Carling Brewing Company v. Philip Morris, Inc., Civ. A. No. 10164.

Citation277 F. Supp. 326,156 USPQ 70
Decision Date22 November 1967
Docket NumberCiv. A. No. 10164.
PartiesCARLING BREWING COMPANY, Inc. v. PHILIP MORRIS, INC.
CourtUnited States District Courts. 11th Circuit. United States District Courts. 11th Circuit. Northern District of Georgia

COPYRIGHT MATERIAL OMITTED

Richard C. Freeman, Haas, Holland, Freeman, Levison & Gibert, Atlanta, Ga., James L. Dooley, Wm. K. West, Jr., Cushman, Darby & Cushman, Washington, D. C., for plaintiff.

Edgar A. Neely, Jr., Neely, Freeman & Hawkins, Atlanta, Ga., David J. Mountan, Jr., Joyce Daryl Chaikin, Conboy, Hewitt, O'Brien & Boardman, New York City, for defendant.

ORDER

EDENFIELD, District Judge.

1. Plaintiff, Carling Brewing Company, Inc., is a Virginia corporation, with a principal place of business at Cleveland, Ohio, and a substantial manufacturing activity at Atlanta, Georgia. Its business is the manufacture and sale of beer and ale products, and it does not contemplate the production of any other product at this time. Plaintiff's principal product, in terms of sales, is a type of beer which plaintiff contends is known as "Black Label".1

2. Defendant, Philip Morris, Inc., is also a Virginia corporation, with a principal place of business at New York, New York. Its primary business is the manufacture and sale of tobacco products, although it manufactures and sells other consumer goods, such as chewing gum and razor blades. Its 1966 Annual Report listed its net sales as $767,473,120 and its assets as $512,549,000. It ranks fourth in sales in the American cigarette market.

3. This is a suit for alleged infringement of a federally registered trademark, and alleged attendant unfair competition created by the defendant's use of the trademark "BLACK LABEL" as a brand name for cigarettes. Jurisdiction is based upon the Trademark Laws of the United States, more particularly upon 28 U.S.C. § 1338, and 15 U.S.C. §§ 1114, 1116, 1119, 1121 and 1125(a).

4. Venue is founded on 28 U.S.C. § 1391(c). Defendant was duly served with process in this District and has made a general appearance herein.

5. This action began on May 24, 1966, when plaintiff alleged that defendant's past and proposed use of the words "BLACK LABEL", as a brand name for a type of cigarette, constituted an infringement of their trademark "Black Label". Plaintiff sought a temporary and permanent injunction against any such use of that mark in connection with tobacco products. Plaintiff also sought damages, an accounting for profits, destruction of all materials possessed by defendant containing the words "BLACK LABEL", attorney's fees, and an injunction against defendant's further processing of its then pending application to the Patent Office for registration of the mark "BLACK LABEL" for cigarettes. Numerous affidavits have been submitted by both parties and a full hearing has been held on the motion to grant a temporary injunction against this use of "BLACK LABEL" by Philip Morris. The request for an injunction against the Patent Office proceedings has not been pressed.

6. Trademark Registration Number 308,966 was awarded to a predecessor of plaintiff on December 26, 1933 for use on lager beer, under the Trademark Act of February 20, 1905. This registration was assigned to plaintiff, who had it republished under the provisions of Section 12(c) of the Lanham Act and thereafter duly filed the affidavits required under Sections 8 and 15 of that Act (15 U.S.C. §§ 1058(a) and 1065). This registration states on its face: "No claim is made to the exclusive use of a label colored black." On this label, the words "BLACK LABEL", in block print, were approximately half the size of the word "CARLING'S" above it and the word "LAGER" below. This trademark registration was renewed on December 6, 1953. The required affidavits of use for this registration were filed on or about May 12, 1965, together with a specimen label. This label shows the words "Black Label" in a large script, with the words "CARLING" and "BEER" above and below the words "Black Label" in a print that is approximately one-third to one-fourth as high as the script "l" and "k". This label is the one now used on Carling's bottled beer.

7. In addition, plaintiff is the owner of federal Trademark Registration No. 796,521, registered on September 21, 1965. The specimen covered by this registration shows the words "Black Label" in a script, surrounded by a series of concentric rectangles with rounded corners. This label is the one now used, with the addition of the word "BEER" (but not the word "CARLING") below the words "Black Label", on the canned beer sold by Carling. This particular arrangement also appears on the cardboard containers used for both canned and bottled beer. This combination ("Black Label" in white and "BEER" in red) appears on a black background, bounded by the afore-described rectangles, which are black lines separated by white spaces. The rectangular label in turn appears against a background of red. In most cases where this mark is used, the word "CARLING" is also printed in either black or white, surrounded by an oval line in the same color, the whole being described as the "Carling racetrack". The "racetrack" usually appears above and to the left of the "Black Label" rectangle. On the whole, the words "Black Label" are the words with the most visual impact in the entire scheme. This registration also stated on its face: "Applicant makes no claim to the exclusive use of a label colored black."

8. Carling Brewing Company is one of the larger American brewing companies, with regional breweries producing Black Label beer scattered throughout the United States. Nationally, it is the sixth largest beer producer, and its rank in markets close to its breweries may be even higher. The company's product is also sold in a substantial number of foreign countries.2 In addition to Black Label beer, Carling also produces, for regional markets within the United States only, Heidelberg beer, Red Cap ale, and Stag beer. The labels for each of these products contain the Carling "racetrack", either above or above and to the left of the brand name, which is always in substantially larger print.

9. There is a dispute as to the degree to which the words "Black Label" alone are recognized as being the name of a brand of beer. Defendant contends that the beer is known as "Carling Black Label", while plaintiff contends that it is known as "Black Label" alone. There is no direct evidence by survey or otherwise as to which name is currently accepted by the public as the name of the product. The evidence does show that Carling has made a sustained and expensive advertising effort, amounting to at least 50 million dollars in corporation-sponsored advertising alone in the last five years, to popularize Black Label beer under that name.3 Additional advertising at the numerous points of sale, sponsored or subsidized by Carling to the extent of 12 million dollars over the same period, has repeated the emphasis on the mark "Black Label". Other advertising by distributors and retailers has been consistent with the Carling policy of emphasizing "Black Label". On the other hand, some retailers have advertised Black Label beer by referring to it only as "Carling's" in their advertisements, or with "Carling" given equal or greater importance than the words "Black Label".4 The evidence shows that Carling's national advertising has, over the last ten years, deliberately shifted its emphasis to the words "Black Label" and has subordinated "Carling". Therefore, the court finds no inherent conflict between evidence of past and current advertising practices, or the fact that some local advertisers may advertise Black Label without following Carling's lead in emphasizing the name of the beer rather than the name of the company. The ultimate question is not whether all the public know Carling's beer as "Black Label", but whether enough of the public recognize Carling's beer as "Black Label" to give Carling a right to protect that mark alone from an infringing use.

10. The court takes judicial notice of the fact that most establishments that sell beer at retail also sell tobacco products, with the limited exception of so-called package stores in areas where their licenses allow the sale of certain alcoholic beverages only. Further the evidence shows that many retail establishments selling beer for on-premises consumption either use or have available ashtrays and matchbooks bearing the Black Label mark, which have been distributed to the retailers in the course of Carling's publicity activities. Such matchbooks and ashtrays are most commonly used in conjunction with cigarettes of all types and brands.

11. There is evidence that at the time Philip Morris first used the mark in October, 1965, there were two other uses of the words "Black Label" as a primary trademark. In one case, it was in use for a hair spray and styling gel that was being sold only to licensed professional beauticians and not to the general public. The trademark application for this product has been amended (on September 15, 1967) to so restrict its use to such an application. A second use was for the words "Black Label" as a registered trademark for certain types of clothing produced by the P. H. Hanes Knitting Company, of Winston-Salem, North Carolina. There is no evidence as to its use in October 1965, and only the barest evidence that it had ever been used at all, and that only during the month of May, 1965.

12. Beyond these two cases where there was a use of "Black Label", there were three other valid registrations of the words "Black Label" as a part of a trademark at the time Philip Morris used it. These were for Johnnie Walker Black Label (a Scotch whiskey), Lanson pere & fils Black Label Champagne, and Yardley's Black Label Cologne.5

13. Patent Office records show seven other registrations for the words "Black Label", alone or with other words, all of them dating from the 1923-1937 period, and all of which had expired by 1965. There is no evidence...

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