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Blue Bell, Inc. v. Farah Mfg. Co. - 508 F.2d 1260 (5th Cir. 1975)

Rule:

Ownership of a mark requires a combination of both appropriation and use in trade. Thus, neither conception of the mark nor advertising alone establishes trademark rights at common law. Rather, ownership of a trademark accrues when goods bearing the mark are placed on the market. 

Facts:

Plaintiff Blue Bell, a clothing manufacturer, brought an action for common law trademark infringement and unfair competition against Defendant Farah Manufacturing, another clothing manufacturer.  Blue Bell also sought to enjoin Farah from use of the disputed trademark. The evidence suggested that both parties created identical trademarks for substantially identical goods at approximately the same time, and they sought injunctions against each other based on common law trademark infringement and unfair competition. the United States District Court for the Western District of Texas granted summary judgment to Defendant Farah, and Blue Bell appealed.

Issue:

Was an internal shipment of a product bearing a trademark form the basis of a first use of a mark?

Answer:

No

Conclusion:

The United States Court of Appeals for the Fifth Circuit affirmed the lower court's grant of summary judgment in favor of Farah, but declined to adopt the determination that Farah's shipment of one item to each of its 12 sales managers was a bona fide use in trade. Rather, that internal transaction was insufficient to secure trademark ownership. The Court also agreed with the district court that Blue Bell's actions in affixing the new mark to goods previously manufactured under a different name was a bad faith attempt to reserve a mark, and shipment of those goods was not a valid date of first use. A trademark is a symbol (word, name, device or combination thereof) adopted and used by a merchant to identify his goods and distinguish them from articles produced by others.  Ownership of a mark requires a combination of both appropriation and use in trade. Thus, neither conception of the mark, nor advertising alone establishes trademark rights at common law. Moreover, the Court concluded that the date of first sales to customers to be determinative and awarded priority to Farah.

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