AMP Inc. v. Foy

Citation189 U.S.P.Q. 392,540 F.2d 1181
Decision Date10 February 1976
Docket NumberNo. 74-2215,74-2215
PartiesAMP INCORPORATED, Appellant, v. Howard J. FOY, Jr., et al., Appellees.
CourtUnited States Courts of Appeals. United States Court of Appeals (4th Circuit)

Floyd A. Gibson, Charlotte, N. C. (James D. Myers, Charlotte, N. C., Charles B. Elderkin, Parrott, Bell, Seltzer, Park & Gibson, Charlotte, N. C., on brief), for appellant.

James L. Roberts, Charlotte, N. C., for appellees.

Before WINTER and WIDENER, Circuit Judges, and MERHIGE, District Judge. *

WIDENER, Circuit Judge:

Plaintiff-appellant, AMP Incorporated, sued to enjoin defendant, Howard J. Foy, et al., doing business as Amp Electric Company, from using the term "Amp" as a part of its business name. Plaintiff's causes of action are based both upon Title 15 U.S.C. § 1114, for infringement upon its registered trademark, and also for infringement by defendant of plaintiff's trade name. The district court held that neither alleged cause of action has been sustained and denied relief.

The denial of damages is not appealed from, but the denial of injunctive relief is. We remand for further consideration in the light of this opinion.

Plaintiff has been in business since 1941, and, since 1956, has operated under the name "AMP Incorporated." The term "AMP" is an acronym derived from the capital letters of plaintiff's original name, "Aircraft Marine Products, Inc." Plaintiff manufactures and distributes about 35,000 electrical and related products which are component parts to be used in electrical circuits for aircraft, boats, and home, and for other electrical appliances. Its largest customers are power companies, discount houses, and manufacturers of electrical appliances. The products manufactured by plaintiff are also sold to national chain stores, including Sears, Roebuck & Co., Woolco, Grant's, J. C. Penney, and others, and various electrical supply houses, for sale to the consuming public.

Products manufactured by plaintiff carry the trademark AMP which has been protected by seventeen United States Trademark Registrations. The validity of these registrations is conceded and is not in issue. This trademark "AMP" appears upon all of plaintiff's products.

Plaintiff operates a facility in Charlotte, North Carolina, which manufactures component parts for electrical apparatus, as well as distribution or manufacturing facilities in six other locations in North Carolina. The Charlotte plant has been in operation for eight years and employs one hundred and fifty-eight people. Many of these employees were obtained as the result of advertisements placed in Charlotte newspapers. Plaintiff's products are distributed in Charlotte through a number of retail outlets. Those which are sold by Sears, Roebuck & Co., are in Sears' packages but have the trademark AMP on them.

The principal defendant, Howard J. Foy, operates as a sole proprietorship under the name Amp Electric Company. Foy is engaged in the business of electrical contracting. He wires houses and apartments, adds extra circuits for dryers, air conditioners, dishwashers and disposals, and repairs electrical appliances such as water heaters, ranges and electrical heating units.

In July or August, 1972, a prior partnership between Howard J. Foy and Cyrus L. Foy was dissolved. This partnership had operated under the name of Ace Electric and American Electric Company. After the dissolution, defendant, Howard J. Foy, thought that a new name should be used. He selected the name "Amp Electric Company" ostensibly in order to have a name near the top of the alphabet so as to have a priority listing in the telephone book. The evidence fully sustains the trial court's finding that at the time of selecting the designation Amp, Foy was aware that plaintiff had been operating in the Charlotte area as "AMP Incorporated."

The opinion of the district court is basically predicated upon three grounds: 1 (1) that a trademark registration does not confer a monopoly of use upon the registrant, (2) that plaintiff and defendant were not competitors, and thus there was no element of unfair competition, (3) that defendant's use of the word "Amp" was not likely to confuse plaintiff's customers. We agree with the district court as to the first two grounds. The main thrust of its decision, however, is found in the third ground. We remand because we hold that the district court used too restrictive a standard. The test is not only the danger that defendant's use of the term "Amp" will confuse plaintiff's customers, but the likelihood of danger that such use will confuse the public in general, including plaintiff's customers, defendant's customers and other members of the public.

The district court was correct in its conclusion that registration of a trademark does not create a legal monopoly. In that sense, a trademark differs from a patent or copyright. United Drug Co. v. Rectanus Co., 248 U.S. 90, 97, 98, 39 S.Ct. 48, 63 L.Ed. 141 (1918); Beer Nuts, Inc. v. King Nut Co., 477 F.2d 326 (6th Cir. 1973); cert. den. 414 U.S. 858, 94 S.Ct. 66, 38 L.Ed.2d 108 (1974); Artype Inc. v. Zappulla, 228 F.2d 695 (2nd Cir. 1956). 2

We also agree that there was no competition between plaintiff and defendant. Thus, cases in which unfair competition was involved are in point only in so far as they can be predicated additionally upon some other basis. However, the absence of competition is no bar to relief if a legitimate basis is otherwise available. Thus, in Fleischmann Distilling Corp. v. Maier, 314 F.2d 149 (9th Cir. 1962), defendant brewing company was enjoined from using the name "Black and White" for its beer, which had already been long applied to Scotch whisky imported and sold by plaintiff. Although there was no competition between the parties, the use of the same name for their respective products was held likely to confuse the public. 3

I

Plaintiff's claim for trademark relief is based upon Title 15, U.S.C. § 1114, which provides as follows:

"(1) Any person who shall, without the consent of the registrant

(a) use in commerce any reproduction, counterfeit, copy, or colorable imitation of a registered mark in connection with the sale, offering for sale, distribution, or advertising of any goods or services on or in connection with which such use is likely to cause confusion, or to cause mistake, or to deceive;

shall be liable in a civil action by the registrant for the remedies hereinafter provided. . . . "

This statute had undergone considerable change. 4 It was first enacted by the Trademark Act of 1905. Under the 1905 statute, a trademark was protected only from a similar mark being placed on "(goods) of the same descriptive properties." The Lanham Act, passed in 1946, 5 granted protection against the use of marks "likely to cause confusion or mistake or to deceive purchasers as to the source or origin of such goods or services." It now became clear that the protection received by a registrant's trademark is not limited to cases of unfair competition, and exists between parties not in competition with each other. The public is protected from being confused as to the sponsorship of goods or services purchased. The trademark registrant could be harmed by such popular confusion because inferior service by the infringer might be attributed to the registrant.

We reverse primarily on the authority of Communications Satellite Corp. v. Comcet, Inc., 429 F.2d 1245 (4th Cir. 1970). In that case, the plaintiff, Communications Satellite Corporation, started using "Comsat" as its trade name shortly after its incorporation in 1963 and as its service mark in 1964. Comsat alone is authorized to use satellites in connection with inter-continental communications. The defendant, Comcet, Inc., develops, manufactures, and sells communications computers which receive data over telephone and teletype lines, edit and verify the information, and relay it to data processing computers. Suit was for an injunction based both upon the theory of trade name infringement and trademark infringement. Relief was denied in the district court, but this court reversed and ordered that an injunction be issued, holding that plaintiff was entitled to relief upon both theories.

Communications Satellite Corp. v. Comcet, Inc. is quite similar to the case here in that in both cases plaintiff and defendant are not in direct competition. In both cases, the plaintiff was the first to use the trade name and trademark. Although the parties did not compete, their services and products are in related fields: communications in Communications Satellite Corp., and electricity in the case at bar. The two cases are different in that the term "Comsat" had acquired a secondary meaning, whereas the term "Amp" has not.

As in this case, the injunction granted in Communications Satellite Corp. could not be based upon either a monopoly or an unfair competition theory. The court based its decision upon the likelihood to confuse and stated at p. 1252:

"When, as here, the parties are not competitors, the issue of infringement hinges on the likelihood of confusion about the source or sponsorship of the defendant's goods and services . . . "

and again at p. 1253:

"Complementary products, or services, are particularly vulnerable to confusion . . . (citation omitted). A reasonable person may well believe that Comcet's communications computers come from a source related to Comsat's communications services . . .

"We conclude, therefore, that the evidence establishes sufficient likelihood of confusion among prospective purchasers about the source or sponsorship of Comcet's computers to justify protection of Comsat's service mark."

It will be noted that the court emphasized confusion of defendant's customers, not plaintiff's customers as emphasized by the trial court in this case.

Another case in which the danger of confusion was stated as the standard in cases such as this is Tisch Hotels, Inc. v. Americana Inn, 350 F.2d 609, 613 ...

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