Procter & Gamble Co. v. JL Prescott Co.

• Decision Date: 11 April 1939
• Docket Number: 6264.,No. 6249,6249
• Citation: 102 F.2d 773
• Court: U.S. Court of Appeals — Third Circuit
• Parties: PROCTER & GAMBLE CO. v. J. L. PRESCOTT CO. J. L. PRESCOTT CO. v. PROCTER & GAMBLE CO.

102 F.2d 773 (1939)

PROCTER & GAMBLE CO. v. J. L. PRESCOTT CO. J. L. PRESCOTT CO. v. PROCTER & GAMBLE CO.

Nos. 6249, 6264.

Circuit Court of Appeals, Third Circuit.

February 2, 1939.

Rehearing Denied April 11, 1939.

Joshua R. H. Potts and Basel H. Brune, both of Philadelphia, Pa., Eugene Vincent Clarke, of Chicago, Ill., and Charles P. Hutchinson, of Trenton, N. J., for counter-claimant.

Thos. G. Haight, of Jersey City, N. J., Cooper, Kerr & Dunham, and Drury W. Cooper, all of New York City, and Allen & Allen, Marston Allen, Erastus S. Allen, and Dinsmore, Shohl & Sawyer, Frank F. Dinsmore and Walter M. Shohl, all of Cincinnati, Ohio, for plaintiff.

Before BUFFINGTON and BIGGS, Circuit Judges, and WATSON, District Judge.

BIGGS, Circuit Judge.

Two appeals are presented by the cases at bar. One, No. 6249, is a suit by Procter & Gamble Company against J. L. Prescott Company in which the gravamen of the complaint is that Prescott infringed its rights in the trade mark "Oxydol" by placing upon the market a product called "Oxol", and was guilty of unfair competition in respect to the sales of that product. The second suit, No. 6264, is a cross complaint by Prescott against Procter & Gamble alleging that the latter corporation has infringed its rights in the trade mark "Chase-O" by placing upon the market a product called "Chipso", and was guilty of unfair competition in respect to sales of Chipso.

Prescott prayed also for an order requiring Procter & Gamble to deliver up its registration for the word "Chipso" to the Commissioner of Patents for cancellation. To Prescott's counterclaim Procter & Gamble filed an answer and a counterclaim. The counterclaim alleged that Prescott by its own acts and with the intention of profiting by the subsequent confusion made use of a Chase-O package design embracing the distinctive coloring then in use upon the Chipso carton. This counterclaim was struck from the pleading by the order of the court. Substantially similar matter, however, was contained in the answer. The answer further alleges that Prescott did not act with diligence in preventing others from employing the "Chase-O" mark or simulations of it. The learned District Judge found the contentions of the parties to be without merit and dismissed both the bill of complaint and Prescott's counterclaim. He also denied cancellation of the mark Chipso, holding this issue to be res adjudicata because of the outcome of the litigation had in the Patent Office and before the Court of Customs and Patent Appeals.¹ From the decree referred to, these appeals were taken by the respective parties to the litigation. We will endeavor to dispose of the issues presented in one opinion.

As to "Oxydol" and "Oxol".

Oxydol, as the bill of complaint alleges and the evidence shows, is a cleanser composed of powdered soap. It is sold in a package, not in a bottle. From the year 1920, in which 470,600 cartons were sold by Wm. Waltke & Company, sales steadily increased until a total carton sale of 92,770,330 was attained in 1930. In 1931, the sales of Oxydol by carton numbered 68,304,982. By 1931, Oxydol was being sold by 65% of all grocery stores and in every part of the United States.

Oxydol was first manufactured and sold in 1914 by the Wm. Waltke Company of St. Louis. The Waltke Company created the fanciful name "Oxydol" for the product. In 1922 the Waltke Company spent $42,000 advertising its product. In 1927 Procter & Gamble took over the Waltke Company and Oxydol. Half a million dollars was spent by Procter & Gamble in advertising Oxydol in 1928. In 1930 and 1931 Procter & Gamble spent over a million dollars a year in advertising Oxydol.

It appears from the testimony that though Oxydol was sold widely throughout the United States, in one area, viz., the New England States, New York, Pennsylvania, Delaware and Maryland, sales did not march proportionately with those in the rest of the country. The sales manager of Procter & Gamble testified that in his opinion the reason why sales of Oxydol in the areas mentioned were less was because of confusion caused in the mind of the average purchaser by the Prescott product "Oxol". It is the substance of the Procter & Gamble's complaint that Prescott has attempted to capitalize and has capitalized upon the confusing similarity of the word Oxol to the word Oxydol in the sales of its product, the purchasing public attributing both Oxydol and Oxol to a common origin, the Procter & Gamble Company.

Oxol is a liquid and is sold in brown bottles. J. L. Prescott Company commenced to manufacture the solution in 1927 and first placed it upon the market in 1928. It contains a bleaching compound and is in fact a chlorinated solution. It acts chemically. It is a detergent. Oxol possesses disinfectant qualities. Oxol is represented as having a distinct function as a deoderant, disinfectant, cleanser and bleacher, and we think that this representation is borne out clearly by the evidence.

Prior to the actual selection of the name, Oxol, as was testified to by an officer of the Prescott Company, much study was given to the selection of a name for the Prescott product. The same witness testified that the use of the syllable Ox seemed natural for a compound containing sodium hyperchlorid since that chemical is frequently used as an oxidizing agent. It was shown that Prescott possessed a trade name Oxidoff formerly used in connection with a metal polish, and also had manufactured an oil called Lubrol. Many examples of registered trade marks containing the Ox syllable were put in evidence by the Prescott Company. The word Oxidol for use in connection with antiseptic powders was registered in the United States Patent Office in 1907. Oxygenol was registered in 1905 for bleaching and washing compounds. It was shown that Webster's dictionary of the year 1913 contains both Oxindol and Oxygonal and many words beginning with Ox.

Upon May 27, 1931, the United States Court of Customs and Patent Appeals in the case of Procter & Gamble Co. v. J. L. Prescott Co., 49 F.2d 959, 960, denied Prescott the right to register the mark Oxol. Mr. Justice Bland in delivering the opinion of the court stated: "It was admitted in argument before this court that the applicant deliberately selected the mark `Oxol' after considering the legal effect of doing so, in view of the registered trademark `Oxydol,' and, while applicant does not admit that it selected `Oxol' with the purpose of profiting by the advertisement and good will of the `Oxydol' trade-mark, there is no attempt at explanation as to why the word `Oxol' was adopted, and it seems fair to infer that, owing to the peculiar character of the two arbitrary marks, and in the absence of any explanation whatever, applicant sought to profit by the confusion that would result." The court then refers to Lever Bros. Co. v. Riodela Chemical Company, Cust. & Pat.App., 41 F.2d 408, which goes off upon the ground that the defendant corporation possessed a tortious motive in using a confusing mark.

Further facts must be considered. In the latter part of 1931, Prescott began advertising Oxol by radio broadcasts. A typical broadcast over Station WABC, upon November 24, 1931, we think should be summarized. Early in the broadcast emphasis was laid upon the efficacy of Oxol for washing clothes and the fact that it would produce suds without rubbing "* * * to make that washing snowy white." Reference was made to the brown bottle, to the spelling of the word and to the fact that Oxol is neither powder nor soap. It was then stated in the broadcast, "When you buy a bottle of Oxol, take the label off and send it to the Oxol trio in care of this Station, or address your letter to the J. L. Prescott Company, Passaic, New Jersey. * * * In return, they will send you the gaily colored "Oxol" rag doll that children love. * * * And don't forget to send in an Oxol label for one of those little Oxol Rag Dolls." The substance of this broadcast was repeated many times. Upon several occasions radio announcers referred directly to the "Oxol doll". Instructions for completing the "Oxol doll" were sent to all who requested the doll from the Prescott Company.

It is obvious that when the tongue pronounces the words "Oxol doll", or when the mind operates to put these two words together, a connection in thought between Procter & Gamble's product and Prescott's product is inescapable. Such a connection must have occurred to the Prescott Company. Why then was such advertising made use of? The answer is obvious. Ground for mistake in the public mind as to Oxydol and Oxol was well laid and the resulting confusion may not be described as a coincidence.

Confusion as to which company was offering the doll in return for the label immediately came to pass and this was admitted by one of Prescott's officers. Many housewives sent Oxydol labels to Procter & Gamble and demanded the Oxol doll. An examination of the letters in evidence seems to indicate that the persons writing them were ordinary members of the purchasing public. One housewife wrote, "Am sending the clip off of the Oxydol box. Would you please send us one of your rag dolls * * *". Another wrote, "Enclosed is a clipping from Oxydol. Kindly send me a rag doll, as promised over Radio." The requests quoted seem typical.

Other evidence is even more indicative of confusion between the two products. Some grocery stores confused Oxydol with Oxol and in fact offered one for the other. Community Stores, Inc., and The Great Atlantic and Pacific Tea Co. were chain stores which offered Oxydol by the bottle, indicating that they had confused it with Oxol. Numerous grocers offered testimony of their confusion between Oxydol and Oxol. The confusion of names and products extended therefore to the trade itself.

A manager of a store of the A. & P. Company testified, "My experience in handling the products `Oxydol' and `Oxol' is that in the educated class of people they come in...