Phillip W. Stanfield v. Osborne Industries, Inc., Stanley M. Thibault, Ronald Thibault

52 F.3d 867, 34 U.S.P.Q. 2d (BNA) 1456, 1995 U.S. App. LEXIS 7988, 1995 WL 215277
CourtCourt of Appeals for the Tenth Circuit
DecidedApril 11, 1995
Docket94-3020
StatusPublished
Cited by77 cases

This text of 52 F.3d 867 (Phillip W. Stanfield v. Osborne Industries, Inc., Stanley M. Thibault, Ronald Thibault) is published on Counsel Stack Legal Research, covering Court of Appeals for the Tenth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Phillip W. Stanfield v. Osborne Industries, Inc., Stanley M. Thibault, Ronald Thibault, 52 F.3d 867, 34 U.S.P.Q. 2d (BNA) 1456, 1995 U.S. App. LEXIS 7988, 1995 WL 215277 (10th Cir. 1995).

Opinion

TACHA, Circuit Judge.

Plaintiff Phillip W. Stanfield brought this action against defendants Osborne Industries, Inc. (Oil), Stanley M. Thibault, and Ronald M. Thibault alleging two claims under the Lanham Act, 15 U.S.C §§ 1051-1128, and various state common law claims. Plaintiffs claims arise from Oil’s use of two trademarks containing the word “Stanfield.” The district court granted defendants’ motion for summary judgment as to the Lanham Act claims and declined to exercise supplemental jurisdiction over the remaining state law claims. Stanfield v. Osborne Indus., Inc., 839 F.Supp. 1499, 1508 (D.Kan.1993). Plaintiff appeals the district court’s order to this court. We have jurisdiction pursuant to 28 U.S.C. § 1291 and affirm.

I. Background

In 1972, plaintiff developed several agricultural products including a fiberglass heating pad for newborn hogs. 1 He presented these ideas in a letter to the president of First State Bank in Osborne, Kansas. Although plaintiff was not in the business of manufacturing these products at the time of his letter, he indicated that he would call his business “Stanfield Products” if he went into business. Osborne community leaders subsequently created defendant Oil to manufacture plaintiffs products. Oil was incorporated in May 1973.

The organizers of Oil approached defendant Stanley M. Thibault in March 1973 *869 about becoming involved with Oil. Stanley Thibault moved to Osborne in September 1973 to become president of Oil. In that same month, plaintiff agreed to allow Oil to manufacture the products he had developed in exchange for royalties on sales (the 1973 agreement). Plaintiff simultaneously became an employee of OIL

In April 1974, defendant Ronald Thibault, Stanley’s brother, undertook several special design projects for Oil. Ronald became a full-time employee of Oil in April 1975 when he took the position of vice president in charge of marketing and engineering. Ronald decided that Oil needed to reduce its dependence on the company that distributed Oil’s products and develop its own markets. He concluded that Oil would need its own trademark to foster its independence. When plaintiff learned of Oil’s plan to develop a trademark, he insisted that Oil use the word “Stanfield” in its mark. Oil agreed, and the parties entered into the following agreement (the 1975 agreement):

LICENSE AGREEMENT
THIS AGREEMENT, made and entered into as of this 5th day of July, 1975, by and between Phillip W. Stanfield, of the County of Osborne, State of Kansas, hereinafter referred to as First Party, and Osborne Industries, Inc., hereinafter referred to as Second Party:
WITNESSETH THAT:
WHEREAS, Second Party is manufacturing certain products of which First Party is the inventor as enumerated in a certain License Agreement by and between said parties dated the 3rd day of October, 1973, and
WHEREAS, Second Party is manufacturing certain products other than invented by First Party, and
WHEREAS, Second Party desires to use the name “Stanfield” on all or part of the products manufactured by Second Party whether or not the same be invented by First Party, as a distinctive mark on said products in conjunction with the name of said products, and
WHEREAS, Second Party desires to use the name “Stanfield” as a distinctive mark on all or part of its products manufactured, at its discretion for a period of Fifteen (15) years from the date of this agreement and that said design of the distinctive mark bearing the name “Stan-field” shall be at the sole discretion of said party of the Second Part as to the design of the same, and
WHEREAS, both parties agree that all products manufactured by Second Party shall bear a distinctive mark and shall bear all marks required by the patent laws pertaining to and in conjunction with a License Agreement between the parties entered into on the 3rd day of October, 1973, and in the event that any of those distinctive marks referring specifically to “Stan-field” products or used in connection with “Stanfield” products shall be registered as á trademark, Second Party will be entitled to use said trademark in connection with the License Agreement dated the 3rd day of October, 1973 by and between the parties and shall use said mark in accordance with the trademark laws.
WHEREAS, in consideration of the use of the name “Stanfield” as above described in this Agreement in regard to any or all products manufactured by Second Party, the sum of $75.00 shall be paid to First Party by Second Party for the use of said name as above described.
This Agreement shall inure to the benefit of and be binding upon the Parties hereto, their respective heirs, legal representatives, successors and assigns.
IN WITNESS WHEREOF, the parties have hereunto executed this Agreement as of the day arid year first above written.

Oil commissioned an artist to design two trademarks. One mark consisted of the word “Stanfield”; the other mark was a circle design incorporating the word “Stan-field.” By September 1976 011 was using both trademarks. Oil applied for registration of these trademarks in March 1977. The United States Patent and Trademark Office registered the circle design mark on the principal register of trademarks on January 24, 1978.

*870 Meanwhile, plaintiff had become ill and grown disenchanted with Oil. He resigned from Oil on September 23, 1975. Since his resignation, plaintiff has had no involvement with Oil. In February 1976, the Patent and Trademark Office rejected plaintiffs application for a patent on the hog heating pad. Oil stopped paying royalties to plaintiff on the sale of heating pads in December 1976.

Plaintiff filed his first lawsuit against Oil in Kansas state court in February 1977, claiming that Oil had breached the 1973 agreement by discontinuing the payment of royalties. In that lawsuit, plaintiff alleged that Oil’s use of the word “Stanfield” was conditioned upon the payment of royalties. Although the jury returned a verdict in plaintiffs favor, the Kansas Supreme Court ultimately overturned that verdict. Stanfield v. Osborne Indus. Inc., 232 Kan. 197, 654 P.2d 917 (1982). The court held that, under the terms of the parties’ contract, Oil was not obligated to pay royalties to plaintiff after the Patent and Trademark Office denied plaintiffs patent application. Id. 654 P.2d at 922.

In connection with the state court case, defendant informed plaintiff that Oil considered the July 1975 agreement a release of plaintiffs rights in the word “Stanfield,” and that Oil had registered its “Stanfield” trademark. Oil has continuously used its trademarks in commerce since 1976.

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52 F.3d 867, 34 U.S.P.Q. 2d (BNA) 1456, 1995 U.S. App. LEXIS 7988, 1995 WL 215277, Counsel Stack Legal Research, https://law.counselstack.com/opinion/phillip-w-stanfield-v-osborne-industries-inc-stanley-m-thibault-ca10-1995.