Georgia-Pacific Corp. v. Great Plains Bag Co.
1980 CCPA LEXIS 293, 204 U.S.P.Q. (BNA) 697, 614 F.2d 757 (1980)
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Rule of Law:
A corporation has constructive knowledge of a rival's trademark use if its professional salespeople are exposed to the mark during their regular duties. An unreasonable delay in asserting trademark rights after gaining such knowledge, coupled with prejudice to the junior user who built up business goodwill, establishes the defense of laches and estops the senior user from seeking cancellation of the trademark registration.
Facts:
- Since the late 1940s, Georgia-Pacific Corp. has used the trademark 'G-P' on forestry products, including Kraft paper.
- In 1961, Great Plains Bag Co. began using a stylized logo containing the letters 'GP' on its paper and plastic bags, corporate stationery, and business checks.
- Beginning in 1962 and continuing for many years, Georgia-Pacific's salespeople and sales managers made numerous business visits to Great Plains' facilities, which featured large signs displaying the stylized 'GP' logo.
- Between 1962 and 1969, the two companies engaged in over thirty business transactions, including Georgia-Pacific's sale of Kraft paper to Great Plains.
- During these dealings, Great Plains used trucks, purchase orders, and checks bearing its stylized 'GP' logo.
- Great Plains also sold a significant number of multi-wall bags, imprinted with its logo, directly to Georgia-Pacific.
- While Georgia-Pacific did not object, Great Plains' annual sales under its logo grew from approximately $372,000 in 1961 to about $28,000,000 in 1973.
Procedural Posture:
- On June 8, 1971, the U.S. Patent and Trademark Office granted Great Plains Bag Co. registration for its stylized 'GP' mark.
- On July 11, 1973, Georgia-Pacific Corp. filed a petition with the Trademark Trial and Appeal Board (board) to cancel Great Plains' registration.
- Great Plains asserted the defenses of laches and estoppel in the cancellation proceeding.
- The board found Georgia-Pacific guilty of laches and estopped from challenging the registration, dismissing Georgia-Pacific's petition.
- Georgia-Pacific appealed the board's decision to the United States Court of Customs and Patent Appeals.
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Issue:
Is Georgia-Pacific estopped by laches from canceling the trademark registration of Great Plains Bag Co. where the likelihood of confusion is debatable and where Georgia-Pacific's employees had constructive knowledge of the mark's use for over a decade while Great Plains built substantial goodwill?
Opinions:
Majority - Baldwin, Judge.
No, Georgia-Pacific is estopped by laches from canceling Great Plains' registration because it had constructive knowledge of the mark's use for over a decade and its inaction resulted in prejudice to Great Plains. The court first found that the likelihood of confusion was reasonably debatable. The marks are visually distinct, with Great Plains' mark being a stylized design rather than a literal representation of the letters. Furthermore, the relevant consumers are sophisticated, discriminating purchasing agents who are unlikely to be confused as to the source of the goods. The court then addressed the defense of laches, holding that the knowledge of Georgia-Pacific's salespeople, who were repeatedly exposed to the Great Plains logo on signs, trucks, and business documents, must be imputed to the corporation. This imputed knowledge, combined with Georgia-Pacific's lengthy delay of over a decade in challenging the mark, during which Great Plains built a multi-million dollar business, established the elements of laches. Therefore, Georgia-Pacific is estopped from asserting that it will be damaged by the registration.
Analysis:
This case is significant for its application of the equitable defense of laches in trademark cancellation proceedings, particularly its detailed treatment of constructive knowledge. The court's decision to impute the knowledge of salespeople to the corporation establishes that a large company cannot claim ignorance if its market-facing employees were aware of an infringing use. This holding reinforces that trademark owners have an affirmative duty to police their marks and act diligently against potential infringers. The ruling provides a strong precedent for junior users to defend their registrations by showing that the senior user acquiesced through prolonged inaction, leading to economic prejudice.
