PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
RFE INDUSTRIES, INCORPORATED,
Plaintiff-Appellant,
v. No. 95-2665
SPM CORPORATION,
Defendant-Appellee.
Appeal from the United States District Court
for the Western District of Virginia, at Lynchburg.
Jackson L. Kiser, Chief District Judge.
(CA-94-20-L)
Argued: October 31, 1996
Decided: January 29, 1997
Before WIDENER and HALL, Circuit Judges, and
THORNBURG, United States District Judge for the
Western District of North Carolina, sitting by designation.
_________________________________________________________________
Affirmed in part, vacated in part, and remanded with instructions by
published opinion. Judge Hall wrote the opinion, in which Judge Wid-
ener and Judge Thornburg joined.
_________________________________________________________________
COUNSEL
ARGUED: David Marc Freeman, NAGEL, RICE & DREIFUSS,
Livingston, New Jersey, for Appellant. Michael Francis Urbanski,
WOODS, ROGERS & HAZLEGROVE, P.L.C., Roanoke, Virginia,
for Appellee. ON BRIEF: Bruce H. Nagel, NAGEL, RICE & DREI-
FUSS, Livingston, New Jersey; GENTRY, LOCKE, RAKES &
MOORE, Roanoke, Virginia, for Appellant. Dudley F. Woody, Frank
K. Friedman, Paul C. Kuhnel, WOODS, ROGERS & HAZLE-
GROVE, P.L.C., Roanoke, Virginia, for Appellee.
_________________________________________________________________
OPINION
HALL, Circuit Judge:
RFE Industries, Inc., a New Jersey corporation, filed this action
against SPM Corporation of Montvale, Virginia, in the district court
for the District of New Jersey, alleging that SPM had violated federal
and state law by infringing on RFE's "Popcorn" trademark, used by
RFE to denote certain of the silver anodes that it manufactures and
distributes for use in electroplating. SPM successfully maintained that
it was not subject to personal jurisdiction in New Jersey, and the case
was transferred to the Western District of Virginia on February 25,
1994. RFE's motion for retransfer was denied by the district court
below, and that court subsequently entered a final order granting
SPM's motion for summary judgment on all claims. RFE timely filed
a notice of appeal.
We conclude that the district court did not abuse its discretion by
denying the motion for retransfer, and we affirm its grant of summary
judgment to SPM on RFE's state-law claim for tortious interference
with contractual relations. We vacate the court's judgment and
remand the case with respect to the remaining claims, however,
because its finding that RFE's trademark is merely descriptive is
clearly erroneous.
I.
Both RFE and SPM supply anodes to the electroplating industry.
These anodes are small pieces of metal that, when placed in a plastic
or titanium basket, subjected to an electric current, and submerged
into a potassium cyanide "bath," ionize, dissolve, and accumulate on
the surface to be plated.
2
RFE developed a process in early 1989 to make silver anodes in
shapes that vaguely resemble cereal flakes or, perhaps, popped corn.
Later that year, RFE began to market its new product, which it called
"Popcorn." In June 1990, RFE applied to register the mark with the
United States Patent and Trademark Office (PTO).
During September 1991, SPM began selling the identical product
under the same name; it mailed solicitation letters, containing samples
of its product, to prospective purchasers. A few of those letters
reached some of RFE's customers, one of which forwarded a copy to
RFE in March 1992. RFE filed suit soon thereafter, asserting claims
for trademark infringement and for unfair competition under the Lan-
ham Act, 15 U.S.C. § 1051 et seq. The complaint also alleged state-
law claims for infringement and for tortious interference with contrac-
tual relations.
Upon learning of the suit, SPM changed the name of its product
from "Popcorn" to "Snowflake." On November 9, 1993, the PTO
issued a certificate of registration to RFE for its"Popcorn" trademark,
without requiring RFE to submit any proof that the mark had acquired
a secondary meaning. See Section III-A, infra.
The PTO's certification failed to convince the district court, which
found the "Popcorn" mark, as it pertains to silver anodes, undeserving
of protection from infringement. The court's finding necessitated the
entry of summary judgment for SPM on three of RFE's four claims;
the fourth claim, that for tortious interference with contractual rela-
tions, was also held by the district court to be without merit. RFE
appeals.
II.
At the threshold, we must determine whether the district court
abused its discretion by denying RFE's motion to retransfer the case
to the District of New Jersey. See Linnell v. Sloan, 636 F.2d 65, 67
(4th Cir. 1980) (stating applicable standard of review).
RFE contends that the case was ripe for retransfer when, during the
latter stages of discovery, it finally came to light that SPM had failed
3
to timely disclose its business relationship, beginning in 1990, with
Englehard Corporation, a New Jersey wholesaler of silver salts. It was
also revealed that SPM had purchased silver from another New Jersey
company in November 1992, and that it had sold silver cyanide to a
New Jersey customer about a year prior to the February 1994 transfer
order.
The district court below observed that, had the district court in New
Jersey known of SPM's then-existing contacts with the putative
forum state, it nonetheless need not have determined that those con-
tacts were so substantial as to require it to assert personal jurisdiction
over SPM. We agree that, even had the New Jersey court been fully
apprised of the nature and quality of SPM's contacts, it could have
nevertheless exercised its sound discretion to grant the transfer
motion.
We note also that RFE failed to demonstrate below that, as of the
date it moved for retransfer, it had been or would be prejudiced by
being compelled to litigate in Virginia. Moreover, there has been no
showing that SPM perpetrated a fraud on the court by intentionally
concealing its contacts with New Jersey. In light of the above consid-
erations, we hold that the district court below did not abuse its discre-
tion by denying the motion for retransfer.
III.
A.
We turn now to the merits of RFE's contention that the designation
"Popcorn," pertaining to its line of oddly shaped silver anodes, is a
mark worthy of legal safeguarding. We have noted previously that the
protection accorded such marks is a function of the mark's distinc-
tiveness. Sara Lee Corp. v. Kayser-Roth Corp. , 81 F.3d 455, 464 (4th
Cir.), cert. denied, 117 S. Ct. 412 (1996)."Fanciful," "arbitrary," or
"suggestive" marks are distinctive; marks that are merely "descrip-
tive" or "generic" are not, unless, in the case of the former, the pri-
mary significance of the product feature described by the mark is to
identify the source of the product, rather than the product itself. Id.
Such descriptive marks -- Coca-Cola(R), for example -- are said to
have acquired "secondary meaning" in the minds of the public. Id.
4
The controversy here, typical of trademark disputes, centers on
whether RFE's "Popcorn" mark is suggestive (and therefore distinc-
tive) or merely descriptive. The district court found that the "Popcorn"
designation, as applied to silver anodes, "describes a characteristic of
the product -- its shape or appearance -- rather than suggest[s] it."
The court found further that "Popcorn" had not acquired a secondary
meaning in the silver anode market, identifying RFE as its single
source. The district court's findings may be disturbed on appeal only
if they are clearly erroneous. Sara Lee at 460; Pizzeria Uno Corp. v.
Temple, 747 F.2d 1522, 1526 (4th Cir. 1984).
We agree with the district court that the proper focus in this case
is on the product's shape. Any similarity between"Popcorn" anodes
and actual popped corn begins and ends with shape; the designation
is in no way intended to indicate that RFE's anodes have the color,
weight, or texture of popcorn. The question to be answered, then, is
the one posed by the district court: Does the term"Popcorn" suggest
the anodes' shape, or merely describe it?
We begin by acknowledging that basic, "common" shapes are not
generally accorded trademark protection. Wiley v. American Greet-
ings Corp., 762 F.2d 139, 141-42 (1st Cir. 1985) ("It is hornbook law
that `ordinary geometric shapes such as circles, ovals, squares, etc.,
. . . are regarded as non-distinctive and protectable only upon proof
of secondary meaning.'"), quoting J. Thomas McCarthy, Trademarks
and Unfair Competition, § 7:12, at 172; Brooks Shoe Mfg. Co., Inc.
v. Suave Shoe Corp., 716 F.2d 854, 858 (11th Cir. 1983) (quoting
McCarthy).
Our acknowledgment does not, however, end our inquiry. The
word "popcorn" is not generally used to denote a shape, much less a
common or ordinary one like a circle or square; we doubt, for exam-
ple, that geometry students are routinely asked to bisect a "popcorn."
Moreover, popcorn does not admit of a paradigmatic shape. Like
snowflakes (both real and SPM's anode version), it might be said that
no two of the popped kernels are exactly alike.
Even were the shape at issue one that is both common and cons-
tant, an important distinction must be made when the product only
resembles, and does not replicate, the shape. No one would mistake
5
RFE's anodes for popcorn, even if they were the same color and tex-
ture, drenched in butter, and salted.
The anodes are not themselves popcorn. They are not made of pop-
corn, and they are not used in the manufacture of popcorn. In the con-
text of silver anodes, then, the name "Popcorn" is neither a generic
term nor an actual description of any "function, use, characteristic,
size, or intended purpose of the product." See Sara Lee, 81 F.3d at
464. RFE's "Popcorn" mark is instead a metaphor; it cleverly con-
jures or suggests an image that its product vaguely resembles. The
name therefore "reinforces the association between the product and its
source -- a sure sign of a mark entitled to protection." Id. at 465.
Lastly, we note that we find ourselves confronted yet again with a
case where a trademark has been ruled descriptive, notwithstanding
that the PTO has issued a certificate of registration for the mark with-
out requiring proof of secondary meaning. We have said at least twice
before that the PTO's taking of such an action is powerful evidence
that the registered mark is suggestive and not merely descriptive. See
Sara Lee at 465 n.12; Pizzeria Uno at 1529 ("this essential fact . . .
must be considered prima facie correct by a court in considering the
validity of a trademark[.]") (citations omitted).
It must by now be apparent that a district court should not freely
substitute its opinion for the PTO's. See Sara Lee at 465 n.12 ("The
inescapable conclusion is that either the Patent and Trademark Office
or the district court has made a mistake; we are convinced that it was
the latter."). We conclude that the PTO has again correctly deter-
mined the mark at issue to be suggestive, and that the district court's
finding to the contrary is clearly erroneous.
B.
Our holding today does not, in light of the record before us, man-
date the entry of judgment for RFE on the three claims to which the
strength or distinctiveness of its mark is relevant. The district court,
in ruling that SPM was entitled to summary judgment based solely
upon the perceived weakness of RFE's mark, did not consider factors
other than distinctiveness that may be pertinent to resolving the ques-
tion of whether SPM's use of the "Popcorn" trademark was likely to
6
have resulted in anode purchasers confusing its product with RFE's.
See Sara Lee at 463-64 (cataloging a non-exclusive list of potential
factors). A likelihood of confusion must be established in order for a
plaintiff to prevail on claims of trademark infringement and unfair
competition under the Lanham Act. Id. at 463. The same is true of
common-law infringement claims. See, e.g., Rosso & Mastracco, Inc.
v. Giant Food Shopping Center of Va., 104 S.E.2d 776, 781 (Va.
1958).
For the purposes of remand, then, we instruct the district court only
that it must consider the distinctiveness of RFE's"Popcorn" trade-
mark to be conclusively established. Whether RFE may ultimately
prevail on its claims, along with the nature and extent of any relief
to which it may be entitled, are among those issues left for the district
court to determine.
IV.
We turn finally to the district court's grant of summary judgment
to SPM on RFE's state-law claim for tortious interference with con-
tractual relations. The essence of this claim is that SPM made unsolic-
ited mailings and telephone calls to some of RFE's customers,
offering to sell them "Popcorn" at a lower price than RFE was asking.
The tort has four elements:
(1) the existence of a valid contractual relationship or busi-
ness expectancy; (2) knowledge of the relationship or expec-
tancy on the part of the interferor; (3) intentional interfer-
ence inducing or causing a breach or termination of the rela-
tionship or expectancy; and (4) resultant damage to the party
whose relationship or expectancy has been disrupted.
Chaves v. Johnson, 335 S.E.2d 97, 102 (Va. 1985).
In this case, the affected customers had, in the past, simply ordered
their anodes from RFE on an "as needed" basis; they had not commit-
ted to any future purchases of "Popcorn" at all. RFE thus had only the
weakest kind of business expectancy. All that it could expect is that
it would retain its customers only so long as it met their demand for
a quality product at a competitive price.
7
Moreover, RFE's witnesses conceded that its former customers
began purchasing "Popcorn" anodes from SPM solely because the lat-
ter offered a lower price for precisely the same product. Thus, it has
been established that SPM's mailings and letters were not a proximate
cause of any business loss suffered by RFE. We conclude that RFE
has failed to adduce evidence of the first and third Chaves elements
sufficient to withstand the entry of summary judgment against it.
V.
The summary judgment entered on behalf of SPM by the district
court is affirmed as to RFE's claim under state law for tortious inter-
ference with contractual relations. The court's judgment is vacated,
however, on the claims for trademark infringement and for unfair
competition under the Lanham Act, and on the state-law infringement
claim. The case is remanded for further proceedings, with instructions
for the district court to treat the distinctiveness of RFE's "Popcorn"
trademark as conclusively established.
AFFIRMED IN PART, VACATED IN PART,
AND REMANDED WITH INSTRUCTIONS
8