560 F.2d 1325 (7th Cir. 1977), 77-1138, Helene Curtis Industries, Inc. v. Church & Dwight Co., Inc.

Docket Nº:77-1138.
Citation:560 F.2d 1325
Party Name:582 HELENE CURTIS INDUSTRIES, INC., Plaintiff-Appellant, v. CHURCH & DWIGHT CO., INC., and Allied Chemical Corporation, Defendants-Appellees. CHURCH & DWIGHT CO., INC., Plaintiff-Appellee, v. HELENE CURTIS INDUSTRIES, INC., and N.W. Ayer & Son, Incorporated d/b/a N.W. Ayer ABH International, Defendants-Appellants.
Case Date:August 17, 1977
Court:United States Courts of Appeals, Court of Appeals for the Seventh Circuit
 
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Page 1325

560 F.2d 1325 (7th Cir. 1977)

582

HELENE CURTIS INDUSTRIES, INC., Plaintiff-Appellant,

v.

CHURCH & DWIGHT CO., INC., and Allied Chemical Corporation,

Defendants-Appellees.

CHURCH & DWIGHT CO., INC., Plaintiff-Appellee,

v.

HELENE CURTIS INDUSTRIES, INC., and N.W. Ayer & Son,

Incorporated d/b/a N.W. Ayer ABH International,

Defendants-Appellants.

No. 77-1138.

United States Court of Appeals, Seventh Circuit

August 17, 1977

Argued April 12, 1977.

As Amended Aug. 26, 1977.

Rehearing and Rehearing En Banc Denied, Sept. 30, 1977.

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[Copyrighted Material Omitted]

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[Copyrighted Material Omitted]

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James W. Clement, R. Howard Goldsmith, Chicago, Ill., for plaintiff-appellant.

Rynn Berry, New York City, Daniel W. Vittum, Jr., Chicago, Ill., for defendants-appellees.

Before BAUER and WOOD, Circuit Judges, and JAMESON, [*] Senior District Judge.

JAMESON, Senior District Judge:

Helene Curtis Industries, Inc. (Curtis) has appealed from a preliminary injunction order enjoining it from using the words "Arm in Arm" or any combination of words including Arm in Arm "as part of any trademark, brand name or other product or commercial identification in connection with the sale, offering for sale, distribution, advertising or promotion of any deodorant or antiperspirant product". The injunction arises from a suit brought by Church & Dwight Co., Inc. (Church & Dwight) charging Curtis with trademark infringement and unfair competition. Curtis counterclaimed, charging Church & Dwight with violation of the antitrust laws in attempting to monopolize the sale of products containing baking soda. Curtis subsequently filed a separate antitrust action, and the two cases were consolidated. Curtis contends that the evidence was insufficient to support the injunction and that it was unfairly precluded from establishing its antitrust counterclaims by a court order staying discovery on that issue. We affirm the order of the district court.

Factual Background

Church & Dwight is a Delaware corporation which, under its registered trademark Arm & Hammer, has advertised and sold baking soda to the public for over 100 years. It also sells other household and personal care products under the Arm & Hammer trademark, including laundry detergent, washing soda, borax, oven cleaner and personal deodorant. Curtis is an Illinois corporation which sells various personal care

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products, including Arm in Arm deodorant with baking soda.

Based on an idea derived from Arm & Hammer television commercials, Curtis developed and began test-marketing Arm in Arm with Baking Soda deodorant in three cities on April 28, 1975. In early May, 1975, the initial marketing of the Curtis deodorant came to the attention of Church & Dwight, which was preparing for the marketing of its own baking soda deodorant under the Arm & Hammer trademark. 1 Church & Dwight immediately protested to Curtis against Curtis' use of the Arm in Arm brand name and packaging. 2 Following Curtis' rejection of its protests, Church & Dwight on May 16, 1975, commenced this action against Curtis in the United States District Court in Rochester, New York.

Curtis answered on July 3, 1975, asserting an affirmative defense and counterclaim predicated on allegations that Church had attempted to monopolize the sale of products containing baking soda. On August 27, 1975, Church & Dwight moved, pursuant to F.R.Civ.P. 42(b), for a separation for trial of the antitrust issues raised by the answer and counterclaim from the trademark issues raised in its complaint. Following a hearing on the motion September 22, 1975, the New York district court on February 25, 1976, entered an order separating trial of the antitrust and trademark issues and staying all proceedings on the antitrust issues pending resolution of the trademark issues. On April 15, 1976, the court denied Curtis' motion for certification under 28 U.S.C. § 1292(b).

Despite the pendency of the lawsuit, in July, 1975, Curtis expanded from the three-city test to national marketing of Arm in Arm, reaching national distribution in October, 1975. Curtis' decision to expand its marketing program was announced by its division president, who stated:

"As you probably heard, about six weeks ago, Arm and Hammer entered a suit against us in an effort to slow us down with our introduction."

" . . . We are going ahead faster than ever before. We are so unconcerned with the suit that we are ready to offer a letter of indemnity to any account who wants it. As far as you are concerned, you need have no worry or fear regarding this at all." (Finding of Fact 52)

In April, 1976, Curtis further expanded the Arm in Arm line with the introduction of a roll-on deodorant, nationally advertised and distributed in June, 1976.

On June 10, 1976, Church & Dwight filed a motion for preliminary injunction. On June 15, 1976, Curtis filed a petition seeking a writ of mandamus directing the district court to vacate its Rule 42(b) order. The petition was dismissed by the Court of Appeals for the Second Circuit on July 8, 1976.

On June 16, 1976, Curtis filed an antitrust action against Church & Dwight in the court below, repeating the allegations made in its answer and counterclaim in the New York action as well as adding several new ones. On the same date Curtis filed a motion to transfer the New York action to Illinois pursuant to 28 U.S.C. § 1404(a). The New York court granted the motion on November 17, 1976, and the case, together with the undecided motion for preliminary injunction, was transferred to Chicago. Upon learning of the Rule 42(b) order, the Illinois district court stayed the antitrust action filed by Curtis. Curtis then moved to vacate the Rule 42(b) order; the motion is still pending.

On January 24, 1977, the district court entered its Preliminary Injunction Order against Curtis, to become effective on April 1, 1977. The order was accompanied by detailed findings of fact 3 and conclusions of law. The court concluded, inter alia :

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In view of the irreparable injury that will be suffered by plaintiff if defendant's trademark infringement and unfair competition are not immediately enjoined, the lack of dispute as to the basic facts, and the showing of the probable right of both plaintiff and the public under the law to relief against continuation of defendant Curtis' misleading, confusing and deceptive acts, injunctive relief pendente lite should be granted.

Curtis filed a notice of appeal on January 27, 1977. On February 11, 1977 this court stayed the preliminary injunction until further order of this court.

Propriety of Preliminary Injunction

The decision to grant or deny a preliminary injunction "depends upon a balancing of several factors, including the likelihood of success on the merits, the lack of adequate remedy at law, the lack of irreparable harm if the injunction is not issued and a comparison of the relative hardships imposed on the parties". Banks v. Trainor, 525 F.2d 837, 841 (7 Cir. 1975). "In reviewing the district court's assessment of these factors, the Court of Appeals should not substitute its judgment for that of the lower court unless it is convinced that the district court abused its discretion." Washington v. Walker, 529 F.2d 1062, 1065 (7 Cir. 1976), citing, inter alia, Banks v. Trainor, supra at 841. We shall consider in turn each of the factors to be weighed in determining the propriety of the injunction.

(1) Likelihood of Success on the Merits

Under the Federal Trademark Statute (the Lanham Act), the test of liability for infringement is whether the infringer's "use is likely to cause confusion, or to cause mistake, or to deceive . . . ." 15 U.S.C. § 1114(1). This court has recognized that:

A third party, the consuming public, is present and its interests are paramount. Hence infringement is found when the evidence indicates a likelihood of confusion, deception or mistake on the part of the consuming public. James Burrough Ltd. v. Sign of Beefeater, Inc., 540 F.2d 266, 274 (7 Cir. 1976).

In determining "likelihood of confusion" several factors are important: "the degree of similarity between the marks in appearance and suggestion; the similarity of the products for which the name is used; the area and manner of concurrent use; the degree of care likely to be exercised by consumers; the strength of the complainant's mark; actual confusion; and an intent on the part of the alleged infringer to palm off his products as those of another". Carl Zeiss Stiftung v. VEB Carl Zeiss Jena, 433 F.2d 686, 705 (2 Cir. 1970), cert. denied, 403 U.S. 905, 91 S.Ct. 2205, 29 L.Ed.2d 680 (1971).

The district court's findings of fact reveal numerous factors showing a likelihood of public confusion of the Arm in Arm trademark with that of Arm & Hammer. Arm in Arm employs packaging with a cream yellow background, similar to that used on Arm & Hammer Baking Soda packages, which was chosen because "the cream background packages are most suggestive of baking soda, the unique ingredient in Arm in Arm". (Finding 23.) In questionnaires used in Curtis' initial marketing research, numerous persons stated that the Arm in Arm packaging reminded them of "the yellow background design of the Baking Soda package (Arm & Hammer)". (Finding 24.) On the basis of its marketing research, Curtis concluded on February 7, 1975, that "The name Arm in Arm is a very acceptable name for the test product. The name readily produces such images as: * * * Arm and Hammer Baking Soda." (Finding 22.)

Additionally, the district court detailed multiple examples of actual public confusion. While the test of infringement is the likelihood of confusion, which can be proven without any evidence of actual confusion, such evidence, if available, is entitled to substantial weight. Tisch Hotels, Inc. v. Americana Inn, Inc., 350 F.2d 609, 612 (7 Cir. 1965)...

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