Petition for Writ of Certiorari — DeCosta v. Viacom International

Supreme Court brief1993

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Text

No.

In The

Supreme Court of the United States

October Term, 1992

DAVID DeCOSTA, AS EXECUTOR OF THE

ESTATE OF VICTOR DeCOSTA,

Petitioner,

VIACOM INTERNATIONAL,

Respondent.

Petition For A Writ Of Certiorari

To The United States Court Of Appeals

For The First Circuit

PETITION FOR WRIT OF CERTIORARI

RicHarD W. Petrocetti

Mark J. HacoriAn

Visconti & PETROCELLI, LTb.

55 Dorrance Street

Providence, Rhode Island 02903

(401) 331-3800

Attorneys for Petitioner

COCKLE LAW BRIEF PRINTING CO,, (800) 225-6964

OR CALL COLLECT (402) 342-2831

QUESTIONS PRESENTED FOR REVIEW

1. WHETHER A SENIOR USER OF A SERVICE MARK

WHO FAILS TO PROVE A LIKELIHOOD OF CONFUSION

BASED SOLELY UPON COMMON LAW RIGHTS MAY

ESTABLISH INFRINGEMENT WHERE HE ACHIEVES

SUBSEQUENT FEDERAL REGISTRATION AND INCON

TESTABLE STATUS OF THE MARK AND EXPANDS INTO

THE JUNIOR USER’S MEDIUM OF TRADE.

Il. WHETHER LEGAL PRESUMPTIONS ARISING FROM

FEDERAL REGISTRATION AND INCONTESTIBLE STA

TUS OF A SERVICE MARK IMPACT THE BURDEN OF

PROVING LIKELIHOOD OF CONFUSION SUCH THAT A

PRIOR RULING OF NO LIKELY CONFUSION BASED ON

PRE-REGISTRATION USES DOES NOT COLLATERALLY

ESTOP A SERVICE MARK OWNER FROM LITIGATING

THE ISSUE BASED ON POST-REGISTRATION USES

TABLE OF CONTENTS

Page

QUESTIONS PRESENTED FOR REVIEW....... .

SABLE GP AU TIRE Pee 6s i ass 0 oes se i

OPINIONS OF THE COURT BELOW .... PAN eS ers |

SSATEMENT OF FURST URI 6. bs isc co kone es |

STATUTORY PROVISIONS AND RULES INVOLVED

STATEMENT OF THE CASE ..... a 2

ARGUMENT §

I A SENIOR USER OF A SERVICE MARK WHO

FAILS TO PROVE LIKELIHOOD OF CONFU-

SION BASED SOLELY UPON COMMON LAW

RIGHTS MAY ESTABLISH INFRINGEMENT

WHERE HE ACHIEVES SUBSEQUENT FED-

ERAL REGISTRATION AND INCONTESTABLE

STATUS OF THE MARK AND EXPANDS INTO

THE JUNIOR USER’S MEDIUM OF TRADE... &

A. A Prior Finding Of No Likelihood Of Contu-

sion Does Not Forever Bar DeCosta From

Establishing Infringement Where His Cir-

cumstances Have Changed ............... &

B. Where A Senior User Of A Federally Regis-

tered Service Mark Crosses Over Into The

Channel of Trade Of A Junior Concurrent

User, The Likelihood Of Confusion Between

The Uses Increases Where The Expansion Is

Forescecable And The Services Are Related. 10

TABLE OF CONTENTS Continued

Page

C. DeCosta Proved “Likelihood Of Confusion”

Based Upon The Parties’ Post-Registration

Uses Of The “Have Gun Will Travel Wire

Paladin” Service Mark, And This Factual

Finding Should Have Been Reviewed Under

The Clearly Erroneous Standard... 1s

Il. LEGAL PRESUMPTIONS ARISING FROM

FEDERAL REGISTRATION AND INCONTEST

IBLE STATUS OF A SERVICE MARK IMPACT

THE BURDEN OF PROVING LIKELIHOOD OF

CONFUSION SUCH THAT A PRIOR RULING

OF NO LIKELY CONFUSION BASED ON PRE

REGISTRATION USES DOES NOT COLLAT-

ERALLY ESTOP A SERVICE MARK OWNER

FROM LITIGATING THE ISSUE BASED ON

POST-REGISTRATION USES... 20

A. Collateral Estoppel and The Law of Trade

orca ee 20

B. The DeCosta III Holding That The Presump

tions Raised By Federal Registration And

Incontestability Do Not Impact The Likeli

hood Of Confusion Analysis Directly Con-

flicts With Holdings In Other Circuits, With

The District Court Holding, And With The

Language of the Lanham Act 27

CONCLUSION ..................... | | 29

TABLE OF AUTHORITIES

Page

Cases

A.M.F. Inc. v. Sleekcraft Boats, 599 F.2d 341 (C.A. 9

i en eT ee roe tag re ee Ere Sew as See 5, 16, 29

Allstate Insurance Co. v. Allstate Ins. Co., 307 F.

me. TOT CRG. OR. COO xs oe on cheek Seascale 17

Allstate Insurance Co. v. Allstate Invest. Corp., 210 F.

Supp. 25 (W.D. La. 1962), aff'd, 328 F.2d 608

ds OURO sy oka Kunwar s vad teres thease wusana cree tes 17

Aluminum Fabricating Co. v. Seasonall Window

CO. caer Fae See LM, 2 PPO bc beck cae evvecin 28

American Heritage Life Insurance Co. v. Hentage Life

Insurance Co., 494 F.2d 3 (C.A. 5 1974)........ 23, 27, 29

Armco, Inc. v. Armco Burglar Alarm Co., 693 F.2d

CRO Sethe COONS 654 cakes Ss GA ee ees bse ead Geek 16

In re Beatrice Foods Co., 429 F.2d 466 (C.C.P.A.

REOE NLU u eRe a eek eerie eee ee Sea eR 12

C.L.A.S.S. Promotions, Inc. v. D.S. Magazines, Inc.,

pe A eee a) er rere rr 10

Carson v. Here’s Johnny Portable Toilets, Inc., 698

Pee ee Si CPEs os eas oo eh os ee ES 16

Chemtron Corp. v. Matsuo Electric Co., 153 U.S.P.Q.

PET We MC SUTRA 80k ocak eae Oe es 28

Columbia Broadcasting System v. DeCosta, 377 F.2d 315

(C.A. 1 1967), cert. den., 389 U.S. 1007 (1967) ..... passim

Columbia Broadcasting System, Inc. v. DeCosta, 192

Umea. Sos CEB. WEB). oo 6 oes ken es Peaannee

Compco Corp. v. Daybright Lighting, Inc., 376 U-S.

234, 84 S. Ct. 779, 11 L.Ed. 2d 669 (1964).......... 3

. TABLE OF AUTHORITIES — Continued

Page

Dawn Doughnut Co. v. Hart’s Food Stores, Inc., 267

Ee Ses 2 ON 55k i eee coe eee 12

Decatur Federal Savings & Loan Association v. Peach

State Federal Savings & Loan Association, 203

U.oug aoe IND: Se. $978) oy 13

DeCosta v. Viacom Int’l., 91-221 (C.A. 1 1992).... passim

DeCosta v. Viacom Int’l., 758 F. Supp. 807 (D.R.I.

tt EERE ETE PE eee oe a nae £u, 21, 22, 24, 25

DeCosta v. Columbia Broadcasting Inc., 520 F.2d 499

(C.A. 1 1975), cert. den., 423 U.S. 1073 (1976) . passim

Dicter v. B & H Ind., 880 F.2d 323 (C.A. 11 1989).

con. cen... U.S... 111:S; Ce. 369. 117 1. Ga.

Be Dae CEM s ok 5 ee ce kv osge cute ee

Finchley, Inc. v. Finchley Co., 40 F.2d 736 (DC Md.

PWM a's i i'n ah surise bee Sys wk ee ee ate eee 10)

Fleishmann Distilling Corp. v. Maier Brewing Co.,

314 F.2d 149 (C.A. 9 1963), cert. den., 374 U.S

830, 83 S. Ct. 1870, 10 L.Ed. 2d 1053 (1963)....... 15

Fox Trap, Inc. v. Fox Trap, Inc., 671 F.2d 636 (DC

PRS FP es ei ek eee eee 1]

Goldstein v. California, 412 U.S. 546, 93 S. Ct. 2303.

SF GG, OO WAS CEST). ok vos eden cceaeaseee 3

Hanover Star Milling Co. v. Metcalf, 240 U.S. 403, 36

>. Ci. 357, 60 8d. 71S C9916). «ook eee

Interpace Corporation v. Lapp, Inc., 721 F.2d 460

hs B- Pe cc lls rc eee pee ee io, a9

J.C. Hall Co. v. Hallmark Cards, Inc., 52 CCPA 981.

Se Fic Wie CAPES oo oo a ctw 28

TABLE OF AUTHORITIES ~— Continued

Page

Keds Corp. v. Renee International Trading Corp., 888

tS es ha | a Ye Se ener er .19

King Research Inc. v. Shulton, Inc., 454 F.2d 66 (C.A.

EU Os ei Alate as ke ct aaa gee any eek ees os teat )

L.E. Waterman Co. v. Gordon, 72 F.2d 272 (C.A. 2

i) re ee rar re er ree rey ye 10)

Liberty Mutual Insurance Co. v. Liberty Insurance

Co., 185 F. Supp. 695 (E.D. Ark. 1960)............. 28

Maternally Yours, Inc. v. Your Maternity Shop, Inc.,

San Cae ae Ae hk aa eens oe eee ee 28

Perini Corp. v. Perini Const., Inc., 915 F.2d 121 (C.A.

A dg REE eC ere ee ee ye eee ee ere 16

Philadelphia Storage Battery Co. v. Mindlin, 296

Pe Mae dk yd Pere ee Sorry ne eu ne See are ae 10

Pic Design Corp. v. Bearings Specialty Co., 436 F.2d

Pe ais 8: SPEED: CA ark Lee ee ee eee 28

Pizzeria Uno Corp. v. Temple, 747 F.2d 1522 (C.A. 4

Pcs oa sa he One Cee ee ees 16

Polaroid Corp. v. Polaroid Electronics Corp., 287 F.2d

492 (C.A. 2 1961), cert. den., 368 U.S. 820, 82 S.

Shs: lee ee a eo es eee ee 9, 16

R.G. Barry Corp. v. Mushroom Makers, Inc., 436 N_Y.

ae WE CEPT). 3c eek a ee eee 8, 9

Raxton Corp. v. Anania Associates, Inc., 635 F.2d 924

ee. 8 ONS Cs x chk se seer ea ee ee 13, 14, 29

Rolley, Inc. v. Younghusband, 204 F.2d 209 (C.A. 9

FE ee Cr ete I ret RS aE 28

Vil

TABLE OF AUTHORITIES — Continued

Sarah Coventry, Inc. v. T. Sardelli & Sons, Inc., 526

F.2d 20 (C.A. 1 1975), cert. den., 426 U.S. 920, 96

S. Ct. 2626, 49 L.Ed. 2d 374 (1976)....... 8, 9,

Scarves by Vera, Inc. v. Todo Imports, Ltd., 544 F.2d

PEGE Citas & OPM oa Vcr ee eae econ snes 10,

Scott Paper Co. v. Scott’s Liquid Gold, Inc., 589 F.2d

Leo Bae OR Be. c: | re err rng ener

Sears, Roebuck & Co. v. Stiffel Co., 376 U.S. 225, 84

S. Ct. 1184, 11 L.Ed. 2d 661 (1964)....

Sears, Roebuck & Co. v. Allstate Driving School,

Inc., 301 F. Supp. 4 (E.D. N.Y. 1969)

Sears, Roebuck & Co. v. Johnson, 219 F.2d 590 (C.A

Op | ine eA Ma ee out era

Southland Corp. v. Shubert, 297 F. Supp. 477 (C.D.

Cal., 1968)

Squirtco v. 7-Up Co., 628 F.2d 1086 (C.A. 8 1980)

Sterling Brewing v. Cold Springs Brewing Corp., 100

F.Supp. 412 (D. Mass. 1951)...

Travelodge Corp. v. Siragusa, 228 F.Supp. 238 (N.D

Ala, 1964), affd per curiam, 352 F.2d 516 (CA. 5

Pie Rakate seca eae ee eee ies

Union Carbide Corp. v. Eveready, Inc., 531 F.2d 366

(C.A. 7 1976), cert. den., 429 U.S. 830, 97 S. C1

71, 30 L.Ed. 2d 94 (1976) ............

United Drug Co. v. Theodore Rectanus Co., 248 U.S

90, 39 S. Ct. 48, 63 L.Ed. 141 (1918) ..

Value House v. Phillips Mercantile Company, 523

F.2d 424 (C.A. 10 1975).........

Page

iy, 2

Vill

TABLE OF AUTHORITIES Continued

Page

STATUTES

IS U.S.C. § 1057(b) eee 1, 28

IS U.S.C. § 1065 eg aee ae 1, 29

is US. § 72... See se Pa) ee

IS U.S.C. § 1115(a) paase acu ea a es fy te2e

hele eae Se) hk) ea we fas Ye

tS ae 2S. 2

28 U.S.C. § 1254(1) v

Lanham Act, § 7(b), 15 U.S.C. § 1057(b): § 33(a), 15

U.S.C. § 1115(a); § 15, 15 U.S.C. § 1065: eee b

U.S.C. § 1072; § 33(b), 15 U.S.C. § 1115(b) 28, 29

RuLES

Fed. R. App. P. 35(b) |

Fed. R App. P. 40(a)

Rules of the Supreme Court of the United States

R.10(a)

TREATISES

H.R. Callman, Law of Unfair Competition, Trade

marks and Monopolies, § 87.5..... )

J. Thomas McCarthy, Trademarks and Unfair Compe

tition, 2d Ed. § 16:12; § 24:6; § 24:10: § 26:8:

S £0.ts; 6 20: 4: 832-37. passim

TABLE OF AUTHORITIES Continued

Pa \

Restatement (Second) of Judgments, § 17; § 24, Com

ment (f); § 28, Comment (f); § 28(4); § 28, Com

ment (c); § 27, Comment (h), [Hlustration 14 (1982)

Zu. £4; 24: 25.. 26, 2

Ss 73]

Restatement of Torts, §

Now comes the Petitioner, David DeCosta, as the Execu-

tor of the Estate of Victor DeCosta, formerly the Plaintiff

below, and by his attorneys, prays that this Honorable Court

issue a Writ of Certiorari to the United States Court of

Appeals for the First Circuit to review that Court’s erroneous

decision of questions involving the infringement of a feder-

ally registered service mark.

OPINIONS OF THE COURT BELOW

The opinions of the United States Court of Appeals for

the First Circuit and of the United States District Court for the

District of Rhode Island are reprinted in the appendix hereto

STATEMENT OF JURISDICTION

The judgment of the United States Court of Appeals tor

the First Circuit was entered on December 17, 1992. Plaintiff

below subsequently petitioned the Court of Appeals for

rehearing pursuant to Fed. R. App. P. 40(a) and suggested

reconsideration en banc, pursuant to Fed. R. App. P. 35(b)

The Court of Appeals entered an Order on February 3, 1993,

denying both the Petition for Rehearing and the Suggestion

for Reconsideration en banc. Jurisdiction ot this Court is

invoked pursuant to 28 U.S.C. § 1254(1) and by the Rules ol

the Supreme Court of the United States R.10(a)

STATUTORY PROVISIONS AND RULES INVOLVED

Pertinent portions of the following statutory provision

and rules involved in this case are set forth beginning at

appendix p. AlQ7.

1S U.S.C. § 1057(b)

1S U.S.C. § 1065

1S U.S.C. § 1072

iS U.S.C. & 1121S(a)

1S U.S.C. § 1115(b)(S)

STATEMENT OF THE CASE

In 1946, Victor DeCosta created a western character

named Paladin. His purpose was to provide entertainment

services. DeCosta’s Paladin wears a unique outfit consisting

of a black cowboy hat with a silver medallion on the band,

black shirt, black pants, boots, six-gun holster to which ts

affixed a silver facsimile of a horse-head knight chess picce

and a hidden derringer with which he surprises the “bad guys”

during his appearances. DeCosta’s Paladin sports dark hat

and a thin black mustache.

The defining characteristic of DeCosta’s Paladin, how

ever, is his calling card. DeCosta created the slogan “Have

Gun Will Travel, Wire Paladin” juxtaposed on a calling card

with a horse-head knight chess piece logo. DeCosta appeared

as the Paladin character at rodeos and other functions during

the 1940's and 1950's and passed out hundreds of thousands

of calling cards containing his slogan and horse-head logo.

Beginning in 1957 and continuing in its first run until

1964, Columbia Broadcasting System, Inc. (hereinafter

“CBS”), broadcast a western series entitled “Have Gun Will

Travel.” The central character was named “Paladin” and used

the same slogan, calling card, logo and dress as DeCosta.

Comparison photographs of the two Paladins and their calling

cards are contained in the Appendix (A106).

After learning of the theft of his slogan and character,

DeCosta sued CBS in 1963 for misappropriation, willful and

intentional infringement of his common law service mark, and

unfair competition. The misappropriation count was tried to a

jury, which found that CBS misappropriated DeCosta’s idea

and character and awarded $150,000 damages. The First Cir-

cuit Court of Appeals reversed the judgment, noting that:

“ [T]he Plaintiff has had the satisfaction of

proving the Defendants pirates. But we are drawn to

conclude that that proof alone is not enough to

entitle him to a share of the plunder.” Columbia

Broadcasting System v. DeCosta, 377 &.2d 315, 31

(CLA. | 1967), cert. den., 389 U.S. 1007 (1967)

(hereinafter “DeCosta I”)

Ihe DeCosta 7 Court reversed the jury verdict hased

upon an erroneous interpretation of federal preemption under

the copynght clause. The DeCosta 7 Court misinterpreted thi

Court's decisions in Sears, Roebuck & Co vy. Stiffel Co , 376

U.S. 225, 84 S. Ct. 1184, 11 L-Ed. 2d 661 (1964). and

Compco Corp. v. Daybright Lighting, In 57/6 U.S. 234, 4

S. Ct. 779, 11 L.Ed. 2d 669 (1964) as holding that the

Mherefore, the Circuit Court reasoned that, since DeCosta had

not copyrighted his cards, he couid not recover under stat!

misappropriation laws. Columbia Broadcasting Systen

DeCosta, 377 F.2d at 321

The First Circuit later acknowledged, in light of

Court's decision in Goldstein v. California, 412 US. 546, 9

S. Ct. 2303, 37 L.Ed. 2d 163 (1973), that its interpretat

Sears-Compco and the preemptive reach of the

clause was over-broad. The Circuit Court recognized

}

“We face a dilemma. Goldstein tells us that we

were, In Our interpretation of the preemptive rea

of the Copyright Clause, over-inclusive. And

what we decided in DeCosta / has settled, for th

case, the issue of misappropriation.” Det 1

Columbia Broadcasting Inc., $520 F.2d 499, §

(C.A. 1 1975), cert. den., 423 U.S. 1073 (197¢

(hereinafter “Decosta Il") (A86

Thus, although the First Circuit acknowledged

DeCosta had lost his jury verdict on the misappr

count

After DeCosta /, the matter was tried before a Magistra

by consensual reference on Counts II and III ot the Con

plaint. In a subsequent appeal, the First Circuit character

the second cause of action as one for intentional common law

service mark infringement of the slogan “Have Gun W

Travel, Wire Paladin,” and the knight

DeCosta v. Columbia Broadcasting System, 520 F.2d 499, 509

(C.A. 1 1975), cert. den., 423 U.S. 1073 (1976). The First

Circuit characterized the third cause of action as one for

unfair competition for intentional copying of DeCosta’s

marks, manner of dress, and for passing off the television

character as the original Paladin. /d.

The Magistrate made a finding of fact that “likelihood of

confusion” existed as a result of uses of the marks by DeCosta

and CBS during the initial run of the series. DeCosta v

Columbia Broadcasting System, 520 F.2d at 514. The Magis-

trate’s decision was based, in part, upon the identity of the

marks and characters, evidence of actual confusion, including

the testimony of six witnesses that they had thought, upon

viewing the program, that the television Paladin was Mr.

DeCosta, and testimony of another 21 witnesses as to confus-

ing similarity between the physical characteristics of the

characters. /d. Despite the fact that the standard of review in

the First Circuit is that “likelihood of confusion” is an issue

of fact, not to be overturned unless “clearly erroneous,” the

Circuit Court found the evidence insufficient to support the

finding, and reversed the lower court again. Central to its

Opinion that likely confusion was not proved, based on the

parties’ prior uses, the DeCosta // Court reasoned:

“Plaintiff's enterprise was localized; Defen-

dant’s was nationwide.” DeCosta v. Columbia

Broadcasting Inc., 520 F.2d 499, 510 (C.A. 1 1975),

cert. den., 423 U.S. 1073 (1976).

The DeCosta I] Court concluded that DeCosta could not

recover, although it acknowledged:

“We recognize that Plaintiff has lost something

of value to him. The very success of Defendants’

series saturated the public consciousness, and in

time diluted the attractiveness of Plaintiff's cre-

ation, ... ” /d.

While he battled with CBS over its prior use of his mark

in the federal court cases, DeCosta sought protection for the

future use of his mark in an application before the U.S. Patent

and Trademark Office for registration of his service mark

Over the opposition of CBS, which was supported by defen

dant-appellant Viacom, the syndicator of the television series,

(hereinafter “Viacom”), DeCosta was granted an unrestricted,

geographically unlimited federal service mark registration of

his slogan “Have Gun Will Travel, Wire Paladin” and horse

head logo.

Despite the argument of CBS (Opposcer) that the granting

of an unrestricted registration would interfere with its present

and future syndication rights, the Trademark Trial and Appeal

Board ruled as follows:

“It is Opposer’s argument that the granting of an

unrestricted registration to Applicant will poten

tially interrupt Opposer’s existing agreements and

the formation of new agreements, which would

Cause economic injury to Opposer. This seems to us

to be a bald-faced argument that Opposer, already

branded a pirate, should be allowed to make off

with additional plunder unhindered by any inconve

nience that might result from the recognition ol!

Applicant’s lawful rights. We shall determine

Applicant’s right of registration on its own merits,

and leave for the future any economic consequences

hereof .

“Opposer’s argument that the issuance of a registra

tion to applicant may upset Opposer’s existing and

future television syndication and merchandise

licensing agreements, apart from lacking any appeal

to our equitable conscience, is fully answered by

the principle that a subsequent user, even ina terri-

torially remote area, cannot be damaged in a legal!

sense by the issuance of an unrestricted registration

to the prior user, who has superior rights as a result

of his priority Applicant herein has the superior

right, and the Opposer must yield even though

may consequently have to endure economic injur\

(emphasis supplied) Columbia Broadcasting Sys

tem, Inc. v. DeCosta, 192 U.S.P.Q. 453, 457

(T.T.A.B. 1976). (A74)

The undisputed evidence in the present action shows that,

in the years following the federal registration of his service

mark, DeCosta dramatically expanded his use of the mark by

making appearances in three-quarters of the United States. He

also made commercial use of his mark in a television adver-

lisement and in other ways. DeCosta has also received offers

for motion picture use of his mark and character. DeCosta’s

mark has also now achieved incontestable status under the

Lanham Act. The District Court summarized the evidence of

DeCosta’s post-registration uses of the mark in deciding post-

trial Motions (A47, AS6).

Notwithstanding the fact that its active cflorts to prevent

the unrestricted registration of DeCosta’s mark failed, Viacom

syndicated the television series after the date of registration.

As a result, DeCosta sued Viacom. The jury and the District

Court below found that there was a likelihood of confusion

between DeCosta’s post-registration expanded uses of his

mark and Viacom’s uses during the post-registration period

and that Viacom's syndication of the series constituted federal

and comnion law trademark infringement and unfair competi-

tion. The jury and the District Court also found that Viacom

acted intentionally and in bad faith in violating DeCosta’s

rights. The jury awarded DeCosta One Million ($1,000,000)

Dollars in compensatory damages and Two and One-hall

Million ($2,500,000) Dollars in punitive damages and that

award was upheld by the District Court upon review as

provided under the Lanham Act.

Viacom appealed and the First Circuit reversed the judg-

ment of the District Court. DeCosta v. Viacom Int'l., 91-221

(C.A. 1 1992) (hereinafter “DeCosta III”) (A1). The Court of

Appeals did not rule that DeCosta had failed to prove likeli-

hood of confusion. The Circuit Court did not rule that the

findings of the jury and District Court as to “likelihood of

confusion” were clearly erroneous. In fact, the First Circuit

acknowledged the overwhelming proof of likelihood of contu-

sion in the record. Rather, the First Circuit held that its

decision in DeCosta // that likelihood of confusion was not

sufficiently proved, based upon uses of the marks by the

partics during the initial run of the series, collaterally

estopped litigation of the issue of whether their post-registra-

tion uses caused likelihood of confusion. In so ruling, the

First Circuit announced a policy that an adjudication of a

failure to prove likely confusion based upon uses of a mark

during one discrete time period, granted the admittedly junior

user the continuing and permanent right to continue to use the

mark. Relying on decisions of this Court which predate pas-

Sage of the Lanham Act by approximately thirty years, the

First Circuit ruled that its adjudication in DeCosta // granted

Viacom the prior right to use DeCosta’s mark in television

The Court held:

“e

... [I]t is CBS and Viacom who have the

prior right to use the mark in television, not

DeCosta. And, for that reason, insofar as DeCosta’s

expansion into television creates ‘confusion,’ he

has no legal basis for recovery.”

The Court of Appeals held that DeCosta was barred from

re-litigating the issue of likelihood of confusion, which is the

ultimate fact to be proved in a service mark infringement

case, because neither the law nor DeCosta’s circumstances

had changed sufficiently from the prior litigation to warrant

holding Viacom liable. The Circuit Court erroneously rea-

soned that even if DeCosta’s subsequent federal registration

and expansion of the use of his mark were viewed as signifi-

cant changes in circumstances, those changes would do

DeCosta no good, as Viacom had the prior right to use the

mark in the television medium.

ARGUMENT

I. A SENIOR USER OF A SERVICE MARK WHO

FAILS TO PROVE LIKELIHOOD OF CONFUSION

BASED SOLELY UPON COMMON LAW RIGHTS

MAY ESTABLISH INFRINGEMENT WHERE HE

ACHIEVES SUBSEQUENT FEDERAL REGISTRA-

TION AND INCONTESTABLE STATUS OF THE

MARK AND EXPANDS INTO THE JUNIOR USER’S

MEDIUM OF TRADE

A. A Prior Finding Of No Likelihood Of Confusion

Does Not Forever Bar DeCosta From Establishing

Infringement Where His Circumstances Have

Changed

The Circuit Court’s holding in DeCosta /// that

DeCosta’s expansion into the television medium does him no

good, as the record of litigation indicates that Viacom has the

prior right to use the mark in television, is completely at odds

with a prior decision of that Court. The Circuit Court has

previously held that a prior finding of no likelihood of contu-

sion arising from the concurrent uses of a mark al a given

time will not bar a subsequent action if circumstances of the

party's use has changed. Sarah Coventry, Inc. v. T. Sardelli &

Sons, Inc., 526 F.2d 20, 23 (C.A. 1 1975), cert. den., 426 U.S

920, 96 S. Ct. 2626, 49 L. Ed. 2d 374 (1976). This holding

appears to be in accord with the well-settled view that trade

mark infringement is a continuing tort, which gives rise to

fresh causes of action, if future uses of the mark cause

contusion R.G. Barry Corp. v. Mushroom Makers, Inc, 436

N.Y. Supp.2d 927 (1981); H.R. Callman, Law of Unfair Com-

petition, Trademarks and Monopolies, § 87.5

In holding that a prior federal court finding of no

infringement, based on earlier conduct of the same parties,

did not bar a subsequent state court action, the court in Barry

observed:

“this (pnor) judgment speaks only of the date of its

entry The court has already noted the latent

potentiality that likelihood of confusion may with

the passage of time become a reality. Given the

rapid growth of the companies involved in the con

tinued use by them of their marks on the respective

products they sell, the defendant may arguably con

tend that a change of circumstances would justify

relief to it as the senior user and bring another

action Charging plaintiff with infringement or unfair

competition. (441 F.Supp. 1220, at 1234) See also

King Research Inc. v. Shulton, Inc., 454 &.2d 66, 69

(CLA. 2 1972); Polaroid Corp. v. Polaroid Ele:

tronics Corp., 287 F.2d 492 (C.A. 2 1961), cert

den., 368 US 820, 82 S. Ct. 36, 7 L.Ed. 2d &2

(1961)." R.G. Barry Corp. v. Mushroom Makers

Inc., 436 N.Y.S.2d 927, 930 (1981)

[In ruling that DeCosta’s evidence does not show a signif

icant Change in his use of the mark, the Court of Appeals

completely overlooked evidence in the record that DeCosta

has made live appearances as Paladin in three-quarters of the

United States since registration of his mark. This fact alone is

a significant change from the Circuit Court's finding in

DeCosta Il that his prior uses of the mark were “localized

(whereas CBS’s use was nationwide) DeCosta vy Columbia

Broadcasting System, 520 F.2d 499, 514 (C_A_ 1 1975) More

over, the Circuit Court held that the significant new fact that

DeCosta has made commercial use of his mark in the tele:

sion medium has no bearing on consideration of whether

changes of use have occurred which impact collateral estop

pel

The most unsettling aspect of the Circuit Court's rulin

that it announces a rule that no matter how significant

changed circumstances may be, a prior finding of likelihood

of confusion forever bars DeCosta from entering

Viacom's channel of trade. Such a holding 1s inconsistent w

the Circuit Court’s ruling in Sarah Coventry, Inc v T Sa

delii & Sons, Inc., §26 F.2d 20. 23 (CA. 1 1975 ‘rt. der

426 U.S. 920, 96 S. Ct. 2626, 49 L. Ed. 2d 374 (1976). The

Circuit Court's decision ts also directly at odds with r

eS eee

of other Circuits on this issue and threatens the uniformity of

decisions of the lower federal courts in such matters. The

decision further confuses the standard of conduct of users of

service marks nationwide by heightening conflict: between

decisions of the Circuit Courts of Appeal over the rights of a

senior user to cross over into the channel of trade of a jumior

user

B. Where A Senior User Of A Federally Registered

Service Mark Crosses Over Into The Channel of

Trade Of A Junior Concurrent User, The Likeli-

hood Of Confusion Between The Uses Increases

Where The Expansion Is Foreseeable And The

Services Are Related

The law has long recognized the mght of a senior user o!

a mark lo cross-over into the channel of trade of a concurrent

junior user. Finchley, Inc. v. Finchley Co., 40 F.2d 736 (DC

Md. 1929); L.E. Waterman Co. v. Gordon, 72 F.2d 272 (CA. 2

1934); Philadelphia Storage Battery Co. v. Mindlin, 296 NYS

176 (1937), Scarves by Vera, Inc. vy. Todo Imports, Lid., 544

F.2d 1167 (C.A. 2 1976); C.L.A.S.S. Promotions, Inc. v. DS

Magazines, Inc., AS3:) F.2d 14 (C.A. 2 1985).' These cases

hold that, where a senior user crosses-over into the channel o!

trade of a junior concurrent user, the likelihood of contusion

between the uses increases and, therefore, the junior user

must vield. These holdings are directly conflicting with the

DeCosta Iill holding. Here, DeCosta has bridged the gap

between his use and Viacom's use. The uncontroverted ev!

dence shows that DeCosta and Viacom now use the mark in

the same entertainment medium, t.e., television. Moreover,

there have been prior judicial findings by the Circuit Court in

An “intermediate” or “junior user” ts one whose use ts Chronology!

cally intermediate between the senior user's first use and the semor user

federal regisuation. J. Thomas McCarthy, /rademarks and Unfair Compe-

ution, 2d.Ed. § 26:18.

DeCostal and DeCosta Il and administrative findings by the

Irademark Trial and Appeal Board that DeCosta is the mor

user of the mark in commerce In other Circuits, these fact

would bear directly on proof of likely confusion. In the |

Circuit, based on DeCosta TI, these facts ha no hearing

the issue of likely confusion

lo support its holding that Viacom has the prior rig

use DeCosta’s mark in television, the Court of Appeals r

on the all but obsolete JEA ROSE Rervtanus ru flangves

Star Milliny ia 4 Metcalf AND US 1f) f oe S

[. Fed. 713 (1916) (Superseded by statu f r f

Trap, Inc. vo Fox Trap, Ine 6/71 F.2d 636 (DC Ar )*

l/nited Drug Co v Theodore Rectanus Ca 1 . Y

oo, 1K 63 LL Ed IA] (1978) if

Observed in Fox Trap In Fox Trap. Tr f

(DC App. 1982). The » called TEA ROSE. Re ind

ilowed a junior user of a nationa x , ‘

he did not know of th enior usey irk

applied where th senior u imK

ustomers in a remote afea a

user first good fa ic

Rectanus ful | inded

iser, when } i ind \

mark which ha i }

recograpt area J M

linfair Compet r 1 Fd

ipplicat I LAR é

CBS, pirated D kK

laitn adoft

More br

uppor S :

eC mark Cie s Nak

the Value House case cited by the Circuit Court, the Tenth

Circuit Court of Appeals observed that registration of a mark

under the Lanham Act:

“is constructive notice of the registrant's claim of

Ownership and affords protection which is nation-

wide and not confined to areas of actual use of the

mark. Dawn Doughnut Co. v. Hart's Food Stores,

Inc., 267 F.2d 358, 362 (C.A. 2 1959). Registration

also brings the right to rely on the evidentiary

presumptions of 15 U.S.C.A. § 1115, In re Beatrice

Foods Co., 429 F.2d 466, 472 (C.C.P.A. 1970),

which include the registrant’s exclusive right to use.

Beyond affording nationwide protection, the con-

structive notice provision of § 1072 has eliminated

the defense of a subsequent user that he had adopted

the mark in his area in good faith and with lack of

knowledge.” See Dawn Doughnut Co. v. Hart's

Food Stores, Inc., supra, 267 F.2d at 362; Sterling

Brewing v. Cold Springs Brewing Corp., 100

F.Supp. 412, 418 (D. Mass. 1951). (emphasis sup

plied) Value House v. Phillips Mercantile Company,

§23 F2d 424, 429 (C.A. 10 1975).

While the Lanham Act provides that a party charged with

infringement of a federally registered mark may raise the

defense that it adopted the mark “without knowledge of the

registrant's prior use”, even where the mark has become

incontestable, as DeCosta’s has, that statutory defense has no

application in this case. See Value House v. Phillips Mercan

tile Company, at 429; 15 U.S.C. § 1115 (a) and (b)(5). There

is no evidence in the record that Viacom adopted DeCosta's

mark without knowledge of his prior use. In fact, the District

Court and jury specifically found bad faith use by Viacom.

(A47, A56) Viacom was an active combatant in CBS's oppo-

sition to the registration of DeCosta’s mark and has consis-

tently argued that it is in privity with CBS. The Circuit Court

acknowledged in both DeCosta / and DeCosta // that CBS had

pirated DeCosta’s mark and, hence, Viacom is chargeable

with knowledge of DeCosta’s prior use at the time it adopted

the mark and it cannot claim the benefit of 15 U.S.C S 1115

(b)(S). Southland Corp. v. Shubert, 297 & Supp. 477 (C.D

Cal., 1968). Additionally, there is no evidence in the record to

support the Circuit Court’s speculation that Viacom might

have relied on DeCosta I or advice of counsel in adopting the

mark. The trial judge specifically noted this lack of reliance

evidence. (A47, AS6) In any event, such evidence would not

help Viacom, since a plain reading of 15 U.S.C. § 1115 (by(5)

makes it clear that simple knowledge of prior use defeats the

Statutory defense. See Travelodge Corp. v. Stragusa, 22%

F.Supp. 238 (N.D. Ala, 1964), aff'd per curiam 352 F.2d 516

(C.A. 5 1965); Decatur Federal Savings & Loan Association

v. Peach State Federal Savings & Loan Association, 203

U.S.P.Q. 406 (N.D. Ga., 1978)

The Circuit Court's reliance on the case of Scott Paper

Co. v. Scott's Liquid Gold, Inc., 589 F.2d 1225 (CA. 3 1978)

lO support the proposition that Viacom has the prior right to

use DeCosta’s mark in television, is equally misplaced That

case held that where an otherwise non-distinctive mark, such

as a Surname, requires proof of sccondary meaning and it |

used on noncompeting goods, priority of trademark depend

not upon which mark first obtained secondary meaning in

general, but upon whether the plaintiff can prove that hi

mark possessed secondary meaning in the defendant's market

at the time the defendant commenced his use of the mark. /d

at 1231, see, also J. Thomas McCarthy, Trademarks and

Unfair Competition, 2d Ed., § 16:12. This holding has ni

application here, since, as the Circuit Court has previou

recognized, DeCosta’s mark is so distinctive that it does

require proof of secondary meaning. DeCosta » Columbta

Broadcasting System, Inc., 520 F.2d 499, $13 (C.A_ 1 1975

cert. den., 423 U.S. 1073 (1976)

The Circuit Court’s citation of the TEA ROSE-Rectanu

rule for the proposition that Viacom has the prior right to use

DeCosta’s mark in television, also appears completely at odds

with its ruling in Raxton Corp. v. Anania Associates, Inc . 635

’

F.2d 924 (C.A. 1 1980). In Raxton, the holder of an unregis-

tered, common law trademark alleged that a remote junior

user of the mark was liable for trademark infringement. The

junior remote user argued that it had adopted the mark in

good faith. In an attempt to overcome the TEA ROSE-Rect-

anus defense raised by the junior user, the senior user argued

that the junior user was an infringer, since its use fell within

the senior user’s territorial zone of natural expansion. The

Circuit Court rejected the natural expansion zone theory as

“at once unworkable, unfair, and, in the light of statutory

protection available today, unnecessary.” Raxton Corp. vy.

Anania Associates, Inc., 635 F.2d 924, 930(C.A. 1 1980). The

Circuit Court reasoned that a senior user who desires greater

territorial protection than its actual sales or reputation zones

warrant, should avail itself of the nationwide protection avail-

able for federally registered marks. /d. at 930-931. Thus, in

Raxton, the Circuit Court recognized that the TEA ROSE-

Rectanus rule and its exceptions apply only to common law

marks and that federally registered marks deserve greater

protection (making its application of that rule in this case

unfathomable).

As has been observed by Professor McCarthy:

It is this important and vital right which the federal

registrant obtains — the right to preempt all post-

registration junior users in the nation once the reg-

istrant expands into a territory. That is what is

meant by “nationwide” trademark rights for federal

registrants. If the federal registrant proves no pre-

sent likelihood of entry into the disputed area, there

is no present likelihood of confusion in that area,

and no grounds for injunction at that time .. . once

the senior user-federal registrant shows a likelihood

of entry into an area of the United States, he is

entitied io an injunction against junior users in that

area. That is, a likelihood of confusion flows

directly from the proof of likelihood of entry by the

registrant. . . . This “likelihood of entry” for a

federal regisirant is different from the fictional

“zone of natural expansion” of the common law

“Likelihood of entry” denotes an immediate, impen

ding entry of the federal registrant into the junior

user’s territory. J. Thomas McCarthy, /rademarks

and Unfair Competition, 2d Ed., §§ 26:13 and 26:14

The real issue in this case is not whether there are

geographical boundaries between DeCosta’s and Viacom's use

of the mark. The real question is whether DeCosta, as the

senior user of the mark in commerce, may expand his use

from certain types of entertainment services to others. The

Circuit Court has ruled that, since Viacom, the jumor use!

was the first to exploit the mark in television, an entertain

ment medium, DeCosta may not expand his services into thal

medium, and Viacom is immune from suit for any such use

This rule clearly conflicts with that applied in other

Circuits which have addressed this issue. Other Circuits have

held that, where a senior and junior user of a mark deal in

non-competing goods or services, where expansion by the

senior user into the junior user’s market Is likely, and where

the goods or services are related, the likelihood of confusion

increases and the senior user has priority over the junior user

Scarves by Vera, Inc. v. Todo Imports, Ltd., 544 F.2d 116?

(C.A. 2 1976); A.M.F., Inc. v. Sleekcraft Boats, 599 F.2d 341

(C.A. 9 1979); Interpace Corporation vy. Lapp, Inc., 721 F.2d

460 (C.A. 3 1983).

The analysis of the Courts in these cases focuses on

whether non-competitive products are so related that contu-

sion is likely as to source, connection or sponsorship. As the

Ninth Circuit has ruled: “The [Defendant's] use need not be

the same as, nor in competition with the original use. The

question is, are the uses so related that they are likely to be

connected in the mind of a prospective purchaser?”

Fleishmann Distilling Corp. v. Maier Brewing Co., 314 F.2d

149 (C.A. 9 1963), cert. den., 374 U.S. 830, 83 S. Ct. 1870,

10 L.Ed. 2d 1053 (1963); accord, A.M.F., Inc. v. Sleekcraft

Boats, 599 F.2d 341 (C.A. 9 1979); J. Thomas McCarthy,

Trademarks and Unfair Competition, 2d Ed. § 24:6.

This is a recurring issue in the lower federal courts, and

there is a complete lack of uniformity among the Circults as

to the tests to be applied in determining whether non-competi-

tive goods are so related that a likelihood of confusion exists.

The Restatement of Torts, § 731 sets forth nine factors rele-

vant to such a determination. Each Circuit which has

addressed the issue has adopted its own version of the restate-

ment test “and each appears to be jealous of its own formula-

tion of factors.” J. Thomas McCarthy, Trademarks and Unfair

Competition, 2d Ed. § 24:6: See, ¢.g., Polaroid Corp. vy.

Polaroid Electronics Corp., 287 F.2d 492 (C.A. 2 1961), cert.

den., 368 U.S. 820, 82 S. Ct. 36, 7 L.Ed. 2d 25 (1961); Union

Carbide Corp. v. Eveready, Inc., 531 F.2d 366 (C.A. 7 1976).

cert. den., 429 U.S. 830, 97 S. Ct. 91, 50 L.Ed. 2d 94 (1976):

Scott Paper Co. v. Scott’s Liquid Gold, Inc., 589 F.2d 1225

(C.A. 3 1978); A.M.F., Inc. v. Sleekcraft Boats, 599 F.2d 341

(C.A. 9 1979); Squirtco v. Seven-Up Co., 628 F.2d 1086 (C.A.

8 1980); Armco, Inc. v. Armco Burglar Alarm Co., 693 F.2d

1155 (C.A. 5 1982): Carson v. Here’s Johnny Portable Toilets,

Inc., 698 F.2d 831 (C.A. 6 1983). In fact, the Fourth Circuit

appears to apply two tests, one a seven-factor test and the

other the eight-factor so-called Polaroid test applied by the

Second Circuit. Pizzeria Uno Corp. v. Temple, 747 F.2d 1522

(C.A. 4 1984): Perini Corp. v. Perini Const., Inc... 915 F.2d

121 (C.A. 4 1990).

These varying tests often lead to inconsistent results in

the lower federal courts. As McCarthy has observed:

. there is no doubt that two courts will

often come to inconsistent results on the same mark

which even the most skilled ‘case distinguisher’

cannot explain away. For example, how can one

explain why a Louisiana Federal Court held no

likelihood of confusion between ALLSTATE insur-

ance and a local ALLSTATE mortgage broker, while

a Texas Federal Court a few years later held that

there was a likelihood of confusion between ALL-

STATE insurance and a local ALLSTATE car wash

company? One cannot rationalize or distinguish, on

the basis of the marks and products alone, the Third

Circuit’s decision that a local ALLSTATE driving

School infringed the ALLSTATE insurance mark.

with a decision of a New York federal district court

that another local ALLSTATE driving school did

not infringe the ALLSTATE insurance trademark.

Obviously, more is at work here than an off-the-cufl

comparison of marks and products. The effect of

such decisions as precedent for later, even subtly

different, factual situations is not as strong as in

Other areas of the law.” Allstate Insurance Co. v

Allstate Invest. Corp., 210 F. Supp. 25 (W.D. La.

1962), aff'd, 328 F.2d 608 (C.A. 5 1964); Allstate

Insurance Co. v. Allstate Ins. Co., 307 F. Supp 1161

(N.D. Tex. 1969); Sears, Roebuck & Co. v. Johnson,

219 F.2d 590 (C.A. 3 1955); Sears, Roebuck & Co

v. Allstate Driving School, Inc., 301 F. Supp. 4

(E.D. N.Y. 1969). J. Thomas McCarthy, Trademarks

and Unfair Competition, 2d Ed. § 24:10.

Therefore, had this case been decided in another Circuit,

there is a likelihood that the outcome would have been differ-

ent. Another Circuit could have determined that, in addition

to the fact that the marks used by DeCosta and Viacom are

identical, they have been used for essentially the same enter-

tainment services, i.e., appearances of the cowboy character

“Paladin.” Another Circuit could have decided that, although

in the past DeCosta and Viacom have sold their services in

separate markets, the entertainment services to which the

mark has been attached are not only related, they are identi

cal. Based upon the overwhelming, unrebutted evidence from

two marketing experts in the record of this case that there is a

likelihood of confusion as to sponsorship and source of

DeCosta’s and Viacom’s services, another Circuit could have

decided that DeCosta’s entry into Viacom's market increased

the likelihood of confusion. As a result, another Circuit could

have decided that Viacom’s use was an infringement, since

DeCosta was the senior user of the mark in commerce, despite

the fact that Viacom was the first to use the mark in the

television medium.

aes

DeCosta Proved “Likelihood Of Confusion”

Based Upon The Parties’ Post-Registration Uses

Of The “Have Gun Will Travel — Wire Paladin”

Service Mark, And This Factual Finding Should

Have Been Reviewed Under The Clearly Erro-

neous Standard.

There is no dispute in the record of DeCosta HM of the

fact that DeCosta proved “likelihood of confusion” exists

based upon the parties’ post-registration uses of the “Have

Gun Will Travel Wire Paladin” service mark. The trial judge

summarized the evidence of likelihood of confusion as fol

LOWS:

“As tar as the likelihood of confusion argument

is concerned, there was ample evidence from which

the jury could conclude that such a likelihood has

been established. Evidence was presented that Mr

DeCosta and his mark were known throughout the

United States by virtue of the fact that he personally

appeared in many states as Paladin and that he

distributed thousands of calling cards and auto

graphed photos of himself as Paladin both during

those appearances and in response to letters he

received from individuals around the country

“There was also evidence that the defendant's

tclevision program makes liberal use of a calling

card that is virtually identical to that set forth in Mr

DeCosta’s registered service mark. And it uses that

card in association with a western character having

the same name, that ts to say Paladin. And a physi

cal appearance that ts practically indistinguishable

trom the western character created and portrayed by

Mr. DeCosta in connection with the use of his

mark . . . such finding is further supported by the

evidence of actual confusion consisting of the let

ters received by Mr. DeCosta indicating that the

authors of those letters believed him to be con

nected with the television show and by Mr

DeCosta’s testimony to the effect that he was fre-

quently asked about such a connection when he

made personal appearances.

‘In addition, the results of the survey con

ducted by Professor Venkatesan imdicated that a

majority of those persons surveyed who had seen

the television show believed that there was a con

nection between Mr. DeCosta’s Paladin and the pro

gram and that Mr. DeCosta’s slogan and logo cam

from the television show

‘| inally, there WaS eviden e of re rv¢ Oofiitl

ion in the form of Mr DeCosta’s testimony that

people frequently expressed the belv to hhim tha

he was an imposter or an impersonator of th

son Paladin and Mr. Swoegler’s testimony that t

initially held that belief himself upon meeting Mr

DeCosta”” (A60 61 Trial Court Decision on M

for New Trial)

Inthe First Circuit, the sue of ‘likelihood of contfu

is anissue Of fact which may not he overturned ur

erroneous. Sarah Coventry, Ine I Sarde & Sor

$26 F.2d 20 (C_A. 1 1975). cert. den a7 7 ae )

Ct. 2626, 49 L.Ed. 2d 374 (1976). Keds Corp Ry

International Trading Corp , 88% F 2d 215 (0 A v4)

DeCosta Ill Court did not rule that the finding,

Of confusion” by the jury and Distr Court »

erroneous. Thus, the record establishe hat a lik

confusion exists based upon the post re

partics

Whether a “likelihood of confu

the post registration uses of the partics

have been fully and fairly litigated in the pre is De

litigation since those uses had not ye irrcd )

/7 litigation dealt only with a comparisor Cas

first run of the television program

DeCosta’s use of his mark during i er

DeCosta Ill, the uses involved are all pe ;

DeCosta’s federal registration. There!

whether those post 1976 uses of the mark za

likelihood of confusion could not have b

litigated in the DeCosta // litigation wt

uses during much earlier periods of time. Therefore. »

those uses give rise to a likelithood

“issue of fact,” a finding upon which may not be overturned

unless clearly erroneous.

Il. LEGAL PRESUMPTIONS ARISING FROM FED-

ERAL REGISTRATION AND INCONTESTIBLE

STATUS OF A SERVICE MARK IMPACT THE

BURDEN OF PROVING LIKELIHOOD OF CONFU-

SION SUCH THAT A PRIOR RULING OF NO

LIKELY CONFUSION BASED ON PRE-REGISTRA-

TION USES DOES NOT COLLATERALLY ESTOP

A SERVICE MARK OWNER FROM LITIGATING

THE ISSUE BASED ON POST-REGISTRATION

USES

A. Collateral Estoppel and The Law of Trademarks

Viacom moved prior to trial to dismiss DeCosta’s action

on grounds that it was barred by the doctrines of res judicata

and collateral estoppel. As the District Court noted, res judi

cata and collateral estoppel:

. are designed to establish a point at which

litigation comes to an end. They serve three basic

Purposes: (1) promoting judicial economy by pre-

venting repetitive litigation; (2) establishing cer-

tainty and respect to judgments; and (3) protecting

the party relying upon the prior adjudication from

vexatious litigation . . . On the other hand, neither

res judicata nor collateral estoppel bars a party

from seeking to vindicate rights or litigate issues

not encompassed by the prior suit.” DeCosta \

Viacom Int’l., 758 F. Supp. 807, 811 (D.R.I. 1991).

(A 31-32).

The principles of collateral estoppel upon which both the

District Court and the First Circuit relied are set forth in the

Restatement (Second) of Judgments, § 17 as follows:

“A valid and final personal judgment is conclu-

Sive between the parties, except on appeal or other

direct review, to the following extent:

(3) A judgment in favor of either the Plain-

tiff or the Defendant is conclusive, in a subse-

quent action between them on the same or a

ell

2 |

different claim, with respect to any issue actually

litigated and determined, if its determination was

essential to that judgment (See § 27). °

Restatement (Second) of Judgments, § 17, cited by DeCosta \

Viacom Int'l, 758 F. Supp. 807, 812 (DRE. 1991) (A33)

The District Court recognized these principles. However

it also observed that:

res judicata does not bar a plainuff from

secking redress for post-judgment acts, even though

similar injuries and/or legal theories are asserted in

both suits. Thus, the Restatement recognizes that

events taking place after the prior litigation is con

cluded may ‘comprise a transaction which may be

made the basis of a second action not precluded by

the first.’ ”

DeCosta v. Viacom Int. 1, 758 F. Supp. 807, 812 (DR -I

1991) (citing Restatement (Second) of Judgments, 2 24

ment (f) (A35)

In applying these principles to DeCosta laims af

Viacom, the District Court further wrote

. DeCosta 1 and DeCosta Il held only that

CBS was not liable for broadcasting the ‘Have Gun

Will Travel’ series during the period belore the sul

was brought. Those decisions did not vest CBS w

any property interest in DeCosta’s creation, nor an)

license to continue exploiting it even after DeCosta

registered his mark Viacom's syndication of the

series occurred after the original broadcasts which

were the subject of the previous suit had beer

completed. Therefore, the two clusters of condu

are at least temporally distinct This case

based on acts committed prior to the antecede!

litigation and selectively omitted from it. Rather

is a case based on acts that the defendant had

yet committed when the first suit was litigated

DeCosta v. Viacom Int.i., 758 F. Supp. 5! ¥13 (DR

1991) (A36)

The District Court recognized that the federal traden

rights at issue in the present action did not even exist

DeCosta I and DeCosta II were decided. The District Court

concluded:

“Moreover, the federal trademark infringement

rights that DeCosta seeks to vindicate in this case

did not exist when DeCosta I and DeCosta I] were

decided, because he did not register his mark until

after that time . . . DeCosta’s registration of his

mark vested him with new rights under the Lanham

Act that he did not possess when the previous suit

was decided. Since those rights and the conduct

allegedly violating them both postdate DeCosta |

and DeCosta II, the federal claims are not part of

the same transaction underlying the prior litiga-

tion.”

Id. (A36-37)

As to Viacom's argument that collateral estoppel pre-

vented DeCosta from relitigating issues previously decided,

the District Court addressed the same issue which the First

Circuit subsequently considered in DeCosta /II. The District

Court framed the issue as follows:

“Viacom points out that likelihood of confusion

is an essential clement of the trademark infringe-

ment and unfair competition claims, and that the

Court in DeCosta I! specifically found the evidence

insufficient to establish that element. Accordingly,

Viacom argues that DeCosta is collaterally estopped

from asserting those claims.”

DeCosta v. Viacom Int’ l., 758 F. Supp. 807, 814 (D.R.1. 1991)

(A38).

The District Court, in denying the Motion to Dismiss.

correctly and succinctly disposed of that argument. The Court

wrote:

“That argument fails to take into account the

intervening events that have materially altered the

legal principles governing the resolution of the like-

lihood of confusion issue. The First Circuit’s hold-

ing in DeCosta II was predicated on what it found

to be a ‘paucity’ of evidence that the public would

be confused as to the origin of the Paladin charac-

ter. Since then, DeCosta has registered his mark,

which establishes a rebuttable presumption of likely

confusion that did not exist when DeCosta Il was

decided. In American Heritage Life Insurance Co. v.

Heritage Life Insurance Co., 494 F.2d 3 (C.A. 5

1974), the Fifth Circuit explained the effect of reg-

istration as follows:

‘Under the [Lanham] Act, registration is

prima facie evidence of the registrant’s owner-

ship of the mark, and of the registrant’s exclu-

sive right to use the mark in commerce in

connection with the services specified in the

Registration Certificate. Thus, registration is

sufficient to establish prima facie (1) the

required prior use, (2) of a registrable mark, (3)

which is likely to be confused with another's

use of the same or a similar mark.” American

Heritage Life Insurance Co. v. Heritage Life

Insurance Co., 494 F.2d at 10 (citations omit-

ted).

“DeCosta’s registration and apparent use of his

mark since 1975 also impacts the ‘likelihood of

confusion’ calculus in another way. One of the

factors to be considered in determining likelihood

of confusion is the strength of the plaintiff's mark

(citations omitted). Use of a mark for five consecu-

live years subsequent to registration makes the

mark incontestible (citation omitted). Incontestabil-

ity, in turn, creates a presumption that the mark Is a

relatively strong one for purposes of the likelihood

of confusion analysis. Dieter v. B & H Ind., 880

F.2d 323 (C.A. 11 1989), cert. den., Ua.

111 S. Ct. 369, 112 L.Ed. 2d 332 (1990) (additional

citations omitted).

“As the Dieter Court stated:

‘We hold that incontestible status is a tac-

tor to be taken into consideration in likelihood

of confusion analysis. Because [the Plaintiff's]

mark is incontestible, then it is presumed to be

at least descriptive with secondary meaning

and therefore a relatively strong mark.’ Dieter

v. B & H Ind., 880 F.2d at 329.”

DeCosta v. Viacom Int'l., 758 F. Supp. 807, 814 (D.R.1. 1991)

(A38-39).

Based upon this rationale, the District Court held that

there had been a change in the applicable legal context

regarding proof of the issue of likelihood of confusion such

that collateral estoppel did not apply. The Court concluded:

“These factors constitute precisely the kinds of

‘[c]hange in applicable legal context’ that the

Restatement recognizes as exceptions to the gencral

rule of issue preclusion.” See, Restatement (Second)

of Judgments, § 28, Comment (c).

“Thus, § 28 provides:

‘Although an issue is actually litigated and

determined by a valid and final judgment, and

the determination is essential to the judgment,

relitigation of the issue in a subsequent action

between the parties is not precluded in the

following circumstances:

“(4) The party against whom preclu-

sion is sought had a significantly heavier

burden of persuasion with respect to the

issue in the initial action than in the subse-

quent action; the burden has shifted to his

adversary; or the adversary has a signifi-

cantly heavier burden than he had in the

first action . . . Restatement (Second) of

Judgments, § 28(4).’

‘Comment (f) explains the rationale for

that exception as follows:

“(f) Differences in the burden of per-

suasion (Subsection (4)). To apply preclu-

sion in the cases described in Subsection

(4) would be to hold, in effect, that the

losing party in the first action would also

have lost had a significantly different bur-

den been imposed . . . Since the process by

which the issue was adjudicated cannot be

reconstructed on the basis of a new and

different burden, preclusive effect is

he «

properly denied. Restatement (Second) of

Judgments § 28, Comment (f).°°

Id. at 814-15 (A40-41)

The District Court further concluded

“In a nutshell, although the issuc in the prior

litigation in this case is nominally the same, the

context in which it arises is materially different, and

the difference could easily affect the outcome in

this case. The presumptions regarding likelihood ot

confusion and the strength of DeCosta’s mark are

significant new clements in the equation that did

not exist when DeCosta 1 and DeCosta Il were

decided. Together, they so alter the mix of factors

bearing on likelihood of confusion, that the prior

resolution of the issue does not bar DeCosta’s trade

mark infringement or unfair competition claims in

this case.”

DeCosta v. Viacom Int'l., 758 F. Supp. 807, 815 (D.R LE. 1991

(A411).

The District Court also concluded that the misappropria

tion claim which is embodied in the unfair competition counts

was not barred by the prior litigation. The common law untatr

compcution claim for misappropriation was not barred by the

doctrine of collateral estoppel because:

. collateral estoppel only applies to issucs

‘actually litigated and determined’ in the previous

suit. In DeCosta /, the First Circuit never reached

the question of whether DeCosta had proved the

elements of his substantive misappropriation claim

Instead, it rejected that claim on the ground that the

common law basis for it had been preempted by

Article I, Section 8, Cl. 8, of the United States

Constitution, Columbia Broadcasting System

DeCosta, 377 F.2d at 319, an interpretation that it

later acknowledged to be ‘over-inclusive.’ DeCosta

v. Columbia Broadcasting Inc., 520 F.2d at 510

“In sum, the issues presented in this case are

either different from those addressed in DeCosta |

and DeCosta //, due to intervening changes in the

applicable legal framework, or they are issues that

were not previously litigated and determined

Accordingly, the Plaintiff is not collaterally

estopped from maintaining this action.”

Id., at 815 (A42).

It has been observed that, in trademark cases, res judi-

cata must be carefully applied “since the facts of trademark

usage and consumer recognition may have changed since the

prior judgment was rendered.” J. Thomas McCarthy, Trade-

marks and Unfair Competition, 2d Ed., § 32:27. McCarthy

Wriles:

“that is, the ‘res,’ or thing decided in Case

No. 1, may have changed in the time period

between adjudication of Case No. 1 and the adjudi-

cation of Case No. 2. As Judge Rich of the CCPA

has observed:

‘Rights in this field do not stay put. They are

like ocean beaches; they shift around. Public behav-

ior may affect them.’ ”

J. Thomas McCarthy, Trademarks and Unfair Competition, 2d

Ba...§ 32:27

As previously argued in this petition, trademark infringe

ment is a continuing tort which gives rise to a fresh cause ot

action so long as the infringement exists. Based upon this

rationale, a ruling of no likelihood of confusion based upon

uses prior to that judgment does not bar subsequent litigation

over whether likelihood of confusion exists based upon subsce-

quent uses. An illustration of this principle is contained in the

Restatement (Second) of Judgements, § 27, Comment (h),

Illustration 14 (1982):

“A, as the owner of a trademark, brings an

action against B for infringement. B denies the

validity of the trademark and denies infringement.

The court finds that the trademark is valid, but that

B had noi infringed it, and gives judgment for B.

Thereafter, A brings an action against B alleging -

that, since the rendition of the judgment, B

infringed the trademark. B is not precluded from

defending this action on the ground that the trade-

mark is invalid.”

Although this illustration deals directly with the non-

essential nature of the finding of validity, it illustrates the fact

that subsequent infringement actions may be brought despite

prior judgments finding no infringements based upon prior

uses.

B. The DeCosta III Holding That The Presumptions

Raised By Federal Registration And Incontest-

ability Do Not Impact The Likelihood Of Confu-

sion Analysis Directly Conflicts With Holdings In

Other Circuits, With The District Court Holding,

And With The Language of the Lanham Act.

In its analysis of the adjudicative cffect of the prior

litigation, the DeCosta /I/] Court stated:

“Each of Mr. DeCosta’s claims now before us

depends, for its success, upon his winning an issuc

now that he lost before, in his litigation against

CBS. In particular, we held that he had failed to

show a ‘likelihood’ of buyer ‘confusion’ between

his ‘Paladin’ character and that of CBS. That issue

was ‘essential’ to CBS’ victory in the carlier action

Mr. DeCosta had a ‘full and fair opportunity to

litigate’ that issue in the earlier litigation.”

DeCosta v. Viacom Int’'l., 91-2211 (C.A. 1 12/17/92) (AS)

This statement misapprehends the continuing nature of an

infringement action. As the District Court noted, it Is a

comparison of the uses which determines likelihood of contu

sion. The issue of whether post-registration uses cause likell

hood of confusion could not have been litigated in DeCosta |

and DeCosta Il as those uses had not yet occurred.

The DeCosta III Court was compelled to recognize that

“DeCosta is right that a change in relevant

‘burden of proof’ rules can transform a legal issue,

permitting relitigation of an issue that ‘collateral

estoppel’ otherwise would bar.” Sec, Restatement

(Second) of Judgments, § 28(4).

However, it concluded, in conflict with other Circuits,

that registration and incontestability do not impact the burden

of proof of likelihood of confusion. American Heritage Life

Insurance Co. v. Heritage Life Insurance Co., 494 F.2d 3

(C.A. 1974); Dieter v. B & H Ind., 880 F.2d 323 (C.A. 11

1989), cert den., _-s—~U-.S. __, 111 S. Ct. 369, 112 L.Ed. 2d

332 (1990). The Circuit Court stated that it was not aware of

any reason why registration should significantly affect the

burden of proof about confusion. DeCosta v. Viacom Int'l.,

91-2211 (C.A. 1 12/17/92) (A7).

This decision also conflicts with the language of the

Lanham Act itself. The Lanham Act provides that registration

on the Principal Register is prima facie evidence of the

registrant's Ownership and exclusive right to use the mark.

Lanham Act § 7(b), 15 U.S.C. § 1057(b); Lanham Act § 33(a),

IS U.S.C. § 1115(a). Registration on the Principal Register is

also prima facie evidence of proof of continual use of the

mark, dating back to the filing date of the application for

registration. J.C. Hall Co. v. Hallmark Cards, Inc., 52 CCPA

981, 340 F.2d 960 (1965); Rolley, Inc. v. Younghusband, 204

F.2d 209 (C.A. 9 1953); Chemtron Corp. v. Matsuo Electri«

Co., 153 U.S.P.Q. 372 (T.T.A.B. 1967). Registration has been

held to be prima facie evidence that the mark is not con-

fusingly similar to other registered marks. Liberty Mutual

Insurance Co. v. Liberty Insurance Co., 185 F. Supp. 895

(E.D. Ark. 1960). Registration is prima facie evidence that

the mark has acquired secondary meaning. Pic Design Corp

v. Bearings Specialty Co., 436 F.2d 804 (C.A. 1 1971). Regis-

tration is prima facie evidence that the mark has been used in

interstate commerce prior to registration. Maternally Yours,

Inc. v. Your Maternity Shop, Inc., 234 F.2d 538 (C.A. 2 1956).

The Second Circuit Court of Appeals has interpreted the

prima facie effect of a registration as meaning that a party

contesting a mark not only has the burden of going forward,

but that there is a strong presumption of validity so that the

party contesting the mark “must put something more into the

scales than the registrant.” Aluminum Fabricating Co. v. Sea-

sonall Window Corp., 259 F.2d 314 (C.A. 2 1958).

Principal Register registration is constructive notice of a

claim of ownership so as to eliminate any good faith adoption

defense. Lanham Act § 22, 15 U.S.C. § 1072. When a mark

becomes incontestible under the Lanham Act by virtue of its

use for five consecutive years in commerce, and the filing of

the incontestability affidavit, such an incontestible registra-

tion is conclusive evidence of the registrant's exclusive right

to use the mark, subject only to certain statutory defenses.

Lanham Act § 15, 15 U.S.C. § 1065; Lanham Act § 33(b), 15

U.S.C. § 1115(b).

Many of these presumptions impact the burden of proof

in an infringement action. None of these presumptions existed

in the DeCosta I and DeCosta II cases, prior to registration of

DeCosta’s mark. Additionally, the incontestable status of

DeCosta’s mark did not exist in the prior litigation and

changed DeCosta’s burden of proof in his action against

Viacom.

CONCLUSION

The Circuit Court’s decision in this matter overlooks or

declares as without legal effect significant changes in

DeCosia’s use of his mark. The decision conflicts with the

Circuit Court’s decisions in Sarah Coventry, Inc. v. T. Sardelli

& Sons, Inc., 526 F.2d 20, 23 (C.A. 1 1975), cert. den., 426

U.S. 920, 965 S. Ct. 2626, 49 L.Ed. 2d 374 (1976) and Raxton

Corp. v. Anania Associates, Inc., 635 F.2d 924, 930 (C.A. |

1980). The Circuit Court’s decision also conflicts with deci

sions of other Circuit Courts of Appeals. Scarves by Vera, In

v. Todo Imports, Ltd., 544 F.2d 1167 (C.A. 2 1976), A.M.F.,

Inc. v. Sleekcraft Boats, 599 F.2d 341 (C.A. 9 1979), Inter

pace Corporation v. Lapp, Inc., 721 F.2d 460 (C.A. 3 1983);

American Heritage Life Insurance Co. v. Heritage Life Insur

ance Co., 494 F.2d 3 (C.A. 5 1974); Dieter v. B & H Ind., 880

F.2d 323 (C.A. 11 1989), cert den., U.S. » DER By Gt.

369, 112 L.Ed. 2d 332 (1990). The decision of the Circuit

Court announces a rule that no matter how significant

changed circumstances may be, a prior finding of likelihood

of confusion forever bars the senior user of a service mark,

which is later registered and has become incontestible, from

entering into the channel of trade of a junior concurrent user

or from using such expansion as the basis for a finding ol

likelihood of confusion.

ie |

The Circuit Court has also misapplied rules announced in

decisions of this Honorable Court, which predate the Lanham

Act and has erroneously used them to limit the protections

available to the owner of a federally registered service mark

under the Act.

This decision heightens a conflict among the Circuit

Courts of Appeal and impacts upon the conduct of every

owner of a federally registered service mark who desires to

expand, or actually expands, the uses of their marks. Depend-

ing upon the Circuit in which the expansion takes place, the

senior user may or may not have the right to preclude a junior

user from using the mark or establish infringement based

upon the senior user's expansion. This policy conflict must be

resolved to insure the orderly conduct of service mark usage

nationwide, For these reasons, Plaintiff-Petitioner respect

fully requests that this Court issue its Writ of Certiorari to the

Circuit Court and review that Court's decision in this matter

Respectfully submitted, “**

Davip DrCosta,

Executor of the Estate

of Victor DeCosta,

Petitioner,

By his Attorneys,

Viscont? & Prrrocenit Lip

RicHarD W. Prrrocrsst, Eso

Mark J. HaGopian, Eso.

55 Dorrance Street

Providence, RI 02903

(401) 331-3800

APPENDIX

} t

DeCosta v. Viacom Int’l 91-2211 Ist Circuit

(12-17-92) \ |

LDeCosta v. Viacom Int'l 758 FSupp 807 (IRI 199] \24

ludgment .45

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ment \47

[rial Judge Decision (DeCosta v. Via¢

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Columbia Broadcasting System, In Det

192 U.S.P.Q. 453 (T.T.A.B. 1976) \74

DeCosta v. CBS, 520 F.2d 499 (C.A,. | \S¢E

Photograph A100

| | Sy ( ‘* =) 1() (hh

United States Court of Appeals

For the First Circuit

No. 91-2211

VICTOR DeCOSTA,

Plaintiff, Appellee,

VIACOM INTERNATIONAL, IN¢

Defendant, Appellant

APPEAL FROM THE UNITED STATES

DISTRICT COURT

FOR THE DISTRICT OF RHODE ISLAND

(Hon. Ernest C. Torres, U.S. District Judge!

Bef >

ICTOTE

Breyer, Chief Judge

Coffin, Senior Circuit

and Cyr, Circuit Judge

Robert M. Callagy with whom Satterlee Stephens Burh

Burke and Jan R. Uhrbach were on brief for appellant

! ; ’ } ' 17

Richard W. Petrocelli with whom Mark |]. Hagopian and

|/ ; ot of] J , oa f . Fa on

Visconti & Petrocelli Ltd. were on brief for appellee

December 17, 1992

BREYER, Chief Judge. More than thirty years ago,

between 1957 and 1964, CBS provided television stations

with a program called “Have Gun - Will Travel.” The

program starred “Paladin,” a fictional cowboy who

dressed in black, carried a derringer pistol, and handed

out calling cards with a picture of a chess knight. More

than forty years ago, beginning in 1947, Victor DeCosta,

the plaintiff in this case, began to appear, as a cowboy, at

rodeos, hospitals, and charitable events. DeCosta dressed

in black, carried a derringer pistol, handed out cards with

a picture of a chess knight, and called himself “Paladin.”

In 1963 DeCosta sued CBS, claiming it had unlawfully

copied his idea. Eventually, this court decided that CBS

may have copied DeCosta’s idea, but, the laws under

which DeCosta had sued did not prohibit CBS from doing

so. This court held that DeCosta had failed to prove a

violation of trademark, or other relevant, laws. Columbia

Broadcasting System, Inc. v. DeCosta, 377 F.2d 315 (st Cir.)

[hereinafter DeCosta I], cert. denied, 389 U.S. 1007 (1967);

DeCosta v. Columbia Broadcasting System, Inc., 520 F.2d 499

(Ist Cir. 1975) [hereinafter DeCosta II], cert. denied, 423

U.S. 1073 (1976).

DeCosta has now sued again. He has sued Viacom, a

company that CBS created, and to which it assigned re-

run rights for the old Paladin programs. He again com-

plains that CBS copied his idea; and he says that Viacom,

by broadcasting the old CBS programs, has violated fed-

eral and state trademark and unfair competition laws. 15

USC. §§ 1114(1), 1125(a). The district court permitted

the suit to proceed. DeCosta v. Viacom Int'l, Inc., 758 F.

Supp. 807 (D.R.I. 1991). A jury found in DeCosta’s favor.

And, Viacom appeals. In our view, DeCosta’s new suit

depends for its success upon relitigating issues that this

court already has decided against him. And, for that

reason, the doctrine of “collateral estoppel” bars his new

claims. We therefore reverse the district court and order

judgment for the defendant.

DeCosta’s Basic Legal Problems

When Mr. DeCosta first sued, many years ago, CBS

claimed that it had not copied his “Paladin” character

Rather, CBS said, both “Paladin’s” found their origin,

independently, in the same historical sources. A jury,

however, rejected CBS’s argument. And, ever since, the

courts have proceeded on the assumption that CBS, in

fact, did copy Mr. DeCosta. Why, then, has Mr. DeCosta

not succeeded in obtaining compensation?

The answer to this question ultimately rests upon the

fact that the law does not always consider harmful, or

always make unlawful, the copying by one person of the

creation of another. Free, uncontrolled copying may, of

course, prove harmful. It can discourage the creation of

new, valuable ideas, works, or products, by diminishing

the creator’s monetary reward. It can cause commercial

confusion, as a copier tries to take advantage of the good

will attached to another’s name. Free, uncontrolled copy

ing, however, may also prove beneficial. It can promote

the widespread dissemination of new works or ideas

“Education . . . proceeds from a kind of mimicry, and

‘progress,’ if it is not entirely an illusion, depends on

generous indulgence of copying.” Benjamin Kaplan, An

Unhurried View of Copyright 2 (1966). Some creators, say,

novelists or dramatists, rightly expect compensation from

those who buy or use their creations. Other creators, say,

academic scientists, teachers, or certain commercial inno-

vators (e.g., the inventor of the supermarket) expect

others to copy, and to use, their ideas free of charge.

The result is a need for balance. Courts and legisla-

tors have responded to that need with separate, discrete

bodies of intellectual property law, each with its own

rules. The laws of patents, copyright, trade secrets, trade-

marks, unfair competition, and misappropriation balance

the conflicting interests in protection and dissemination

differently in different contexts through specific rules

that determine just who will receive protection, of just

what kind, under what circumstances, and for how long.

See generally WCVB-TV v. Boston Athletic Ass'n, 926 F.2d

42, 45 (1st Cir. 1991).

Mr. DeCosta’s original legal problem lay in his inabil-

ity to bring his case within a particular set of protective

rules. Copyright law, for example, might in principle

have offered protection for his “Have Gun - Will Travel”

calling card, but he had brought that card into the “public

domain” by distributing it widely, without giving the

kind of specific “copyright” notice that federal copyright

law requires. DeCosta I, 377 F.2d at 321. Nor was he able

to show the type of “confusion” between products essen-

tial to success on his trademark, and most of his other,

claims. DeCosta I] 520 F.2d at 513-15.

Mr. DeCosta’s present legal problem lies in the fact

that he previously sued CBS and lost. The traditional

legal doctrine of “collateral estoppel” bars relitigation of

any issue that, 1) a party had a “full and fair opportunity

to litigate” in an earlier action, and that, 2) was finally

decided in that action, 3) against that party, and that, 4)

was essential to the earlier judgment. See Restatement

(Second) of Judgments §§ 27, 29 (1982). Each of Mr.

DeCosta’s claims now before us depends, for its success,

upon his winning an issue now that he lost before, in his

litigation against CBS. In particular we held that he had

failed to show a “likelihood” of buyer “confusion”

between his “Paladin” character and that of CBS. That

issue was “essential” to CBS’s victory in the earlier

action. Mr. DeCosta had a “full and fair opportunity to

litigate” that issue in the earlier litigation. And, Viacom,

as CBS’s successor, here stands in the shoes of CBS

Mr. DeCosta’s argument on this appeal consists of an

attempt to escape the bonds of “collateral estoppel”

through a claim that legal and factual changes since 1975

(when we decided DeCosta-II) make the “confusion”

issue, in essence, a new one. See Restatement (Second) of

Judgments § 27, cmt. c; § 28(2) (b), (4) (collateral estoppel

does not bar relitigation of an issue transformed by sig-

nificant factual or legal changes). After considering Mr

DeCosta’s arguments in detail, however, we find no

legally significant change.

Trademark Registration

Trademark law seeks to prevent one seller from using

the same “mark” as - or one similar to — that used by

another in such a way that he confuses the public about

who really produced the goods (or service). Confusion

; 4

Abo

may prevent the buyer from obtaining the goods he really

wants. It may also jeopardize the commercial reputation

of the senior (first) user, which might be tarnished by

association with the junior (subsequent) user. To win a

trademark case, a plaintiff must show 1) that he uses, and

thereby “owns,” a mark, 2) that the defendant is using

that same or a similar mark, and 3) that the defendant's

use is likely to confuse the public, thereby harming the

plaintiff. See, e.g., Dieter v. B & H Indus. of Southwest

Florida, 880 F.2d 322, 326 (11th Cir. 1989), cert. denied, 111

S. Ct. 369 (1990); WCVB-TV, 926 F.2d at 45; Astra Phar-

maceutical Prods., Inc. v. Beckman Instruments. Inc., 718 F.2d

1201, 1205, 1209 (1st Cir. 1983); Pignons S.A. de Mecanique

v. Polaroid Corp., 657 F.2d 482, 486-87 (1st Cir. 1981);

W.W.W. Pharmaceutical Co. v. Gillette Co., 23 U.S.P.Q.2d

1609, 1614, 1621 (S.D.N.Y.), reaff'd, amended in other

respects, 1992 U.S. Dist. LEXIS 10053 (S.D.N.Y. July 11,

1992); Merritt Forbes & Co. v. Newman Investment Securi-

ties, Inc., 604 F. Supp. 943, 956 (S.D.N.Y. 1985); but cf. 15

U.S.C. § 1051(b) (creating an exception, not presently

relevant, to the use requirement). DeCosta, as we have

said, previously failed to show a “likelihood” of pubiic

“confusion” between the “mark” (i.e., the “Have Gun -

Will Travel” and “Wire Paladin” phrases and the chess

knight sign) as he used it, and the same “mark” as used

by CBS. DeCosta argues that the legal “confusion” issue

in the case before us differs from the issue in his earlier

1975 case because, in 1976, he registered his mark. Colum-

bia Broadcasting System, Inc. v. DeCosta, 192 U.S.P.Q. 453

(T.T.A.B. 1976). The fact of registration, he says, changes

the legal “burden of proof” rules, making it legally easier

for a plaintiff to show “likelihood of confusion.” See

American Heritage Life Ins. Co. v. Heritage Life Ins. Co., 494

F.2d 3, 10 (5th Cir. 1974). That legal change transforms the

old legal issue into a new one

DeCosta is right that a change in relevant “burden of

proof” rules can transform a legal issue, permitting

relitigation of an issue that “collateral estoppel” other

wise would bar. See Restatement (Second) of Judgment

§ 28(4). But, we can find no such relevant transformation

here. Registration consists of persuading the Trademark

Board to issue an appropriate “certificate.” 15 US<

§§ 1051, 1057(a). The relevant statute says that the certifi

cate becomes “prima facie evidence” of the mark’s “regis

tration,” of its “validity,” of “the registrant’s ownership,’

and of the “registrant’s exclusive right to use the mark

in connection with the goods or services specified in the

certificate.” 15 U.S.C. § 1057(b). The statute also says that,

in certain circumstances, “registration” makes the “regis

trant’s right to use” the mark “incontestable.” 15 U.S

§ 1065. But, the statute nowhere says that registration

makes it easier for a registrant (with a conceded right t

use a concededly valid mark that he concededly owns) t

prove that a relevant buying public may confuse som

other person’s mark with his own

Nor are we aware of any reason why registrati

here should significantly affect the proof about confusion

To decide whether buyers are likely significantly t

fuse two different marks, a court will examine 1) their

similarity, 2) the similarity of the underlying goods or

services, 3) the relation of the “channels” through which

the parties “trade,” 4) the relation of the parties’ advertis

ing, 5) the kinds of prospective buyers, 6) evidence of

actual confusion, 7) the defendant's reasons for using the

mark, and 8) the strength of the plaintiff's mark. Boston

Athletic Ass'n v. Sullivan, 867 F.2d 22, 29 (1st Cir. 1989);

Volkswagen Aktiengesellschaft v. Wheeler, 814 F.2d 812, 817

(1st Cir. 1987); Astra, 718 F.2d at 1205; Pignons, 657 F.2d at

487; Polaroid Corp. v. Polarad Elecs. Corp., 287 F.2d 492, 495

(2d Cir.), cert. denied, 368 U.S. 820 (1961). The fact of

registration, at most, relates to one aspect of the last

mentioned factor, the plaintiff's mark’s strength.

The particular relation of registration to “strength”

concerns what trademark jargon calls “secondary mean-

ing.” That term refers to a word’s, or a sign’s, ability to

tell the public that the word or sign serves a special

trademark function, namely, that it denotes a product or

service that comes from a particular “source.” Words and

phrases, in ordinary, non-trademark, use normally pick

out, or refer to, particular individual items that exhibit

the characteristics that the word or phrase connotes

(without specific reference to the item’s source). The

phrase “white eagle,” as ordinarily used on a particular

occasion, for example, would pick out from a nearby

flock of birds, the bird that has white, and eagle-like,

characteristics. The phrase “white eagle” in trademark

use, however, would denote, or refer to, something spe-

cial, something other than a white eagle, such as, for

example, a beer — “White Eagle Beer” - and, in doing so,

it would signify that the item comes from a particular

source, say, the White Eagle Company, a Milwaukee

brewery. And, insofar as the public takes the word, or

sign, to refer to a product or service with a particular

source (indeed, a product or service that, for example,

might be neither white, nor like an eagle), the word, or

sign, has “secondary meaning.” Registration relates to

strength in that it helps a court conclude that a particular

mark, in fact, does possess such “secondary meaning,”

which is simply to say that it helps a court conclude that

a particular set of words or signs does indeed act like a

trademark. Dieter, 880 F.2d at 329; Wynn Oil Co. v. Thomas,

839 F2d 1183, 1187, 1190 (6th Cir. 1988); Keds Corp. v

Renee Int'l Corp., 888 F.2d 215, 220-21 (Ist Cir. 1989); cf.

New Kids on the Block v. News America Publishing, Inc., 23

U.S.P.Q.2d 1534, 1535 (9th Cir. 1992) (describing the pri-

mary purpose of trademarks as “to identify the source ol!

goods and services”).

That “strength” relates to confusion and registration

“relates” (in this way) to strength, however, does not help

DeCosta. The “strength” of DeCosta’s mark was not an

issue before us in the earlier cases. This court assumed in

its opinions that DeCosta’s mark had a secondary mean-

ing. It specifically said that his mark is “distinctive

enough so that proof of secondary meaning Is not essen-

tial,” and that, “at least among some people, plaintiff's

name and card had come to be associated with him.”

DeCosta II, 520 F.2d at 513. It went on to find no relevant

“confusion,” even assuming a mark as strong as registra

tion might have forced it to assume. Thus, the fact of later

registration, insofar as it helps establish that the mark has

a “secondary meaning,” adds nothing significantly new

We concede that, in one of the cases that DeCosta

cites, the court said that “registration is sufficient to

establish prima facie (1) the required prior use (2) of a

registrable mark (3) which is likely to be confused with

another’s use of the same or a similar mark.” American

Heritage, 494 F.2d at 10 (emphasis added). The underlined

phrase, however, likely refers simply to the mark’s

A10

“strength,” in which case the phrase is consistent with

holdings in other courts. Dieter, 880 F.2d at 329; Wynn, 839

F.2d at 1187, 1190; Keds, 888 F.2d at 220-21. If it means

more than that, we do not understand the theory behind

it, and we do not follow it. Rather, we agree with the

Seventh Circuit, that, in the case before us, “the pro-

cedural advantages conferred by registration are [not]

substantial, at least in the context of determining the

issue of likelihood of confusion. Therefore, we see no

inequity in applying collateral effect to the [prior] deci

sion [that likelihood of confusion was not shown].” FZ

Loader Boat Trailers, Inc. v. Cox Trailers, Inc., 746 F.2d 375,

379 (7th Cir. 1984). In sum, the “new” fact of registration

does not warrant relitigating the “likelihood of confu

sion’ issue

IT]

Reverse Confusion

DeCosta next argues that collateral estoppel does not

bind him because, since 1975, there has occurred a “mod

ification or growth in legal principles [that] effect a sig

nificant change” in the law. See Commissioner of Internal

Revenue v. Sunnen, 333 U.S. 591, 600 (1948); Restatement!

(Second) of Judgments § 28(2) (b). His “new” case, he adds,

rests upon a claim that Viacom’s present use of “Paladin”

would violate this “new” law, not “old.” pre-1975, legal

doctrine. Hence, the fact that the behavior of CBS

(Viacom’s predecessor) was lawful before 1975 tells us

nothing about Viacom's similar behavior today

DeCosta finds these “new” legal principles in an area

of trademark law called “reverse confusion,” an area in

All

which a plaintiff claims that the public will confusedly

think that the plaintiff's product emanates in some way

from the defendant, rather than the (more ordinary) con

trary. An imaginary example may help explain the con

cept.

Suppose that Tom, in 1970, estal hed a knife com

pany, which used the trademarked name “SupR-Chop

per.” Later, say, in 1975, Mary established an electric

kitchen-blender company, and she used the same “SupR

Chopper” name on her kitchen-blenders. In 1980, Tom

sues Mary. To win, Tom must show “confusion.” In a

traditional trademark confusion case, Tom will claim that

Mary’s kitchen-blender customers may confusedly think

that he, Tom, has expanded into the kitchen-blender busi

ness, either directly or by “sponsoring” (i.e., authorizing)

Mary to use the “SupR-Chopper” name. If they think that

he, Tom, makes (or sponsors) the kitchen-blender, their

dissatisfaction with Mary’s kitchen-blenders may harm

the reputation of Tom’s knives; or, even if Mary makes a

fine product, insofar as her customers are moved to buy

Mary’s product because they associate Tom with Mary’s

product, they thereby permit Mary to take a “free-ride”

on the work and investment that Tom made in order to

develop a positive image for the name “SupR-Chopper

See. e.g., S.C. Johnson & Son, Inc. v. Johnson, 175 F.2d 176,

180 (2d Cir.), cert. denied, 338 U.S. 860 (1949) (recognizing

trademark owner’s legitimate claim to protection from

“the possibility that the trade practices of the second user

may stain the owner’s reputation in the minds of his

customers”); Triangle Publications, Inc. v. Rohrlich, 167 F.2d

969, 972 (2d Cir. 1948) (prohibiting defendant’s attempt to

Al2

profit from “the erroneously supposed sponsorship of the

plaintiff”).

The less typical, “reverse confusion,” case involves

somewhat different circumstances. In such a case, Tom is

worried that his knife customers will wrongly think that

Mary makes, or “sponsors” his, Tom’s, kitchen knives

(not that he makes Mary’s blenders). This “reverse confu-

sion,” just like ordinary confusion, may hurt Tom. If

Mary’s kitchen-blenders work badly, for example, Tom’s

potential customers may decide that Tom’s knives come

from a poorly managed company, and they may hesitate

to buy them. See. e.g., Plus Products v. Plus Discount Foods,

Inc., 722 F.2d 999, 1003-04 (2d Cir. 1983) (recording plain-

tiff’s concern that reverse confusion might lead to plain-

tiff’s “reputation for high quality merchandise” becoming

“tarnished because of [defendant’s] bargain basement,

no-frills image”); Banff, Ltd. v. Federated Dep't Stores, Inc.,

841 F.2d 486, 490 (2d Cir. 1988) (similar).

The problem for DeCosta is that, as illustrated by this

simplified example, “reverse confusion” is nothing par-

ticularly new. The principal trademark statute does not

speak of “ordinary,” or “reverse,” confusion. It refers

simply to copying that is “likely to cause confusion,”

without dividing confusion into types. 15 U.S.C.

§ 1114(1). It protects the holder from the harm that confu-

sion might cause, without specifying whether that harm

flows from a copier taking advantage of the holder's

“good will,” or from the copier potentially reducing the

value of the mark, say by associating the holder with the

copier’s own “bad” name. The leading case on the sub-

ject, Big O Tire Dealers, Inc. v. Goodyear Tire & Rubber Co.,

561 F.2d 1365, 1371 (10th Cir. 1977), cert. dismissed, 434

Al3

U.S. 1052 (1978), decided two years after our decision in

DeCosta II, made absolutely clear that a trademark holder

could base a claim on such “reverse confusion.” But, in

doing so, the court did not suggest that its holding repre-

sented a totally new, or novel, principle. The jury instruc

tion which it upheld followed the language of § 1114(1)

See id. at 1371. And, Big O reasserted a principle set forth

in a case that DeCosta invoked at length in DeCosta |

namely, International News Services v. Associated Press, 248

U.S. 215 (1918). In that case, in addition to deciding that

the defendant had unlawfully misappropriated the news

product of the plaintiff’s investigations, the Court found

a wrongful and “significant... false representation” that

that news product was derived from defendant's own

work. Id. at 242. Justice Holmes’ concurrence rested

entirely on the “false representation” aspect, which he

viewed as unfair competition:

The ordinary case [of unfair competition] is pal

ming off the defendant’s product as the plain

tiff’s, but the same evil may follow from the

opposite falsehood — from saying, whether in

words or by implication, that the plaintiff's

product is the defendant’s, and that is what

has happened here.

Id. at 247; see also Banff, 841 F.2d at 490 (observing that

trademark law’s traditional objectives, concerned with

ensuring that good will remains attached to those who

earn it, are equally implicated in “reverse” and “non-

reverse” confusion cases). DeCosta cannot therefore claim

that the principle (that trademark law protects against a

buyer’s being led to believe, wrongly and harmfully, that

the copier is the source of the holder’s product) was

Al4

unavailable to him or that he was not aware of it in his

initial case.

DeCosta’s more plausible claim is that the law of

“reverse confusion” has itself undergone significant

expansion since 1975. Several dicta in the Second Circuit

suggest that a plaintiff, claiming reverse confusion, can

recover for harm suffered, not because the buying public

may wrongly believe that the defendant makes or spon-

sors the plaintiff’s product, but simply because the public

wrongly believes that the plaintiff copied the defendant's

name. See Banff, 841 F.2d at 490; Lobo Enters., Inc. v.

Tunnel, Inc., 693 F. Supp. 71, 77 (S.D.N.Y. 1988); PAF S.rl.

v. Lisa Lighting Co., 712 F. Supp. 394, 410 (S.D.N.Y. 1989);

W.W.W. v. Gillette, 23 U.S.P.Q0.2d at 1615. To return to our

example, it is as if Tom could win his trademark case

even if everyone knows that Tom and Tom's knife com-

pany have nothing whatsoever to do with Mary’s

kitchen-blenders. Tom might still win because the public

might wrongly think that Mary thought of the “SupR-

Chopper” name first and Tom copied her idea for his

trademark. If the public wrongly thought that Tom

“pirated” the name, they might think less well of Tom,

who would thereby suffer a harm to his good reputation.

Were this theory the law, Tom might win a trademark

case against Mary, even if Mary used the “SupR-Chop-

per” name to label a product that nobody thought had

anything whatsoever to do with kitchen knives, say, heli-

copters (called “SupR-Choppers”), for the public still

might wrongly believe Tom a “pirate.”

We agree with DeCosta that one can find dicta, more

recent than 1975, that seem to offer support for such a

theory. And, we also agree that such a theory might have

Al15

offered him a basis for success, had he known of its

availability before 1975. The fatal problem for DeCosta in

respect to this “change in the law,” however, lies in our

view that this change is not sound law. We find that it

does not correctly state the law of trademarks

Our reasons for this conclusion are several. First, to

adopt this theory would undermine an important limita

tion central to the law of trademarks, the limitation of

trademark protection to the protection of marks as used

on particular goods to identify their source or sponsor

See United Drug Co. v. Rectanus Co., 248 U.S. 90, 97 (1918)

(trademark rights are not “right[s] in gross”). As the

Supreme Court wrote many years ago, in Hanover Milling

Co. v. Metcalf, 240 U.S. 403, 415 (1916)

[W]here two parties independently are employ

ing the same mark .. . in separate markets

wholly remote the one from the other, the ques

tion of prior appropriation is legally insignifi

cant, unless at least it appear that the second

adopter has selected the mark with some design

inimical to the interests of the first user, such as

to take the benefit of the reputation of his goods,

to forestall the extension of his trade, or the like

Thus, at present the law often permits a person to take a

pre-existing name or mark and use it on a different prod

uct in a different market. See. e.g., McGregor-Doniger, Ini

v. Drizzle. Inc., 599 F.2d 1126 (2d Cir. 1979) (allowing

manufacturer of expensive women’s coats to use trade

mark “Drizzle,” despite prior registration of “Drizzler

mark for plaintiff's cheaper golf jackets); King Research

Inc. v. Shulton, Inc., 454 F2d 66 (2d Cir. 1971) (“Ship

Shape” on hairspray did not infringe registered “Ship

Alo

Shape” trademark for comb and brush cleaners). If

“falsely being thought a pirate” were an actionable harm,

no one could safely use a mark ever previously used by

another, no matter how different the product, place of

sale, or class of buyer. Mary the helicopter maker, for

example, would have to make certain that no small com

pany anywhere had used the name “SupR-Chopper” on

any product before she attached the name to her helicop

ter product, lest some of, say, Tom’s knife customers

believe that she, not Tom, had had the idea first. The

specter of resulting lawsuits, inhibitions on the use of

names, and a reversal of present presumptions favoring

linguistic freedom (in different fields) cautions against

what weuld seem a fairly radical change in the law

Second, other, non-trademark law offers specifically

tailored protection against the most obvious harms that

may befall the falsely labeled “pirate.” Copyright law, for

example, protects the initial users of certain names and

phrases against any copier. We have mentioned the possi-

bility that DeCosta might have obtained such protection,

at least for his calling card. See DeCosta |, 377 F.2d at 321

But, he did not do so.

A common law tort, the law against “commercial

disparagement” (also known as “injurious falsehood”),

may also protect a trademark holder against the false

implication that he has “pirated” the work of another,

where the defendant intends such harm. See, e.g., Public

Ledger v. New York Times, 275 F. 562, 565-66 (S.D.N.Y

1921), aff'd, 279 F. 747, cert. denied, 258 U.S. 627 (1922)

(allowing relief for defendant’s assertion that it had cop-

ied “with permission” from the London Times as dispar-

aging plaintiff's rights, if plaintiff could prove that, as

A | 7

defendant knew, plaintiff had — and advertised itself as

having — a contract with the London Times guaranteeing

it exclusive copying rights); Big ©, 561 F 2d at 1373-74

Both these areas of law, however, contain carefully

crafted conditions and limitations, designed to prevent

their becoming vehicles for unduly limiting the use of

words, phrases, and other forms of spee h where no

serious harm, in fact, will likely occur. See. e.g, copyright

law's “fair use” exemption, 17 USC. § 107; see also Big ©,

561 F.2d at 1373 (outlining the special requirements of

“commercial disparagement,” namely (1) false statement,

(2) malice, and (3) special damages) The existence of

these other carefully tailored types of protection also

cautions strongly against introducing, into trademark

law, a kind of overriding concept such as the ac tionable

harm of “falsely being thought a pirate,” which concept

could well upset the balance between those interests

favoring “protection” and those favoring free use and

dissemination — a balance carefully developed by legisla

tures, and slowly by courts, over Many years

Finally, the leading case about trademark “reverse

confusion,” Big O, supra, suggests that “commer lal dis

paragement” law, not traditional “trademark law, pri

vides proper legal relief for the harm of “falsely being

thought a pirate.” See id. at 1373-74. Insofar as the court

discusses this latter kind of harm, it does so in the context

of a “commercial disparagement” type of tort. Insofar as

the court discusses trademark “reverse confusion,

does so in the context of confusion about the source of the

product not the source of the name. The court does explain

why, in its view, trademark law does not limit recovery t

victims of “passing off.” And, in doing so, It says that

A18

otherwise, a large firm could simply take someone else’s

mark and develop a new “secondary meaning” for it. But,

nothing in this explanation suggests that “falsely being

thought a pirate” automatically produces recovery

For these reasons, insofar as the doctrine of “reverse

confusion” may be thought Significantly “new” (reverse

confusion about “piracy”), we do not accept it. Insofar as

we accept it (reverse confusion involving source or spon

sorship), we do not believe it is significantly new. Hence,

we do not believe that there are changes in the law here

that can overcome the effects of “collateral estoppel.”

Factual Changes

DeCosta argues that facts have changed since 1975

Hence, the issue of “confusion now” is Significantly dif

ferent than the issue of “confusion then.” And, “collateral

estoppel” does not bar its litigation. See Restatement (Se:

ond) of Judgments § 27, cmt. c. In the earlier cases DeCosta

proved that he presented the character “Paladin” at

rodeos and through various personal appearances. CBS

Presented the character “Paladin” in its television pro-

grams. This court held that few, if any, buyers of either

“product” (rodeo/personal appearances or television

Programs) would likely believe that either DeCosta or

CBS was the “source” of the other’s “service.” That is to

say, few, if any, television viewers were likely to believe

that DeCosta produced the TV programs and few, if any,

rodeo (or personal service) customers were likely to

believe that CBS provided the rodeo, or other personal,

appearances. The question is whether the factual] changes

A119

to which DeCosta now points are such that litigation of

the “confusion” question represents a significantly differ

ent factual issue. See id

After reviewing the record, we conclude that

DeCosta has not presented evidence of significantly dif

ferent circumstances for two reasons. First, much of his

evidence amounts to no more than added efforts to prove

the same “ultimate facts” he failed to prove the first time

Thus, DeCosta found several people (and produced sur

veys showing other people) who think he has something

to do with the CBS television program. He provided four

letters from persons who referred to him as “Paladin.” He

provided a witness who said he thought DeCosta was

impersonating the television program character. He intro

duced a newsletter that says he is “from the T.V. series.”

He testified that he had met people who thought he was

‘connected” with the TV series and was an ‘impersona

tor” oran “imposter.” One of his surveys said that about

half of the individuals shown his picture thought he was

connected with the TV series or that it was ‘sponsoring

him. And, he produced a “public relations” expert wit

ness who testified that people would be “confused

This evidence does not help DeCosta, however,

because, in context, it seems designed to prove the same

ultimate fact - “confusion” - that he failed to prove

before. As the Restatement of Judgments points out, when a

party has litigated such an “ultimate fact,” and failed

“new evidentiary facts may not be brought forward to

obtain a different determination of that ultimate fact.” [d

We simply do not see why this kind of evidence could not

have been provided the first time. Nothing in the record

convincingly explains why those who saw DeCosta when

A20

the Paladin television program was current would have

been any the less “confused” than those who now see

him when “Paladin” is the subject of old television

reruns.

Second, DeCosta provided evidence of his having

expanded his own activities since 1977. He says, for

example, that since that time, he has distributed 60,000

more calling cards (having distributed about 300,000

before 1977); 15,000 more photographs (having distrib-

uted about 20,000 before 1977); 15,000 bumper stickers,

and 2800 pens with a Paladin legend. He has made more

personal appearances at rodeos and ice cream stores, and

he appeared on two television talk shows and in one

television commercial. A picture of him in costume

appeared once ina horsebreeders’ magazine. And, he has

objected several times to others using slogans such as

“Have Cup, Will Travel” (by Dunkin Donuts) and “Have

Guns, Will Travel” (by the U.S. Air Force).

This evidence basically shows no more than the same

kind of activity in which DeCosta previously engaged.

And, we do not see how it can bring him outside the

“collateral estoppel” bar. Even were he to have provided

evidence of his own, far greater, expansion into, say, the

television business, that evidence would do him no good.

The litigated holding of “no confusion” in the initial

DeCosta cases amounts to a holding that DeCosta had no

legal right to exclude others from using his mark in the

field of television. Moreover, DeCosta has conceded that

CBS/Viacom has used the “Paladin” mark in that field

before, and after, he brought his initial cases. Further, the

record provides no evidence at all that, since 1977, CBS or

Viacom has used the mark in “bad faith,” i.e., with an

A21

intent or expectation of causing confusion or “forestalling

expansion under the mark by the prior user” (in a differ-

ent field) or harming DeCosta’s “reputation or good

will.” See Restatement (Third) of Unfair Competition § 19(a),

cmt. d & illus. 3 (Tent. Draft No. 2, 1990); GTE Corp. v.

Williams, 904 F.2d 536, 541 (10th Cir.), cert. dented, 111 S.

Ct. 557 (1990) (in assessing whether second user acted in

bad faith, “[t]he ultimate focus is on whether the second

user had the intent to benefit from the reputation or

goodwill of the first user.”); Triumph Hosiery Mills. Inc. v.

Triumph Int'l Corp., 308 F.2d 196, 200 (2d Cir. 1962) (simi-

lar); El Chico, Inc. v. El Chico Cafe, 214 F.2d 721, 726 (Sth

Cir. 1954) (similar); James M. Treece, “Security for Feder

ally Registered Mark Owners Against Subsequent Users,”

39 Geo. Wash. L. Rev. 1008, 1018 (1971) (mere knowledge

of the first user’s prior use should not be regarded as bad

faith in cases where “the second user [is] in fact remote

from the first user’s market [and] where consumers are

not confused”); cf. Mead Datu Central, Inc. v. Toyota Motor

Sales, U.S.A., Inc., 875 F.2d 1026, 1037 (2d Cir. 1989)

(Sweet, J., concurring) (in statutory dilution context, bad

faith “requires a showing that the junior user adopted its

mark hoping to benefit commercially from association

with the senior mark.”). Indeed, CBS/Viacom might rea

sonably have relied upon our prior final judgment as

holding that their activities did not cause “confusion” or

significantly harm “reputation or good will.” Cf. Restate

ment (Third) of Unfair Competition § 19, cmt. d (“Good faith

reliance by the subsequent user on an opinion of counsel

is also relevant.”).

All this being so, as far as the present case is con

cerned, it is CBS and Viacom who have the prior right to

A22

use the mark in television, not DeCosta. And, for that

reason, insofar as DeCosta’s expansion into television cre-

ates “confusion,” he has no legal basis for recovery. See

United Drug Co. v. Rectanus Co., 248 U.S. 90 (1918) (within

regional market, defendant first user in that market had

priority over plaintiff earlier user in a different region

who now sought to enter that market); Value House v.

Phillips Mercantile Co., 523 F.2d 424 (10th Cir. 1975) (same,

where plaintiff registered its mark after defendant had

begun to use its); compare Dawn Donut Co. v. Hart's Food

Stores, Inc., 267 F.2d 358, 360 (2d Cir. 1959) (plaintiff who

registered before defendants began to use their mark, and

had previously operated in defendants’ market and not

abandoned its mark in that market, retained priority); see

also Scott Paper Co. v. Scott's Liquid Gold, Inc., 589 F.2d

1225, 1231 (3d Cir. 1978) (“Priority depends not upon

which mark succeeds in first obtaining secondary mean-

ing but upon whether the plaintiff can prove by a prepon-

derance of the evidence that his mark possessed

secondary meaning [and, we add, that there was a poten-

tial likelihood of confusion] at the time the defendant com-

menced his use of the mark.”) (emphasis added).

Returning to our example, it is as if Tom, the kitchen

knife maker, sued Mary the helicopter manufacturer, and

a court determined that their use of the same name did

not create confusion. Suppose that Mary continues, in

good faith, to use the mark on her helicopters, but Tom

then expands into the helicopter business. At that point,

even if buyers now confuse the source of the two prod-

ucts (Tom’s helicopters and Mary’s helicopters), Tom can-

not recover from Mary, for it is Mary, not Tom, who has

the legally prior right to use the name in that field.

A23

DeCosta reminds us that, since findings as to likeli

hood of confusion can turn on the relation of the parties’

uses, a prior finding of no likelihood of confusion will not

always bar a subsequent action if circumstances of the

parties’ uses change. See Sarah Coventry, Inc. v. T. Sardelli

& Sons, Inc., 526 F.2d 20, 23 (1st Cir. 1975), cert. denied, 426

U.S. 920 (1976). The problem for DeCosta is that his

evidence does not show a significant change. And, in any

event, that change would do a plaintiff no good where it

consists of his expansion into a field where the record of

litigation indicates that the defendant has priority in

using the mark.

For these reasons, the judgment of the district court

Reversed.

A24

Victor De COSTA

VIACOM INTERNATIONAL, INC.

Civ. A. No. 89-0598-T.

United States District Court,

D. Rhode Island.

March 11, 1991.

Trademark infringement action was brought against

television program syndicator. On syndicator’s motion to

dismiss, the District Court, Torres, J., held that action was

not barred by res judicata or collateral estoppel.

Motion denied.

Mark J. Hagopian, Providence, R.I., for plaintiff.

Jeffrey Schreck, Robert Karmen, Providence, R.L.,

Robert M. Callagy, Mark A. Fowler, New York City, for

defendant.

MEMORANDUM AND ORDER

TORRES, District Judge.

This is an action by Victor DeCosta for infringement

of his trademark and/or service mark rights and for

unfair competition under both common law and the Lan-

ham Act (15 U.S.C. §§ 1114(1) and 1125(a)). The case is

presently before the Court on the motion of Viacom Inter-

national, Inc. (“Viacom”) to dismiss pursuant to

Fed.R.Civ.P.12(b)(6), or, in the alternative, for summary

judgment pursuant to Rule 56 on the grounds that the

A25

action is barred by the doctrines of res judicata, collateral

estoppel and/or laches.

BACKGROUND

DeCosta is a former rodeo performer. During the

1940’s, he conceived the idea of a western hero whom he

named “Paladin.”! DeCosta’s character had a mustache

and wore a black outfit that included a hat affixed with a

medallion. He also carried calling cards bearing facsim-

iles of a chess piece (i.e. a “knight”) and the slogan “Have

Gun Will Travel, Wire Paladin.” The chess piece logo was

imprinted on the holster of his six-shooter as well. In

addition, Paladin carried an antique derringer concealed

under his arm. Since 1947, DeCosta, as Paladin, has con-

tinuously appeared at rodeos, horse shows, parades and

charitable functions throughout the eastern United States

and California where he distributed his cards to specta-

tors.

In June of 1957, Columbia Broadcasting System, Inc.

(“CBS”) began televising a “western” series entitled

“Have Gun Will Travel,” starring a character called “Pal-

adin.” The television Paladin wore a black costume iden-

tical to that worn by DeCosta’s character, including the

medallion on his hat. CBS’s Paladin also carried a calling

card bearing the words “Have Gun Will Travel, Wire

Paladin.” Both the card and his holster were embossed

1 For a more detailed description of the origins of the Pal-

adin character, see Columbia Broadcasting Sys. v. DeCosta, 37;

F.2d 315. 316-17 (1st Cir.1967) [hereinafter “DeCosta 1]

A26

with the same chess piece logo used by DeCosta’s charac-

ter. Furthermore, the pilot episode of the CBS series

included a scene in which the television Paladin used a

concealed derringer to win a gunfight.

After watching these programs, DeCosta apparently

concluded that not all of the television bandits were

portrayed in the series. Accordingly, after an unexplained

delay of eleven years, he applied to the Patent and Trade-

mark Office (the “PTO”) for registration of his mark. At

the same time, he sued CBS, one of its subsidiaries that

licensed the series and the corporation owning several

television stations that broadcast the show. The suit

alleged misappropriation of his idea, common law trade-

mark and/or service mark infringement and unfair com-

petition. The PTO deferred action on DeCosta’s

application pending the outcome of that litigation.

The misappropriation count was severed and tried

before a jury and another judge of this Court. CBS pre-

sented extensive testimony from writers and network

executives responsible for the series who explained the

marked similarity between the television Paladin and

DeCosta’s character as purely coincidental. The jury did

not believe that testimony and returned a verdict for

DeCosta in the amount of $150,000.00 Judgment was

entered on that verdict, and the defendant appealed.

—— The First Circuit reversed. Columbia Broadcasting Sys.

v. DeCosta, 377 F.2d 315, 321 (1st Cir.1967) [hereinafter

“DeCosta I}. Although it shared the jury’s skepticism of

CBS’s story and characterized the defendants as

“pirates,” the Court found that simply copying another's

creation is not, by itself, actionable. The Court recognized

A27

that appropriating the value attached to a creation by

exploiting its “secondary meaning” may constitute a form

of unfair competition (i.e. the tort of “passing off”) if it

misleads the public into thinking that the resulting prod-

uct was created by the plaintiff. However, the Court

noted that the unfair competition count had not been

submitted to the jury.

As to the misappropriation count the Court found it

lacking in merit based upon its reading of Sears, Roebuck

& Co. v. Stiffel Co., 376 U.S. 225, 84 S.Ct. 784, 11 L.Ed.2d

661 (1964) and Compco Corp. v. Day-Brite Lighting, Inc., 376

U.S. 234, 84 S.Ct. 779, 11 L.Ed.2d 669 (1964) (hereinafter

“Sears-Compco”]. Specifically, the Court interpreted Sears-

Compco to mean that Art. I, § 8, cl. 8 of the United States

Constitution, which confers copyright power on Con-

gress, preempts any state efforts to protect writing and

other concrete, describable manifestations of intellectual

creation within the scope of that power and leaves those

creations in the public domain unless they are protected

by federal copy-right laws. DeCosta I, 377 F.2d at 319. The

Court found that DeCosta’s creation failed to qualify for

protection under the copyright laws as an unpublished

work (i.e. one that had not been abandoned to public use

by publication) because his creation was completely

embodies in the cards that he freely distributed to others.

The Court concluded that such distribution constituted

publication of DeCosta’s work and that by failing to

lic domain where it could be freely copied. /d. at 321.

On remand, the remaining counts for common law

trademark infringement and unfair competition were pre-

sented, by agreement, to a Magistrate for determination

A28

on cross motions for summary judgment. Relying on the

Supreme Court's intervening decision in Goldstein v. Call-

fornia, 412 U.S. 546, 93 S.Ct. 2303, 37 L.Ed.2d 163 (1973),

the Magistrate held that those claims were not preempted

under Sears-Compco. He went on to find that the defen-

dants had infringed upon DeCosta’s marks and had

unfairly competed by falsely advertising the marks to be

their own. Accordingly, the Magistrate entered judgment

requiring the defendants to account for what amounted

to $12 million in profits. DeCosta v. Columbia Broadcasting

Sys., Civil Action No. 3130 (D.R.I. Apr. 15, 1974).

Once again, CBS appealed, and once again the First

Circuit reversed. DeCosta v. Columbia Broadcasting Sys.,

520 F.2d 499 (1st Cir.1975) [hereinafter “DeCosta II]. The

Court endorsed the Magistrate’s holding that, under

Goldstein, the states remain free to “grant to authors the

‘exclusive Right to their respective Writings’” and to

“protect businesses in the use of their trademarks, labels,

or distinctive dress in the packaging of goods so as to

prevent others, by imitating such markings, from mis-

leading purchasers as to the source of such goods.” Id. at

510-11 (quoting Goldstein, 412 U.S. at 560, 93 S.Ct. at 2311,

Sears-Compo, 376 U.S. at 232, 84 S.Ct. at 789). The Court

acknowledged that it may have erred in holding the

misappropriation claim was preempted but expressed

unwillingness to reopen the matter saying:

We face a dilemma, Goldstein tells us that we were,

in our interpretation of the preemptive reach of the

we decided in DeCosta I has settled, for this case,

the issue of misappropriation.

Id. at 510.

A29

The Court then focused on what it identified as the

critical issue underlying the trademark infringement and

unfair competition counts, namely, “whether there was a

deceiving of the public as the result of defendants’

actions” or whether “the defendant's use of a trademark

similar to the plaintiff's created a likelihood of confu-

sion.” DeCosta II, 520 F.2d at 513 (citation omitted). It

found nothing to support a finding that the defendants

“passed off” their Paladin or program as the plaintiff's

creations. Id. Nor did it find the identical nature of the

marks used by plaintiff and defendants sufficient to

establish a likelihood of confusion. Id. at 513-15. There-

fore, the Court found no basis for liability for common

law service mark infringement or unfair competition and

accordingly reversed and remanded with instructions to

enter judgment for the defendants.

After DeCosta unsuccessfully petitioned the United

States Supreme Court for a writ of certiorari, the PTO

activated his application for registration of his mark. That

application was vigorously opposed by CBS which, in the

meantime, had assigned its syndication rights to Viacom,

a “spinoff” corporation that licenses local television sta-

tions to broadcast reruns of the series. CBS’s opposition

was based on the claim that registration would adversely

affect its agreement with Viacom and cause it economic

injury. Despite that opposition, the PTO granted

DeCosta’s application in 1975.2 It referred to CBS's

2 DeCosta’s registered mark consists of the familiar knight

chess piece surrounded by the phrase “Have Gun Will Travel”

and, below these, the phrase “Wire Paladin,” see Columbia Broad

casting Sys. v. DeCosta, 192 U.S.P.Q. 453, 454 (P.T.O. Trademark

Trial and Appeal Bd. 1976).

A30

opposition as “a bald-faced argument that [CBS], already

branded a pirate, should be allowed to make off with

additional plunder unhindered by any inconvenience that

might result from the recognition of [DeCosta’s] lawful

rights.” Columbia Broadcasting Sys. v. DeCosta, 192 U.S.P.Q.

453, 456 (P.T.O Trademark Trial and Appeal Bd. 1976).

The instant complain’ charges that, since 1975

Viacom has licensed the “Have Gun Will Travel” series

for broadcast throughout the United States with full

knowledge of DeCosta’s federal registration and without

his permission. It contains five counts: Count | alleges

federal trademark infringement in violation of 15 U.S.C.

§ 1114(1); Count II alleges misappropriation and common

law trademark infringement; Count III alleges unfair

competition in violation of 15 U.S.C. § 1125(a); Count IV

alleges common law unfair competition; and Count V

alleges negligent or intentional infliction of emotional

distress. Viacom characterizes this suit as nothing more

than a rehash of matters long since determined and seeks

dismissal or summary judgment on the grounds that

plaintiff's claims are barred by the doctrines of res judi-

cata and collateral estoppel and that laches precludes

DeCosta from maintaining this action.

DISCUSSION

1. The Summary Judgment Standard

Since affidavits have been filed, the Court will treat

Viacom’s motion as one for summary judgment. In pass-

ing on that motion, the Court must bear in mind that

summary judgment is appropriate only when “there is no

A31

genuine issue as to any material fact” and “the moving

party is entitled to a judgment as a matter of law.”

Fed.R.Civ.P. 56(c). In making that determination, the

Court must view the evidence in the light most favorable

to the nonmoving party. United States v. Diebold, Inc., 369

U.S. 654, 655, 82 S.Ct. 993, 994, 8 L.Ed.2d 176 (1962) (per

curiam); Garside v. Osco Drug, Inc., 895 F.2d 46, 48 (1st Cir.

1990); United States Fire Ins. Co. v. Producctones Padosa,

Inc., 835 F.2d 950, 953 (Ist Cir.1987).

However, the mere assertion that there is some fact in

dispute is insufficient to defeat a motion for summary

judgment. The disputed fact must be material and the

dispute must be genuine. A fact is deemed material if,

under applicable substantive law, it may affect the out

come of the case. Moreover, a dispute is considered genu

ine only if there is adequate evidence to require

resolution of the disagreement at trial. Unsupported alle-

gations are insufficient to create a genuine dispute. Once

the movant has presented probative evidence establishing

its entitlement to judgment, the party opposing the

motion must set forth specific facts demonstrating that

there is a genuine issue for trial. See Celotex Corp

Catrett, 477 U.S. 317, 323-25, 106 S.Ct. 2548, 2552-53, 91

L.Ed.2d 265 (1986); Anderson v. Liberty Lobby, Inc., 477 US

242, 247-50, 106 S.Ct. 2505, 2509-11, 91 L.Ed.2d 202 (1986);

Lipsett v. University of P.R., 864 F.2d 881, 894-95 (lst

Cir.1988).

I]. Res Judicata and Collateral Estoppel

The doctrines of res judicata and collateral estoppel

are designed to establish a point at which litigation comes

A32

to an end. They serve three basic purposes: (1) promoting

judicial economy by preventing repetitive litigation; (2)

establishing certainty and respect to judgments; and (3)

protecting the party relying on the prior adjudication

from vexatious litigation. See generally 18 C. Wright, A.

Miller & E. Cooper, Federal Practice and Procedure § 4403,

at 11-22 (1981 & Supp.1990). The doctrines reflect the

principle that once a case has been heard and decided, a

litigant is not entitled to an “encore.” 1B J. Moore, Moore's

Federal Practice 4 0.405[1], at 186 (1988) [hereinafter

“Moore’s”]. On the other hand, neither res judicata nor

collateral estoppel bars a party from seeking to vindicate

rights or litigate issues not encompassed by the prior suit.

DeCosta implies that he should not be prevented

from bringing this action because DeCosta | and DeCosta I!

were wrongly decided. As support for that contention, he

cites at least one treatise criticizing those decisions. R.

Callmann, Unfair Competition, Trademarks and Monopolies

§ 15.17, at 55-56 (4th ed. Supp.1983). Such an argument is

inapposite for two reasons. First, res judicata and collat-

eral estoppel are not mere technical rules of convenience.

Rather, they are expressions of a fundamental public

policy favoring repose for both society and litigants.

Moore's 4 0.405[1], at 186. Consequently, their appli-

cability is not affected by the equities of the claim at

issue. They represent a determination that claims and/or

issues already litigated and decided should be barred no

matter how meritorious they appear to be. Jeter v. Hewitt

63 U.S. (1 How.) 352, 364, 16 L.Ed. 345 (1859).

Second, no matter how vehemently the plaintiff or

others may disagree, the First Circuit's holdings in

A33

DeCosta | and DeCosta II are binding on this Court. There-

fore, the only issue presented is whether the require-

ments of res judicata and/or collateral estoppel have

been satisfied.

The principles governing res judicata (i.e. claim pre

clusion) and collateral estoppel (i.e. issue preclusion) are

set forth in Section 17 of the Restatement (Second) of Judg

ments as follows:

a valid and final personal judgment is conclu-

sive between the parties, except on appeal or

other direct review, to the following extent:

(2) If the judgment is in favor of the defendant,

the claim is extinguished and the judgment bars

a subsequent action on that claim (see § 19),

(3) A judgment in favor of either the plaintiff

or the defendant is conclusive, in a subsequent

action between them on the same or a different

claim, with respect to any issue actually litigated

and determined if its determination was essential to

that judgment (see § 27).

Restatement (Second) of Judgments § 17 (emphasis added)

There is no question that CBS and Viacom are in

privity with one another for res judicata and/or collateral

estoppel purposes. The established rule is that a judg-

ment in favor of a predecessor in interest is conclusive in

subsequent litigation between the successor in interest

and the same adversary. See, e.g., Behrens v. Skelly, 173

F.2d 715, 717-18 (3d Cir.1949); Moore’s 4 0.411[12], at

485-86; see also Restatement (Second) of Judgments § 44

Because CBS assigned its syndication rights to Viacom

preclusion of DeCosta’s right to sue CBS would also bar

A34

him from suing Viacom with respect to the same claims

and/or issues litigated in DeCosta | or DeCosta II.

A. Res Judicata (Claim Preclusion)

1. The Federal Trademark Infringement and Unfair

Competition Claims (Counts I and II)

As previously noted, the doctrine of res judicata pro-

vides that an adverse judgment bars another action by

the plaintiff against the defendant on the “same claim.”

Restatement (Second) of Judgments § 19. Unlike collateral

estoppel, identity of issues is not required. Consequently,

even though DeCosta II did not decide DeCosta’s federal

trademark infringement or unfair competition claims, he

may be barred from asserting them in this action if they

constitute the “same” claims as the common law claims

previously litigated.

For purposes of delineating the boundaries of a claim

for res judicata purposes, Rhode Island follows the prin-

ciples set forth in the Restatement (Second) of Judgments.

See Capraro v. Tilcon Gammino, Inc., 751 F.2d 56, 58 (Ist

Cir.1985); Manego v. Orleans Bd. of Trade, 773 F.2d 1, 5 (1st

Cir.1985), cert. denied, 475 U.S. 1084, 106 S.Ct. 1466, 89

L.Ed.2d 722 (1986); Gonsalves v. Alpine Country Club, 563

F.Supp. 1283, 1287 (D.R.1.1983), aff'd, 727 F.2d 27 (st

Cir.1984). One of those principles is that, in determining

whether identity of claims exists, the relevant inquiry is

whether the claims arise from a common nucleus of facts

or seek redress for the same injury. That approach is

codified in § 24 of the Restatement which adopts what is

termed a “transactional” test. Section 24 provides that:

A35

(1) [T]he claim extinguished includes all rights

of the plaintiff to remedies against the defen-

dant with respect to all or any part of the trans-

action, or series of connected transactions, out

of which the action arose.

Restatement (Second) of Judgments § 24(1).

Consequently, a plaintiff may not get additional bites

of the apple by demanding multiple forms of relief for the

same injury or by cloaking a single claim in a variety of

legal theories. Res judicata cannot be circumvented by

“splitting” one cause of action into a multiplicity of suits.

Restatement (Second) of Judgments § 24 comment c; Moore's

q 0.410[1].

On the other hand, res judicata does not bar a plain

tiff from seeking redress for post-judgment acts even

though similar injuries and/or legal theories are asserted

in both suits. Thus the Restatement recognizes that events

taking place after the prior litigation is concluded may

“comprise a transaction which may be made the basis of a

second action not precluded by the first.” Restatement

(Second) of Judgments § 24 comment f

Therefore, in this case, the issue is whether Viacom's

syndication of the “Have Gun Will Travel” series after

DeCosta registered his mark is merely part of the transac-

tion that was the subject of the prior suit or whether it is

sufficiently distinct from the conduct giving rise to the

previous litigation that it may be fairly characterized as a

separate transaction.

Viacom asserts that the two suits are based on the

same transaction because licensing the series for rebroad-

cast did not involve any conduct different from that

A36

already found by the First Circuit to be lawful. There are

several flaws in that argument. First, DeCosta | and

DeCosta II held only that CBS was not liable for broadcast-

ing the “Have Gun Will Travel” series during the period

before the suit was brought. Those decisions did not vest

CBS with any property interest in DeCosta’s creation or

any license to continue exploiting it even after he regis-

tered his mark.

In addition, Viacom’s subsequent actions are not so

similar or interrelated to CBS’s that they should be

deemed part of the same transaction underlying DeCosta |

and DeCosta II. Viacom’s syndication of the series

occurred after the original broadcasts that were the sub-

ject of the previous suit had been completed. Therefore,

the two clusters of conduct are at least temporally dis-

tinct. In other words, this case is not based on acts com-

mitted prior to the antecedent litigation and selectively

omitted from it. Rather, it is a case based on acts that the

defendant had not yet committed when the first suit was

litigated.

Moreover, the federal trademark infringement rights

that DeCosta seeks to vindicate in this case did not exist

when DeCosta | and DeCosta II were decided because he

did not register his mark until after that time. Conse-

quently, DeCosta cannot be said to have impermissibly

“split” his cause of action by merely advancing a new

theory of recovery. DeCosta’s registration of his mark

vested him with new rights under the Lanham Act that

he did not possess when the previous suit was decided.

Since those rights and the conduct allegedly violating

them both postdate DeCosta I and DeCosta II, the federal

A37

claims are not part of the same transaction underlying the

prior litigation.

2. The Common Law Trademark Infringement and

Unfair Competition Claims (Counts Il and IV)’

Federal registration of DeCosta’s mark is not a sine

qua non of his common law claims for trademark

infringement and unfair competition. However, like their

federal counterparts, those claims are based on acts com-

mitted after DeCosta | and DeCosta II were decided.

Therefore it is difficult to see how they can constitute part

of the claims asserted in that litigation.

The difficulty is compounded by the fact that, as will

be discussed infra, the intervening registration of

DeCosta’s mark created a “likelihood of confusion” that

was lacking when the series was originally aired by CBS

In short, since Viacom syndicated the “Have Gun

Will Travel” series after DeCosta | and DeCosta Il were

litigated and after the legal landscape had been altered,

its actions cannot be viewed as part of the “same” trans

action giving rise to the prior suit. Therefore, if there 1s

any bar to prosecuting them, it must emanate from the

doctrine of collateral estoppel rather than res judicata

> The Court need not deal with the emotional distress claim

contained in Count V because it does not appear to be an inde

pendent substantive claim. As the Frist Circuit indicated in

DeCosta II, emotional distress is merely a theory regarding the

damages sought and requires a predicate of liability to support

it. Consequently, it is dependent upon the substantive claims

asserted in Counts | through IV. 520 F.2d at 515.

A38

B. Collateral Estoppel (Issue Preclusion)

The doctrine of collateral estoppel is embodied in

§ 27 of the Restatement which provides:

When an issue of fact or law is actually litigated

and determined by a valid and final judgment,

and the determination is essential to the judg-

ment, the determination is conclusive in a sub-

sequent action between the parties, whether on

the same or a different claim.

Restatement (Second) of Judgments § 27.

Viacom points out that likelihood of confusion is an

essential element of the trademark infringement and

unfair competition claims and that the Court in DeCosta I!

specifically found the evidence insufficient to establish

that element. Accordingly, Viacom argues that DeCosta is

collaterally estopped from asserting those claims.

That argument fails to take into account the intervening

events that have materially altered the legal principles

governing resolution of the likelihood of confusion issue.

The First Circuit’s holding in DeCosta Il was predicated

on what it found to be a “paucity” of evidence that the

public would be confused as to the origin of the Paladin

character. Since then, DeCosta has registered his mark

which establishes a rebuttable presumption of likely con-

fusion that did not exist when DeCosta I] was decided. In

American Heritage Life Ins. Co. v. Heritage Life Ins. Co., 494

F.2d 3 (Sth Cir.174), the Fifth Circuit explained the effect

of registration as follows:

Under the [Lanham] Act, registration is prima

facie evidence of the registrant's ownership of

the mark and of the registrant’s exclusive right

A39

to use the mark in commerce in connection with

the services specified in the registration certifi-

cate. Thus registration is sufficient to establish

prima facie (1) the required prior use (2) of a

registrable mark (3) which is likely to be con-

fused with another's use of the same or a similar

mark.

American Heritage, 494 F.2d at 10 (citations omitted).

DeCosta’s registration and apparent use of his mark

since 1975 also impacts the “likelihood of confusion”

calculus in another way. One of the factors to be consid-

ered in determining likelihood of confusion is the

strength of the plaintiff's mark. Pignons S.A. de Mecanique

de Precision v. Polaroid Corp., 657 F.2d 482, 487 (Ist

Cir.1981). Use of a mark for five consecutive years subse;

quent to registration makes the mark incontestable. Vol-

kswagenwerk Aktiengesellschaft v. Wheeler, 814 F.2d 812, 820

(ist Cir.1987) (citing 15 U.S.C. §§ 1065, 1115(b)). Incon-

testability, in turn, creates a presumption that the mark is

a relatively strong one for purposes of the likelihood of

confusion analysis. Dieter v. B & H Ind., 880 F.2d 322 (11th

Cir.1989), cert. denied, ER , 101 SAR. 369, Tie

L.Ed.2d 332 (1990); Wynn Oil Co. v. Thomas, 839 F.2d 1183

(6th Cir.1988); see Keds Corp. v. Renee Intern. Trading Corp.,

888 F.2d 215 (1st Cir.1989). As the Dieter court stated:

We hold that incontestable status is a factor to

be taken into consideration in likelihood of con-

fusion analysis. Because [the plaintiff's] mark is

incontestable, then it is presumed to be at least

descriptive with secondary meaning, and there-

fore a relatively strong mark.

Dieter, 880 F.2d at 329.

A40

These factors constitute precisely the kinds of

“[c]hange in applicable legal context” that the Restate

ment recognizes as exceptions to the general rule of issue

preclusion. See Restatement (Second) of Judgments § 28 com

ment c. Thus, § 28 provides:

Although an issue is actually litigated and

determined by a valid and final judgment, and

the determination is essential to the judgment,

relitigation of the issue in a subsequent action

between the parties is not precluded in the fol

lowing circumstances:

(4) The party against whom preclusion is

sought had a significantly heavier burden of

persuasion with respect to the issue in the initial

action than in the subsequent action; the burden

has shifted to his adversary; or the adversary

has a significantly heavier burden than he had

in the first action.

Restatement (Second) of Judgments § 28(4)

Comment f explains the rationale for that exception

as follows:

f. Differences in the burden of persuasion (Subsec-

tion (4)). To apply issue preclusion in the cases

described in Subsection (4) would be to hold, in

effect, that the losing party in the first action

would also have lost had a significantly differ-

ent burden been imposed. While there may be

many occasions when such a holding would be

correct, there are many others in which the

allocation and weight of the burden of persua-

sion (or burden of proof, as it is called in many

jurisdictions) are critical in determining who

should prevail. Since the process by which the

—

A4l

issue was adjudicated cannot be reconstructed

on the basis of a new and different burden,

preclusive effect is properly denied.

Restatement (Second) of Judgments § 28 comment t

The Restatement also furnishes the following exam

ple:

10. A brings an action against B for injuries

incurred in an automobile accident involving

cars driven by A and B. Under the governing

law, A has the burden of proving his freedom

from contributory negligence. Verdict and judg

ment are given for B on the basis that A has not

sustained that burden. In a subsequent action by

B against A for injuries incurred in the same

accident, the issue of A’s negligence (on which B

now has the burden of persuasion) is not con

cluded by the first judgment.

Restatement (Second) of Judgments § 28 comment f, illustra

tion 10.

In a nutsheil, although the issue in the prior litigaton

and this case is nominally the same, the context in which

it arises is materially different and that difference could

easily affect the outcome in this case. The presumptions

regarding likelihood of confusion and the strength of

DeCosta’s mark are significant new elements in the equa-

tion that did not exist when DeCosta I and DeCosta Il were

decided. Together, they so alter the mix of factors bearing

on likelihood of confusion that the prior resolution of the

issue does not bar DeCosta’s trademark infringement or

unfair competition claims in this case.

Nor does the prior litigation bar the misappropria-

tion claim contained in Count II. As previously noted,

A42

collateral estoppel only applies to issues “actually liti-

gated and determined” in the previous suit. In DeCosta 1,

the First Circuit never reached the question of whether

DeCosta had proved the elements of his substantive mis-

appropriation claim. Instead, it rejected that claim on the

ground that the common law basis for it had been pre-

empted by Art. I, § 8 cl. 8 of the United States Constitu-

tion, DeCosta I, 377 F.2d at 319, an interpretation that it

later acknowledged to be “over-inclusive.” DeCosta II, 520

F.2d at 510.

In sum, the issues presented in this case are either

different from those addressed in DeCosta | and DeCosta I!

due to intervening changes in the applicable legal frame-

work or they are issues that were not previously litigated

and determined. Accordingly, the plaintiff is not collat-

erally estopped from maintaining this action.

Ill. Laches

Viacom’s final argument is that the instant action is

barred by laches. Specifically, it cites DeCosta’s long

delay in bringing suit and the substantial time and effort

it has expended in licensing the series for rebroadcast.

Laches is an affirmative defense that must be proven

by the party asserting it. Fed.R.Civ.P. 8(c). Under Rhode

Island law, it requires a showing of unexcused failure to

assert a known right coupled with prejudice to the

adverse party. Rodrigues v. Santos, 466 A.2d 306, 311 (R.I.

1983). The mere passage of time is, by itself, insufficient

to invoke laches. The delay must result in such an unfair

disadvantage to the defendant that the plaintiff should be

estopped from asserting his claim. Gaglione v. Cardi, 120

A43

R.1. 534, 388 A.2d 361, 364 (1978). What constitutes laches

is ordinarily a question of fact to be determined in light

of the circumstances of the particular case. Pukas v. Pukas,

104 R.1. 542, 247 A.2d 427, 429 (1968); Arcand v. Haley, 95

R.I. 357, 187 A.2d 142, 146 (1963).

In order to establish the defense of laches in a trade

mark action, the defendant must prove each of the fol-

lowing elements:

1. a substantial unexplained delay by the

plaintiff prior to filing suit;

Awareness by the plaintiff that the disputed

trademark was being infringed; and

3. A reliance interest resulting from the defen-

dant’s continued development of goodwill

during the period of delay.

NAACP v. NAACP Legal Defense & Educ. Fund, 753 F.2d

131, 137 (D.C.Cir.1985).

The defense of laches is a creatuse of equity. Jonklaas

v. Silverman, 117 R.I. 691, 370 A.2d 1277, 1280 (1977);

Grand d’Hauteviile v. Montgomery, 92 R.I. 453, 169 A.2d

916, 918 (1961). Consequently, the defendant’s reliance

must be justifiable in the sense that the defendant must

have acted with a reasonable expectation that its conduct

was permissible. See Pukas, 247 A.2d at 429-430 (change in

condition must be in good faith and laches applies if

defendant relies in good faith on prior court decree even

though decree turned out to be in error). To put it another

way, laches may not be used to shield a party from the

consequences of conduct it knows to be wrongful. Baker

Simmons Co., 307 F.2d 458, 466 n. 4 (Ist Cir.1962) (laches

does not apply if defendant had calculated design to

A44

trade upon plaintiff's reputation and misappropriate

goodwill in plaintiff’s mark).

In this case, Viacom has done nothing more than cite

the lapse of time and the efforts it has expended in

promoting DeCosta’s idea. It has failed to present any

evidence establishing a good faith belief that it was justi-

fied in continuing to exploit DeCosta’s mark. On the

contrary, CBS’s opposition to the registration of that mark

on the ground that it would interfere with Viacom's syn-

dication rights is powerful evidence indicating knowl-

edge that rebroadcasting the series could violate

DeCosta’s rights. Nor is there any basis for inferring that

it would be otherwise inequitable to allow DeCosta to

maintain this action. If Viacom has illegally exploited

DeCosta’s mark, there is nothing unjust about requiring it

to account for the profits it has realized. An equitable

defense cannot be invoked to permit a wrongdoer to keep

something to which he is not entitled. Consequently,

Viacom has failed to establish the requisite elements of a

laches defense.

CONCLUSION

For all of the foregoing reasons, Viacom’s motion for

summary judgment is hereby denied.

IT IS SO ORDERED.

A45

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF RHODE ISLAND

VICTOR DECOSTA

vs CA 89-0548T

VIACOM INTERNATIONAL

JUDGMENT

Judgment is hereby entered with respect to counts 1

and 3 for the plaintiff for compensatory damages, in the

amount of $1,000,000.00, plus prejudgment interest from

October 31, 1989, plus the costs of this action, plus rea-

sonable attorney’s fees.

With respect to counts 2 and 4 judgment is hereby

entered for the plaintiff for compensatory damages in the

amount of $1,000,000.00, plus prejudgment interest from

October 31, 1989, plus the cots of this action, plus reason-

able attorney’s fees and plus punitive damages in the

amount of $2,500,000.00.

INJUNCTIVE RELIEF

With respect to counts 1 through 4 judgment is

hereby entered enjoining the defendant, its officers,

employees, agents, and those acting in concert with them

from directly or indirectly syndicating for broadcast or

otherwise authorizing, or permitting the broadcast of any

episode of the television series HAVE GUN WILL

TRAVEL anywhere in the United States, unless:

(1), all references to and all depictions or portrayals

of the calling card, bearing the chess piece logo or slogan

Tiel

A46

shown in the plaintiff's registration of his mark or any

logo or slogan deceptively similar are excised, and

(2), a disclaimer is prominently displayed at the

beginning and at the end of each broadcasting, acknowl-

edging the plaintiff, as the owner of the registered mark

and explaining that the television program HAVE GUN

WILL TRAVEL bears no connection to him.

The injunction is stayedfor [sic] a period of 60 days to

permit the defendant to seek a further stay from the

Court of Appeals. Thirty days from the expiration of this

Court's stay, the defendant shall file a written report with

this Court, under oath, setting forth in detail the manner

and form in which the defendant has complied with the

injunction as provided for in 15 U.S.C. 1116.

Judgment is hereby entered for the defendant with

respect to count 5, pursuant to the Courts ruling on

defendant’s motion for directed verdict.

ENTER: BY:

/s/ Ernest C. Torres /s/ Paula Brown

ERNEST C. TORRES, DEPUTY CLERK

US DISTRICT JUDGE

OCTOBER 4, 1991

Attest to

True Copy

RAYMOND F. BURGHARDY

Clerk

By Illegible

Deputy Clerk

A47

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF RHODE ISLAND

a a ie Be Me Be eee ee

CIVIL ACTION

VICTOR DeCOSTA a a aet

Plaintiff

VS. *

: Providence,

VIACOM INTERNATIONAL : Rhode Island

Defendant *

ee ee

ERNEST C. TORRES, DISTRICT JUDGE

APPEARANCE:

FOR THE PLAINTIFF: Richard W. Petrocelli, Esquire

and

Mark J. Hagopian, Esquire

FOR THE DEFENDANT: — Robert M. Callagy, Esquire

and

Jan Uhrbach, Esquire

HEARD BEFORE THE HONORABLE

Court Reporter: Judith L. Montie

215 Federal Building

Providence, RI 02903

Proceedings reported by computer-aided stenography,

transcript produced by scopist.

[p. 2] FRIDAY, OCTOBER 4, 1991

THE CLERK: Civil Action 89-0598, Victor

DeCosta versus Viacom International.

THE COURT: Good morning

ee eee

~ A48

ALL: Good morning, Your Honor.

THE COURT: This case is here this morning for

the entry of judgment.

As counsel know, the Jury previously returned a

verdict for the Plaintiff on the first four counts of the

complaint for Federal service mark infringement under

the Lanham Act, common law service mark infringement

under state law, Federal unfair competition under the

Lanham Act, and common law unfair competition under

state law, New York law to be precise. And the Jury

awarded compensatory damages in the amount of one

million dollars and punitive damages in the amount of

two point five million dollars.

The issue now before the Court is whether in enter-

ing judgment on the Jury’s verdict the Court should first

increase Or decrease the compensatory damages awarded

under the Lanham Act counts.

Second, whether it should award interest and/or

costs to the Plaintiff.

Third, whether it should award a [p.3] reasonable

attorney's fee to the Plaintiff.

Fourth, whether it ought to grant injunctive relief

and if so, in what form.

Now, in deciding the form of the final judgment to be

entered, the Court must first determine whether the stat-

utory section to be applied is 15 US Code Section 17,

Subsection A or Subsection B of that section. Both of

those sections deal with violation of service mark rights.

A49

Subsection B was added in 1984 when the Lanham

Act was amended. In Subsection B is limited by its terms

to intentional use of a counterfeit mark and it mandates

an award of treble damages and attorney’s fees. The

legislative history describes counterfeiting as a uniquely

pernicious form of trademark infringement. Generally

speaking, a counterfeit is identical copy that the counter:

feiter tries to pass off as the more valuable original. And

that’s consist [sic] with what the legislative history indi-

cates was Congress’s purpose in enacting Subsection B;

namely, to prevent a purchaser from being defrauded by

paying for what the purchaser thought was brand name

quality but receiving instead a copy, imitation of inferior

quality.

Now, in this case there is no [p.4] evidence that

Viacom tried to pass of its product specifically as that of

Mr. DeCosta’s. Or that its product was less valuable or

inferior in quality so that consumers received less than

what they paid for so to speak.

Now, what the evidence shows here is that the Pala

din character was essentially stolen from Mr. DeCosta

and his service mark was used in connection with the

television series in such a way as to create a likelihood of

confusion and that the Defendant and its predecessor

have been unjustly enriched by the misappropriation of

Mr. DeCosta’s property. Therefore, the governing law 1s

contained not in Subsection B but rather in Subsection A

The language of Subsection A regarding the circum.

stances under which the Court may or should award

damages in addition to those awarded by the Jury or

alternatively reduce the damages awarded by the Jury ts

A50

vague and confusing to say the least. However, it does

seem clear that Congress intended additional damages to

be a means for compensating a successful claimant for

damages that he likely sustained but due to the diffi-

culties inherent in proving losses occasioned by trade-

mark infringement could not prove with precise certainty

or damages that [p. 5] are not otherwise provided for in

the statute. Thus the statute requires that the amount

awarded constitute compensation and not a penalty.

Moreover, the statute permits the Court to enter judg-

ment for such sums as the Court shall find to be just

according to the circumstances of the case.

Applying those principles to this case it’s clear that

the Jury awarded an amount for profits unjustly realized

by Viacom and/or for actual damages sustained by Mr.

DeCosta because the evidence regarding the cost of cor-

rective advertizing to remedy reverse confusion placed

that cost at somewhere in the neighborhood of six hun-

dred thousand dollars. Had the Jury awarded only an

amount to cover that cost of corrective advertizing, the

Court would have considered that amount inadequate

within the meaning of the statute for its failure to com-

pensate the Plaintiff for the profits unjustly realized by

Viacom and in that connection I should say the Court

finds, as I believe the Jury did, that Viacom failed to meet

the burden of proving all of the elements of the costs or

deductions claimed in a manner sufficient to support its

contention that it actually incurred a loss on airing this

program.

Also the Court would have [p.6] considered an award

only of corrective advertizing costs to be inadequate

because it would have failed to compensate the Plaintiff

cilia i i

A51

for being wrongfully branded as an impostor in some

quarters when it was actually the Plaintiff who originated

the character and the associated service mark. It also

would have failed to compensate the Plaintiff for the

diminution in the value of his mark. For example, it

seems quite clear that to the extent that others are using

his mark and he had no exclusivity to it his ability to

market that mark to other sources was reduced. So for all

of those reasons, had the Jury awarded only an amount

sufficient to cover the corrective advertizing, the Court

would have felt that enhancement of those damages was

warranted.

Obviously, there is no precise formula for determin-

ing the amount of any such additur but the amount

apparently factored in by the Jury strikes the Court as

perfectly reasonable measure of the amount necessary to

make the Plaintiff whole. And, therefore, since the Jury

has awarded that amount, the Court sees no basis for

increasing or decreasing the Jury’s award pursuant to

Subsection A.

As to interest and costs, the costs question is a pretty

simple one. The [p. 7] Plaintiff's right to recover costs is

clear to the Court. Subsection A specifically provides that

subject to the provision of equity the Plaintiff is entitled

to recover costs. In this case, there is no equitable reason

why the Plaintiff should not recover costs. On the con-

trary, I don’t think it’s overstating things at all to say that

equity crys [sic] out for an award of costs in this case.

As far as interest is concerned, the Plaintiff's right to

recover interest is a little bit more difficult to determine.

Unlike Subsection B, subsection A does not specifically

A52

provide for interest. Neither does it prohibit interest. It is

simply silent on the question. The Court can think of no

plausible reason and defense counsel have been unable to

point to any reason that the Court considers plausible for

inputting to Congress an intent to permit interest under

Subsection B but not under Subsection A.

Moreover, the general rule in this circuit is that when

recovery is had under a Federal statute that is silent on

the question of interest, the Court should examine the

relative equities in determining whether interest is appro-

priate. In this case, the relative equities in [p. 8] the

Court's opinion weigh heavily in the Plaintiff's favor. An

award of interest not only serves the remedial purpose of

the statute but it’s also necessary to make the Plaintiff

whole. Without an award of interest, individuals could

violate the trademark rights of others — the service marks

rights of others with a greater degree of impunity. Fur-

thermore, the interest in this case as the Court has indi-

cated is also necessary to make the Plaintiff whole.

The damages awarded here could have consisted of

only three components and in hindsight the Court wishes

it had asked the jury to enumerate exactly what the

components were but that’s water under the bridge right

now. It’s quite clear only three elements could have gone

into that award of damages.

One was actual damages; for example, the diminu-

tion of the value of the Plaintiff's mark to the Plaintiff.

The second would be the profits unjustly realized by the

Defendant and the third would be the cost of corrective

advertizing to dispel the reverse confusion engendered

by the Defendant’s actions.

A53

Any losses that Mr. DeCosta [p. 9] sustained and any

profits that were unjustly realized by the Defendant

clearly occurred prior to the commencement of this suit.

And, therefore, the Plaintiff should be entitled to interest

to those sums to compensate him for the time during

which he was wrongfully deprived of those amounts.

Similarly the cost of corrective advertizing is nothing

more than a measure of the damages sustained as a result

of the reversed confusion generated by the Defendant's

infringement. It’s an index of the extent of those dam-

ages. Since that confusion was created prior to the com-

mencement of this suit, the Court find that the Plaintiff is

entitled to interest on that sum as well.

In short, it seems to the Court it would be a travesty

of justice not to permit the Plaintiff to recover interest

particularly in the circumstance such as this where the

jury has found and the Court feels with good cause, that

the Defendant acted willfully and knowingly.

Indeed, both the Second Circuit in the American

Honda case, and the Seventh Circuit in the Gorenstein

case have recognized the propriety of awarding interest

under Subsection A in cases such as this one.

[p. 10] And finally it seems to the Court that interest

is proper because the Federal claims in this case essen-

tially mirror the state law claims which are contained in

Counts Two and Four, and interest appears to be pro-

vided for under the applicable New York law. And in

such cases the First Circuit has said that the Plaintiff is

entitled to select which body of law will govern the

award of prejudgment interest. And in any event clearly

A54

the Plaintiff would be entitled to interest independently

on the state law claims set forth in Counts Two and Four

As far as the attorney’s fees are concerned, Subsec-

tion A provides for an award of attorney’s fees in what it

describes as exceptional cases. Now, the case law defines

exceptional cases or exceptional circumstances to include

malicious, fraudulent, deliberate or willful acts. And the

First Circuit in the Shoeder case has specifically held that

applicable to the Lanham Act. If ever there was a case

that presented exceptional! circumstances, it seems to the

Court that this is it. If this isn’t an exceptional circum-

stance, then it’s difficult for the Court to imagine a sce-

nario under which exceptional circumstances would be

said to exist.

[p. 11] The Jury here found that the Defendant's

conduct was sufficiently willful and malicous and inten-

tional to warrant a verdict, a significant verdict, for puni-

tive damages. It also found that the Defendant acted in

bad faith by finding for the Plaintiff under Count Four

The Court specifically instructed the jury that in order to

return a verdict for the Plaintiff under Count Four, they

would have to conclude that the Defendant acted in bad

faith.

It seems to the Court that the failure to award attor

ney’s fees here would effectively gut the statute in cases

like this one. What would happen is that little people like

Mr. DeCosta, who are wronged by large a [sic] corpora-

tion with great resources, woulda find their victories hol-

low indeed if the amounts they recovered were consumed

or perhaps even dwarfed by the attorney’s fees that they

incurred in achieving those victories. Those would be

Pyrrhic victories indeed, and I doubt that there would be

many so-called little people who would seek to vindicate

the rights conferred to them by the Lanham Act if they

could not recover their attorney’s fees particularly in a

case such as this where, as | have indicated, the Jury has

found conduct sufficient to [p. 12] constitute bad faith

and warrant the imposition of punitive damaves

Now, as far as the question of injunctive relief is

concerned, that is governed by Section 1116 of the Title 15

of the United States Code. That section confers on the

Court the power to grant injunctions according to the

principles of equity and upon such terms as the Court

may deem reasonable to prevent the violation of any

right of registrant of a mark registered in the Patent and

Trademark Office. The Plaintiff's right as the registered

owner of this service mark is the exclusive right to use

that mark in the United States and in connection with

appearances as a western character that he created and

which has come over the time to be known as Paladin

In this case, the Jury found that the airing of the

television show Have Gun Will Travel constituted

infringement of that right and as | have already said a

deliberate one at that and that the infringement created a

likelihood of confusion. And the Court concurs in that

finding and, therefore, finds injunctive relief is necessary

to provide Mr. DeCosta with an adequate remedy. The

only question is what form should that injunctive reliet

take. The

A56

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF RHODE ISLAND

ee ee ee ee oe oe oe ob oe ae ob oe ob CIVIL ACTION

NO. 89-0598T

VICTOR DeCOSTA *

ee Tuesday,

VS. . October 29, 1991

VIACOM *

INTERNATIONAL *

Defendant * Providence, Rhode Island

SSSSSEE SEES SEES EEE ESE EE EEE

HEARD BEFORE THE HONORABLE

ERNEST C. TORRES, DISTRICT JUDGE

(ATTORNEY FEES BENCH DECISION)

APPEARANCE:

FOR THE

PLAINTIFF: Richard W. Petrocelli, Esquire

and

Mark Hagopian, Esquire

FOR THE

DEFENDANT: Mark A. Fowler, Esquire

COURT REPORTER: Judith L. Montie

215 Federal Building

Providence, RI 02903

Proceedings reported by computer-aided stenography,

transcript produced by scopist.

* * *

A57

[p. 4] CA 89-0598T TUESDAY, OCTOBER 29, 1991

drawn from the evidence.

Where it is possible for reasonable people to disagree

about the verdict, the First Circuit has said that a motion

for judgment NOV should be denied.

A motion for new trial, on the other hand, should be

granted only if the Jury’s verdict was so clearly against

the weight of the evidence as to constitute a manifest

miscarriage of justice. Thus, while the Court is permitted

to assess the weight of the evidence, it should not act

merely as a thirteenth Juror and set a verdict aside simply

because it might have reached a different result. The

Court should grant a motion for a new trial only if

convinced that the verdict is contrary to the clear weight

of the evidence or constitutes a seriously erroneous or

unjust result.

In this case, the Defendant has advanced numerous

arguments in support of its motion. Many were previ-

ously addressed by the Court in denying the aforesaid

motion to dismiss or in the alternative for summary judg-

ment and the Defendant’s motion for a directed verdict.

Also the Court has addressed many of these things in

Stating its reasons for not giving certain requested

charges and for directing the entry [p. 5] of judgment on

October 4, 1991. And the Court has no intention of

rehashing those rulings at this time.

Other arguments advanced in support of the motion

presently before the Court are predicated on alleged

errors in the Court’s charge but the Court sees no reason

to address some of those arguments because the right to

A58

raise them was waived by the failure to make timely

objections to those aspects of the charge. Once again, the

law in this Circuit is quite clear that one cannot complain

of a failure to give a charge or an alleged error in the

charge unless one timely objects to the charge.

The Court also notes that there are serious questions

as to whether with respect to the motion for judgment

NOV, at least, some of the arguments raised may be

properly considered because they were not asserted in

connection with the motion for a directed verdict and

whether the motion for judgment NOV itself is properly

before the Court because the motion for directed verdict

may have been untimely. However, for present purposes,

the Court will pass over those problems and consider the

merits of the arguments that have been raised while at

the same time attempting to minimize repetition of the

Court’s rulings during prior phases of this case.

[p. 6] The prior adjudication and laches arguments

were dealt with at some length in the Court’s memoran-

dum and order of March 11, 1991. No more needs to be

said at this time other than to note that the Court charged

the Jury on the doctrine of laches and that in the Court's

judgment there was ample evidence to support the Jury’s

apparent conclusion that the defense had not been estab-

lished. Among other things, the Defendant failed to pre-

sent any evidence that it had justifiably relied on the

belief that its actions were permissible and/or had suf-

fered some unfair disadvantage or prejudice as the result

of the Plaintiff's failure to assert a claim sooner.

The evidence clearly indicated that the Defendant

was aware of Mr. DeCosta’s registration in 1985. And, in

A59

fact, one of the Defendant officers filed an affidavit in

support of CBS’s opposition to that registration presuma

bly out of concern that the registration would affect or

impact its rights to air the television show.

Nevertheless, no one from Viacom testified that

despite this knowledge it believed that it had a right to

syndicate the program or that it made a decision to do so

in reliance on the [p. 7] Plaintiff's knowledge of and

failure to challenge that syndication.

Thus, the Defendant failed to establish either reliance

or justification for any such

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