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December 13, 1965

Jean PEYRAT et al., doing business as Societe Saint-Louvent Peyrat & Cie, and trading under the name of Renault & Co., Plaintiffs,
L. N. RENAULT & SONS, INC., and Honorable Joseph P. Kelly, United States Collector of Customs for District No. 10, Defendants

Ryan, Chief Judge.

The opinion of the court was delivered by: RYAN

RYAN, Chief Judge.

This suit is brought under the provisions of Title 28, United States Code, Sections 1332, 1338, 1340 and under Title 15, United States Code, Sections 1121 and 1124 and under Title 19, United States Code, Section 1526. The plaintiffs and defendants have brought this non-jury suit on for trial upon a stipulation of facts, entered into after pretrial hearings. It has been further stipulated that defendant Joseph P. Kelly, United States Collector of Customs for District No. 10, will be bound with respect to the relief afforded to the parties.

 The complaint pleads four separate counts. Only two counts remain for trial disposition. The first count seeks a declaratory judgment that Renault (France) has the right to sell its brandy and/or cognac brandy in the United States under the trademarks "Renault" and "Renault and Co.". The second count seeks cancellation of all United States trademark registrations of Renault (U.S.A.) which make use of the word "Renault".

 The facts are basically these:

 Plaintiffs are French citizens doing business as copartners and trading under the name of Renault & Co.

 Defendant L. N. Renault & Sons, Inc., is a New Jersey corporation which has registered a number of trademarks, including the name "Renault" and used it in connection with the marketing of their domestic wines and other related products.

 Defendant does not sell cognac brandy, which can only be made in the Cognac District of France, and plaintiff does not wish to sell in this country any product other than its cognac brandy. For convenience, the plaintiffs doing business as Societe Saint-Louvent Peyrat & Cie and their predecessors will hereafter be referred to as French Renault and the defendants L. N. Renault & Sons, Inc., and its predecessor will be referred to as American Renault.

 In the United States, from a date at least as early as 1870 and continuously thereafter until 1935, except during the years of Prohibition (January 17, 1920-December 5, 1933), French Renault employed the trademarks "Renault & Co." and/or "Renault" in connection with cognac brandy shipped by them in commerce between France and the United States and sold in interstate commerce in the United States. Such shipments and sales were substantial in the years covered. Sales in the United States were halted in or about the year 1935, at which time French Renault's distributor went out of business. French Renault made no further shipments of cognac brandy either under the trademark "Renault & Co." or the trademark "Renault" in the United States until in or about June 1959. No efforts were made by French Renault in the years 1939-1944 to find a new distributor in the United States for their cognac brandy because of the advent of World War II. Commencing in or about 1944, French Renault and American Renault engaged in correspondence regarding distribution by American Renault of French Renault's cognac brandy in the United States under the trademarks "Renault" and "Renault & Co.". This correspondence continued until late in 1957.

 American Renault has used the trademark "Renault" continuously since 1870 in the United States and in connection with the manufacture, distribution, advertising and sale of domestic wines and wine products other than brandies. Since at least 1900 the "Renault" wines of American Renault have been sold throughout the United States. American Renault's sales of wines under the trademark "Renault" except during prohibition have also been substantial. American Renault's net annual sales, approximately 75% of which are under the "Renault" trademark, have exceeded $2,000,000 during the years 1959 through 1961. In addition, American Renault has expended over $238,000 on advertising during the period from 1958 through 1961, 90% of which was expended for the promotion of wines bearing the "Renault" label. During prohibition, American Renault marketed wine tonics, bitters, wine and jellies under the trademark "Renault".

 Since 1928 American Renault has registered 15 trademarks incorporating the name "Renault". All registrations are for wines and wine products, including seasoning and tonics. None are for brandy or cognac brandy.

 In 1933 French Renault filed an application for the registration of the trademark "Renault & Co." for cognac brandy. American Renault opposed the application on the ground of alleged confusing similarity between "Renault & Co." for cognac and American Renault's previously registered trademarks "Renault", "L. N. Renault & Sons, Inc.", and the word "Renault" in association with a pictorial representation of the founder of the business of American Renault's predecessor. The opposition was sustained on the ground that French Renault's predecessor did not have exclusive use of its mark between 1895 and 1905 and thus was not entitled to the benefit of the "tenyear proviso" of Section 5(b) (15 U.S.C. § 85(b)) of the Act of February 20, 1905 relating to registration of trademarks, which provided for the registration of surnames such as "Renault" and under which proviso French Renault sought registration.

 In 1936, American Renault filed applications for two trademarks for use of wines, "Renault" and "Renault French 75". French Renault opposed both applications on the grounds that cognac and wine were goods of the same descriptive properties and that the use of the "Renault" trademark by both parties would result in confusion to the public. Opposition proceedings followed and testimony was taken by French Renault. In October 1938, prior to the final hearings and decision on the merits, an agreement was reached between the parties and subsequently the oppositions were withdrawn and the registrations granted to American Renault for use on its domestic wines and champagnes.

 Applications were later filed by French Renault in 1947 and in 1951 to register "Renault" and "Renault & Co." as trademarks for cognac brandy. Both applications were denied on the ground, among others, that the mark sought to be registered therein was confusingly similar to American Renault's previous registrations.

 In 1959 French Renault informed American Renault that they had made arrangements with a distributor to sell their cognac brandy in this country under the trademark "Renault". One week later, American Renault notified French Renault and their distributor that American Renault claimed the exclusive right to use the trademark "Renault" in connection with all alcoholic beverages and that any attempt by French Renault to sell their cognac under that trademark would be met with legal proceedings. American Renault at that time recorded the trademark registration No. 367,358 dated May 16, 1939, constituting the mark "Renault, as applied to wines, with the United States Treasury Department to prevent importation into the United States of the same or similar goods bearing the same or similar trademarks. As a result of this recordation, the defendant Joseph P. Kelly, Collector of Customs in the New York area, has prohibited importation into the United States at the Port of New York of French Renault's cognac brandy under the trademarks "Renault" and "Renault & Co.". In 1960, one shipment of cognac brandy was detained by Customs and returned to France at French Renault's expense. Since that time, French Renault has made ...

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