T&T Manufacturing Co. v. A.T. Cross Co.

A.T. Cross Co. (Cross) (defendant) owned registered trademarks for certain design features of its mechanical pens and pencils. When The Quill Co. (First Quill) began to manufacture mechanical pens and pencils almost identical in design, Cross filed suit against First Quill for trademark infringement and unfair competition. The parties settled the dispute pursuant to an agreement (settlement agreement) that allowed First Quill to continue manufacturing the mechanical pens and pencils. First Quill then sold and assigned its rights under the settlement agreement, as well as all of its manufacturing equipment, to T&T Manufacturing Co. (Second Quill) (plaintiff), who from that moment on manufactured and sold the almost identical mechanical pens and pencils in question. When Cross tried to register another design for its mechanical pens and pencils with the United States Patent and Trademark Office, Second Quill objected. Cross filed a motion with the district court to enjoin Second Quill from manufacturing and selling its instruments on grounds of trademark infringement and unfair competition. The district court found that Second Quill’s mechanical pens and pencils were almost identical to those of Cross and thus infringed them, but that Cross was barred from suing Second Quill under the terms of the settlement agreement. The sole issue presented on appeal was whether the settlement agreement was valid and enforceable in allowing the manufacture and sale of such identical instruments.