GD Searle & Company v. MDX Purity Pharmacies, Inc.

• Decision Date: 01 August 1967
• Docket Number: No. 66-2087.,66-2087.
• Citation: 275 F. Supp. 524
• Court: U.S. District Court — Central District of California
• Parties: G. D. SEARLE & COMPANY, a corporation, Plaintiff, v. MDX PURITY PHARMACIES, INC., a corporation, and Daylin Medical and Surgical Supply, Inc., a corporation, doing business as Daylin Products, Defendants.

275 F. Supp. 524

G. D. SEARLE & COMPANY, a corporation, Plaintiff, v. MDX PURITY PHARMACIES, INC., a corporation, and Daylin Medical and Surgical Supply, Inc., a corporation, doing business as Daylin Products, Defendants.

No. 66-2087.

United States District Court C. D. California.

August 1, 1967.

COPYRIGHT MATERIAL OMITTED

Sidley & Austin, Chicago, Ill., and McCutchen, Black, Verleger & Shea, by Philip K. Verleger and Jerome A. Hoffman, Los Angeles, Cal., for plaintiff.

Stanley Fleishman, by Harold Rosenberg, Hollywood, Cal., for defendants.

MEMORANDUM OPINION FOR USE IN PREPARATION OF PROPOSED FINDINGS OF FACT, CONCLUSIONS OF LAW, AND JUDGMENT.

CRARY, District Judge.

Plaintiff, an Illinois corporation, since about 1934, has been and now is the manufacturer and marketer of a bulk laxative under the registered trademark of METAMUCIL. The trademark was registered on October 2, 1934. The product is a non-prescription ethical drug containing a derivative of psyllium seed and dextrose.

Defendant MDX Purity Pharmacies (MDX), a California corporation, is a wholly owned subsidiary of Daylin Medical and Surgical Supply, Inc., doing business as Daylin Products (Daylin). Daylin has, at least since the fore part of 1967, been actively engaged in marketing a bulk laxative substantially the same or identical to that of plaintiff under the name of MUCILIN, also a non-prescription drug.

Invoices in evidence from Riders, Ltd., to Daylin (Defts.' Exs. A and B) indicate that in May, 1962, there was invoiced to Daylin 228 16-ounce cans of a product under the name of "CAL MUCIL" at 70 cents each and in October, 1962, there was invoiced to Daylin 7 dozen cans of MUCILIN at 70 cents each. Defendants' Exhibits G-1, G-2 and G-3 evidence sale by Daylin to Unimart Pharmacy, San Diego, of 2 dozen cans of MUCILIN on October 9, 1962, and 2 dozen cans to Unimart Pharmacy, El Cajon, on October 23, 1962, and 2 dozen cans of MUCILIN to Govway RX Pharmacy on October 9, 1962. These are the only Exhibits disclosing sales between 1962 and 1967.

There was testimony of defendants' witness Marshall, Assistant Operations Manager of Daylin, that MUCILIN was shipped to all Daylin stores from late 1962 to date. The evidence does not disclose the amount of MUCILIN delivered to Daylin stores during the period 1962 to 1967 and the court concludes that little, if any, MUCILIN was offered for sale by Daylin on the shelves of their stores from 1962 to 1967, since, although sales personnel of plaintiff visited all of the Daylin stores which sold METAMUCIL about every six weeks during the period involved, all plaintiff's salesmen testifying stated they did not see MUCILIN in the stores until February or March, 1967. These salesmen visited the Daylin stores to check on their displaying of METAMUCIL and viewed such displays on the Daylin shelves. It was also their duty to observe and evaluate competing products on these tours of drug stores marketing METAMUCIL. It appears to the court that if Daylin's product, MUCILIN, was on defendants' shelves from 1962 to 1967 in the area in which the store displayed bulk laxatives it would have been noticed by plaintiff's salesmen and reported to plaintiff as it was in February or March of 1967. It is true that Mr. Ram, plaintiff's patent attorney, testified that he first learned of the defendants marketing of MUCILIN from plaintiff's attorney Verleger, who had been advised by defendants' counsel about February of 1967 that defendants would abandon the use of the name META-MED but continue to market a product similar to plaintiff's under the name of MUCILIN. This was about the same time salesmen stated they observed MUCILIN on the shelves of Daylin drug stores next to and mingled with METAMUCIL.

Defendant MDX manufactured and sold a bulk laxative product the same as MUCILIN and METAMUCIL under the name of META-MED from July, 1966, to December, 1966, when MDX merged with Daylin.

Violation of the Lanham Act, Title 15, U.S.C., Chapter 22, and unfair competition are asserted by plaintiff.

The issues to be determined are (1) whether the buying public in the circumstances involved are or were likely to be confused, mistaken or deceived, into believing defendants' product to be the product of plaintiff or in any way connected with plaintiff or its product, (2) have the defendants sought to confuse or deceive the buying public, by use of the name MUCILIN or META-MED, into believing defendants' product to be or connected with plaintiff's product, (3) is defendant attempting to palm off its product MUCILIN as the product of plaintiff or having any connection with plaintiff's product, and (4) is MUCILIN or was META-MED a copy or colorable imitation of plaintiff's trademark METAMUCIL.

Plaintiff has expended substantial sums in advertising METAMUCIL in medical and pharmaceutical trade magazines and journals. It is to be noted that plaintiff at no time advertised METAMUCIL in or by newspapers, magazines, television, radio, or any advertising media other than publications subscribed to by doctors and pharmaceutical houses. Plaintiff's effort to create a market for METAMUCIL was by having doctors recommend its use to their patients. In addition to the advertising noted above, plaintiff delivered thousands of documents, brochures, and samples of METAMUCIL to doctors throughout the country.

Approximately 55% of the bulk laxative sold is METAMUCIL. In 1966 its sales totaled about eight million dollars, two million of which were sales in California. About 80% of the METAMUCIL sold was through recommending the product by doctors to their patients, the balance by word of mouth of users and friends.

METAMUCIL was, until recently, packaged in 16 (Ex. 2), 8 and 4-ounce round cans. Presently it is marketed in 14-ounce and smaller plastic, cylinder shaped containers of the same appearance as the 16-ounce can. The label on all containers has a white background with green lettering, except the word METAMUCIL is in white letters on a green oblong background (Plaintiff's Ex. 2 and 3).

META-MED was produced and sold by MDX for only about five months in 1966, at the end of which time, December, 1966, MDX merged with Daylin. METAMED was sold in 16-ounce cans. The label was also in green lettering on a white background (Pltf.'s Ex. 5). The description of META-MED as "a natural vegetable powder" and its operation and direction for use appearing on the front of the container was identical to that of METAMUCIL. Defendants state they discontinued the use of META-MED in December, 1966, and do not intend presently at least to market the product under the name of META-MED. No reason for the use of the name META-MED was given by defendants.

No container in which MUCILIN is alleged to have been sold prior to the fore part of 1967 is in evidence. The label and container in which MUCILIN has been sold commencing the fore part of 1967 appears in plaintiff's Ex. 6. The front of this label has a background about 70% of which is black in color with white lettering, 20% blue with black lettering, and about 5% white (lower left hand corner in which appears a large black D below which is the name "Daylin" in black letters). The entire back of the label is white with black lettering and the nature of the product and directions for its use are not similar to that of plaintiff's METAMUCIL.

There is also on the bulk laxative retail market a psyllium powder product sold by Winthrop Laboratories under the registered trademark of MUCILOSE. This name was registered in May, 1935, about seven months after plaintiff registered METAMUCIL.

Plaintiff's patent counsel, Mr. Ram, testified plaintiff had not objected to the registering of the name MUCILOSE nor had made any effort to cancel the registration. He was not sure contest of the mark MUCILOSE was now barred but to determine same he would need a great deal of information which would have been in files of plaintiff some forty years old, which had long since been destroyed.

The evidence discloses that Winthrop's product MUCILOSE has been on the market since approximately 1935, and whether it must be deemed to weaken plaintiff's mark and, if so, to what extent, is to be determined herein. The evidence further shows that sales of MUCILOSE, a nationally distributed product, over many years, represented in 1966 only about 1.9% of the market and approximately 1.2% of the market in the Pacific area. METAMUCIL had a 3.1% increase in sales in 1966 over 1965 whereas MUCILOSE sales declined 0.9%. Daylin does not sell MUCILOSE.

In National Lead Company v. Wolfe, 223 F.2d 195 (C.A.9, 1955) at page 204, the court discusses the effect of the use of a like name by a third party, stating:

"The remaining proven third party uses of the word `Dutch' in connection with paint sale or manufacture are too inconsequential to establish a claim of publici juris or the claim that appellant's mark has become a weak mark or to justify on any other theory the acts of these appellees. It may be that some of these third persons may also have been guilty of wrongful infringement, but such would not be a defense or justification for the appellees. It is no excuse for them to say that others have been guilty of the same wrong. Del Monte Special Food Co. v. California Packing Corp., 9 Cir., 34 F.2d 774; Potter-Wrightington, Inc. v. Ward Baking Co., 1 Cir., 298 F. 398, affirming D.C., 288 F. 597."

The defendants cite Sterling Drug v. M-A Pharmaceutical Corp., 343 F.2d 1016, 52 CCPA 1265 (1965). At page 1017 of that opinion, the court refers to Conde Nast Publications, Inc. v. American Greetings Corp., 329 F.2d 1012, 51 CCPA 1176 (1965), which concerns the use of the name "Vogue" as a trade name for greeting cards. In commenting on the effect of the use of a similar name by third parties, the court states at page 1014:

"As we have noted, the board found, with abundant support of record, that the term "VOGUE" had become exceedingly well known in the

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