Arrow Distilleries v. Globe Brewing Co.

• Decision Date: 06 January 1941
• Docket Number: No. 4622.,4622.
• Citation: 117 F.2d 347
• Parties: ARROW DISTILLERIES, Inc., v. GLOBE BREWING CO.
• Court: U.S. Court of Appeals — Fourth Circuit

117 F.2d 347 (1941)

ARROW DISTILLERIES, Inc., v. GLOBE BREWING CO.

No. 4622.

Circuit Court of Appeals, Fourth Circuit.

January 6, 1941.

Harold F. Watson, of Washington, D. C. (Bartlett, Poe & Claggett, of Baltimore, Md., Watson, Cole, Grindle & Watson, of Washington, D. C., and Robert D. Bartlett, of Baltimore, Md., on the brief), for appellant.

Edward G. Fenwick and Charles R. Fenwick, both of Washington, D. C. (Morton H. Rosen, of Baltimore, Md., and Mason, Fenwick & Lawrence and Edward T. Fenwick, all of Washington, D. C., on the brief), for appellee.

Before PARKER, SOPER, and DOBIE, Circuit Judges.

SOPER, Circuit Judge.

The parties to this suit each use the same trade-mark "Arrow" for their products. Arrow Distilleries, Inc., a Michigan corporation, uses the same on alcoholic cordials and liqueurs, and the Globe Brewing Company, a Maryland corporation, on beer and ale. The suit was originally instituted by the Distilleries Company under R.S. § 4915, 35 U.S.C.A. § 63, to secure relief from an order of the United States Patent Office directing the cancellation of its registered trade-mark upon the petition of the Brewing Company. A counterclaim was filed by the Brewing Company in the pending suit, charging infringement of its prior registered trade-mark, and this charge the Distilleries Company denied. Subsequently the Distilleries Company withdrew its cause of action under R.S. § 4915 and amended its complaint so as to charge infringement of its trade-mark by the Brewing Company. The position of the Distilleries Company has always been that there was no infringement on either side, but it charged infringement to meet the contingency of a contrary decision by the court so that in such event it might obtain affirmative relief with respect to those territories in which it had first made use of the trade-mark. The Brewing Company has, therefore, become in effect the plaintiff in the suit. No substantial evidence of confusion in the public mind between the parties or their product was offered, and the suit has become one of technical trademark infringement in which the Brewing Company seeks to show that its trade-mark "Arrow", as applied to beer, has such a degree of distinctiveness that the public will be led to attribute a common origin to cordials and liqueurs sold under the same designation.

The Brewing Company and its predecessors have been engaged in the brewing and distribution of beer since prior to 1913. In that year, the trade-mark "Arrow" was adopted for their product. Since that date the mark has been continuously used, having been applied to non-alcoholic beer during the prohibition period. It was registered in the Patent Office for malt beverages five times in the years 1914, 1921, and 1937. The District Court found that the business has extended to nineteen states, most of them on the eastern seaboard or in the southern part of the United States. 96% of the business has been done in Maryland, Virginia and the District of Columbia. The sales from 1933 to 1939 amounted to nearly $20,000,000. More than $2,000,000 has been spent since 1922 in advertising "Arrow" beer.

The Distilleries Company was formed in the fall of 1933 and began to make and sell "Arrow" cordials and liqueurs in 1934. The name was adopted because one of the organizers had been connected with the Arrow Distilleries of Peoria, Illinois, before national prohibition. In 1935 registration of the trade-mark "Arrow" was secured, and shortly thereafter, the present controversy was begun. The District Court found that the products of the Distilleries Company have been sold in thirty-eight states of the union. By far the greater part of the business has been done in New York, New Jersey, Illinois, Michigan, Minnesota and Wisconsin. Total sales amounted to more than $3,500,000 between 1934 and 1938, of which nearly $3,000,000 was received for goods bearing the "Arrow" trade-mark. More than $900,000 has been spent in advertising and in sales promotion, the greater part to encourage the sales of the "Arrow" brand of goods.

The District Judge held that the beer and ale made by one party were goods of the same descriptive properties as the cordials and liqueurs made by the other, and that there was likelihood of confusion, since the products of both were being sold under the same trade-mark in the same sort of store. But he held that each of the parties was the owner of a valid trademark, as applied to alcoholic beverages, and was entitled to its exclusive use in those states of the union in which it was the first user; and hence that the use of the mark therein by the opposing party constituted infringement. The Globe Brewing Company was enjoined from employing the trade-mark or the representation of an arrow on alcoholic beverages of any description within the states in which the Distilleries Company was found to be the prior user; and the Distilleries Company was similarly enjoined with respect to the territory in which it was found that the Brewing Company was the prior user. The Distilleries Company was also enjoined from employing its corporate title in connection with alcoholic beverages of any description in the last-mentioned states unless the labels employed in connection with the goods should bear a notation indicating that the Distilleries Company had no connection with the manufacturer of Arrow beer.

No appeal was taken from the decree by the Brewing Company, but the Distilleries Company appealed on the grounds (1) that there was no infringement by either party, and (2) that if technical infringement existed, the decree should be modified by taking certain territory from the field allotted to the Brewing Company and giving it to the Distilleries Company.

The crucial issue in the case is whether the word "Arrow" is a word of such distinctive character, when adopted as a trade-mark for one kind of intoxicating liquors, that it cannot be used on any other kind without creating the belief that both spring from a common source; or, on the other hand, is a word like "Standard", or "Gold Medal", or "Blue Ribbon", which has been adopted by many persons as a trade-mark for articles of divers kind that it does not signify the goods of any one user. The question is important because, in determining the extent of the field of exclusive occupation, a name in the first class is accorded liberal treatment in the law of trade-marks, while a name in the second class is narrowly restricted to the particular kind of goods for which it is used by its owner. The District Judge held that "Arrow" is a name of the first class, specifically stating that it is not like the illustrative words of the second class above set out.

In the Restatement of Torts it is said that in determining whether one's interest in a trade-mark is protected with reference to the goods on which it is used, one of the important factors is "the degree of distinctiveness of the trade mark". § 731 (f). "* * * The more distinctive the trade mark is, the greater its influence in stimulating sales, its hold on the memory of purchaser and the likelihood of associating similar designations on other goods with the same source. If the trade mark is a coined word, such as Kodak, it is more probable that all goods on which a similar designation is used will be regarded as emanating from the same source than when the trade-mark is one in common use on a variety of goods, such as `Gold Seal' or `Excelsior'."

The decisions show that the adoption by a person of an arbitrary, fanciful or distinctive word, such as Aunt Jemima, Kodak, Rolls Royce, to indicate his goods, is attended by a monopoly of use in a wide field. Many of these decisions are listed in Standard Oil Co. of N. Mex. v. Standard Oil Co. of Calif., 10 Cir., 56 F.2d 973, 978, note 1. See, also, California Packing Corp. v. Halferty, 54 App.D.C. 88, 295 F. 229; Elgin American Mfg. Co. v. Elizabeth Arden, 83 F.2d 687, 23 C.C.P.A., Patents, 1168;...