American Heritage Life Insurance Company, Plaintiff-Appellant-Cross v. Heritage Life Insurance Company, Defendant-Appellee-Cross

494 F.2d 3, 182 U.S.P.Q. (BNA) 77, 1974 U.S. App. LEXIS 8652
CourtCourt of Appeals for the Fifth Circuit
DecidedMay 13, 1974
Docket73-1106
StatusPublished
Cited by160 cases

This text of 494 F.2d 3 (American Heritage Life Insurance Company, Plaintiff-Appellant-Cross v. Heritage Life Insurance Company, Defendant-Appellee-Cross) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fifth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
American Heritage Life Insurance Company, Plaintiff-Appellant-Cross v. Heritage Life Insurance Company, Defendant-Appellee-Cross, 494 F.2d 3, 182 U.S.P.Q. (BNA) 77, 1974 U.S. App. LEXIS 8652 (5th Cir. 1974).

Opinion

THORNBERRY, Circuit Judge:

Fundamentally, this appeal turns on the labels which the law of service marks and unfair competition ascribes to a single word. Unfortunately, the law is sometimes confusing, and consequently, the parties to this suit have been in legal combat for years in an attempt to convince the courts that the word means what each wants it to mean. Both parties have appealed from the decision of the district court because neither is entirely satisfied with the result reached there. The district court found that the word “Heritage,” as used in the corporate names of these two parties, is generic or descriptive, rather than distinctive, of life insurance, that Heritage Life Insurance Company (HLIC) used the word in commerce before American Heritage Life Insurance Company (AHLIC) used the word before the public, that there is no secondary meaning in the word “Heritage” which the public associates with AHLIC or its insurance services, that HLIC is not barred by res judicata or collateral estoppel from defending in this action or counterclaiming for cancellation of AHLIC’s registered service mark, that HLIC is guilty of neither service mark infringement nor unfair competition, and that HLIC is not entitled to a cancellation of AHL-IC’s service mark registration.

Undaunted, AHLIC renews its contentions below that HLIC is infringing upon its registered service mark in violation of 15 U.S.C. §§ 1114, 1116, that HLIC is infringing upon its common law trade name, and that prior proceedings before the Patent Office and the court bar both HLIC’s defense and its counterclaim. While AHLIC seeks no damages, it does seek injunctive relief to prevent HLIC from doing business without using a prefix with the word “Heritage.” Not wholly content with its victory below, HLIC challenges only that part of the district court’s order denying cancellation of AHLIC’s service mark registration. 1

I

The history of these two insurance companies is a litigious one. AHLIC was incorporated in accordance with the laws of the State of Florida on September 11, 1956, and has its principal offices in Jacksonville, Florida. HLIC was incorporated on July 26, 1957, in Arizona and has its executive offices in Los Angeles, California. The parties first became aware of each other’s existence in March of 1959 when AHLIC’s president visited HLIC’s vice president. HLIC initially operated only as a rein-surer, but is presently involved in the direct sale of life insurance in twenty-two states. AHLIC has, since its inception, been dealing in the direct sale of life insurance, and is presently admitted to do business in forty-nine states.

In 1960, HLIC sued the Heritage Life Insurance Company of California for trade name infringement. The suit was settled when the latter agreed to change its name to Peoples Heritage Life Insurance Company. At the same time, HLIC filed an application to register “Heritage” as a service mark, alleging first use in interstate commerce in January of 1958. In 1961, HLIC’s application was published by the Patent Office and AHLIC announced its opposition, claiming superior rights in the service mark “American Heritage.”

*8 On May 1, 1964, while the HLIC application was still pending, AHLIC applied for registration of the service mark “Heritage” for the service of planning and underwriting life and health insurance, alleging first use in interstate commerce in July 1957. The Patent Office Trademark Trial and Appeal Board sustained AHLIC’s opposition to HLIC’s application on July 30, 1964. 143 U.S.P.Q. 244. Subsequently, on December 22, 1964, AHLIC’s application was published, and there was no opposition.

HLIC appealed the denial of its request for registration to the United States District Court for the Southern District of Florida, and AHLIC counterclaimed for infringement. But HLIC’s suit was dismissed with prejudice and without findings, for failure to state a claim upon which relief could be granted. The Florida district court also entered a voluntary dismissal without prejudice of AHLIC’s counterclaim. Soon thereafter, on June 1, 1965, the Patent Office granted AHLIC’s application for service mark registration. AHLIC filed this suit on June 20, 1966, and on August 30, 1972, after a full trial, the Texas district court denied the relief requested by AHLIC and denied HLIC’s petition for cancellation of AHLIC’s service mark registration.

II

We are thus faced with (1) a dismissal with prejudice by the Florida district court of HLIC’s petition for registration, (2) a dismissal without prejudice by the Florida district court of AHLIC’s counterclaim for infringement, (3) a Trademark Trial and Appeal Board decision sustaining AHLIC’s opposition to HLIC’s petition for registration, (4) an ex parte Patent Office proceeding permitting registration of AHL-IC’s mark, and (5) the Texas district court action below involving AHLIC’s infringement claim and HLIC’s counterclaim for cancellation. At the outset we must deal with AHLIC’s contention that HLIC is barred by the res judicata and collateral estoppel effects of the prior proceedings before the Patent Office and the Florida district court from defending or counterclaiming in this action.

Under the doctrine of res judicata, a judgment on the merits in one suit bars a subsequent suit involving the same parties or their privies based on the same cause of action. Under the doctrine of collateral estoppel, on the other hand, such a judgment precludes relitigation of issues actually litigated and determined in the prior suit, regardless of whether the second suit is based on the same cause of action as the first. Lawlor v. National Screen Service Corp., 1955, 349 U.S. 322, 326, 75 S.Ct. 865, 867, 99 L.Ed. 1122, 1126. In the words of Mr, Justice Field, in “a second action between the same parties . . . upon a different claim or demand, the judgment in the prior action operates as an estoppel only as to those matters in issue or points controverted, upon the determination of which the finding or verdict was rendered.” Cromwell v. County of Sac, 1877, 94 U.S. 351, 353, 24 L.Ed. 195, 198. It forecloses inquiry only as to those issues which were necessarily determined. Exhibitors Poster Exchange, Inc. v. National Screen Service Corp., 5th Cir. 1970, 421 F.2d 1313, 1319.

In Lawlor, the Supreme Court held that a judgment dismissing a suit with prejudice constitutes an adjudication of the merits as fully and completely as if the order had been entered after trial and bars a later suit between the same parties on the same cause of action. But the Court noted that where the judgment is not accompanied by findings, the judgment does not bind the parties on any issue which might arise in connection with another cause of action. Lawlor v. National Screen Service Corp., supra, 75 S.Ct. at 868. Thus, such a judgment has only the most limited res judicata and collateral estoppel effect.

*9 The Florida district court dismissed with prejudice and without any findings HLIC’s registration suit, and subjected AHLIC’s counterclaim for infringement to a voluntary dismissal without prejudice.

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Bluebook (online)
494 F.2d 3, 182 U.S.P.Q. (BNA) 77, 1974 U.S. App. LEXIS 8652, Counsel Stack Legal Research, https://law.counselstack.com/opinion/american-heritage-life-insurance-company-plaintiff-appellant-cross-v-ca5-1974.