Sterling Brewing v. Cold Spring Brewing Corp.

• Decision Date: 02 July 1951
• Docket Number: Civ. A. No. 50-233.
• Citation: 100 F. Supp. 412
• Parties: STERLING BREWING, Inc. v. COLD SPRING BREWING CORP.
• Court: U.S. District Court — District of Massachusetts

100 F. Supp. 412

STERLING BREWING, Inc. v. COLD SPRING BREWING CORP.

Civ. A. No. 50-233.

United States District Court D. Massachusetts.

July 2, 1951.

Richard F. Walker, Boston, Mass., Francis C. Browne, Jewett, Mead & Browne, Washington, D. C., for plaintiff.

Cedric W. Porter, Boston, Mass., for defendant.

McCARTHY, District Judge.

1. This is an action for trade-mark infringement and unfair competition. The plaintiff has waived an accounting for damages.

2. The plaintiff is a corporation organized under the laws of Indiana, having its usual place of business in Evansville, Indiana. Its business was founded prior to 1894 when it was taken over by plaintiff's immediate predecessor in business, the Evansville Brewing Association, an Indiana corporation.

3. The Evansville Brewing Association adopted the "Sterling" mark for beer prior to 1895 and had actual and exclusive use of "Sterling" as a trade-mark for beer, with such use including interstate use, until subsequent to 1905.

4. The plaintiff was incorporated in 1917 under the name of Sterling Products Company, and in 1919 acquired all the assets of its predecessor, including its trade and trade-mark rights in, to and under said mark "Sterling" for beer, together with the attending good will, and thereafter plaintiff continued said business with its activities including until 1933 the production of "near beer" under the mark "Sterling".

5. From the early 1880's until the advent of Prohibition a concern, Reuter & Company, was engaged in Boston, Massachusetts, in the production of ale which it sold solely within the New England States under the mark "Sterling".

6. From some time in 1900 until in or about November of 1907 another concern, Worcester Brewing Corporation, with a place of business in Worcester, Massachusetts, was engaged in the production and sale of ale which it sold within the New England States under the mark "Worcester Sterling Ale".

7. Shortly after the advent of Prohibition Reuter & Company liquidated and terminated its business activities. Neither Reuter & Company nor Worcester Brewing Corporation was at any time engaged in the manufacture or sale of beer.

8. In pre-Prohibition days ale and beer were substantially different in character, and the uniform practice was for one product to be produced and sold by certain brewing concerns from their breweries and for the other product to be produced and sold by different brewery concerns. Following repeal of Prohibition, ale and beer became so close in character that it has become a well-known practice to have both products produced in the same brewery and to have both sold by the brewer under single trade-mark.

9. Upon the repeal of Prohibition the plaintiff in 1933 resumed its production and sale in interstate commerce of beer under the "Sterling" mark, and has continued such production and sale continuously to date. In late 1934 the plaintiff expanded its business to include the production and sale of ale which had not previously been made or sold by it, and since late 1934, except for a short period of inactivity during World War II, plaintiff has continued the sale of its ale under the "Sterling" mark.

10. The plaintiff under Section 5 of the Trade-Mark Act of 1905, now 15 U.S. C.A. § 1052, secured September 26, 1933, its registration of "Sterling" for beer, since which date the plaintiff has been the owner of the registration, No. 306,673.

11. During the prosecution of the application therefor the plaintiff's President Richard T. Riney represented as the basis for the registration that through the ten years preceding 1905 its use of the "Sterling" mark had been exclusive as to beer. This representation was true and accurate. There appears to have been no fraud in the procurement of this registration.

12. Following the commencement of its manufacture and sale of ale under the mark "Sterling", and after more than one year's exclusive use of the mark as applied to ale, the plaintiff secured its "extension" registration, No. 332,040, January 28, 1936, of "Sterling" for ale under the 1920 amendment to Section 5 of the Act of 1905.

13. The plaintiff's registrations Nos. 306,673 and 332,040 were duly republished pursuant to Section 12(c) of the Trade Mark Act of 1946, 15 U.S.C.A. § 1062(c), on May 18, 1948.

14. Plaintiff is also the owner of registrations No. 394,670, April 21, 1942 for ale, and No. 394,929, May 5, 1942 for beer, both of which have been republished under the Act of 1946.

15. The plaintiff (the term is meant to include its predecessor in business) has confined its principal activities with respect to the distribution and sale of beer and ale under its "Sterling" mark to the States of Indiana, Illinois, Kentucky, Ohio, Tennessee, Virginia, North Carolina, Florida, Georgia, Mississippi, Alabama, Louisiana and Arkansas. The further a sales territory is located from the site of the brewery, the smaller are the sales. In Indiana, for example, the plaintiff makes one-third to one-half its annual sale by volume (approximately 175,000 barrels in the last year) while in Virginia, Florida, Georgia, Mississippi, Louisiana and Arkansas, last year's sales amounted to only two to four hundred barrels in each State.

16. In 1950 the plaintiff made very small sales in New Hampshire, Massachusetts and Rhode Island, each shipment being ten to fifteen cases, and there being but three or four shipments.

17. I find that the plaintiff's zone of potential expansion of business cannot reasonably be expected to extend to New England. The plaintiff now covers the outlying States of its sales territory very lightly. To come into New England from the South the plaintiff would have to cover Maryland, Pennsylvania, Delaware, New Jersey and New York before reaching the borders of New England. From the West the plaintiff would have to cover that portion of Ohio east of Dayton, Pennsylvania and New York. Despite the alleged "intentions" of the plaintiff, its President admits that he has taken no active steps toward expansion into the northeastern section of the country. He testified that he talked about possibly buying a brewery in New Bedford, Massachusetts, but the talk did not progress to actual negotiations.

18. Since 1933 the plaintiff has expended approximately four and a half million dollars for advertising its products, using the media of newspaper advertisements, radio programs, outdoor posters or billboards, signs and display advertising at points of sale. One type of advertising which has reached potential customers in New England has been advertisements in Indianapolis, Nashville, Atlanta, Birmingham, Memphis, Terra Haute, Evansville, Louisville and Chicago newspapers. At best, as conceded by the plaintiff, each of these newspapers has about a dozen individual subscribers in the Boston area (some as few as one or two) and a smaller and scattered circulation in the rest of New England. "Point of sale" advertising has accompanied the aforementioned small 1950 sales of plaintiff's products in Massachusetts, New Hampshire and Rhode Island.

19. During World War II, some 15% of the plaintiff's "Sterling" products were sold to the armed forces in camps throughout the Mid-West. The Court takes judicial notice of the fact that New Englanders, both in and out of the Armed Forces, spent some time within the Mid-West during that period.

20. I find that the plaintiff's "Sterling" mark has not acquired a secondary meaning in Massachusetts and New England as indicative of the plaintiff and its products.

21. The defendant, a Massachusetts corporation, was incorporated in September of 1947, and is the successor to the Cold Spring Brewing Company which has conducted a business of brewing since 1895. In the course of that time it had sold its products under the marks "Cold Spring", "Amberlite", "5X" and "Hacker's".

22. In the early fall of 1949 the defendant's president, Mr. Richmond, had actual knowledge of the plaintiff's use of the mark "Sterling" for ale in the Mid-Western States.

23. On November 10, 1949, the defendant posted the brand name "Hacker's Sterling Ale", and the price at which the product bearing the mark would be sold, with the Massachusetts Alcoholic Beverage Commission.

24. On November 17, 1949, the plaintiff served written notice on the defendant of its "Sterling" registrations and of a "plan to expand" its "Sterling" trade into New England.

25. On November 21, 1949, the plaintiff filed an application for registration of the mark "Sterling" for beer and ale on the Principal Register under the Trade-Mark Act of 1946, 15 U.S.C.A. § 1051 et seq., which resulted in Registration No. 526,392, June 13, 1950. This registration is under the provisions of Section 2(f), for registration of a descriptive word which has become "distinctive of the applicant's goods in commerce". Through the five years next preceding the filing date, the plaintiff had had substantially exclusive and continuous use of "Sterling" as its trade-mark for ale and beer in interstate commerce.

26. On December 9, 1949, the defendant made its first sale of "Hacker's Sterling Ale" in Massachusetts. The first interstate shipment was to Portland, Maine, on December 16, 1949.

27. The defendant made no special product for its "Sterling" mark but applied the said mark to the same ale which it had been selling as "Amberlite".

28. The plaintiff's first sales in New England were made on or subsequent to January 3, 1950.

29. The defendant's mark is confusingly similar to that of the plaintiff. The resemblance is such as to deceive the ordinary purchaser. The only difference between the two is the name "Hacker's" in the mark of the defendant. The dominant part of the mark is the word "Sterling", as was intended and admitted by the defendant through its president who testified that he considered "Sterling" to be an old New England tradition as a mark, and that the defendant corporation aspired to become known eventually...