Skippy, Inc. v. Cpc International, Inc., Skippy, Inc. v. Cpc International, Inc.

674 F.2d 209, 33 Fed. R. Serv. 2d 901, 216 U.S.P.Q. (BNA) 1061, 1982 U.S. App. LEXIS 21209
CourtCourt of Appeals for the Fourth Circuit
DecidedMarch 5, 1982
Docket81-1043, 81-1044
StatusPublished
Cited by52 cases

This text of 674 F.2d 209 (Skippy, Inc. v. Cpc International, Inc., Skippy, Inc. v. Cpc International, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fourth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Skippy, Inc. v. Cpc International, Inc., Skippy, Inc. v. Cpc International, Inc., 674 F.2d 209, 33 Fed. R. Serv. 2d 901, 216 U.S.P.Q. (BNA) 1061, 1982 U.S. App. LEXIS 21209 (4th Cir. 1982).

Opinions

CHAPMAN, Circuit Judge:

This appeal and cross appeal are from a trademark infringement and unfair competition suit in which the plaintiff charged the defendant with infringement of its Skippy trademark. Defendant cross-claimed for damages for breach of contract and certain declaratory and injunctive relief based on its rights in the Skippy trademark. The district court granted defendant partial summary judgment, dismissing all plaintiff’s claims for damages. After a nonjury trial on the merits, judgment for defendant was entered on plaintiff’s claims for declaratory and injunctive relief. The district court held for the plaintiff on defendant’s cross-claim for damages. The district court also held for the plaintiff on defendant’s claim that plaintiff had abandoned its trademark rights in the mark Skippy. The district court granted defendant’s cross-claim for a declaratory judgment that its registration of the mark Skippy had become incontestable pursuant to 15 U.S.C. § 1115.

Plaintiff appeals the judgment against it on its damage claims. It also appeals denial of its claims for declaratory and injunctive relief. Plaintiff asserts that it is entitled to a new trial on all its claims since it was denied a jury trial. In addition, plaintiff appeals the declaratory judgment for defendant on its claim to incontestable rights. Defendant cross appeals the district court’s denial of its cross-claim for a declaratory judgment that plaintiff had abandoned its rights to the Skippy mark. We affirm the district court’s resolution of these issues, except the declaratory judgment that defendant’s right to the mark Skippy for peanut butter had become incontestable, which must be vacated.

In March of 1923, Percy L. Crosby created a cartoon featuring a school-aged child he named Skippy. Within a few years of its creation the cartoon had been syndicated to newspapers throughout the country, where it was published as a newspaper comic strip. During the first decade of publication, and to a lesser extent thereafter, Crosby capitalized on the popularity of the “Skippy” comic strip by marketing “Skippy” cartoon books, magazine articles and novels. Crosby also licensed rights to use the Skippy name and concept to commercial interests for product endorsements, radio programs and at least' one motion picture.

In 1925 Crosby obtained a federal trademark for the mark Skippy for the title of cartoons depicting a humorous juvenile character. Skippy, Inc., the appellant/cross appellee herein and plaintiff below, was organized by Crosby in 1932. Crosby reportedly transferred his rights in the Skippy trademark to Skippy, Inc. in return for stock in the corporation. CPC International, Inc., appellee/cross appellant herein and defendant below, acquired its right to the mark Skippy for peanut butter in a 1958 merger with The Best Foods, Inc. Best Foods had acquired Rosefield Packing Company in 1954, obtaining with it Rosefield’s [212]*212rights to the mark Skippy for peanut butter. Rosefield began marketing Skippy brand peanut butter in 1933 when it was a fledging packing company distributing food products in the California area.

Rosefield initially placed a white slat fence and a bucket with a paintbrush in it on its Skippy peanut butter labels. The white slat fence, the bucket and brush, and the hand painted name Skippy, all appearing on the label of Rosefield’s peanut butter, were arguably suggestive of Crosby’s “Skippy” comic strip. Rosefield, Best Foods and CPC continued to use the fence, the bucket and brush and the hand painted Skippy mark on their labels until approximately 1960.

Syndication of the “Skippy” comic strip ceased in 1945, but Crosby and Skippy, Inc., continued to seek commercial uses for the Skippy cartoon character after 1945. In 1947 Skippy, Inc. retained the Al Dvorin advertising agency to promote and license the Skippy mark and concept. It is apparent that these efforts met with little success since Skippy, Inc.’s total income from 1945 to 1980 was $45,000, with $25,000 of this sum being received from CPC for what CPC asserts was a settlement of the parties’ differences over use of the Skippy mark.

Skippy, Inc.’s federal registration of the Skippy mark was not renewed when it expired in 1945. In 1947 Rosefield registered the mark Skippy for peanut butter without opposition from Skippy, Inc. Prom 1958 to 1979 net sales of Skippy peanut butter totaled $1,218,000,000. Marketing and advertising expenses during that same period totaled $105,700,000.

Management of Skippy, Inc. changed hands in 1968 when Joan Crosby Tibbetts was elected president. In early 1977 Tib-betts advised CPC of her knowledge that Skippy, Inc. had successfully opposed Rose-field’s attempts, in 1933, to register the mark Skippy for peanut butter. Shortly thereafter Tibbetts began negotiating with CPC to settle any claims that Skippy, Inc. might have against CPC. From May 1977 until September 1977, Tibbetts discussed several matters with CPC, including what came to be designated an “option” agreement entitling CPC to use the mark Skippy and the Skippy cartoon character in advertising its food products. This agreement contained a release of CPC by Skippy, Inc.

The district court, Judge Albert V. Bryan, Jr., presiding, granted CPC partial summary judgment and dismissed Skippy, Inc.’s claims for monetary damages on grounds of laches. Skippy, Inc. now appeals the grant of partial summary judgment, asserting that laches is not a defense to a claim for damages. Skippy, Inc. also asserts that laches, even if applicable to claims for damages, was improperly applied to the instant damage claims since Rose-field and its successors were guilty of bad faith infringement.

Laches is a defense to claims for damages for trademark infringement and unfair competition. Greyhound Corp. v. Rothman, 84 F.Supp. 233 (D.Md.1949), aff’d, 175 F.2d 893 (4th Cir. 1949); Worcester Brewing Corp. v. Rueter & Co., 157 F. 217 (1st Cir. 1907); 1 Gilson, Trademark Protection & Practice § 8.12[12][K]. While the availability of laches as a defense to claims for injunctive relief may be limited when the defendant is guilty of bad faith infringement, see Menendez v. Holt, 128 U.S. 514, 9 S.Ct. 143, 32 L.Ed. 526 (1888) and Saxlehner v. Eisner, 179 U.S. 19, 21 S.Ct. 7, 45 L.Ed. 60 (1900), laches will bar a claim for damages for bad faith infringement. Hanover Star Milling Co. v. Metcalf, 240 U.S. 403, 36 S.Ct. 357, 60 L.Ed. 713 (1916); Greyhound, supra.

Skippy, Inc.’s failure to pursue its claims against Rosefield from the late 1940’s until 1979, when the instant suit was filed, convinces us that Judge Bryan did not abuse his discretion in applying laches to bar Skippy, Inc.’s claims for damages for trademark infringement and unfair competition.

Skippy, Inc.’s claims for declaratory and injunctive relief were tried nonjury to the district court, Judge Oren R. Lewis presiding.

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Bluebook (online)
674 F.2d 209, 33 Fed. R. Serv. 2d 901, 216 U.S.P.Q. (BNA) 1061, 1982 U.S. App. LEXIS 21209, Counsel Stack Legal Research, https://law.counselstack.com/opinion/skippy-inc-v-cpc-international-inc-skippy-inc-v-cpc-international-ca4-1982.