Association of Co-Operative Members, Inc. v. Farmland Industries, Inc., Defendant-Third Party v. Elmer Gibson, Third Party

684 F.2d 1134, 216 U.S.P.Q. (BNA) 361, 1982 U.S. App. LEXIS 25901
CourtCourt of Appeals for the Third Circuit
DecidedSeptember 3, 1982
Docket81-1260
StatusPublished
Cited by36 cases

This text of 684 F.2d 1134 (Association of Co-Operative Members, Inc. v. Farmland Industries, Inc., Defendant-Third Party v. Elmer Gibson, Third Party) is published on Counsel Stack Legal Research, covering Court of Appeals for the Third Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Association of Co-Operative Members, Inc. v. Farmland Industries, Inc., Defendant-Third Party v. Elmer Gibson, Third Party, 684 F.2d 1134, 216 U.S.P.Q. (BNA) 361, 1982 U.S. App. LEXIS 25901 (3d Cir. 1982).

Opinion

WISDOM, Circuit Judge:

This is an appeal from an interlocutory order granting partial summary judgment in favor of Farmland Industries, Inc. (Farmland) and its wholly owned subsidiary, Farmland Life Insurance Co. (Farmland Life), on their trademark infringement claim against the Association of Co-operative Members, Inc. (Association) and Elmer Gibson. 1 In their appeal, Gibson and the Association raise several issues over which this Court does not exercise appellate jurisdiction, and to that extent, we dismiss the appeal. Finding, with respect to the remaining issues, that there are no disputed questions of material fact and that the district court’s disposition was sound in law, we affirm.

I. Statement of the Case

The background to this case and most of the basic facts are undisputed. Farmland submitted numerous affidavits and deposition excerpts in support of its motion for partial summary judgment, and neither Gibson nor the Association filed affidavits disputing the contents of Farmland's filings. Our summary of the background and undisputed facts therefore relies heavily on Farmland’s sworn submissions to the district court.

Farmland is a cooperative organization, owned and controlled by the 2,300 local farmers’ cooperative associations throughout the country that make up its membership. It provides a full line of goods and services to its members and attempts to supply all the basic needs of the farming community. Among the services Farmland provides its members is insurance, which it sells through Farmland Life.

Since 1958, Farmland has used the “double circle” mark, pictured below, in connection with the goods and services it provides. The mark has appeared on Farmland’s advertising, stationery, annual reports, buildings, and labels, although Farmland has obtained neither a state nor a federal registration of it. Farmland has spent millions of dollars, more than 45 million dollars in the past decade alone, on advertising associated with the mark. People throughout the area in which Farmland operates associate the mark with Farmland exclusively.

*1136 Farmland is a member of Universal Cooperatives, Inc. (Universal), which holds various registrations for trade and collective marks consisting of or including the word “CO-OP”. Universal’s by-laws permit its members, including Farmland, to use its marks. It is Farmland’s relationship with Universal that, according to Gibson and the Association, raises disputed questions of material fact. Farmland claims the right to include the word “CO-OP” in its mark by virtue of Universal’s by-laws. The appellants, however, relying on a statement by counsel for Farmland at the district court hearing, argue that Farmland’s right to use Universal’s marks derives from a licensing agreement. The appellants also maintain that Universal owns the double circle format used by Farmland, and they have submitted copies of several of Universal’s trademark registration and renewal applications, which include reproductions of this mark as specimens. Farmland maintains that Universal has registered only the word “CO-OP” and that the registration and renewal applications included the double circle only as an example of the use of “CO-OP”.

The Association is a corporation organized, according to its pleadings, “to promote the general interests of members of co-operatives and also promote agricultural interests”. To solicit membership, the Association mass-mailed letters to residents of rural communities in Texas, advertising insurance as well as membership. The letters and envelopes bore the Association’s logo, reproduced below. The Association and Gibson, who handled the mass mailing, were apparently aware of Farmland’s use of the double circle. Farmland has submitted affidavits of several consumers who were misled by the Association’s logo and responded to the mailing in the belief it was from Farmland.

The mailings contained forms that consumers who were interested could complete and return. Gibson sold these responses to General Life and Accident Insurance Co. (General) for $18.50 each, and General agents then called on those who responded. The agents tried to sell both insurance and membership in the Association. Consumers choosing to join the Association subsequently received catalogues bearing its logo and advertising farm and household supplies and equipment that the Association would sell to its members. Much of the merchandise was of the same type Farmland markets.

In April 1979, Farmland learned of the Association’s activities and wrote the Association and General, notifying them of what it considered a trademark infringement and demanding that they cease using the infringing logo. In May 1979 the Association filed for registration of its trademark in several states, including Texas, and sued Farmland in state court in Texas, alleging fraud, restraint of trade, and defamation.

Farmland removed the action to the United States District Court for the Western District of Texas, relying for subject matter jurisdiction on diversity of citizenship. Farmland then moved to dismiss and, with Farmland Life, filed a counterclaim against the Association and General for trademark infringement. In December 1980, Farmland and Farmland Life amended their counterclaim, suing the Association, Gibson, and Gibson’s alleged alter-ego, Associated Agencies, Inc., for trademark infringement under Texas law, false representation and false designation of origin under § 43(a) of the Trademark Act of 1946,15 U.S.C. § 1125(a), false procurement of trademark registrations, and unjust en *1137 richment. 2 Farmland sought injunctive relief, cancellation of any registrations of the infringing trademark, damages, and attorney fees.

Early in 1981, Farmland and Farmland Life moved for partial summary judgment, as did the Association. The district court denied the Association’s motion and granted that of Farmland and Farmland Life. The court held that Farmland owns a common law trademark in the double circle and that the Association and Gibson had willfully and intentionally infringed it. It enjoined the Association and Gibson from using or registering any logo likely to cause confusion with Farmland’s trademark and ordered them to deliver to the court for destruction all materials bearing the infringing logo and to withdraw and cancel any application to register a logo infringing Farmland’s trademark. The court also found that the actions of Gibson and the Association amounted to “false representation and designation of origin in connection with goods and services placed in the stream of commerce” and that they had fraudulently procured trademark registrations. On these grounds, as well as that of trademark infringement, the court awarded Farmland and Farmland Life damages and attorney fees. In addition, the court can-celled existing registrations of the Association’s infringing trademarks and ordered Gibson to account to Farmland and Farmland Life for profits attributable to the use of infringing logos. The district court withheld consideration of the measure of damages and of the Association’s defamation claim pending our disposition of this appeal.

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684 F.2d 1134, 216 U.S.P.Q. (BNA) 361, 1982 U.S. App. LEXIS 25901, Counsel Stack Legal Research, https://law.counselstack.com/opinion/association-of-co-operative-members-inc-v-farmland-industries-inc-ca3-1982.