Long, Legal Editor, CCH
Trademark Law Guide
A surgical instrument manufacturer was entitled to a preliminary injunction barring competitors from using the mark "Whitmann Patch" in connection with surgical patches used in abdominal surgery, the federal district court in Milwaukee has decided. The competitors --two companies formed by the inventor of the product, who was a former officer and shareholder of the manufacturer --were using an identical mark on almost identical products sold to the same customers.
Ownership of Mark
The manufacturer had the exclusive common-law right to use the "Whitmann Patch" mark, the court determined. Although the inventor of the patch had obtained a federal registration for the mark, the manufacturer had acquired prior common-law rights in the mark through use in commerce. The manufacturer sold and promoted Whitmann Patches nationally for a decade before the inventor and his business partners began selling their own patches under the name.
The inventor had been vice president of the manufacturer and a 49 percent shareholder prior to a disagreement that led to the inventor leaving the manufacturer and forming two new businesses to compete with the manufacturer. Simply because the inventor was a shareholder and officer of the manufacturer did not mean that he owned the mark, the court said.
To establish ownership, the inventor would have to show that he actually controlled the manufacturer's use of the mark with respect to the quality of the products sold under the mark. There was no evidence that the inventor had such power. The manufacturer, not the inventor, controlled the quality of the product. In addition, there was no basis for finding an implied licensing agreement between the parties, the court determined.
Likelihood of Confusion
The fact that the inventor of the product was affiliated with the competitors and was formerly affiliated with the manufacturer made confusion more likely. Although the doctors and hospital administrators that purchased the patches were likely to be sophisticated purchasers, there was evidence of actual confusion, the court noted.
The manufacturer would sustain irreparable harm to its reputation and goodwill in the absence of injunctive relief, the court said. Although the competitors were the only other sellers of the product, the competitors' sales might not accurately measure the damage to the manufacturer's goodwill and reputation. There was evidence that the competitors' patches were not of as high a level of quality as the manufacturer's, the court added.
Starsurgical, Inc., ED Wis., ¶61,820.