B. H. Bunn Co., Inc., Plaintiff-Appellant-Cross v. Aaa Replacement Parts Co., Inc., Defendants-Appellees-Cross

451 F.2d 1254, 171 U.S.P.Q. (BNA) 780, 1971 U.S. App. LEXIS 7095
CourtCourt of Appeals for the Fifth Circuit
DecidedNovember 16, 1971
Docket71-1199
StatusPublished
Cited by95 cases

This text of 451 F.2d 1254 (B. H. Bunn Co., Inc., Plaintiff-Appellant-Cross v. Aaa Replacement Parts Co., Inc., Defendants-Appellees-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
B. H. Bunn Co., Inc., Plaintiff-Appellant-Cross v. Aaa Replacement Parts Co., Inc., Defendants-Appellees-Cross, 451 F.2d 1254, 171 U.S.P.Q. (BNA) 780, 1971 U.S. App. LEXIS 7095 (5th Cir. 1971).

Opinion

GOLDBERG, Circuit Judge.

We enter here the rather swampy area of unfair competition, an area already substantially staked out by the federal protective laws of patent and trademark. In the principal issue of this case the court below found both appellees, Cara-valla and Leto, not guilty of patent or trademark infringement, but found ap-pellee Caravalla liable for unfair competition and granted injunctive relief. Leto was exculpated from charges of unfair competition. Although our footings are not granitic and require extensive detailing, they are firm enough to lead us to affirm in part and remand in part.

Unfair competition is an amorphous but not an altogether vaporous area of the law. As the Supreme Court has made clear in two rather recent cases, unfair competition does not take up where statutory protection given to originality lets off. Compco Corp. v. Day-Brite Lighting, Inc., 1964, 376 U.S. 234, 84 S.Ct. 779, 11 L.Ed.2d 669, reh. denied, 1964, 377 U.S. 913, 84 S.Ct. 1162, 12 L.Ed.2d 183; Sears, Roebuck & Co. v. Stiffel Co., 1964, 376 U.S. 225, 84 S.Ct. 784, 11 L.Ed.2d 661, reh. denied, 1964, 376 U.S. 973, 84 S.Ct. 1131, 12 L.Ed.2d 87. The patent and copyright laws exist to prevent copies from being produced at all, without the consent of the registered holder. It runs counter to federal purposes, and perhaps borders on the *1259 unconstitutional, for a state to prolong or to create any trade monopoly to an originator by forbidding the production of copies under the rubric of unfair competition. U.S.Const. Art. I, § 8; U.S.Const. Art. VI; see Compco v. DayBrite, supra) Sears, Roebuck & Co. v. Stiffel, supra. What is left to the state laws lies in the tort realm of deceit. As Judge Learned Hand stated:

“The whole basis of the law of ‘unfair competition’ ... is that no one shall sell his goods in such a way as to make it appear that they come from some other source. The simplest form of this is to use the name or trademark of another, but the law goes further than that.”

American-Marietta Co. v. Krigsman, 2 Cir. 1960, 275 F.2d 287, 289.

Outright copying is often a civilizing rather than a cannibalizing folkway. The world would be a duller place without the originators, but it would not work without the copyists. Even so, the law has bounded the monopoly of patent originality without giving blank approval to deceptiveness. Whatever the legal competitive rights one might have to copy and to sell the works originated by another, the copyist, if state law so requires, cannot “palm off” his copied goods as the genuine goods of the originator, to the deceit of the purchasing public:

“A State of course has the power to impose liability upon those who, knowing that the public is relying upon an original manufacturer’s reputation for quality and integrity, deceive the public by palming off their copies as the original.”

Compco v. Day-Brite, supra, 376 U.S. at 238, 84 S.Ct. at 782. Whether or not there has been unfair competition, despite a lack of technical infringement of patent or trademark laws, is a mixed question of law and fact, each case turning essentially on its own base. Cream-ette Co. v. Conlin, 5 Cir. 1951, 191 F.2d 108. The set of facts for this case is, briefly, as follows:

Plaintiff Bunn Company, Inc., is an Illinois corporation that manufactures and markets automatic tying machines for tying packages and bundles with twine. In addition to some 50 patents on its machine, Bunn also holds a registered trademark, a “knot” looped over a horizontal line. For about thirteen years defendant C. Gus Caravalla was a sales and service representative for Bunn in Florida. Following his dismissal in 1964 Caravalla began to manufacture and sell replacement parts “to fit” the Bunn machines, but he manufactured the parts without Bunn specifications or drawings. He also kept and continued to sell the stock of genuine Bunn parts that he had on hand when discharged. Some of Caravalla’s own make of parts were imprinted with an ampersand (“&”).

As a result of Caravalla’s post-1964 activities, Bunn sued Caravalla in a federal district court in Florida, asking both damages and equitable relief. Bunn alleged that Caravalla was not only infringing Bunn’s patents and trademark, but was also engaged in the Florida tort of unfair competition. Cara-valla raised as defenses certain antitrust violations by Bunn and the invalidity of some of Bunn’s patents. In addition, Caravalla counter-claimed for alleged interference with a business relationship.

Subsequent to the filing of Bunn’s suit Caravalla leased certain property, consigned his inventory, and sold other property to defendant Sam S. Leto, Jr., who was doing business as both Tampa Brass and Automatic Tying, enterprises incorporated in Florida. Precisely what Caravalla sold to Leto is in dispute, but it is clear that Caravalla is no longer in the trade and that Leto is, using Cara-valla’s inventory, Caravalla’s shop, and many of Caravalla’s techniques. Leto is now making and selling, also without Bunn specifications or drawings, replacement parts for Bunn machines. Therefore, Bunn joined Leto and his corporations as defendants to the claim of unfair competition.

*1260 After trial on the merits the district court found that there had been neither patent nor trademark infringement. While the trial court held Caravalla liable in tort for unfairly competing against Bunn, the complaint against Leto was dismissed. Finally, the court rejected Caravalla’s counter-claim for interference with a business relationship. Caravalla presented no evidence regarding the alleged antitrust violations or invalid patents, and the district judge dismissed them as defenses. That dismissal was not appealed. The district judge issued an injunction against Cara-valla and postponed a hearing on damages pending appeal. Bunn appeals the decisions regarding infringement and the dismissal of the claim against Leto. Caravalla appeals the finding of unfair competition and the dismissal of his counter-claim.

Both appellants come to us primarily under the aegis of Rule 52(a), F.R.Civ.Proc. Under this Court’s interpretation of Rule 52(a), to be “clearly erroneous” a finding of fact must leave us with the “definite and firm conviction that a mistake has been committed.” Chaney v. City of Galveston, 5 Cir. 1966, 368 F.2d 774. We do not have a “definite and firm conviction” that the district court was mistaken in its findings regarding patent infringement, trademark infringement, unfair competition with regard to Caravalla, and Caravalla’s counter-claim. Nor do we think that the court committed any error of law in its conclusions and rulings on those matters. Those rulings are affirmed. However, we are left in doubt with regard to the dismissal of the unfair competition claim against Leto.

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451 F.2d 1254, 171 U.S.P.Q. (BNA) 780, 1971 U.S. App. LEXIS 7095, Counsel Stack Legal Research, https://law.counselstack.com/opinion/b-h-bunn-co-inc-plaintiff-appellant-cross-v-aaa-replacement-parts-ca5-1971.