A federal appellate court ruled that Duncan could not claim an exclusive trademark on the term “Yo-Yo” because the word had long been used in The Philippines to describe the toy. Duncan filed for bankruptcy a short time after the ruling, although it's not clear how much the court ruling played in a company already beset by major financial problems.
Here's the background, culled from appellate rulings available on the web.
THE START OF YO-YOS IN AMERICA
Pedro Flores, who had been born in The Philippines, introduced the yo-yo to the United States about 1928 with a small manufacturing plant in California. Duncan, a longstanding company, got into the yo-yo business, going back to at least January 1929.
On July 22, 1930, Flores Yo-Yo Corporation obtained registration of the trademark "Flores Yo-Yo."
 |
| Donald F. Duncan Sr. |
The argument apparently worked. Duncan received trademark 298,697 for “Genuine Duncan Yo-Yo” on Nov. 1, 1932, and trademark 300,504 for “Yo-Yo” on Jan. 24, 1933.
THE MURKY YEARS
At some point Duncan bought the Flores company, and for the next 20 years the use of the term yo-yo often drifted through uncertain legal waters.
The term was used freely by Joseph Radovan, who started Royal Tops in 1937. He was born in The Philippines in 1909, came to the United States in 1931, working as a yo-yo demonstrator until he formed the Royal toy company.
On July 23, 1948, the Duncan company signed an agreement with Louis Marx & Company, Inc. and Charmore Company, in which Duncan granted them a license to use the trademark “Yo-Yo,” which were technically described as “bandalore types of toy spinning tops.” The agreement allowed for Duncan to cancel the agreement with 30 days written notice.
In 1951, Royal filed suit in the Northern District of Illinois federal court seeking cancellation of Duncan's trademark registration because “Yo-Yo” was a generic name. That lawsuit effectively ended on Sept. 14, 1955, Duncan granted Royal “an exclusive and non-transferable right to use Licensor's trade-mark, `Yo-Yo,' on or upon or in association with bandalore tops," and Royal agreed to file papers in the federal lawsuit declaring Duncan's trademarks to be “valid and existing." On Nov. 21, 1955, a consent judgment was entered in the lawsuit declaring the trademarks to be valid.
1961 -- THE START OF THE BIG LAWSUIT
Royal kept using the term. Eventually, Duncan insisted Royal stop. Royal refused. In 1961 Duncan filed a federal lawsuit claiming that Royal Tops and Randy Brown, a former Duncan employee who went to work for Royal, were improperly using the term Yo-Yo.
Royal filed counterclaims, alleging it was due money for Duncan making fraudulent claims. Royal contended that in the 1955 license agreement, Duncan claimed there was no agreement in effect, when in fact the 1948 agreement with Marx was still operative. In its 1965 appellate court decision, the judges wrote that “Royal's president, Joseph T. Radovan, testified that he would not have settled Royal's suit against plaintiff for declaratory judgment if he had known there was an outstanding license agreement with some other company.”
A lengthy trial was held. Donald Duncan Sr testified that the 1948 agreement was cancelled in 1952 by mutual agreement in a conversation with Marx, but he admitted that no formal 30-day notice was given until Duncan's lawyer filed one in 1961.
Joseph Radovan, president of Royal, testified in court that “yo-yo” was a Filipino word for a childhood game and was well known.
Also testifying was Henry Lee Smith Jr., chair of the department of anthropology and linguistics at the State University of New York at Buffalo, who was qualified as an expert linguist and etymologist, particularly in the Polynesian languages. He testified that he made a study of the term yo-yo, including major unabridged encyclopedias, dictionaries, various bibliographical references, and conversations with colleagues and children. As the appellate court later wrote: “As a result of his study, he expressed the definite opinion that the word 'yo-yo' is a Malayo-Polynesian word of Philippine origin; that the toy itself is of Oriental origin, and that the word 'yo-yo' was tied together with the toy in the Philippines and was introduced into the American language from that country.”
Among Smith's documented references, the judges cited, was The Sunday Tribune Magazine of March 5, 1933, entitled, "Is Yo-Yo from the Philippines," which quotes the assistant director of the Philippine National Library, as saying that “ 'yo-yo' is descriptive of the movement and sound of the toy and hence the toy is characteristically so called in Filipino languages.” The article also stated that yo-yo was a well-known term for the toy throughout the Filipino islands.
Smith also pointed to a July 1, 1916, in the Scientific American Supplement, entitled, "Filipino Toys," which mentioned that yo-yo was a term commonly used to describe the toy. This article appeared 15 years before Duncan received his trademark.
Duncan countered in court that the publisher of the Merriam-Webster Dictionary and the American College Dictionary have agreed to acknowledge that Duncan owned a trademark that should be capitalized “Yo-Yo.” The company also noted that since it received its trademarks in the early 1930s, the federal government had rejected all efforts for other companies to register names that included the term yo-yo.
A major witness for Duncan was Henry Gleiss, executive vice-president of Markoa Corporation. He testified that he had done a “joint venture” with Duncan's attorneys to prepare a survey that asked “What company do you think of as I mention each of these names?" The names included such well known brands as Band Aid, Coke and Jell-O. Of the 1,445 interviewed, 630 – 43 percent – associated the trademark Yo-Yo with the Duncan company.
DUNCAN WINS TRIAL, BUT GETS APPEALED
Duncan won the trial. Royal appealed. On March 3, 1965, a three-judge panel of the U.S. Court of Appeals Seventh Circuit, based in Chicago, reversed the trial court's decision. “An exhaustive study of the record and the cases leads us to the firm conclusion that plaintiff's trademarks were improperly registered and, therefore, invalid, or in any event that they have subsequently become such by reason of the general acceptance by the public of 'yo-yo' as a descriptive name for the toy,” the judges wrote.
They noted that when Duncan testified that he had come up with the term yo-yo on his own, “It is of more than ordinary significance that Duncan Sr. while a witness ... was not asked to explain this statement, and he did not deny that at the time his applications were being processed he had the information which he then represented to have,” adding that Flores had already used the term in a previous registration.
The appellate judges saw that, starting in the 1950s, the Duncan company had tried to make people use the term “return top” as the generic name for the toy, but that had limited success. They pointed to trial testimony from Duncan's staff that anytime they found people using the term yo-yo as a generic, they wrote letters saying that Yo-Yo was their trademark and return top was the generic name.
“This correspondence constitutes a two-edged sword and is of little help to plaintiff,” the judges wrote, because the Duncan claims were often met with replies, “We thought it was generic.” The final decision said: “ 'Illustrative is the response from Maxwell J. Perrotta, a patent lawyer of Providence, Rhode Island, who in a letter dated June 20, 1962 stated: ' “Yo-Yo” is in our opinion clearly a generic term by which the product is now commonly known. The public is not now aware of what a `return top' is, but they know what a yo-yo is. They do not recognize that yo-yos originate from a single source or have any other trademark significance.' “
SOURCES
The 1965 ruling can be found here and also here.
A subsequent 1967 appellate decision on damage counterclaims can be found here.
No comments:
Post a Comment