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MECHANICAL PLASTICS CORP. v. TITAN TECHS.

March 22, 1994

MECHANICAL PLASTICS CORP., Plaintiff,
v.
TITAN TECHNOLOGIES, INC., et al, Defendants.



The opinion of the court was delivered by: CHARLES L. BRIEANT

 Brieant, J.

 Familiarity of the reader with all of the prior proceedings in this trademark infringement action is assumed. By letter dated March 18, 1994, docketed in this action, the attorney for plaintiff advises as follows:

 
"Plaintiff in the above referenced matter is writing to you, as you requested at the February 25, 1994 Rule 16 Conference, to apprise of the status of the parties settlement negotiations.
 
As was discussed at the conference, both parties have been actively negotiating in an effort to resolve not only this case, but a series of differences that may very well lead to future litigation. These negotiations have led to the resolution of the vast majority of issues, however, three issues still remain. One of the three issues is the status and effect of this Court's decision upon Defendants' Motion for Summary Judgment should a settlement be otherwise reached.
 
It is now apparent, however, that the parties herein will not be able to settle the "other" remaining issues in short order. Therefore discussion regarding a joint motion to vacate this Court's prior decision upon Defendants' Motion for Summary Judgment, is moot. This Court certified issues for immediate interlocutory appeal and stayed the proceedings as to the remaining issues. While thereafter actively engaged in settlement discussions and optimistic about the chances of reaching such a settlement, the parties, by stipulation which was filed with and mandated by the Court of Appeals for the Second Circuit, withdrew the appeal without prejudice and subject to reinstatement. (Copy of the document is annexed hereto.) According to the terms of the stipulation, appellant's counsel may reinstate the appeal within 30 days "after the District Court rules on the proposed settlement."
 
Based on the facts outlined above, the parties must reinstate the appeal. Therefore it becomes necessary for this Court to "rule" on the proposed settlement."

 The letter incorporates and refers to a Mandate of the Court of Appeals issued based on a stipulation which provided that, "The above entitled appeal is hereby withdrawn without costs and without attorneys' fees and without prejudice, subject to reinstatement by written notice to the Clerk of this Court by Appellant's counsel by [sic] 30 days after the District Court rules on proposed settlement".

 There is no proposed settlement. There never was.

 By its opinion dated June 17, 1993, reported in 823 F. Supp. 1137 (S.D.N.Y. 1993) this Court held that one of several trademarks for plastic toggle fasteners belonging to the plaintiff, U.S. Reg. No. 1,510,979 was merely functional and therefore ineligible for trademark protection. This Court directed cancellation of the registration, but stayed that direction pending appeal. A separate final declaratory judgment was issued on the issue of functionality pursuant to F.R. Civ. P. 54(b), and a notice of appeal was duly filed.

 As part of a global settlement of this and other controversies between the parties which plaintiff would like to reach, but which was not agreed to, plaintiff apparently seeks an order from this Court which would withdraw or vacate the prior decision in the case which led to the declaratory judgment appealed from. *fn1" The obvious motivation for doing so is that the plaintiff, once having settled with these defendants, if it can, wishes to be in a position to assert the trademark against other manufacturers of plastic toggle fasteners. This would create an improper and perpetual burden on competition in the manufacture and sale of a prosaic but necessary article of trade. Accordingly, this Court is not willing to lend itself to any such manipulative conduct, which would be adverse to the public interest, not even to settle a lawsuit, nor to avoid a possible reversal upon appeal should an appellate panel reject our analysis of the functionality of plaintiff's trademark.

 Plaintiff has submitted a proposed stipulated order. Loaded with "whereas" clauses, this stipulated order seeks to have the Court "rule" on the proposed settlement. *fn2" Because there is no proposed settlement, and never was, there is nothing to rule on. This Court deals only with actual cases and controversies. It should decline to take any action to assist an end run around the competition in the toggle business.

 Plaintiff may make such application to the Court of Appeals as may be appropriate. That Court undoubtedly has the power to withdraw and vacate its Mandate, because the Mandate was based upon the untruthful representation that there was in fact a proposed settlement upon which this Court should rule. As noted earlier, defendants have never agreed to a proposed settlement.

 This Court declines to sign the proposed stipulated order ruling on the phantom proposed settlement, and leaves the ...


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