# Brief for the Respondents in Opposition — Holiday Inns of America, Inc. v. Zimmerman > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385605_0422%3A3 ## Record - **Collection:** Supreme Court brief - **Document type:** Brief for the Respondents in Opposition - **Published:** January 1, 1971 - **Citation:** 400 U.S. 992 ## Text 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 3la Plaintiffs’ Exhibit No. 292 2291440 ONILEAZLLV SINZLYa 25 — 4 — ‘ ms, A LL ee IN — — 4 ~ * e A, ‘~huyU-Aqueaes*. = Pa RS ND, Me Snoyefz, . fer ee E II Kr ras Museen: :* * 3 2 D D Numer ar- r pry fe = merry ey f S. ae ty | ; j Vveve — n Mr n e- . een e: *suStss2 40 szosso ons str or- gor Jo suuy kapytoa assert v. “* “232 ) TPB MIO MIS m LWT, * mc „ US If DS SRI, e nn SOI M AHD N a 3 peer oe os os Z TE OR PO ome sete sp ge oes pores? Pes ven A gee arg aed 8 aD dbu 3S my eae Ee t eee mum: Sr = =r oa Bape: SE TEVA SOIAMZS «= EI) 8 Jo Boney, EI kr Tero R f n- „ r Pp yg Mat? ür ere e Kspfrteg 03 aoubrsse %s JO uorze oc > ‘s~cscuUay sd ZO u \ ‘samo tao wey AepytoH 7° isi aer, ‘fo * — An r: . — ee 3 saith ~~. 1 5 Te a ee IZ e LINE, B UN OD, Fs 07, 5 8 TORCH £7 TF. WET TIGCINM AAA | 2 8 S = z ' 8 — * — 2 5 8 ) % “SZ NOLONINSYM 7391440 431 24548 o it 3HL ou 72288 • g eee ee SvotuaWy 4O e Ave eh 40 8391440 W- UAN 39 2. LV 214 NO SI 2ZU ) „929 dh e r an wmοννι ν⁰ αν, PSTTVIOSIP n r., PIOM OLY, 9 * ame ii m vun ref. i 71 ven :- 0? en nion NI ryan cry bp o . K. O ‘ATZKWVN—SZOIAUES ISLONW ---- x E — 2. — 7 — — = . ~ BSCE d “OOD F773 “SOT'GTO “ON “23 D COPATOG 7 O οοοõẽ¼ n DIHdVYDOLOHE v SI Sin] row 2 CHLSSLT Teo ees‘703 | east ‘et Aine po, Dold ZNATLVYd SHLVLS GZ TIN --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385605_0422%3A3. Public record. Not legal advice.