Lindy Pen Co v. Bic Pen Corp.

982 F.2d 1400 (9th Cir. 1993)

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Nature of the Case

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Facts

P and Bic (D) are competitors in the production and manufacture of ball point pens. Each marketed a fine-point tip for use by accountants and auditors. In 1965, before Lindy's trademark for 'Auditor' was perfected and registration issued, D used the mark 'Auditor's' on its pen barrels. P made a claim to the mark, and D voluntarily agreed to stop using it. On September 20, 1966, the mark was issued to P for the word 'Auditor's.' Fourteen years later, D adopted the legend 'Auditor's Fine Point' to describe a certain pen model. D researched the term 'Auditor's' and found that at least three other manufacturers employed a variation of the word 'Auditor's' in their marketing materials. This investigation revealed that P also used the term, but that Lindy exerted no proprietary interest over it in its advertising. P sued D in 1980 alleging trademark infringement, unfair competition, breach of contract, and trademark dilution. The district court entered judgment in favor of D on all claims. The circuit court upheld the district court's ruling that D did not infringe in the major retail markets, but remanded the case to determine whether there was a likelihood of confusion in telephone order sales. The district court determined that there was a likelihood of confusion in the telephone order market and that confusion could be cured upon receipt of the goods because the purchaser could return the product. The circuit court again disagreed and found that P had established a likelihood of confusion in the telephone order market which post-sale inspection could not cure. The case was again remanded to district court 'with instructions to enter an order enjoining D from using the word 'Auditor's' on or in connection with its pens. The district court issued an injunction and permitted the parties to conduct discovery regarding damages and profits. The court held that an accounting of profits was inappropriate because D's infringement was innocent and accomplished without intent to capitalize on P's trade name. It held that D had failed to establish the amount of damages. This appeal resulted.