Sears, Roebuck & Co. v. All States Life Insurance Co.
| Citation | 246 F.2d 161 |
| Decision Date | 17 July 1957 |
| Docket Number | No. 16291.,16291. |
| Parties | SEARS, ROEBUCK & COMPANY and Allstate Insurance Company, Appellants, v. ALL STATES LIFE INSURANCE COMPANY, Appellee. |
| Court | United States Courts of Appeals. United States Court of Appeals (5th Circuit) |
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Pinkney Grissom, Dave Kendall, Jr., David M. Kendall, Jr., Dallas, Tex. (Lederer, Livingston, Kahn & Adsit, Chicago, Ill., Thompson, Knight, Wright & Simmons, Dallas, Tex., of counsel), for appellants.
Paul Carrington, Frank G. Newman, Otis B. Gary, Carrington, Gowan, Johnson, Bromberg & Leeds, Dallas, Tex., for appellee.
Before HUTCHESON, Chief Judge, and TUTTLE and JONES, Circuit Judges.
This is an appeal from a judgment of the trial court, sitting without a jury, denying relief to appellants in an action for injunction and damages for trade mark infringement under the Lanham Act 15 U.S.C.A. § 1051 et seq. and for alleged unfair competition.
Appellant Sears, Roebuck & Co. is the owner of appellant Allstate Insurance Company. Sears has, since 1927, used the name Allstate to identify numerous of its products, all articles of merchandise, principally automobile tires, parts and accessories, sold in interstate commerce, and had a registered mark in connection with each class of such articles. Allstate Insurance Company was organized by Sears in 1931 and has since that time continuously engaged in the sale in all the states of the United States of policies of automobile and general casualty insurance. Under the laws of Texas it could not engage also in the life insurance business. It was first qualified to do business in the state of Texas in 1936. It registered service marks under the Lanham Act as to (1) the name Allstate and as to (2) a design showing an automobile held in two hands, with the legend "You're in good hands with Allstate." Each of these services marks was specified to relate to "automobile insurance (fire, theft, property damage, personal liability, etc.) in Class 102."
All States Life Insurance Company, having no connection with the appellants, was chartered by the state of Texas on July 1, 1955, to engage in a life insurance business. To the time of the filing of this suit in December 1955 it was engaged in the sale of its common stock to the public. It had not yet undertaken to sell any life policies.
The incorporation of insurance companies and the granting of their right to engage in the insurance business in Texas is a function of the State Board of Insurance Commissioners. The Board is charged with the duty, among others, to determine whether the applicant for a license has selected a name that is not "so similar to that of any other insurance company as to be likely to mislead the public." A review from this and all other administrative rulings of the Board is provided for by the Texas statute.1 The appellants made formal protest to the Board on October 31, 1955, asserting the grounds later alleged in this suit, and requested the Board `to require All States Life Insurance Company to change its name and select some other name which does not infringe upon and constitute unfair competition with Allstate Insurance Company * * *."
The Board denied this relief by order dated November 8, 1955, reciting that the action was taken at an official meeting of the Board.2 No appeal was taken to the District Court of Travis County or to any other court from this ruling of the Board.
In 1928, a life insurance company was organized in Alabama under the name All States Life Insurance Company. By 1931, the year the appellant Allstate Insurance Company was organized, it was doing business in four states, and by 1946 in thirteen states and the District of Columbia. It was licensed to do business in Texas during part of 1937 and 1938. In July 1955 appellee first commenced negotiations with this company for its purchase, and later, after commencement of this suit, the All States Life Insurance Company transferred all right and interest in and to its name and mark in Texas to appellee, and its principal stockholder also contracted to sell a majority of the stock of the company to appellee, which also bound itself to buy all the remaining shares of the stock.
Appellants urged on the court below and vigorously insist here that their registered trade marks and service marks under the Lanham Act3 protect them against the use by appellee of the name All States Life Insurance Company and that independently of that statute the use of the name of appellee amounts to unfair competition at common law, diversity of citizenship giving jurisdiction to the Federal courts to enjoin the use and to award damages for past injuries.
The trial court made brief findings of fact and conclusions of law.4
Appellants present the following four questions which they say are posed by the judgment of the trial court. They are:
For convenience these questions will be answered in the order in which they are stated. Although appellants do not clearly distinguish at all times in their brief between alleged infringement of the registered marks and the alleged commission by appellee of acts of unfair competition, they do present these issues separately in their questions, and we shall endeavor to treat them separately. In doing so we shall put aside for the moment two arguments put forward by appellee, but shall indicate the proper disposition of them later. These two arguments are: (1) The action seeks to require appellee insurance company to change its name, and this being a matter confided by the state of Texas to the Board of Insurance Commissioners its unappealed action adverse to the plea of appellants cannot be relitigated here; (2) the Lanham Act has no efficacy as to the regulation of an insurance company in a state whose statutes undertake such regulation (and the approval of a name is an act of regulation) because of the limiting terms of the McCarran Act.5
The first question is: Did the trial court err in holding that All States had not infringed Sears' registered trade mark Allstate?
We conclude that this question must be answered in the negative. Strictly as a matter of infringement of the many registered trade marks of Allstate owned by Sears, it is clear that as to the proposed life insurance policies in connection with which appellee intended to use the name All States Life Insurance Company there was no similarity of products. Furthermore, there was no competition between Sears and appellee. Nor was there any real similarity between the registered marks of Sears, taken as a whole, and the name of appellee.6 In the ordinary sense of the terms the name All States Life Insurance Company is not a "reproduction, counterfeit, copy, or colorable imitation"7 of the single word "Allstate" or the word "Allstate" imprinted on an outline map of the United States.8 Is it such a colorable imitation in the peculiar sense in which it is used? No new definition of colorable imitation is contained in the Lanham Act. It simply prohibits the use in commerce of a colorable imitation "in connection with the sale, offering for sale, or advertising of any goods or services on or in connection with which such use is likely to cause confusion or mistake or to deceive purchasers as to the source of origin of such goods or services."
Even if we are to assume that it is not necessary under this law either to prove that the sale of life insurance policies proposed by appellee is a use or sale in commerce (defined by the statute as interstate commerce)9 or to demonstrate, without reference to likelihood of confusion, that the accused mark or name is in fact a counterfeit, copy or colorable imitation, neither of which do we decide, there is still the requirement that the accused name be one the use of which is "likely to cause confusion or mistake."
The fact that the litigants here are not in competition is not the decisive factor as to the likelihood of confusion. Nor is the complete dissimilarity of the articles in whose sale mark is used — automobile tires, batteries, and accessories and the like on the one hand, and life insurance policies on the other. Neither is the different type of relationship that results from the sale of an article of merchandise of small value on the one side and the sale of a policy of life insurance on the other — a difference somewhat like a difference between two classes of purchasers. But it is clear that all of these circumstances are relevant to the determination of whether there is any real "likelihood" of confusion or mistake. Philco Corporation v. F. & B. Mfg. Co., 7 Cir., 170 F.2d 958, certiorari denied 336 U.S. 945, 69 S.Ct. 813, 93 L.Ed. 1102; Brown & Bigelow v. B. B. Pen Co., 8 Cir., 191 F.2d 939. For a case in which this Court found that the allegedly infringing mark was "but a colorable imitation of the head and shoulders of the plaintiff's picture of Johnnie Walker," and which, though the imitation was used on a different article of merchandise (cigars instead of Scotch whiskey) it was held to be a question of fact whether or not there was likelihood of confusion as to the source or origin, see John Walker & Sons v. Tampa Cigar Co., 5 Cir., 197 F.2d 72, 73; after the trial court had then determined that there was indeed likelihood of confusion, we affirmed, 5 Cir., 222 F.2d 460. For another case in which this Court held that the mere fact that the second use was in...
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