Haviland & Co. v. Johann Haviland China Corporation

• Decision Date: 16 May 1967
• Docket Number: No. 60 Civil 4386.,60 Civil 4386.
• Citation: 269 F. Supp. 928
• Parties: HAVILAND & CO., Incorporated, Plaintiff, v. JOHANN HAVILAND CHINA CORPORATION, Montgomery Ward & Co., Incorporated, Rosenthal Glass & Silver Corporation, Arthur Scholder, and Porzellanfabrik Waldershof A. G., vormals Johann Haviland, Defendants.
• Court: U.S. District Court — Southern District of New York

269 F. Supp. 928

HAVILAND & CO., Incorporated, Plaintiff, v. JOHANN HAVILAND CHINA CORPORATION, Montgomery Ward & Co., Incorporated, Rosenthal Glass & Silver Corporation, Arthur Scholder, and Porzellanfabrik Waldershof A. G., vormals Johann Haviland, Defendants.

No. 60 Civil 4386.

United States District Court S. D. New York.

May 16, 1967.

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Pennie, Edmonds, Morton, Taylor & Adams, New York City, for plaintiff, Charles E. McKenney, New York City, W. Brown Morton, Jr., Washington, D. C., McLean, Morton & Boustead, Washington, D. C., of counsel.

Spiro, Felstiner, Prager & Treeger New York City, for defendants, William W. Prager, New York City, Marc S. Gross, New York City, Ostrolenk, Faber, Gerb & Soffen, New York City, Julian Weinberg, New York City, of counsel.

PALMIERI, District Judge.

Preliminary Statement

This is an action seeking injunctive relief and damages for trademark infringement and unfair competition.

The contending parties are competitors, though not direct competitors, in the chinaware business. The central issues in the case concern the plaintiff's claim to the exclusive right to use trademarks containing the Haviland name and the defendants' conflicting claims with respect to this name and their own use of the Johann Haviland mark.

The reason why the parties may not be deemed direct competitors is that they market different types of chinaware. Plaintiff deals in expensive, high quality chinaware while the defendants deal in promotional type chinaware, which is of a lower grade, and which is sold at substantially cheaper prices.

The Haviland surname, especially when linked with Limoges or France, is a prestigious one in the chinaware business and has generally been associated with the Haviland family, which began its business in New York City in 1829. In 1842, David Haviland, one of several Havilands engaged in the chinaware business in this country, travelled to Limoges, France, and established a factory for the manufacture of chinaware and its shipment to the United States for sale. Almost continuously since then there have been members of the Haviland family, both in Limoges and in the United States, who have been engaged, sometimes competitively,¹ in the chinaware business.

The detailed chronology of the use of the Haviland name in the chinaware field and the relationship of various Haviland family members to such use have been set forth in stipulations of facts entered into by the parties, and have been graphically illustrated in charts marked in evidence. These facts will be referred to below to the extent that they are necessary to the decision of this Court.

It is noteworthy that a substantial part of the factual situation underlying this litigation is not the subject of contention and that many of the facts can be gleaned from documents or evidentiary sources which are not impugned. A forty page stipulation of facts is part of the record.²

The plaintiff, owned and controlled by members of the Haviland family, has been known since 1950 as Haviland & Co. Incorporated. It is a New York corporation which was previously named Theodore Haviland & Co., Inc. It imports and sells in this country china made in Limoges, France, bearing the trademarks Haviland, Haviland France and Theodore Haviland. Plaintiff also manufactures and sells china in this country bearing the trademarks Theodore Haviland and Haviland.

The defendant Johann Haviland China Corporation, organized as a New York corporation in 1960, is engaged in the importation and sale in the United States of china made in Bavaria, West Germany, by the defendant Porzellanfabrik Waldershof A.G. vormals Johann Haviland (Waldershof) under the Johann Haviland trademark. The defendant Johann Haviland China Corporation is the wholly-owned subsidary of Waldershof.³

Certain salient facts, more extensively developed in the findings of fact, deserve mention at this point.

The parties, and the persons connected with them, have done business in the chinaware field for many years. Their long business histories, so far as they have been revealed by the record, have not been marked by any overreaching or unfair dealing. Despite the charges of fraud and unfair competition which have been exchanged during the course of this litigation, this Court has not found substantiation for any findings of predatory conduct by defendants, or of fraudulent acts by plaintiff.

The present conflict between the parties is attributable to a complex legal and factual situation reaching back many years.

The defendants' use of the Johann Haviland trade name owes its origins to a member of the Haviland family. It was John (Jean) Haviland,⁴ a member of Haviland & Co. of New York, who set up business in Waldershof, Bavaria, in 1907, and permitted the German form of his name to be used in the chinaware business. This circumstance has been a source of intermittent and increasing irritation to the plaintiff over the years, as the intra-company correspondence and other evidence attest.

The first chinaware from the factory at Waldershof was marketed under the John Haviland name. But beginning in 1927, and continuously thereafter, the defendant Waldershof ceased any use of this mark and (except for the interruption caused by World War II) advertised and marketed its chinaware in this country with only the Johann Haviland trademark. This came about at the request of Jean Haviland himself and pursuant to contractual arrangements between his French company (Electrocer-amiques Jean Haviland) and the defendant Waldershof. It should be noted, parenthetically, that the defendant Waldershof had been granted a United States trademark registration of the mark John Haviland Bavaria in 1928 but that it was not exploited, apparently in deference to the contractual arrangements made with Jean Haviland.

The plaintiff was well aware of the advertising for sale, and the sale, in the United States of this Johann Haviland chinaware but made no protest. Indeed, in 1927, plaintiff's chief executive officer was not "worried about that competition because it was on such a small scale * * *", although he thought "it was a looming danger * *". This view was shared by the managing director of one of the competing Haviland companies in Limoges, France.

The threat of any danger to plaintiff was apparently suspended by World War II but in 1947 the Johann Haviland chinaware returned to the United States market.

In 1948, plaintiff's president, Theodore Haviland, II, had an exchange of correspondence with his father, William D. Haviland, plaintiff's chairman of the board, on the subject of the German mark. Mr. Theodore Haviland, II, wrote on March 4, 1948:

"As you know, some German china is now coming into the country and among them is a line backstamped `Johann Haviland, made in Bavaria'."

On May 26, 1948, Mr. William D. Haviland wrote from Limoges as follows:

"As you will see by enclosed documents the Waldershof factory is the sole owner of the trade name `Johann Haviland' and it has the right to use it as it sees fit. It seems to me that your only redress is against dealers who advertise `Johann Haviland' china as `Haviland' china. * * * You will notice that we are buying from John the exclusive right to the use of his name except when written in the German language; not that we have any intention of using it but only to keep it from falling into anyone's hands later on. This you will understand gives us no rights to or control over the name `Johann Haviland Bavaria' or over the name `Johann Haviland' with or without `Bavaria'."

In 1950 the plaintiff wrote defendant Waldershof a letter of protest saying, in substance, that any use by defendant of a trademark containing the name Haviland would cause confusion in the trade and would constitute an infringement of plaintiff's trade name which at that time was Theodore Haviland. This protest came to nothing. No further action was taken by plaintiff and the continued marketing of Johann Haviland chinaware was not affected. In 1949 and in 1951 similar protests, followed by the same result, were made to a distributor of Johann Haviland china, Midhurst Importing Corp. of New York. Theodore Haviland, plaintiff's president, continued to "make difficulties regarding the trademark" of Waldershof. Although it is not clear as to how this was accomplished, this situation resulted, in 1953, in a visit to Jean Haviland at Limoges by a Waldershof representative. The only concrete result of the visit apparently was a recognition by Jean Haviland and by William Haviland, plaintiff's chairman of the board, that some customers of Waldershof were suppressing the first name Johann and advertising only the name Haviland. In any event, plaintiff appears to have taken no affirmative action and Johann Haviland chinaware continued to be sold in the United States.

In 1954 there was another exchange of correspondence. This occurred about seven years after the resumption of Johann Haviland chinaware sales in this country, following the interruption caused by World War II. At the time they were writing to each other, both Havilands must have known that these sales were in substantial amounts. On June 8, 1954, Mr. William D. Haviland wrote to Mr. Theodore Haviland from Limoges:

"On June 11, 1948, I signed an agreement with Jean Haviland (you have the original draft of this `Acte de Cession') by which I virtually recognized the validity of the sale by Jean Haviland to Porzellanfabrik Waldershof in 1924 of the exclusive right and ownership of the mark `Johann Haviland'; that could not be helped because that sale had occurred 24 years before the signing of the agreement by which I purchased from Jean the exclusive right to, and ownership of the two marks `Jean Haviland' and the mark `John Haviland'. This agreement of 1948 Jean H. and I signed in good faith and vis-a-vis de Jean I can hardly renege my signature."

On June...