*2
HENLEY,
Before BRIGHT and
Circuit
BENSON,
Judges,
Chief District
Judge.*
BRIGHT,
Judge.
Circuit
Seven-Up Bottling
(Bottling),
Co.
local
bottler and
distributor
soft drinks in St.
Louis, Missouri, brought
this action
Seven-Up Company (Company) and Seven-
Up
(Services),
Inc.
wholly-owned
subsidiary
the Company, alleging various
claims under the
Trademark Act
(Lanham Act),
1051-1127,
15 U.S.C.
§§
a pendent state law
compe-
claim
unfair
Subject
jurisdiction
tition.
matter
based
28 U.S.C.
1338. On defend-
dismiss,
ants’
motiоn
court1
district
determined
claims all
attempts by
amounted to
licensee to
its licensor’s title
to the licensor’s marks and hence were
barred
rule of
estoppel,
licensee
BENSON,
Judge,
Roy
Harper,
*PAUL
Chief District
District
1. Hon.
W.
United States Senior
Dakota, sitting by designation.
Judge
of North
District
Eastern
District Mis-
souri.
the Company
in the exercise of
to a fund administered
further
concluded
state law claim
as trustee. The
pendent
made
discretion
fund,
no
Seven-Up Bottling
contributions to this
but used the
be dismissed.
should
(E.D.
fund to
national media
advertising
v.Co.
develop
good
will of itself and its
Mo.1976).
appeals. We affirm.
developers.
advertising
This
fund termi-
in the dis-
fully recounted
The facts are
*3
in
nated
restate, however,
We
opinion.
trict court’s
1943,
During
Company ap-
the
aрpeal.
this
most relevant
to
the facts
plied
register
to
the
“Seven-Up”
1929,
ex-
Company has sold
appellee
Since
along
accompanying
with
drawings as a
flavoring soft drinks and
used in
tracts
“collective” mark for soft drinks showing
the ex-
Bottling
purchased
has
appellant
goods
collective mark as used on the
Company, and bottled and
tracts from the
рersons
“by
duly
by”
Compa-
authorized
with
a soft drink made
locally distributed
ny. Those applications state that
the “col-
the trademark
the extract under
“Seven-
lective” mark
by per-
was used since 1928
was formed in 1957
Up.” Appellee Services
sons
Company
authorized
to show
production
in
and mar-
aid distributors
to
Company
the single
as
source of “ex-
Seven-Up.
keting of
ingredients
tracts or other
used in com-
Company
secured
The
pounding the beverage.”
in 1929
“Seven-Up”
“7-Up”
trademarks
1966,
Company
Between 1954 and
1936,
and the
for soft drinks
obtained six additional
show-
production.
in their
From
extracts used
contexts,
ing “7-Up” in various
which made
1939,
with its
Company
until
dealt
claims similar to those in the 1929 and 1936
basis, with no
on an informal
distributors
registrations.
presently
appli-
Therе is
an
In
distributorship
agreements.
written
pending
cation
for another
registra-
such
1938,
with the initiation
practice
this
ended
tion.
franchising policy.
Company
The
aof
to local bottlers who
granted franchises
1956,
In
Bottling and the Company en-
extract
from the
purchase flavor
would
an agreement regarding
tered
the manufac-
production
and sale of soft
Compаny
ture, promotion,
“pre-mix”
and sale of
Sev-
“Seven-Up.”
the trademark
drinks under
en-Up.2 Bottling expended
large
amount
produce
itself did not
fin-
Company
of money
develop
to
the pre-mix business.
drinks. Franchisees were as-
ished soft
1961, Bottling
Since
has manufactured
rights
territories with “the exclusive
signed
“post-mix”
sold
syrup
soda fountain
to prepare
said territories
such soft
within
“Sеven-Up.”
Bottling
In
was offered
Compa-
according
drinks
to the formula
by Company covering
contract
the promo-
bearing the trademark
ny
packages
in
‘Sev-
syrup
tion and sale of the
but which would
Bottling
party
is a
to two such
en-Up’.”
Company
reserved to the
to
in Missouri and
agreements for territories
syrup
Bottling’s
make and sell
territory
24,1939
Illinois,
January
January
dated
designаte
or to
others
to do so.
agreements contain no ex-
1939. These
offer,
rejected
contending
this
that the at-
duration.
press term of
tempted
rights
permit
reservation of
would
licensees,
Before
Company
compete unfairly
to
with Bot-
in-
“Seven-Up”
advertised
tling,
such as
infringe
rights
and would
beneficial
During
territories.
dividually in their own
“Seven-Up”
to exclusive use of
tradеmarks
campaign
organ-
media
a national
which
claimed under the “collec-
licensees,
a number of
tive” trademark
ized
Bottling.
Accordingly, Bottling purchased syr-
Each licensee contributed
$17.50
up from
until
gallon
purchased
of flavor extract
from
Services
later
1961 when
per
syrup”
to “fountain
which
finished soft drink
is mixed with car-
2. “Pre-mix” soft drink is
plastic cups
point
typicаlly
paper
from coin
bonated water at the
of distribution to
sold in
machines,
“post-mix”
vending
whereas
refers
the consumer.
negotiated
a contract with lan-
Company
claims that
its
protects
claims
guage
attempted
Services have
compete
to
unfair-
produce and
distribute
ly
Bottling through
appropriation of
good
Bottling’s
infringement
will and
Bottling’s rights
arrаnged
under the
Company
Services
produced
in cans.
(1)
and asks the
to grant
injunc-
court
Bottling began
canned “Seven-
tion
the Company,
pro-,
and Services
purchas-
1959. These
Up”
hibiting them
manufacturing
or sell-
on an informal
until Jan-
continued
basis
es
ing
syrup
soft drink under the name
when
uary
Bottling’s
(2)
territory;
allowing
contract
Bot-
written
executed a
order prohibiting
from com-
tling
purchase “Seven-Up” in cans from
peting
manner in
territory
“ap-
designated by
sources
regard
(3)
“Seven-Up”;
an order
*4
the
recently,
More
proved packagers.”
directing
Company
the
and Services to rec-
required Bottling
Company
ognize Bottling’s right
“Seven-Up”
to can
from
“Seven-Up”
prices
cans
designated
(4)
its
territory;
and
cancella-
usually
“approved
thаn those
higher
tion of all the Company’s trademarks ex-
Bottling sought permission
packagers.”
cept
registra-
the 1942 and 1943 “collective”
and distribute
Company
the
can
from
tions,
well
as
as denial
the currently
the
1974
pending registration application.
request except on
Company refused this
(1) agree
the
condition that
Bottling’s
hinge
trademark claims
on its
right
the
to manufаcture
Company reserves
contention that
the 1939
be-
Bottling’s
“Seven-Up” soft drink
finished
parties
the
tween
were exclusive
licenses
(2)
territory;
surrender
its 1939 contract
specific
use within a
territory “collective”
(3) accept
and
new
Company;
the
with
Company
trademarks owned
the
term of years.
contract with a limited
subsequently registered in 1942 and 1943.
similar
be-
Company insisted on
conditions
15
Appeals
See U.S.C. 1127. The Court of
Bottling to package
it would allow
fore
for the Second Circuit has described such
plastic
containers. This ac-
marks as follows:
tion followed.
owned,
A collective
may
contends, basically,
registered, by
group
or association of
actually
soft
Company never
manufactured
symbol,
which it is a
but not
aby
user
syrups
before 1929
drinks
thereof,
public
and it indicates
members of
produced
the association
through fraud on the
procured
therefore
bearing
merchandise
the mark. The as
invalid
void. Bot-
patent office
are
sociation which owns
may
the mark
not
tling
that the “collective”
further contends
merchandise,
use it
produces
on
if
any,
registered in 1942 and 1943 are vаlid
marks
its members. Since the common
prevent
Services
law required affixation and user for the
on
using
from
acquisition of a trademark it is clear that
any
soft
or syrups,
form of finished
drinks
there would be no basis in that law for a
because these
reflect use
mark,
and indeed such marks
on
a col-
marks
finished soft drinks
registration
were denied
under
(Compa-
group
persons
lectivе
of authorized
However,
Trade-Mark Act of 1905.
licensees,
including Bottling)
ny’s
rather
pro
1938 amendment
to the Act of 1905
itself.
than
registration
vided
of collective
all
se-
further contends that
the Lanham Act included a
invalid for the same
cured after
provision.
similar
Com
Baking
registrations,
[Huber
as the 1929 and 1936
reasons
pany
Company,
v. Stroehmann Brothers
they
also
are inconsistеnt with
because
Cir.),
denied,
registrations.
the “collective”
F.2d
cert.
for mark or tradename up any not set the same. adverse claim in it as its licen validity “2. Does not of sor.” Supply Cooperative Pacific mark, ‘Seven-Up’ ‘7-Up’. or Farmers Union Central Exchange, 318 production, that and Services contend the 1942 but asserts thаt there was registrations compa- supervision and 1943 were of “related no at all. ny” company” 10, 1938, marks. “Related is now defined 639, The Act of June 52 Stat. first § in 15 U.S.C. 1127: registration authorized of collective but company” term “collective mark” remained undefined The term “related means passage person legitimately until the of who controls or is con- the Lanham Act of 1946. by registrant applicant reg- Appellees reg- trolled or for concede that the 1942 and 1943 respect marks,” quality istration in of the nature and istrations referred to “collective but goods registered of services in connection with assert that most marks as collective 1946, which the mark is used. marks and between 1938 company’s The effect of a related “Seven-Up” registrations, use of mark 1942 and 1943 do not out in is set 15 U.S.C. 1055: § definition of a meet the Lanham Act’s collec- use shall inure to the benefit mark, [S]uch tive and that use of the registrant applicant registration, and mark” in the 1942 and term “collective 1943 validity such use shall not affect the of such registrations regis- cannot evidence intent to registration[.] of its type mark first defined three later ter a of requi- submits that it exercised in the Lanham Act of degree Bottling’s Seven-Up of control over site 1280 894, (9th 1963), goods. cert. is Cir. de various It an indirect attack 908-9
F.2d nied, by 84 S.Ct. a licensee on its title 375 U.S. licensor’s no (1964). by Plaintiff marks and will be more L.Ed.2d 414 tolerated estoppel of seven trademark the doctrine of licensee than a cancellation seeks 1929, 1936, 1954, (those [Sevеn-Up direct attack on those marks. 1966) Co. v. and refusal 1246, 1251-52, application (1976).] of 1975 on the trademark lently obtained of 1966 ments. invalidity leged other tration statements is tered ingly, prayer being attacked deny the materially false and fraudulent state grounds of no effect” as inconsistency “collective” marks. Such marks as represented for cancellation leave The two trademark licensor-Company’s sought licensee, false and fraudulent well such are requested by of those trademarks. its licensee. Accord having be cancelled those inconsistency as the previously application “invalid, been on the title to the little plaintiffs estopped fraudu alleged for al regis doubt regis basis void man, estopрed consistent registered in 1942 tends that its licenses of collective marks subsequently those Bottling’s challenges clusion of cannot be inconsistent with its licenses istrations claims. Given because the license Trademarks, Bottling argues mark unless the licensee’s ed. marks within its 1969). the Company with the challenge its Law estopped claimed beneficial 1929, 1936, 1954, 1956, If the 1939 do not create Monopolies of Unfair license, from raising those the Company’s licensor’s view of citing licensee is not position Competition, 78.2, to the ex 3 Call claims to estoppel R. at 454 to use is not is in case, con reg registration proposes Plaintiff did license the allegedly invalid “collective” marks of registrations, and marks covered *6 Bottling had and to have two not acknowledge validity continues dis- did their First, plaintiff effects. it vests in when tinct it took license of the collective mark “Seven-Up” developers to other simi- larly drinks and well-settled ownership of the ment constitutes Company, of tacks owner registration of the collective marks of the marks. 1940’s. [******] situated exclusive Company’s right it obtained both trademark By asserting Comрany collective trademark syrups. registrant marks. indirect attack on the marks, Second, it law, rights before and after to of title to trade- such According Bottling use of to the use an argu- vests in marks, is the soft merit at- to censed to however, right licensing agreements Although agreements created a trademark licensor-li syrups, and Seven-Up products standing that censee relationship, silent as to the such contracts entered rights if the 1939 to manufacture Bottling’s position might have some produce, make clear included in precise parties agree such as soft drinks and which these into nature of the trade the parties’ did not have the license. Later distribute the these retained the the only parties. parties, was li under those are effect, Bottling’s attempt uphold to sole to that use mark within its Therefore, the marks of as col- cannot now challenges rights lective marks claim that has the which flow from by registra- marks of covered license territory of a collective stating Company’s tions use the mark mark. example, September when in
For contracts its judgment alone it is desira- which May licensed ble to do so it is further agreed post-mix Seven-Up to manufacture rights such reserved include the provisions, both contain syrup, identical right to for or contract to arrange with read as which follows: other persons, firms organiza- and/or WHEREAS, Seven-Up Company perform tions to any has or all of these retained, always for itself the exclusive functions.
privilege WHEREAS, it distributing Seven-Up business business, bottlers license to in the bottling privileges, and and distribution of Post-Mix WHEREAS, desires desires territory extend this The you 7-Up Company to reserve and addition to The Post-Mix manufacturing, has been for the Seven-Up Company for which handle policy by offering manufacture, 7-Up syrup, the 7-Up bottling the Pre-Mix 7-Up the policy retain let you Company still the licensed which Bottling selling and 7-Up syrup for itself Company is a license of a collective trade- of The 7-Up now sale right to manufacture and distribute within duct are sor-licensee The canned Bottling’s territory that the itly recognizing Bottling’s agreements and course of con- services at various and Bottling. Thus, reservation forms a [******] relationship incompatible Company reserved relationship their times between right to sell Seven-Up. licensed to also has Seven-Up product between Company since part Bottling’s claim itself and the of the licen- purchased itself produce. implic- any subsidiary of it to man- mark, because the licensor-owner of a col- ufacture, sell and/or distribute Post-Mix lective mark may not make or sell trаde- 7-Up syrup any Callman, goods. marked R. The See 3 Law right to to arrange contract for or Competition, of Unfair Trademarks and persons, organizations other firms and/or 68.3, Monopolies 1969). 85-86 at ed. perform all of these func- and/or tions, judgment when in its alone it is Beyond contention desirable, not limited including but marks licensed to it situations where the bottler not inter- Bottling why it offers no reason should not all, where the bot- ested situations estopped making claims to the cooperate cannot or will in han- tler adverse to trademarks dling by developed business Seven- court Company. properly The district dis concessionaires, Up Company through missed claims. organizations may other *7 than one operate in more bottler’s Because the court properly district dismissed trademark claims be
ture, syrup territory in which Manufacturer censed to bottle itself rights to reservation that manufacturer dispensing agrees sell and for use in manufacture, sell equipment to license no other Post-Mix any subsidiary licenses Manufacturer distribute post-mix 7-Up subject within the same Post-Mix vending reserves for and/or dis- of it manufac- to the 7-Up is li- Arts (E.D.Pa.1967); ing Bottling’s competition claim. court did not fore trial for failure to state a claim which relief could Cooper, Federal Practice & Procedure ers of can Foresight Sterling America v. at 558 1130, 16 abuse its Silver, Inc., (1975). 13 C. pendent L.Ed.2d Philadelphia, Gibbs, See Wright, A. granted, discretion in United Mine Work state law (1966); U.S. Inc. v. Fine the district Miller & E. dismiss Ameri unfair 7-Up syrup anywhere tribute Post-Mix Affirmed. PETITION POR
ORDER ON CORPORATION, Appellant, REHEARING CHRYSLER prior opinion reads our Appellant rejecting estoppel theory
this case as MANN, Bankruptcy Curtis L. Trustee in court, affirming the court’s the district Blakely, Appellee. of William H. complaint by ruling on a dismissal No. 76-1196. fact, i.e., disputed matter of that other Appeals, United States Court of agreements spelling relationship out the Eighth Circuit. justified estop the dismissal on Therefore, appellant seeks a pel grounds. Submitted Jan.
rehearing, arguing that because its com 14, 1977. Decided Sept. was dismissed under Fed.R.Civ.P. plaint 12(b)(6), for failure to state a claim on granted, relief can be it was improp to make a
er for this court factual determi Appel
nation based on extrinsic evidence. review,
lant concludes that “[i]n court, subject acted as a trial
panel and is
to the same standards in its determination Appellant
of the motion to dismiss.” then
correctly notes that the rigor standard
ous one: No claim be dismissed under 12(b)(6)
Rule for failure to state claim appears beyond plain
unless it doubt that
tiff cannot obtain relief. appellant
While correctly existing states
law, it our opinion. misreads Based on reading of the
complete pleadings including appellant’s attached to
brief, light construed in a most favorable to opinion this court
appellants, is of prevail.
appellant possibly could not conclusively
pleadings appel- establish argument “collective mark” must be
lant’s
rejected support the district court’s dis- of the case for failure to state a
missal
claim. rehearing deny petition
We en banc. suggestion rehearing