USCA1 Opinion
December 17, 1992
UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
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No. 91-2211
VICTOR DeCOSTA,
Plaintiff, Appellee,
v.
VIACOM INTERNATIONAL, INC.,
Defendant, Appellant.
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APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF RHODE ISLAND
[Hon. Ernest C. Torres, U.S. District Judge]
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Before
Breyer, Chief Judge,
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Coffin, Senior Circuit Judge,
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and Cyr, Circuit Judge.
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Robert M. Callagy with whom Satterlee Stephens Burke & Burke and
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Jan R. Uhrbach were on brief for appellant.
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Richard W. Petrocelli with whom Mark J. Hagopian and Visconti &
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Petrocelli Ltd. were on brief for appellee.
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BREYER, Chief Judge. More than thirty years ago,
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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.
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v. DeCosta, 377 F.2d 315 (1st Cir.) [hereinafter DeCosta I],
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cert. denied, 389 U.S. 1007 (1967); DeCosta v. Columbia
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Broadcasting System, Inc., 520 F.2d 499 (1st Cir. 1975)
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[hereinafter DeCosta II], cert. denied, 423 U.S. 1073
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(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 complains
that CBS copied his idea; and he says that Viacom, by
broadcasting the old CBS programs, has violated federal and
state trademark and unfair competition laws. 15 U.S.C.
1114(1), 1125(a). The district court permitted the suit to
proceed. DeCosta v. Viacom Int'l, Inc., 758 F. Supp. 807
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(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.
I
DeCosta's Basic Legal Problems
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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,
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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
copying, 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
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Unhurried View of Copyright 2 (1966). Some creators, say,
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novelists or dramatists, rightly expect compensation from
those who buy or use their creations. Other creators, say,
academic scientists, teachers, or certain commercial
innovators (e.g., the inventor of the supermarket) expect
others to copy, and to use, their ideas free of charge.
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The result is a need for balance. Courts and
legislators 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,
trademarks, 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
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generally WCVB-TV v. Boston Athletic Ass'n, 926 F.2d 42, 45
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(1st Cir. 1991).
Mr. DeCosta's original legal problem lay in his
inability 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
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was he able to show the type of "confusion" between products
essential to success on his trademark, and most of his
other, claims. DeCosta II, 520 F.2d at 513-15.
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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
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(Second) of Judgments 27, 29 (1982). Each of Mr.
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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
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essence, a new one. See Restatement (Second) of Judgments
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27, cmt. c; 28(2)(b), (4) (collateral estoppel does not
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bar relitigation of an issue transformed by significant
factual or legal changes). After considering Mr. DeCosta's
arguments in detail, however, we find no legally significant
change.
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II
Trademark Registration
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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 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.,
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Dieter v. B & H Indus. of Southwest Florida, 880 F.2d 322,
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326 (11th Cir. 1989), cert. denied, 111 S. Ct. 369 (1990);
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WCVB-TV, 926 F.2d at 45; Astra Pharmaceutical Prods., Inc.
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v. Beckman Instruments, Inc., 718 F.2d 1201, 1205, 1209 (1st
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Cir. 1983); Pignons S.A. de Mecanique v. Polaroid Corp., 657
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F.2d 482, 486-87 (1st Cir. 1981); W.W.W. Pharmaceutical Co.
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v. Gillette Co., 23 U.S.P.Q.2d 1609, 1614, 1621 (S.D.N.Y.),
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reaff'd, amended in other respects, 1992 U.S. Dist. LEXIS
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10053 (S.D.N.Y. July 11, 1992); Merritt Forbes & Co. v.
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Newman Investment Securities, Inc., 604 F. Supp. 943, 956
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(S.D.N.Y. 1985); but cf. 15 U.S.C. 1051(b) (creating an
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exception, not presently relevant, to the use requirement).
DeCosta, as we have said, previously failed to show a
"likelihood" of public "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.
Columbia Broadcasting System, Inc. v. DeCosta, 192 U.S.P.Q.
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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.
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Co., 494 F.2d 3, 10 (5th Cir. 1974). That legal change
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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"
otherwise would bar. See Restatement (Second) of Judgments
___ _________________________________
28(4). But, we can find no such relevant transformation
here. Registration consists of persuading the Trademark
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Board to issue an appropriate "certificate." 15 U.S.C.
1051, 1057(a). The relevant statute says that the
certificate becomes "prima facie evidence" of the mark's
"registration," 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 "registrant's right to use" the
mark "incontestable." 15 U.S.C. 1065. But, the statute
nowhere says that registration makes it easier for a
registrant (with a conceded right to use a concededly valid
mark that he concededly owns) to prove that a relevant
buying public may confuse some other person's mark with his
own.
Nor are we aware of any reason why registration
here should significantly affect the proof about confusion.
To decide whether buyers are likely significantly to confuse
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'
advertising, 5) the kinds of prospective buyers, 6) evidence
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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.
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1989); Volkswagen Aktiengesellschaft v. Wheeler, 814 F.2d
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812, 817 (1st Cir. 1987); Astra, 718 F.2d at 1205; Pignons,
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657 F.2d at 487; Polaroid Corp. v. Polarad Elecs. Corp., 287
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F.2d 492, 495 (2d Cir.), cert. denied, 368 U.S. 820 (1961).
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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
meaning." 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,
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however, would denote, or refer to, something special,
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
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Oil Co. v. Thomas, 839 F.2d 1183, 1187, 1190 (6th Cir.
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1988); Keds Corp. v. Renee Int'l Corp., 888 F.2d 215, 220-21
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(1st Cir. 1989); cf. New Kids on the Block v. News America
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Publishing, Inc., 23 U.S.P.Q.2d 1534, 1535 (9th Cir. 1992)
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(describing the primary purpose of trademarks as "to
identify the source of 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
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not an issue before us in the earlier cases. This court
assumed in its opinions that DeCosta's mark had a secondary
meaning. It specifically said that his mark is "distinctive
enough so that proof of secondary meaning is not essential,"
and that, "at least among some people, plaintiff's name and
card had come to be associated with him." DeCosta II, 520
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F.2d at 513. It went on to find no relevant "confusion,"
even assuming a mark as strong as registration 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
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another's use of the same or a similar mark." American
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Heritage, 494 F.2d at 10 (emphasis added). The underlined
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phrase, however, likely refers simply to the mark's
"strength," in which case the phrase is consistent with
holdings in other courts. Dieter, 880 F.2d at 329; Wynn,
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839 F.2d at 1187, 1190; Keds, 888 F.2d at 220-21. If it
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means more than that, we do not understand the theory behind
it, and we do not follow it. Rather, we agree with the
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Seventh Circuit, that, in the case before us, "the
procedural 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]
decision [that likelihood of confusion was not shown]." EZ
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Loader Boat Trailers, Inc. v. Cox Trailers, Inc., 746 F.2d
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375, 379 (7th Cir. 1984). In sum, the "new" fact of
registration does not warrant relitigating the "likelihood
of confusion" issue.
III
Reverse Confusion
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DeCosta next argues that collateral estoppel does
not bind him because, since 1975, there has occurred a
"modification or growth in legal principles [that] effect a
significant change" in the law. See Commissioner of Internal
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Revenue v. Sunnen, 333 U.S. 591, 600 (1948); Restatement
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(Second) of Judgments 28(2)(b). His "new" case, he adds,
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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.
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DeCosta finds these "new" legal principles in an
area of trademark law called "reverse confusion," an area in
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) contrary. An
imaginary example may help explain the concept.
Suppose that Tom, in 1970, established a knife
company, which used the trademarked name "SupR-Chopper."
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 business, 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
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made in order to develop a positive image for the name
"SupR-Chopper." See, e.g., S.C. Johnson & Son, Inc. v.
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Johnson, 175 F.2d 176, 180 (2d Cir.), cert. denied, 338 U.S.
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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.
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Rohrlich, 167 F.2d 969, 972 (2d Cir. 1948) (prohibiting
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defendant's attempt to 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
confusion," 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
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F.2d 999, 1003-04 (2d Cir. 1983) (recording plaintiff's
concern that reverse confusion might lead to plaintiff's
"reputation for high quality merchandise" becoming
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"tarnished because of [defendant's] bargain basement, no-
frills image"); Banff, Ltd. v. Federated Dep't Stores, Inc.,
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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
particularly 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 confusion 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 subject, Big O Tire Dealers, Inc.
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v. Goodyear Tire & Rubber Co., 561 F.2d 1365, 1371 (10th
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Cir. 1977), cert. dismissed, 434 U.S. 1052 (1978), decided
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two years after our decision in DeCosta II, made absolutely
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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 represented a totally new, or
novel, principle. The jury instruction which it upheld
followed the language of 1114(1). See id. at 1371. And,
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Big O reasserted a principle set forth in a case that
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DeCosta invoked at length in DeCosta I, namely,
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International News Services v. Associated Press, 248 U.S.
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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.
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Justice Holmes' concurrence rested entirely on the "false
representation" aspect, which he viewed as unfair
competition:
The ordinary case [of unfair
competition] is palming off the
defendant's product as the plaintiff'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
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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
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being led to believe, wrongly and harmfully, that the copier
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is the source of the holder's product) was 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 sponsors 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.r.l. v.
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Lisa Lighting Co., 712 F. Supp. 394, 410 (S.D.N.Y. 1989);
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W.W.W. v. Gillette, 23 U.S.P.Q.2d at 1615. To return to our
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example, it is as if Tom could win his trademark case even
if everyone knows that Tom and Tom's knife company 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
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against Mary, even if Mary used the "SupR-Chopper" name to
label a product that nobody thought had anything whatsoever
to do with kitchen knives, say, helicopters (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
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
limitation central to the law of trademarks, the limitation
of trademark protection to the protection of marks as used
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on particular goods to identify their source or sponsor.
See United Drug Co. v. Rectanus Co., 248 U.S. 90, 97 (1918)
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(trademark rights are not "right[s] in gross"). As the
Supreme Court wrote many years ago, in Hanover Milling Co.
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v. Metcalf, 240 U.S. 403, 415 (1916):
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[W]here two parties independently are
employing the same mark . . . in
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separate markets wholly remote the one
from the other, the question of prior
appropriation is legally insignificant,
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 product
in a different market. See, e.g., McGregor-Doniger, Inc. v.
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Drizzle, Inc., 599 F.2d 1126 (2d Cir. 1979) (allowing
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manufacturer of expensive women's coats to use trademark
"Drizzle," despite prior registration of "Drizzler" mark for
plaintiff's cheaper golf jackets); King Research, Inc. v.
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Shulton, Inc., 454 F.2d 66 (2d Cir. 1971) ("Ship Shape" on
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hairspray did not infringe registered "Ship 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 company anywhere had used the name
"SupR-Chopper" on any product before she attached the name
to her helicopter product, lest some of, say, Tom's knife
customers believe that she, not Tom, had had the idea first.
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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 would 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 possibility that DeCosta might have obtained
such protection, at least for his calling card. See DeCosta
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I, 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),
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aff'd, 279 F. 747, cert. denied, 258 U.S. 627 (1922)
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(allowing relief for defendant's assertion that it had
copied "with permission" from the London Times as
disparaging plaintiff's rights, if plaintiff could prove
that, as defendant knew, plaintiff had -- and advertised
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itself as having -- a contract with the London Times
guaranteeing it exclusive copying rights); Big O, 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 speech where no
serious harm, in fact, will likely occur. See, e.g.,
___ ____
copyright law's "fair use" exemption, 17 U.S.C. 107; see
___
also Big O, 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
actionable 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
legislatures, and slowly by courts, over many years.
Finally, the leading case about trademark "reverse
confusion," Big O, supra, suggests that "commercial
______ _____
disparagement" law, not traditional "trademark law,"
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provides 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," it 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 to victims of "passing off." And, in doing
so, it says that, 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 sponsorship), 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."
IV
Factual Changes
_______________
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DeCosta argues that facts have changed since 1975.
Hence, the issue of "confusion now" is significantly
different than the issue of "confusion then." And,
"collateral estoppel" does not bar its litigation. See
___
Restatement (Second) 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 programs. 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 to
which DeCosta now points are such that litigation of the
"confusion" question represents a significantly different
factual issue. See id.
___ ___
After reviewing the record, we conclude that
DeCosta has not presented evidence of significantly
different circumstances for two reasons. First, much of his
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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 surveys
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 introduced 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 "impersonator" or an "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 witness 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." Id. We
___
simply do not see why this kind of evidence could not have
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been provided the first time. Nothing in the record
convincingly explains why those who saw DeCosta when 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 distributed 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 in a
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
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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 intent or expectation
of causing confusion or "forestalling expansion under the
mark by the prior user" (in a different 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. denied, 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) (similar); El Chico, Inc.
_______________
v. El Chico Cafe, 214 F.2d 721, 726 (5th Cir. 1954)
______________
(similar); James M. Treece, "Security for Federally
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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 Data 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 reasonably
have relied upon our prior final judgment as holding that
their activities did not cause "confusion" or significantly
harm "reputation or good will." Cf. Restatement (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
concerned, it 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.
See United Drug Co. v. Rectanus Co., 248 U.S. 90 (1918)
___ ________________ ____________
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(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 meaning but upon
whether the plaintiff can prove by a preponderance of the
evidence that his mark possessed secondary meaning [and, we
add, that there was a potential likelihood of confusion] at
__
the time the defendant commenced 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
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expands into the helicopter business. At that point, even
if buyers now confuse the source of the two products (Tom's
helicopters and Mary's helicopters), Tom cannot recover from
Mary, for it is Mary, not Tom, who has the legally prior
right to use the name in that field.
DeCosta reminds us that, since findings as to
likelihood 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 is
Reversed.
_________
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