612 F.2d 1018 (7th Cir. 1979), 79-1060, Ideal Industries, Inc. v. Gardner Bender, Inc.

Docket Nº:79-1060.
Citation:612 F.2d 1018
Party Name:204 U.S.P.Q. 177 IDEAL INDUSTRIES, INC., Plaintiff-Appellee, v. GARDNER BENDER, INC., Defendant-Appellant.
Case Date:November 19, 1979
Court:United States Courts of Appeals, Court of Appeals for the Seventh Circuit
 
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612 F.2d 1018 (7th Cir. 1979)

204 U.S.P.Q. 177

IDEAL INDUSTRIES, INC., Plaintiff-Appellee,

v.

GARDNER BENDER, INC., Defendant-Appellant.

No. 79-1060.

United States Court of Appeals, Seventh Circuit

November 19, 1979

Argued April 24, 1979.

Rehearing Denied Jan. 28, 1980.

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[Copyrighted Material Omitted]

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George H. Solveson, Andrus, Sceales, Starke & Sawall, Milwaukee, Wis., Richard A. Kranitz, Grafton, Wis., for defendant-appellant.

Alfred H. Plyer, Jr., Chicago, Ill., for plaintiff-appellee.

Before FAIRCHILD, Chief Circuit Judge, MOORE, Senior Circuit Judge, [*] and WOOD, Circuit Judge.

MOORE, Circuit Judge:

This case brings up for decision unique issues in the law of trademarks, especially the question whether numbers may become common law trademarks. Defendant Gardner Bender, Inc. ("Gardner") appeals from an order dated January 10, 1979 of the United States District Court for the Eastern District of Wisconsin, Honorable John W. Reynolds, Chief Judge, which granted plaintiff Ideal Industries, Inc.'s ("Ideal") motion for a preliminary injunction. Gardner was enjoined from selling any electrical connectors bearing the numbers claimed by Ideal to be its trademarks and using the numbers on the labels of cartons or on sales literature. Gardner also was ordered to recall cartons and connectors in the hands of distributors once modified cartons and connectors become available. The district court stayed enforcement of its order on January 15, 1979; this court continued the stay pending resolution of Gardner's appeal.

Ideal is a Delaware corporation with its principal place of business in Sycamore, Illinois. Gardner is a Wisconsin corporation which has its principal place of business in Glendale, Wisconsin. Both parties are in the business of making and selling various electrical products. The district court's subject matter jurisdiction rested on the diversity of citizenship of the parties. 28 U.S.C. § 1332 (1976).

I.

Understanding of the present controversy requires a brief review of the past. Early in the 1930's Ideal began to market the product now at issue: barrel-shaped, screw-on electrical connectors. These connectors have a hard outer shell made of an electrically-insulating material which is molded around a coiled spring. They connect two or more wires securely when they are screwed onto the bared ends of the grouped wires. Such connectors are usually sold in a range of sizes. Ideal has sold, and continues to sell, a range of six sizes under the trademark "Wire Nut".

Beginning in 1936, Ideal adopted an arbitrary series of numbers to designate the different sizes. The number "71" was applied to the smallest, followed by numbers 72, 73, 74 and 76. There are no records which show whether these numbers corresponded to some characteristic of the connectors other than relative size. In 1946, Ideal began to make these connectors with a Bakelite rather than phenolic shell and added a capital "B" to each of the numbers to indicate the new material. The connectors were identified as 71B, 72B, 73B, 74B and 76B (hereinafter referred to as the "71B series"). A sixth, larger size was added in 1966 and was designated "78B". Although Ideal has long used a different material than Bakelite, the 71B series numbers have continued to appear on the connectors, on carton labels, in advertising, and in catalogs since 1946.

In 1965 or 1966, Ideal redesigned the cartons, and their labels, in which the connectors were sold. Besides modernizing the look of the label, Ideal increased the size of the 71B series designations so that they became the largest symbol on the labels. Ideal claims that this change was made because the company realized that the 71B series numbers had come to stand for the source of the connector. 1 The labels continued to carry the registered trademarks

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"Ideal", "Wire Nut" and a registered crow's-foot design logo representing Ideal. Underneath the 71B series designation appeared the word "model" in parentheses. In 1969 the connectors and carton labels were color-coded to indicate size differences but this change had no effect on the label design or the relative prominence of the 71B series designations.

NOTE: OPINION CONTAINS TABLE OR OTHER DATA THAT IS NOT VIEWABLE

The 71B series numbers appear on the tops of the connectors themselves to satisfy the requirements of Underwriters Laboratories, Inc. ("UL") and the Canadian Standards Association ("CSA") that electrical connectors be marked with a type or catalog-number designation. The imprints of UL and CSA also appear on the top of Ideal's approved connectors, along with the trademark "Ideal" and numbers which indicate the range of wire sizes which the connector can accommodate. All these markings satisfy the CSA and UL requirements.

Ideal is the dominant firm in the market for barrel-shaped, fixed-spring electrical connectors. Its chief competitors are Hi-Scale Products Corp., Inc. ("Hi-Scale"), ITT Holub Industries ("Holub"), Eagle Electric Mfg. Co. ("Eagle"), and Gardner. Holub sells its connectors under its trademark "Hi" and the size designation series "No. Hi-3", "No. Hi-4" and "No. Hi-6". Beginning around 1972 Holub's carton labels displayed a 71B series number along with the word "size" in a blue circle to indicate the size comparability between Ideal's and Holub's products. Holub's own number series was still the most prominent label designation and continued to appear on the connectors themselves.

Prior to 1975, Hi-Scale's labels bore Hi-Scale's own series numbers, such as "HS-18" or "HS-7" as well as the appropriate 71B series number in smaller print adjacent to the word "size". The connectors displayed Hi-Scale's own series designations. In 1976, after Gardner entered the market, the 71B series number began to appear on Hi-Scale labels in approximately the same size print as the Hi-Scale series numbers. The 71B series numbers were still accompanied by the adjacent words "Approx. Size".

This case arises from the entry of Gardner into the electrical connector market in 1976. Instead of creating its own series numbers, Gardner adopted the 71B series as the sole type designation for its connectors. In addition, the catalog numbers for each size are similar. While Ideal uses the catalog number "30-073" to represent its 73B connector, Gardner uses "10-073" to represent its own 73B connector. Since Gardner also adopted Ideal's color coding scheme for the connectors, the only way to tell a Gardner connector from one made by Ideal is the presence of a "GB" in place of "IDEAL" on the top of the connectors. All else on the connector is the same. The Gardner carton labels are the same color as Ideal's, although they bear Gardner's "GB" trademark prominently, in addition to Gardner's distinctive logo. The word "style" appears next to the 71B series number on the carton labels.

Ideal commenced this action in May 1976, charging that Gardner was engaged in unfair competition and common law trademark infringement. The complaint sought preliminary and permanent injunctive relief and damages. Ideal filed its brief and exhibits in support of its motion for a preliminary injunction in January, 1977. Not until November 30, 1978 did the district court hold a hearing on the motion. Ideal relied only on its claim that Gardner was infringing its alleged common law trademark rights in the 71B series; the unfair competition claim was not pressed as support for the preliminary injunction. The motion was considered on the affidavits, deposition transcripts and exhibits submitted by the parties as well as the pleadings and the arguments made at the hearing. The district court expressly absolved Ideal of fault for the long delay between the filing of the motion and the hearing. The district court rendered its decision and order in favor of Ideal on January 10, 1979; Gardner appeals. We affirm with modifications and remand for further proceedings.

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II.

The scope of review at this stage is quite restricted. An order granting a preliminary injunction in a trademark case "will not be set aside by a Court of Appeals unless it...

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