205 F.2d 921 (7th Cir. 1953), 10808, Independent Nail & Packing Co. v. Stronghold Screw Products, Inc.

Docket Nº:10808.
Citation:205 F.2d 921, 98 U.S.P.Q. 172
Party Name:INDEPENDENT NAIL & PACKING CO., Inc. v. STRONGHOLD SCREW PRODUCTS, Inc.
Case Date:July 09, 1953
Court:United States Courts of Appeals, Court of Appeals for the Seventh Circuit
 
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Page 921

205 F.2d 921 (7th Cir. 1953)

98 U.S.P.Q. 172

INDEPENDENT NAIL & PACKING CO., Inc.

v.

STRONGHOLD SCREW PRODUCTS, Inc.

No. 10808.

United States Court of Appeals, Seventh Circuit.

July 9, 1953

with reference to its nail products, that defendant was using the same term in its advertising, did not make plaintiff guilty of laches in commencement of its suit to enjoin further infringement, when for the first six years there was no confusion among prospective customers and pattern of defendant was one of progressive encroachment.

Page 922

Thomas F. McWilliams, Chicago, Ill. and Herbert A. Baker, Boston, Mass., for appellant.

Casper William Ooms and Robert C. Williams, Chicago, Ill, for appellee.

Before DUFFY and LINDLEY, Circuit Judges, and BRIGGLE, District Judge.

Page 923

DUFFY, Circuit Judge.

In this action plaintiff charges the defendant with appropriating plaintiff's trade-mark 'Stronghold' by including 'Stronghold' in its corporate name and applying 'Stronghold' to a line of goods, which plaintiff claims is similar to that made and sold by it. The complaint also charges defendant with unfair competition.

After a trial the district court dismissed the complaint on the ground that plaintiff's registered trade-mark 'Stronghold' was not infringed; that the trade-mark 'Stronghold' is descriptive, and that plaintiff did not establish a secondary meaning for it; that Illinois law on unfair competition requires proof of palming off of its goods by the defendant, and that such proof was not made; and finally that plaintiff was not entitled to relief because of laches in filing this suit. 107 F.Supp. 969.

For many years plaintiff has been engaged in the manufacture and sale of a wide line of fastener products, such as nails of various types, screws, escutcheon pins and the like. Prior to 1934 the composition shingle industry was having difficulty in finding suitable fasteners to hold new shingle coverings in place on old walls. The conventional smooth shank nails were then in use and the contraction and expansion of shingles on a wall often caused such nails to loosen and pop out.

In 1934 plaintiff designed and produced a nail with a series of annular ribs about the shank, which it designated as its Stronghold nail, and which did not become loosened by the expansion and contraction of the material into which it had been driven. It could be readily driven with a hammer, and was described by plaintiff as 'The One-Way Nail.' Plaintiff began an advertising campaign in 1934 to popularize its new product. In 1935 plaintiff mailed about 130, 000 pieces of direct-to-customer advertising. In 1936 this number was doubled, and in 1937 and 1938 the direct mail advertising was further intensified.

At first plaintiff sold its Stronghold nail primarily to the roofing and building industry, but later it came to be used by many industries. For instance, as early as 1942 it was widely distributed in the shoe industry by the United Shoe Machinery Co. At the date of the trial plaintiff's products encompassed almost the entire field of metallic fasteners. In 1951 plaintiff's total volume of business was $4, 834, 000. In that year the sale of its products in the Stronghold brand amounted to $2, 275, 000.

From the date when the word 'Stronghold' was first adopted by plaintiff and ever since, all containers enclosing the annularly threaded nails have been marked at its factory with the name 'Stronghold.' Likewise invoices and letterheads have included the word 'Stronghold.' Since 1942, when plaintiff acquired a postage meter stamp, in connection with which a slogan plate on which the words, 'Stronghold Nails Hold Forever, ' was used, most envelopes emanating from plaintiff's plant have borne that slogan.

As early as July 1, 1936, plaintiff began the use of a design comprising a representation of a castle or stronghold, enclosed in a triangular frame, two sides of which are formed by representations of its annularly threaded Stronghold nail. A decorative ribbon extends from either side of the triangle and bears the words, 'They Hold Forever.' The bottom side of the triangle bears the word 'Stronghold' above the word 'Nails.'

In 1938 plaintiff applied for registration of this design as its trade-mark. During the prosecution of the application for registration, the Patent Office required plaintiff to disclaim certain descriptive material, such as the representation of a nail, the words 'Nails, ' and the phrase, 'They Hold Forever.' No disclaimer was required as to the word 'Stronghold, ' and on May 16, 1939, trade-mark registration No. 367, 448 was granted to plaintiff. After the grant of the trade-mark registration plaintiff customarily used the trade-mark in the form shown in the registration, but to some extent it also used the word 'Stronghold' alone.

In the early 1930's defendant's predecessor operated under the name of Sackheim Brothers Corporation. In 1936 its name was changed to Manufacturers Screw and Supply House, and in 1940 to Manufacturers

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Screw Products. Defendant's first use of the word 'Stronghold' as applied to its products was in October, 1938. Defendant concedes that as early as January 9, 1940, it was aware of plaintiff's 'Stronghold' trade-mark and its registration. In 1940 defendant began the use of the name 'Stronghold' in a design in which the word 'Stronghold' appears to be threaded on a bolt and the words 'Screw Products' are printed on a washer into which the bolt appears to be threaded. This use, referred to in the testimony as logotype, appeared on defendant's letterheads, business forms and catalogues, but the company's name, Manufacturers Screw Products, also appeared prominently.

In the summer of 1946 Manufacturers Screw Products changed its name to Stronghold Screw Products, Inc. Letterheads and other business forms were changed to show the new corporate name in bold type. Plaintiff notified defendant on November 27, 1946, that the use of the word 'Stronghold' by the defendant was causing confusion in the trade and damage to the plaintiff. Defendant did not desist, and this action was commenced on April 26, 1948.

Defendant denies that it manufactures nails and refers to itself as a 'screw, nut and bolt manufacturer.' However, both plaintiff and defendant contact the same prospective customers through direct mail advertising, listing in trade magazines, and in directories customarily used by purchasing agents. Defendant circulates its catalogue to plaintiff's customers. Plaintiff's products are used for many of the same purposes for which defendant sells its products.

In ascertaining whether 'principles of old-fashioned honesty' were followed, See: Jewel Tea Co., Inc. v. Kraus, 7 Cir., 187 F.2d 278, 282; Radio Shack Corp. v. Radio Shack, Inc., 7 Cir., 180 F.2d 200, 206, it is significant that in 1947 or 1948 defendant listed itself as a nail manufacturer in the Thomas Register, which publication was described as the 'purchasing agents' Bible.' Mr. Sackheim conceded on the trial that defendant does not manufacture nails, and that to so describe defendant in the Thomas Register was a misrepresentation.

The district court held there was no infringement of plaintiff's registered trade-mark, stating that plaintiff's and defendant's logotypes in their respective combinations have no resemblance to each other and that the only similarity between them that he could find was the use of the word 'Stronghold.' The court apparently gave no weight to the fact that 'Stronghold' is the most prominent word in defendant's mark while 'Stronghold Nails' are the most prominent words appearing in plaintiff's mark.

It is well established that in order to constitute infringement it is not necessary to copy an entire trade-mark. Nims on Unfair Competition and Trade-Marks, 4th Ed., Vol. I, page 678, states: 'A corollary to the doctrine that there may be an infringement though only...

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