598 F.2d 694 (1st Cir. 1979), 78-1415, S. S. Kresge Co. v. United Factory Outlet, Inc.

Docket Nº:78-1415.
Citation:598 F.2d 694
Party Name:202 U.S.P.Q. 545 S. S. KRESGE COMPANY, Plaintiff-Appellee, v. UNITED FACTORY OUTLET, INC., et al., Defendants-Appellants.
Case Date:May 18, 1979
Court:United States Courts of Appeals, Court of Appeals for the First Circuit
 
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Page 694

598 F.2d 694 (1st Cir. 1979)

202 U.S.P.Q. 545

S. S. KRESGE COMPANY, Plaintiff-Appellee,

v.

UNITED FACTORY OUTLET, INC., et al., Defendants-Appellants.

No. 78-1415.

United States Court of Appeals, First Circuit

May 18, 1979

Argued Jan. 5, 1979.

Burton Chandler, Worcester, Mass., with whom Meredith Peterson Tufts, and Seder & Seder, Worcester, Mass., were on brief, for defendants-appellants.

Page 695

Richard W. Renner, Chicago, Ill., with whom Richard E. Alexander, Chicago, Ill., was on brief, for plaintiff-appellee.

Before COFFIN, Chief Judge, CAMPBELL and BOWNES, Circuit Judges.

BOWNES, Circuit Judge.

This is an appeal by defendants-appellants, United Factory Outlet, Inc., et al. (United), from an order of the district court denying a preliminary injunction sought to prevent S. S. Kresge Co. (Kresge), plaintiff-appellee, from using the word "Mart" in any form of advertisement in Worcester County, Massachusetts; making any form of public communication in Worcester County distinguishing appellee's stores from those of appellants; making any form of public comment that the actions of appellants in protecting their right to the use of the name "Mart" will be detrimental to the community; and making any form of public comment as to appellee's plans to expand into Worcester County.

United has operated two retail discount department stores in Worcester County under the name of "The Mart" since 1960. 1 Kresge, which has operated a national chain of similar stores under the name of "K mart" since 1962, 2 announced plans to open two K mart stores in the Worcester area. As a result of repeated assertions by United that it had exclusive use of the term "The Mart" in the area and its threat of legal action, Kresge filed an action in federal district court for a declaratory judgment that it could legally operate stores in Worcester County under the name "K mart."

After filing the lawsuit, Kresge initiated an advertising campaign in the local media announcing that it would like to open a K mart store in the City of Worcester. Several articles appeared in the local press which contained interviews of Kresge employees and dealt with Kresge's anticipated expansion into the area and the potential benefits resulting therefrom in terms of employment in retailing and construction, taxation, etc. The articles also adverted to the pending lawsuit.

In June, 1978, United filed a motion in the pending declaratory judgment action for a preliminary injunction. 3 The district court denied the motion on the basis that the term "mart" is generic and, thus, not subject to protection. Because of the fervor that the parties have evinced in this case, it is appropriate to point out that we are ruling on the question of whether the district court committed a clear error of law in denying the injunction. Appellants bear the heavy burden of convincing us that they had shown below that they probably would prevail on the merits. Automatic Radio

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Mfg. Co. v. Ford Motor Co., 390 F.2d 113, 115 (1st Cir.), Cert. denied, 391 U.S. 914, 88 S.Ct. 1807, 20 L.Ed.2d 653 (1968).

Trade name law involves rights in the use of symbols or words which serve to distinguish the source of a particular good or service. There are generally recognized four categories of words which, in their ascending order of eligibility for protection, are: (1) generic, (2) descriptive, (3) suggestive, and (4) arbitrary and fanciful. Abercrombie & Fitch v. Hunting World, Inc., 537 F.2d 4, 9 (2d Cir. 1976). Generic terms are those which refer to a genus of which a particular product is a species, without distinguishing its source or origin. 4

Generally speaking, generic terms are unprotectible...

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