Standard Oil Company v. Standard Oil Company

• Decision Date: 15 January 1958
• Docket Number: No. 5506.,5506.
• Parties: The STANDARD OIL COMPANY, a corporation; and Sohio Petroleum Company, a corporation, Appellants, v. STANDARD OIL COMPANY, a corporation, Appellee.
• Court: U.S. Court of Appeals — Tenth Circuit

252 F.2d 65 (1958)

The STANDARD OIL COMPANY, a corporation; and Sohio Petroleum Company, a corporation, Appellants, v. STANDARD OIL COMPANY, a corporation, Appellee.

No. 5506.

United States Court of Appeals Tenth Circuit.

January 15, 1958.

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Maurice F. Hanning, Cleveland, Ohio (Rufus S. Day, Jr., Paul C. Shafer, Jr., Leland L. Chapman, Cleveland, Ohio, Walter H. Free, New York City, Carleton A. Lathrop, Cheyenne, Wyo., McAfee, Grossman, Taplin, Hanning, Newcomer & Hazlett, Cleveland, Ohio, Brumbaugh, Free, Graves & Donahue, New York City, Lathrop & Lathrop, Cheyenne, Wyo., and Leland L. Chapman, Cleveland, Ohio, of counsel, were with him on the brief), for appellants.

Wallace H. Martin, New York City (Harry B. Henderson, Cheyenne, Wyo., and Walter J. Halliday, Robert Bonynge, New York City, Thomas E. Sunderland, Chicago, Ill., Hunter L. Johnson, Jr., L. Bates Lea, Chicago, Ill., Henderson & Godfrey, Cheyenne, Wyo., Nims, Martin, Halliday, Whitman & Williamson, New York City, of counsel, were with him on the brief), for appellee.

Before PHILLIPS, MURRAH, and BREITENSTEIN, Circuit Judges.

BREITENSTEIN, Circuit Judge.

Two major, integrated oil companies, each of which is incorporated under the name Standard Oil Company, are here engaged in a bitter fight over the use of trade-marks and trade-names.

Standard Oil Company, an Indiana corporation, obtained an injunction restraining The Standard Oil Company, an Ohio corporation, and its wholly owned subsidiary, Sohio Petroleum Company, also an Ohio corporation, from using the designation "Sohio" in the marketing of petroleum products in a fifteen state midwestern area.¹ The basis of the injunction was that the use of "Sohio" was unfair competition and wrongfully infringed the rights of the plaintiff arising from its prior use within the area of certain "Standard Oil" trade-names and trade-marks.

The trial court dismissed a counterclaim of the defendants seeking a declaratory judgment affirming their right to the use of "Sohio."

To reverse the judgment, defendants urge:

(1) There is no infringement or unfair competition;

(2) The court erred in receiving, and giving probative effect to, evidence of "surveys" and testimony of "public witnesses";

(3) Plaintiff is estopped by laches or delay from enforcing its claimed rights;

(4) The defense of lack of equity and unclean hands bars recovery; and

(5) The court erred in granting a "split injunction."

This case is but another incident in a series of controversies which have arisen over the use of the phrase "Standard Oil" and variations therefrom since the 1911 decision of the Supreme Court dissolving, for anti-trust violations, the combination headed by Standard Oil Company of New Jersey.² The dissolution was ordered to prevent monopoly and to accomplish free competition in the oil industry.

Before the dissolution decree, plaintiff, Standard of Indiana, and defendant Standard of Ohio were each a subsidiary of Standard of New Jersey. Under the then leadership of Standard of New Jersey the country was divided into districts, and the oil business in each district was turned over to a subsidiary corporation within the combination, and such subsidiary had the exclusive use of the "Standard" name within its designated territory.³ Under this method of operation, defendant Standard of Ohio had a common law right to the exclusive use of the "Standard" name and marks within the State of Ohio and plaintiff Standard of Indiana had a similar right in its fifteen state territory. After the dissolution of the combination each of the subsidiaries retained these rights.

Plaintiff was incorporated in Indiana in 1889 under the name "Standard Oil Company" and has used that name continuously ever since. At the time of the dissolution pursuant to the 1911 decision, either the plaintiff or its predecessors in interest were using the "Standard Oil" trade-marks in South Dakota, North Dakota, Missouri, Illinois, Indiana, Minnesota, Wisconsin, Michigan, Kansas, Oklahoma, Iowa and Nebraska. Thereafter plaintiff began to operate in Wyoming, Montana and Colorado and acquired the exclusive right to these trade-marks in those states.⁴

Defendant The Standard Oil Company was incorporated in Ohio in 1870 under that name which it has since used continuously. At the time of dissolution its territory was the State of Ohio and it had the right to the exclusive use of the "Standard" name and trade-marks in that state.

Over the years the plaintiff has developed and used as trade-marks and trade-names the following: "Standard Oil Company," "Standard Oil," "Standard," "SO," "SO Co.," "S O C O" and "Solite." It claims the exclusive right to use these within its territory.

The defendant Standard of Ohio adopted the term "Sohio" as a trade-mark on relatively minor products in 1926. In 1928 it expanded the use of "Sohio" to cover gasoline and other major products and began its use as a synonym for its corporate name. Beginning about 1938 the term was used in the corporate names of such wholly owned subsidiaries as Sohio Producing Company, Sohio Corporation, Sohio Pipe Line Company and the defendant Sohio Petroleum Company. These subsidiaries have been engaged primarily in the exploration, production, and transportation phases of the oil business.

In 1953, defendant Standard of Ohio authorized Gibson Oil Corporation,⁵ a dealer and distributor in petroleum products, to sell gasoline, oil and other petroleum products of the defendant in Michigan under the trade-mark "Sohio." Gibson acted under this authorization and began the advertisement, distribution and sale of defendant's products in Michigan. In connection therewith Gibson used the term "Sohio." Plaintiff's vigorous objections were of no avail and this suit was then brought.⁶

After a prolonged trial, the court below made comprehensive findings of fact and conclusions of law. In substance it held that there was infringement and unfair competition, that the use of the term "Sohio" in marketing operations in plaintiff's territory was an inherent fraud on the plaintiff and its rights, that the plaintiff was not barred by laches, estoppel, unclean hands, or other equitable defenses from maintaining the action, and that the defendants should be enjoined from using the term "Sohio" in marketing operations within the plaintiff's territory.

Over the years there have been several decisions involving the use of the term "Standard Oil Company."⁷ Closely analogous to this case is the decision in Esso, Inc., v. Standard Oil Co., 8 Cir., 98 F.2d 1, wherein the plaintiff Standard of Indiana succeeded in enjoining the use in its territory of the trade-name "Esso" by a wholly owned subsidiary of the Standard Oil Company of New Jersey. In every case reported at this time the courts have acted to protect the Standard Oil company which had first obtained the right to use the "Standard Oil" name and trade-marks in the area involved.

Defendants concede that they have no right to use in plaintiff's territory the name "Standard Oil Company" with or without "Ohio" and that the plaintiff has the right to the exclusive use within its territory of the terms "Standard," "Standard Oil," and "Standard Oil Company" in connection with petroleum products. Plaintiff makes the same concession of a similar right in the defendant Standard of Ohio to use such terms within its territory in connection with petroleum products.

The trial court found that "almost from the date of its incorporation" the plaintiff has used in its territory its trade-names and trade-marks, including "Standard Oil Company," "Standard Oil," "Standard," "SO," "SO Co.," "S O C O," and "Solite," in the advertisement and sale of its products. It has advertised extensively in newspapers and magazines and on billboards, radio and television.⁸ The acceptance of its products is shown by its sales which have increased from $294,500,000 in 1930 to $759,000,000 in 1954. In the petroleum industry in plaintiff's territory the trade-names and trade-marks mentioned above identify the plaintiff and no one else as the source and origin of the products and services on or in connection with which they are used.

Proof of the use by plaintiff of its trade-names and trade-marks is overwhelming. The word "Standard" either alone or in combinations and the letters "SO" either alone or in combinations are used as identifying marks in connection with the great variety of equipment, facilities and products that are a part of the modern oil industry. Only one phase of such use need be particularly mentioned. In 1945, the plaintiff adopted as a common identifying symbol for all outlets offering its products a torch and oval sign. This is an oval with a flaming torch in the center. The flame of the torch extends above the oval. The upper third of the oval is red, the middle third white, and the bottom third blue. The word "Standard" is imprinted in blue on the middle white section. The plaintiff's wide use of this distinctive symbol is conclusively established by the evidence.

The term "Sohio" is derived from "S. O. Ohio." The evidence shows that since the dissolution decree the various Standard Oil companies have been known in trade and financial publications, in the public press, and to the public generally as "S. O. New Jersey," "S. O. Kentucky," "S. O. Indiana," "S. O. California," and "S. O. Ohio." The trial court found that, "In the petroleum world the letters `S. O.' have always stood for `Standard Oil.'" "Sohio" is obviously a contraction of "S. O. Ohio." All that has been done is to eliminate one "O." With reference to the "Sohio" name or mark a 1929 publication of the defendant Standard of Ohio said:

"`Sohio\' is of course an abbreviation of the full name of our organization, The Standard Oil Company of Ohio. In a degree which exceeds that which characterizes the trade names of other Standard Oil Companies, such as `Stanolin

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