump Hairpin Co. v. LeLong Hook & Eye
Co., 190 O.G. 1032, 39 App. D.C. 484 (CA DC, 1913);
Macauley v. Malt-Diastase Co., 338 O. G. 4, 55 App. D.C.
277 (CA DC 1925); Mon tgomery Ward & Co., Inc. v.
Sears, Roebuck & Co., 9 USPQ 524 (CCPA, 1931) ; Dun
can v. ant (Ozon Chemical Company, assignee —
stituted), 46 USPQ 522 (Comr., 1940); American Phar-
— Company, Inc. v. Vitamin Corporation of
America, 74 USPQ 210 (Comr., 1947); Dickerson v.
Wyandotte Chemicals Corporation, 91 USPQ 345 (Comr.,
1951) ; R. J. Moran Co. v. Gordon, 101 USPQ 206 —
1954).
7
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