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AMERICAN CYANAMID CO. v. STERLING DRUG

December 15, 1986

AMERICAN CYANAMID COMPANY, Plaintiff,
v.
STERLING DRUG, INC., Defendant



The opinion of the court was delivered by: LECHNER

 This action based on trademark infringement is brought by the makers of the household cleaning product, "Pine-Sol," against the makers of a similar product, "Lysol Pine Action." It appears the central ingredient in each of these household cleaning products is pine oil. The complaint charges defendant with trademark infringement and breach and frustration of purpose of an agreement entered into by the parties in 1967. Plaintiff has demanded a trial by jury. Defendant has moved to strike the jury demand on the ground the claims asserted are equitable by nature and thus afford plaintiff no right to trial by jury.

 Facts

 Since at least 1950, the parties or their predecessors in interest have sold competing household cleaning and disinfectant products. Agreements between the parties, the first entered into in 1956 and the second in 1967, have established at least some of the terms and conditions governing the manufacture and sale of certain of these products. The 1967 agreement focuses primarily on American Cyanamid's manufacture and sale of, and use of the tradename for, its "Pine-Sol" product, a wall and floor cleaner for which American Cyanamid holds one or more registered trademarks.

 On February 7, 1983, American Cyanamid filed its original complaint in this action against Sterling Drug. As amended on April 26, 1983, the complaint alleges Sterling Drug has begun to advertise and sell a pine oil cleaner, "Lysol Pine Action" in direct competition with American Cyanamid's "Pine-Sol." The amended complaint charges Sterling Drug with: (1) consumer fraud and deceptive business practices; *fn1" (2) trademark infringement; (3) breach of contract; and (4) frustration of the purpose of the 1967 agreement. The amended complaint, as filed, sought: (1) a permanent injunction against further trademark infringement; (2) an accounting and payment of all profits derived by Sterling Drug's wrongful acts; (3) treble damages; *fn2" (4) costs; and (5) provisions to assure Sterling Drug's compliance with the injunction.

 Crucial for purposes of the pending motion are three clauses in the amended complaint's prayer for relief. The second paragraph of the prayer asks that: "Defendant, be required as trustee ex maleficio, to account for and pay over to plaintiff all profits derived by defendant for its aforesaid wrongful acts." The third paragraph of the prayer asks that: "Defendant be required to pay to plaintiff treble the amount of damages incurred by plaintiff by reason of defendant's aforesaid wrongful acts." *fn3" The eighth paragraph of the prayer asserts: "A trial by jury is demanded for all issues triable by jury."

 By notice of motion, filed October 31, 1986 and argued on December 2, 1986, Sterling Drug has moved to strike American Cyanamid's request for a jury trial. Sterling Drug contends American Cyanamid has no constitutional right to a jury trial because all of American Cyanamid's claims, and the various forms of relief sought thereunder, are equitable by nature. Since the Seventh Amendment protects the right to a jury trial only for legal claims and relief, Sterling Drug argues the jury demand must be rejected. *fn4" American Cyanamid counters that its request for an accounting of the profits earned by Sterling Drug, and the paying over of such amounts, is in essence a legal claim and thus supports its request for a jury trial. Because I find the remaining claims of American Cyanamid seek purely equitable relief, the motion to strike the jury demand is granted.

 Discussion

 Insofar as the amended complaint seeks injunctive relief, it is equitable by nature. The issue presented by this motion, therefore, is whether American Cyanamid's claim for an accounting and restitution of Sterling Drug's allegedly unlawful profits sounds in law and thus warrants a jury trial. The clause at issue, to reiterate, provides: "Defendant, be required as trustee ex maleficio, to account for and pay over to plaintiff all profits derived by defendant for its aforesaid wrongful acts." Sterling Drug advances a technical argument, rooted in historical distinctions between actions at law and equity, that an action seeking an "accounting for profits," as distinct from an action seeking an "accounting for damages," is purely equitable and therefore carries no right to a jury trial. American Cyanamid counters that controlling case law does not treat such claims so technically and, because its claim seeks essentially legal relief -- i.e. a monetary recovery -- the right to a jury trial is preserved. Sterling Drug responds that the case law relied upon by American Cyanamid is inapposite since those cases, unlike the case at bar, specifically involved claims for damages.

 The issue before the Court is difficult since the distinction upon which American Cyanamid's right to a jury trial depends is founded not upon any logical rationale per se, but rather upon an historical anomaly incorporated into the Constitution by way of the Seventh Amendment. The question presented, therefore, is not whether it makes any inherent sense to try American Cyanamid's claim to a jury but rather whether, as an historical matter, American Cyanamid's claim would have been submitted to a jury.

 The parties do not disagree that if this action were seeking only an injunction, it would be purely equitable and not entitle American Cyanamid to a jury trial; nor do they disagree that if the action were seeking only money damages for breach of contract, it would be purely legal and entitle American Cyanamid to a jury trial. The parties do disagree, however, whether in this action, where plaintiff is seeking an accounting and recovery of allegedly unjust profits, the claim might properly be classified as a legal claim triable to a jury.

 Sterling Drug points out that courts and commentators have recognized actions seeking an accounting and recovery of unjust profits, as an historical matter, to be equitable actions. As noted by the Supreme Court in Hamilton-Brown Shoe Co. v. Wolf Bros. & Co., 240 U.S. 251, ...


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