In the previous Friday Footnote (Is a Legal Storm Brewing on the Horizon?) we learned that in 1951 the Chapter Supply Company of Danville, Illinois struck a “deal” with the Texas FFA to sell FFA jackets and other merchandise in Texas. The Texas FFA received 10% royalties from the sales and published advertisements for the company in the Texas Future Farmer magazine.
The National FFA did not like this arrangement. After several years of discussion, passing motions, and sending “cease and desist” letters to the Chapter Supply Company, the decision was made to finally take legal action. Last week’s Footnote ended with the letter sent by the FFA in 1952 to a law firm asking them to sue the Chapter Supply Company. Here is what happens next. In the words of Sherlock Holmes – The game is afoot.
At the January FFA Board of Directors Meeting (Minutes, p. 1)
Dr. Spanton introduced Mr. Cerra, of the law firm of Davies, Richberg, Tydings, Beebe & Landa, who gave a complete report on the court action against the Chapter Supply Company. In reviewing the status of the suit, Mr. Cerra reported that oral arguments have been presented and the case is in the hands of the judge – but there are many transcripts of records which he has not had time to read, and which he must read before giving final judgment.
At the July FFA Board of Directors Meeting (Minutes, p. 12)
Mr. Mathis of the law firm, Davies, Richberg, Tydings, Beebe and Landa, gave a brief report on the status of the law suit involving the Chapter Supply Company, Danville, Illinois, for the infringement of trademarks belonging to the FFA. Since the time of the note sent out by the National Office on May 5, 1953, findings of fact have been prepared and final arguments have been presented to the court. The final order of the court has not been made. It was recommended that, in the event of an inconclusive court order, an appeal should be taken.
Mr. Dalton moved that the Board of Directors accept the recommendation of the Board of Student Officers in that $3,500 be allocated for expenditure for attorneys’ fees to appeal the case, if needed, and that this amount be added to the budget. Motion seconded by Mr. Johnson and carried.
I wonder why the Board thought that an appeal might be needed? Does the motion foreshadow the actual court ruling?
The decision of the district court in Illinois regarding the FFA lawsuit was published on September 2, 1953. The FFA was not pleased with the court decision, even though it partially supported their position. In the ruling the court said (Future Farmers of America v. Romack, 114 F. Supp. 796, 801 (E.D. Ill. 1953)):
The court believes that Congress in the wording of the charter [PL 81-740] meant what it said….The inclusion of the words “duly authorized chapters and associations of chapters” in Section 16 and the omission of the words “sole and exclusive” from Sections 3 and 4 were no inadvertent slip on the part of Congress and would indicate it must have been the intention to grant the rights to the emblems to its authorized chapters, and associations of chapters, as well as to the corporation itself.
Public Law 740 authorized these sole and exclusive rights, and it is doubtful if the corporation, chapters, and associations of chapters could lose them even by non use. Inasmuch as the corporation was using the sole and exclusive rights, and the chapters and associations of chapters are part and parcel of the corporation, there is no merit in plaintiff’s [the National FFA] position.
This court therefore concludes that the Texas association had the right to use the trademarked emblems and the insignia of the F.F.A. under the charter.
The four major findings/rulings of the court were:
1. The Texas FFA Association gave permission and the authority to use the FFA trademark to the Chapter Supply Company.
2. The Texas FFA Association had “the right and power” to grant such permission.
3. The National FFA is entitled to the protection of its trademark.
4. The Chapter Supply Company did infringe upon the National FFA trademark and is refrained from further use of the trademark “without authorization or permission of Future Farmers of America, or its chapters or associations of chapters.” [Curators Note: During the trial, it was discovered that the Chapter Supply Company had sold FFA jackets in South Carolina and West Virginia and had no agreement with those states. That may have led to this conclusion.]
Even though the National FFA was not successful in their lawsuit, the court did grant an injunction against Chapter Supply from using the FFA emblem in any state other than Texas.
The court assessed no monetary damages and ruled that each party was responsible for their own legal fees.
At the January FFA Board of Directors meeting (p. 10) we learn:
Mr. Cerra, of the law firm Davies, Richberg, Tydings, Beebe and Landa, gave a brief report on the status of the lawsuit involving the Chapter Supply Company, Danville, Illinois, for the infringement of trademarks belonging to the FFA. He reported that the case is being appealed. A brief has been prepared and the case will be presented for oral argument in the Seventh Circuit Court of Appeals, in Chicago, during the week of February 22. The question was asked: What will our status be if we win this case? – and what will it be if we lose the case? Mr. Cerra replied that if we win, no manufacturer or sales organization would be able to use the registered trademarks without obtaining authorization to do so from the Board of Directors of the FFA — but if we lose, it means that any chapter or any State Association of Chapters can authorize any one to produce anything at all and use the ·FFA emblem. [Curators note: It is somewhat ironic the appeal was heard during National FFA Week.]
The Seventh Circuit Court decision was published on April 7, 1954. The original ruling from the United States District Court was upheld.
Excerpts from the appeal court ruling found in https://casetext.com/case/future-farmers-of-america-v-romack-2/ are as follows:
Under section 16 of its charter, plaintiff [the FFA] and its duly authorized chapters and associations of chapters, without any distinction between them, have the sole and exclusive right to use not only the name of plaintiff and the initials F.F.A. as representing an agricultural organization, but also such seals, emblems and badges as the plaintiff may lawfully adopt. The plaintiff has adopted the trademarked emblems and insignia involved in this case. Inasmuch as the plaintiff and the Texas association are both included in section 16, by language using the conjunctive word “and” between the words “the corporation” (meaning the plaintiff), and the words “its duly authorized chapters and associations of chapters” (which include the Texas association), it is clear that either the plaintiff or the Texas association has the right to the use of such emblems and insignia without the consent of the other.
The facts appearing in evidence amply sustain the conclusion reached by the District Court that the Texas association authorized or permitted the defendants to use said trade-marks in the manufacture of said garments and the sale of said products bearing said trademarks in the state of Texas.
For these reasons, the plaintiff is not entitled to an accounting of profits and damages on any of defendants’ sales in Texas of their products bearing the registered trade-marks of plaintiff, or an award of attorneys’ fees and costs. The final order of the District Court granting an injunction against the defendants but limited in its application, as it is, to acts committed by defendants “without authorization of plaintiff, its duly authorized chapters or associations of chapters” and it is affirmed.
If the reader wants to delve more deeply into the lawsuit the following legal resources are recommended:
https://casetext.com/case/future-farmers-of-america-v-romack (district court case)
https://law.justia.com/cases/federal/appellate-courts/F2/211/925/186854/ (the appeal)
https://casetext.com/case/future-farmers-of-america-v-romack-2/ (the appeal)
In plain English, the National FFA lost the case and the appeal. Local FFA chapters or state associations can enter into agreements with companies to use the FFA emblem. It is interesting to note the FFA v Romack case has been cited in two lawsuits, Robert Bruce , Inc v. Sears Roebuck, and Professional Golfers Association v. Bankers, L.C., and in the Duke Law Journal.
What does the National FFA do next? Do they appeal to the Supreme Court? Do they threaten to revoke the charter of the Texas FFA Association? Do they establish exacting policies and guidelines for using the FFA emblem? Do they seek to amend PL 81-740? They do two of these. Next week we will look at the actions of the National FFA after the Seventh Circuit Court appeal failed. Stay Tuned.