51 West Fifty-first Corp.. v. Roland.

• Decision Date: 18 December 1946
• Docket Number: 147/80.
• Parties: 51 WEST FIFTY-FIRST CORPORATION v. ROLAND.
• Court: New Jersey Court of Chancery

50 A.2d 369

51 WEST FIFTY-FIRST CORPORATION

v.ROLAND.

147/80.

Court of Chancery of New Jersey.

Dec. 18, 1946.

Suit by 51 West Fifty-First Corporation against Bert Roland, trading as Toots Shores, to enjoin defendant from using plaintiff's trade-name or a simulation thereof.

Issuance of an injunction advised.

Syllabus by the Court

1. In a suit to enjoin the use, by another, of one's trade name or a simulation thereof, actual competition is not necessarily a prerequisite to relief; although the term ‘unfair competition’ is ofttimes used in connection with suits of this nature, the invocation of equity rests more vitally upon ‘unfairness' than upon ‘competition.’

2. The prior user of a trade name of value and good repute will be protected against the hazards of the business of a junior user of the name where the possible ill repute of the latter would be visited upon the former.

3. Likelihood of reliance by the public upon the trade name of the junior user as representing the product or service of the senior user, without actual reliance, is sufficient to subject one to liability for fraudulently marketing goods or services as those of another; particularly is this true where the use of the simulated trade name is unnecessary to the honest prosecution of the junior's business.

4. Proof of actual competition has never been deemed essential to the granting of relief when the imitator of an established trade name acted in fraud.

5. The one imitate another's trade name knowingly and act in other ways to convey the impression that his business is associated with the other, the inference may reasonably be drawn that there are prospective purchasers of the senior user to be misled.

6. The jurisdiction of courts of equity is liberally exercised to prevent injury from infringement of a trade name which is an established, distinctive and valuable adjunct of a complainant's business, whether the name distinguished manufactured articles, a place of business, or a service; all that is required to bring into activity the injunctive powers of the court is to inform it that the complainant's trade is in danger of harm from the use of its name by defendant in such a way as is calculated to deceive the public into the belief that defendant's affairs, in the respect complained of, are those of complainant.

Lloyd, Horn & Perskie, of Atlantic City, for whom appeared David M. Perskie, of Atlantic City, with whom was associated David T. Wilentz, of Perth Amboy, for the complainant.

Victor D. Tort, of Atlantic City, for the defendant.

WOODRUFF, Vice Chancellor.

The nationally known ‘Toots Shor Restaurant,’ at 51 West 51st Street, New York City, is owned and operated by the complainant. It was established in April, 1940, by Bernard Shor, nicknamed ‘Toots' when he was a boy in Philadelphia, and still best known by that pseudonym.

The ‘Toots Shores' restaurant on the Boardwalk, opposite the Steel Pier, in Atlantic City, was opened by the defendant in January, 1946. Immediately, Bernard, or ‘Toots' Shor of New York, received many letters referring to the Atlantic City restaurant and criticizing what was assumed to be his action in opening and conducting a branch unworthy of the character and reputation of his New York establishment. Upon receipt of these letters the complainant notified the defendant to cease the use of his imitation of the complainant's trade name. The notice was ignored; the result, this suit.

The complainant seeks an injunction prohibiting the defendant from conducting his present or any other restaurant or foodselling business, under the name ‘Toots Shores' or under any name similar to ‘Toots Shor.’ The defendant concedes the great similarity of his trade name to that of the complainant, and that it was employed subsequent to the creation and use of the complainant's trade name. He contends, however, that he has not been guilty of ‘unfair competition’ because his restaurant is operated in a territory different from that in which the complainant operates, and because he caters to a class of people other than that from which complainant draws its patrons.

Counsel for the complainant suggests that the principles stated in the conclusions filed by me in the recent cases of J. B. Liebman & Co., Inc., v. Leibman, 135 N.J.Eq. 288, 38 A.2d 187, and Weiss v. Stork and Gift Shop, 137 N.J.Eq. 475, 45 A.2d 688, are dispositive of all the questions herein agitated. This is true but some of the defenses advanced in the instant case were not suggested in either the Liebman or the Weiss case. In the Weiss case, the junior competing business was opened almost directly opposite the store of the complainant, and there was actual and aggressive competition in merchandising the same type of goods. In the Liebman case, there was like competition and, altho the principal store of the senior was located in Philadelphia, Pennsylvania, and the store of the junior was opened in Camden, New Jersey, the senior had, over a period of years, developed and maintained an extensive trade with hundreds of customers in Camden.

Law is not static; it is an ever developing science. Under some of the earlier and most of the more recent decisions in our Federal and our State courts, in actions based upon unfair trade practices, actual competition between the litigants has not been held to be an indispensable prerequisite to injunctive relief. Annotation, 148 L.R.A. 22, and collected authorities; 52 Am.Jur., Trademarks, Trade Names &c, Secs. 93 and 109; Restatement of the Law, Torts, Introduction to Chapter 35, pages 537, 540. The modern view was trenchantly expressed in Vogue Co. v. Thompson-Hudson Co., 1924, 6 Cir., 300 F. 509, 512: ‘This rule [that one should not be permitted to pass off his goods as those of another] is usually invoked when there is an actual market competition between the analogous products of the plaintiff and the defendants, and so it has been natural enough to speak of it as the doctrine of unfair competition; but there is no fetish in the word ‘competition.’ The invocation of equity rests more vitally upon the unfairness. If B. represents that his goods are made by A., and if damage therefrom to A. is to be seen, we are aware of no consideration which makes it controlling whether this damage to A. will come from market competition with some article which A. is then manufacturing or will come in some other way. The injury to A. is present, and the fraud upon the consumer is present; nothing else is needed. * * * the same considerations which make the misrepresentation so valuable to defendants make it pregnant with peril to plaintiff.' (Italics mine)

In Hanover Star Milling Co. v. Metcalf, 240 U.S. 403, 36 S.Ct. 357, 360, 60 L.Ed. 713, the Supreme Court of the United States, had before it two cases involving questions of unfair trade practices and of the territorial extent of the right in a trade name. Mr. Justice Pitney, speaking for the court, said ‘Courts afford redress or relief upon the ground that a party has a valuable interest in the good will of his trade or business, and in the trademarks adopted to maintain and extend it. The essence of the wrong consists in the sale of the goods of one manufacturer or vendor for those of another. * * * Into whatever markets the use of a trademark has extended, or its meaning has become known, there will the manufacturer or trader whose trade is pirated by an infringing use be entitled to protection and redress.’ (Italics mine)

The case nearest in point of fact to the instant case is Stork Restaurant, Inc., v. Marcus, 1941, U.S.D.C., E.D.Pa., 36 F.Supp. 90, 93. In that case the plaintiff brought suit to protect the trade name of its restaurant, ‘The Stork Club,’ in the City of New York. That name had been continually used by it for several years, and, with its restaurant, had been advertised extensively by various methods and thru various media. It had also been referred to in various periodicals and other printed matter of local and national circulation, and the favorable publicity given the restaurant had attracted to it persons of prominence in social, literary, artistic, professional, commercial, offical and cinematic circles. Then, the defendant registered in Pennsylvania the trade name ‘The Stork Club’ to designate a restaurant he was opening in Philadelphia, and widely advertised its opening and operation. The court held that the defendant had not deprived the plaintiff of any patrons, but was profiting from the fame and repute adjunctive to the name and insignia of the plaintiff's restaurant and, that the defendant's business, altho fundamentally similar to that of the plaintiff, was of such type that the reputation likely to be accorded to his business would differ materially from the reputation of the plaintiff's restaurant. The court said: ‘ It is generally recognized today that the emphasis in cases concerning trademarks, trade-names, and ‘unfair competition’ is no longer on competition, but rather on the injury suffered by the plaintiff and the public, it being enough if the defendant's acts result in confusion or deceit of the public. * * * Because an attractive, reputable trade-name can be imitated not for the purpose of diverting trade from its owner, but rather for the purpose of securing some of the good will, advertising, and sales stimulation appurtenant to it, the interest in a trade-name came to be protected against being subjected to the hazards of another's business not in actual competition. Restatement of the Law of Torts, § 730, comment (a). That is, one's interest in a trade-name came to be protected against simulation not only in a competing business, but in a business so related to that of the owner of the trade-name that the possible ill repute of the other would be visited upon him.' (Italics mine)

The insistment of the complainant is that its established and nationally known trade name is being belittled and depreciated in value by ...