Armstrong Cork Co. v. World Carpets, Inc.
| Decision Date | 21 June 1979 |
| Docket Number | No. 78-1919,78-1919 |
| Citation | 597 F.2d 496 |
| Parties | ARMSTRONG CORK COMPANY and Armstrong World Industries, Inc., Plaintiffs- Appellants, Cross-Appellees, v. WORLD CARPETS, INC., et al., Defendants-Appellees, Cross-Appellants. |
| Court | U.S. Court of Appeals — Fifth Circuit |
Oscar M. Smith, Rome, Ga., David H. T. Kane, Siegrun D. Kane, Kane, Daleimer, Kane, Sullivan & Kurucy, New York City, for plaintiffs-appellants.
Mitchell, Mitchell, Coppedge, Boyett, Wester & Bates, Warren N. Coppedge, Jr., James H. Bisson, III, Dalton, Ga., Beveridge, DeGrandi, Kline & Lunsford, Julius R. Lunsford, Jr., Atlanta, Ga., for defendants-appellees.
Appeals from the United States District Court for the Northern District of Georgia.
Before BROWN, Chief Judge, COLEMAN and TJOFLAT, Circuit Judges.
In this case, we fly by magic carpet through the exotic and esoteric realm of trademark law and the Lanham Act, 15 U.S.C.A. §§ 1051-1127. Armstrong Cork Company (Armstrong), plaintiff below, appeals from a District Court order enjoining Armstrong from using its proposed new corporate name, Armstrong World Industries, Inc. World Carpets, Inc. (World), defendant below, appeals from the District Court's ruling that Armstrong had not violated the Georgia Fair Business Practices Act of 1975, Ga.Code Ann. §§ 106-1201 to 1217. The main issue on appeal is whether the District Court was correct in ruling that Armstrong's use of its proposed corporate name would infringe World's rights in its registered trademarks WORLD and WORLD with a globe symbol. We conclude that the District Court's finding of trademark infringement was incorrect. The District Court's order of injunction is reversed and its ruling on the state law issue is affirmed.
Armstrong is a Pennsylvania corporation that manufactures home furnishing products, including hard surface flooring, ceiling material, furniture, and carpeting. Armstrong has ten foreign subsidiaries and affiliates located in eight foreign countries. Armstrong's products are sold in over 100 countries. From 1950 to 1976, Armstrong spent approximately 180 million dollars in advertising.
Armstrong sells its products under various trademarks, such as Armstrong with a circled A and Evans & Black. Armstrong is also the owner of registered trademarks INDOOR WORLD and THE INDOOR WORLD, which refer to Armstrong's interior decorating services and cotton piece goods.
Although Armstrong is best known for its hard surface flooring products, Armstrong is also a manufacturer of tufted carpets. In the early part of this century, Armstrong manufactured or sold carpet under various trade names, culminating with the Deltox label that was discontinued in the early 1960's. In 1966, Armstrong acquired Brinton Carpets, a Canadian producer of woven and tufted carpeting. In 1967, Armstrong acquired Evans & Black of Texas and Georgia, a tufted carpet producer. Armstrong is now one of the largest producers of carpets. As required by federal law, the Armstrong corporate name appears on every label of carpet manufactured or warranted by Armstrong.
Since 1973, Armstrong has operated a wholly-owned subsidiary, Pacific World. Pacific World is the wholesale distributor of Armstrong carpets in California and the surrounding areas. Pacific World has approximately six to seven million dollars in annual sales.
For some time now, Armstrong has been considering a name change. Because cork has ceased to be a significant part of Armstrong's product line, Armstrong's executives concluded that the corporate name Armstrong Cork Company no longer provided an appropriate description of Armstrong's business. Deciding to change to a corporate name that was "more reflective of what the Armstrong Cork Company is today," Armstrong embarked upon what has been a rocky road to name change. Testimony of James Binns, Pres., Armstrong Cork Co.
Before deciding upon Armstrong World Industries, Inc., Armstrong considered other names, such as Armstrong International, Armstrong Industries, and Armstrong Indoor World Industries. Armstrong International and Armstrong Industries could not be cleared for use in certain states because of existing companies with identical names. Armstrong Indoor World Industries was not adopted because it was considered too restrictive.
Armstrong eventually settled upon the name Armstrong World Industries, Inc. The proposed name was approved by Armstrong's shareholders in 1977. Armstrong then formed a Delaware nameholder corporation, Armstrong World Industries, Inc., and received permission to do business in that name in all fifty states.
At this point, World pulled the rug from under Armstrong's corporate feet, objecting to the proposed name change.
World is a Georgia corporation manufacturing tufted textile carpets in a variety of styles and colors. Organized in 1954, World is a closely-held corporation with subsidiaries in seven metropolitan areas throughout the United States and with export sales in twenty-five countries, including Australia, England, Germany, and Japan. World's annual sales exceed 100 million dollars. World has an established reputation in the carpet industry as a "trend setter." Nationwide, World has spent approximately eighteen million dollars on newspaper, magazine, and television advertising.
World is the owner of federal registered trademarks WORLD and WORLD with a globe symbol. The federal trademark WORLD has become incontestable under Section 15 of the Lanham Act, 15 U.S.C.A. § 1065.
World and Armstrong are major competitors in the carpeting industry. Their manufacturing processes are similar. They have similar sales and distribution methods. For example, the companies frequently market their products through the same retail stores. Both companies typically furnish distributors and retailers with sample books, display racks, and other promotional materials. Armstrong and World both advertise in the same magazines, often on adjacent pages. The companies use the same toll-free telephone number for consumer inquiries.
When efforts to resolve the name change dispute failed, Armstrong brought this declaratory judgment action, seeking a ruling that its proposed new corporate name did not infringe or unfairly compete with World's rights in its registered trademarks, WORLD and WORLD with a globe symbol. 1 World counterclaimed for an injunction restraining Armstrong's use of the new name and for damages and attorneys fees for violations of the Georgia Fair Business Practices Act of 1975, Ga.Code Ann. §§ 106-1201 to 1217. A jury was impaneled for a determination of World's counterclaim for damages. The jury found that World was not entitled to exemplary or punitive damages. The jury also made advisory findings of fact that Armstrong's use of the proposed name was likely to cause confusion, was not a good faith, fair, and descriptive use of the word World, and was an unfair trade practice. The District Court then made its own findings of fact and conclusions of law and enjoined Armstrong from using the proposed name.
The District Court held that World was entitled to injunctive relief because Armstrong carpet sold by Armstrong World Industries, Inc. would likely be confused with carpet sold by World and that therefore Armstrong's use of its proposed corporate name would infringe World's trademark rights. 2 The Court further held that Armstrong could not claim protection under the "fair use" defense of Section 33(b)(4) of the Lanham Act. 3
The Court ruled against World on the state law issue, finding that Armstrong had not passed off its goods as those of World and that no one was actually confused by the proposed name change. The Court upheld the jury's refusal to award damages to World.
On this appeal, Armstrong attacks the holdings adverse to it. World attacks the District Court's resolution of the state law issue. We need discuss only one of these challenges. 4
In a trademark infringement case, the controlling issue is whether the alleged infringer's imitation of a registered mark is "likely to cause confusion, or to cause mistake, or to deceive . . . ." Lanham Act § 32(1), 15 U.S.C.A. § 1114(1); Roto-Rooter Corp. v. O'Neal, 5 Cir., 1975, 513 F.2d 44; World Carpets, Inc. v. Dick Littrell's New World Carpets, 5 Cir., 1971, 438 F.2d 482; Continental Motors Corp. v. Continental Aviation Corp., 5 Cir., 1967, 375 F.2d 857; American Foods, Inc. v. Golden Flakes, Inc., 5 Cir., 1963, 312 F.2d 619. 5 Therefore, as the District Court rightly observed, the case turns upon the correctness of the District Court's finding that Armstrong's use of World's trademark in its corporate name created a likelihood of confusion in the minds of the carpet buying public. 6
The finding of likelihood of confusion is one of fact and is therefore reviewed by this Court under the "clearly erroneous" test of F.R.Civ.P. 52(a). T. G. I. Friday's, Inc. v. International Restaurant Group, Inc., 5 Cir., 1978, 569 F.2d 895; Holiday Inns, Inc. v. Holiday Out In America, 5 Cir., 1973, 481 F.2d 445. The question for us is whether the District Court's finding of likelihood of confusion was clearly erroneous.
A finding of fact of the District Court is clearly erroneous "when although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed." United States v. United States Gypsum Co., 1948, 333 U.S. 364, 395, 68 S.Ct. 525, 542, 92 L.Ed. 746. In other words, we reverse when the result in a particular case does not reflect the truth and the right of the case. W. R. B. Corp. v. Geer, 5 Cir., 1963, 313 F.2d 750, 753, Cert. denied, 379 U.S. 841, 85 S.Ct. 78, 13 L.Ed.2d 47. We have such a result here. Having considered all the evidence in ...
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