Socony-Vacuum Oil Co. v. Rosen

• Decision Date: 09 January 1940
• Docket Number: No. 8041.,8041.
• Parties: SOCONY-VACUUM OIL CO., Inc., v. ROSEN.
• Court: U.S. Court of Appeals — Sixth Circuit

108 F.2d 632 (1940)

SOCONY-VACUUM OIL CO., Inc., v. ROSEN.

No. 8041.

Circuit Court of Appeals, Sixth Circuit.

January 9, 1940.

Farnum F. Dorsey, of New York City, for appellant.

Casper W. Ooms, of Chicago, Ill., and Alexis J. Rogoski, of Muskegon, Mich., for appellee.

Before HICKS, HAMILTON, and ARANT, Circuit Judges.

HAMILTON, Circuit Judge.

The parties to this appeal are engaged in manufacturing and selling stainless stick lubricants, largely used for lubricating automobile parts not subjected to a high degree of friction or heat. Each sells its product in sticks packaged in cylindrical metal boxes or tubes of striking colors with push bottoms.

This suit was brought by the appellee seeking to enjoin the appellant from engaging in alleged unfair trade competition. The trial court sustained the prayer of the petition and entered an interlocutory decree enjoining appellant and awarding appellee an accounting with reference to a Master from which this appeal is prosecuted.

Appellee's assignee, Harold Rosen, had been operating a gasoline filling and tire service station for many years prior to 1931 and discovered that when ordinary oil or grease was used on door parts and hood lacings of automobiles, dirty spots appeared and an easy flowing lubricant soiled the clothes of occupants. He also observed that when these parts were left without lubrication, squeaks and noises developed. In 1928, he began experimenting with ingredients for a lubricant which would eliminate these imperfections and in 1931 evolved one of slight potentiality, solid and molded into a candlelike stick about 4½ inches in length, ½ inch in diameter, wrapped in paper. It was sufficiently adhesive to stay on the metal to which applied and plastic enough to not liquefy or become brittle under varying temperatures and was reasonably waterproof, almost stainless, not easily wiped off and did not readily pick up dirt or dust. Rosen first manufactured his product and placed it on the market under the trade names "Door-Ease" and "Stainless Stick Lubricant, Universal Size." Some were packaged in multi-colored boxes, twenty-four sticks to a box, and some were only wrapped in cellophane. In 1932, as an incident to refinancing the manufacture and sale of his product, Rosen assigned his trade name and business to appellee, Florence Rosen, and continued with her and her husband, Leo Rosen, in the manufacture of the product under the name "American Grease Stick Company." The product was placed in use and sold by personal solicitation of dealers in lubricants, service station operators, garages and car dealers. Harold Rosen spent most of 1932 and 1933 consulting and working with the different car manufacturers, their engineering, testing and research departments with reference to this product and appellee spent approximately $25,000 advertising it.

After experimenting with the package, one was finally adopted of metal, approximately 1 inch in diameter and from 4½ to 5 inches in length with a push-up bottom on which was marked "push from bottom; as used, fill in with paper wad." They were marked "Door-Ease" or "Stainless Stick Lubricant," and were packaged six sticks to a box. The product was of a natural yellowish color, the result of the blend of materials used, and the sticks were later packaged in lithographed containers with an aluminum colored body and with blue printing.

About 1933, appellee produced these sticks for some of the major oil companies, using her trade mark "Door-Ease" but also adding the name of the company, such as those for the Shell Petroleum Company under the name "Shell Door-Ease," and those for Texaco Company, "Texaco Door-Ease," etc. Many of the large petroleum distributors undertook the distribution of appellee's product and published lubrication charts to guide service station attendants in lubricating automobiles in which they recommended appellee's stick. Many automobile manufacturers, including Studebaker, Buick, Pontiac and Oldsmobile, specified its use by its trade name "Door-Ease" in their service manuals and frequently published an illustration of the shop-stick size package. Appellee's standard package was also sold to and by independent jobbers and distributors, large and small tire and oil companies, automobile accessory dealers, service stations, garages, etc.

In 1933, appellee negotiated with appellant for the sale of the "Door-Ease" sticks in a bracket which could be fastened to a bench or lubricating panel, which it had theretofore been selling the White Star Company, its subsidiary. At this time the Pontiac, Buick and Chevrolet Companies were recommending the use of appellee's "Door-Ease" to the trade. Appellant bought appellee's product and had it put up in a special package, trade marked "Mobil Door-Ease" and during the years from 1934 to 1936 appellee manufactured and sold it more than 152,000 packages and appellant published 7500 lubrication charts in 1934 and 10,000 in 1936, specifying this product to its trade for automobile lubrication.

Prior to 1936, appellant had manufactured and sold grease sticks of various sizes and colors and had packaged its other products with colors of red, white and black and had employed the insignia of the Pegasus within a shield and had used the trade mark "Mobil."

Early in 1936, appellant discontinued the purchase of appellee's product, and began the manufacture and distribution of a stick lubricant named Mobil Dri-Lube, and adopted a sheet metal cylindrical tube of the same dimensions, form and general appearance of appellee's shop-stick size package except it had on it the Pegasus insignia. These containers were packed six to a flat sales carton, side by side, exactly as appellee's were packed. This lubricant in its natural state was of a grayish white, but appellant added a yellow dye which gave it a yellow color similar to appellee's product. Appellant manufactured its product in candle molds 5 inches long and over 1 inch in diameter, but then placed it in a forming ring 1 inch in diameter and cut the stick to the exact length of appellee's. Appellee notified appellant that its product was in packages confusingly similar to those long used by her but the package was not changed and appellant did not give notice of the change to its distribution organization, which had theretofore been using appellee's product, consisting of from 35,000 to 40,000 filling stations, and 5,000 bulk plants. It did notify its thirteen division offices, which it claimed was to notify the others. However, the lower court did not so find.

The lower court found appellant filled numerous oral and written orders for appellee's product, Door-Ease, with its own Mobil Dri-Lube at filling stations and at its wholesale bulk plants and in some cases Dri-Lube was sent when the invoices of appellant's employees specified Door-Ease, some of the purchases being conducted by mail. When appellant discontinued the sale of appellee's product, it left many of her packages with its customers with which its new product was mingled.

Some purchasers, after receiving Dri-Lube when their orders were for Door-Ease, telephoned appellant's...