Springfield Fire & Marine Ins. Co. v. FOUNDERS'F. & MI CO.

• Decision Date: 24 September 1953
• Docket Number: No. 29834.,29834.
• Citation: 115 F. Supp. 787
• Court: U.S. District Court — Northern District of California
• Parties: SPRINGFIELD FIRE & MARINE INS. CO. v. FOUNDERS' FIRE & MARINE INS. CO.

115 F. Supp. 787

SPRINGFIELD FIRE & MARINE INS. CO. v. FOUNDERS' FIRE & MARINE INS. CO.

No. 29834.

United States District Court N. D. California, S. D.

September 24, 1953.

COPYRIGHT MATERIAL OMITTED

Cooper, White & Cooper, San Francisco, Cal., Townsend, Townsend & Hoppe, San Francisco, Cal., for plaintiff.

Lyon & Lyon, Leonard B. Lyon, Reginald E. Caughey, Los Angeles, Cal., for defendant.

GOODMAN, District Judge.

This case tenders the novel question, whether or not the plaintiff Insurance Company, which uses a picturization of a "covered wagon," drawn by oxen, on its insurance policies, stationery, and advertising media and which registered the picturization as a "service" mark pursuant to the provisions of the Lanham Act, 60 Stat. 427, 15 U.S.C.A. §§ 1051-1127, may enjoin the defendant Insurance Company from using a similar picturization on its policies, stationery, and advertising matter.

Prior to July 5, 1947, the effective date of the Lanham Act, there was no federal statutory provision for registering any mark used in connection with the sale or advertising of "services." Theretofore the federal registering of "trade-marks" had been confined to those affixed to tangible commodities.

Section 45 of the Lanham Act indicates the distinction between "trade-marks" and "service marks" as follows: It defines the term "trade-mark" as any word, name, symbol or device used by a manufacturer or merchant to identify his goods and distinguish them from those manufactured or sold by others. It defines the term "service mark" to mean a mark used in the sale or advertising of services to identify the services of one person and distinguish them from the services of others.

Plaintiff's complaint sets forth two causes of action. One alleges what might be termed technical "service mark" infringement, i. e. that the defendant's picturization of a "covered wagon" is a colorable imitation of the plaintiff's registered mark.

The second is for unfair competition. It is based upon the ground that the plaintiff's mark has acquired secondary meaning in the industry and that the defendant competes unfairly by using a similar mark. The second cause of action may be summarily disposed of. The ultimate test for unfair competition under the applicable California law¹ is: is the consuming public likely to be deceived. Silvers v. Russell, D.C., 113 F. Supp. 119, 125 and cases there cited. The evidence fails to show that plaintiff's mark has acquired any secondary meaning. It follows therefore that defendant's use of a similar mark would not be deceptive.

An appraisal of the merits of the first cause of action necessitates a fuller statement of the facts of the case. The evidence shows that the plaintiff first began to use the so-called "covered-wagon" picturization as a mark in 1926. In the succeeding years, and prior to registration, the mark was used on the plaintiff company's letterheads, insurance policies, by pictorial display in advertising in newspapers and trade journals, on pamphlets, booklets and circulars concerning its insurance services, and on calendars and similar advertising media. As well, the company has had a fine painting of the "covered-wagon" in the vestibule of its home office in Springfield.²

On July 18, 1947, some two weeks after the Lanham Act became effective, plaintiff applied for registration of the "covered-wagon" as a service mark. Registration was issued on September 21, 1948. The registration statement, as well as the evidence, shows that the plaintiff is engaged in the business of writing fire, marine and other similar types of insurance. Its insurance policies are issued upon the order of and through insurance agents and brokers, who deal with the public. The plaintiff company itself has no direct relationship with those who desire to obtain insurance coverage or protection. The brokers and agents order the insurance for the insured, who are customers of the brokers. Equally, the evidence shows the same method of doing business by the defendant insurance company; and also that it uses a representation of a "covered-wagon" drawn by oxen across the prairies, in the same general manner and upon the same type of documents as does the plaintiff. The defendant began the use of such insignia or picturization a short time prior to the passage of the Lanham Act.

The picturization of the "covered-wagon" drawn by oxen, as registered, is of the general pattern of similar pictures of "covered-wagons" frequently found in advertising and literature. The mark of the "covered-wagon" used by the defendant, while it might be differentiated in minor details, is still the picture of a "covered-wagon" drawn by oxen proceeding on the prairie. The motif of both marks is the same: an oxen-drawn covered wagon on the prairie. The mark used by plaintiff is as follows:

The mark used by the defendant is as follows:

The picturization of "covered-wagons" drawn across the prairies by oxen has been used in advertising both services and goods for more than half a century.³ It is, of course, well known that the covered wagon was the means by which merchants, in movements south and west in early days, transported their wares, and families transported themselves and their possessions. It is sometimes referred to as a Conestoga wagon because it was said to have been manufactured at Conestoga, Pennsylvania, a town which took its name from an old tribe of Iroquois Indians who lived in the Susquehanna area. Others say that the Conestoga wagon was named after the breed of horses by which it was drawn. Some of the covered wagons have been referred to as Pittsburg wagons.⁴

However that may be, the covered wagon came into widespread use in the trek south and southwest over the Santa Fe trail and later across the prairies to the west.⁵ As has been picturesquely stated, "the covered wagon, or `prairie schooner' is perhaps the best single symbol of the great westward movement of the virile Anglo-Saxon race as it reached out with an irresistible demand for continental boundaries for the nation."⁶

Plaintiff has adopted and used the covered-wagon picturization to symbolize that it was a pioneer company in the insurance business.⁷ Whether plaintiff's use of this symbolic mark entitles the mark to the trademark protection, sought in the first cause of action under the Lanham Act, is a novel question. The Lanham Act created, for the first time, federal substantive rights in registered trademarks and extended these rights to registered marks used in the sale or advertisement of services. Plaintiff's cause depends upon the scope of the protection Congress intended to afford by the Lanham Act. The Congressional intent must be considered against the background of the common law philosophy of trademark protection.

Trade-marks have always been regarded by the law as a means by which the seller seeks to distinguish his goods from those of another. A trade-mark has been treated as a right which is appurtenant to a business or trade in which the mark is employed or to the commodity with which it is identified. The right to the mark grows out of its use.

Today, a trade-mark performs a three-fold function: (1) to indicate origin; (2) to guarantee; and (3) to advertise and sell. Historically, the function of indicating origin was the first to develop. The trade-mark came to mean that a certain manufacturer made the goods that bore the mark. Today, the trademark still serves to indicate origin, but the identity of the origin is often unknown to the consumer. The mark merely indicates to him that goods bearing the mark come from the same origin, whatever that origin may be.

Later in their historical development, trade-marks took on the function of guaranteeing to the consumer that the quality of goods bearing the mark was the same as previous goods which bore the same mark.

As modern advertising developed, trade-marks assumed their third function of creating and perpetuating a market for goods through use of the advertising. Consumers are now induced to try a product because of the inherent appeal of the trade-mark used in advertising the product.⁸

The common law was originally shaped to protect trade-marks in their functions of indicating origin and guaranteeing quality to the consuming public. There was much discussion in the early cases as to whether protection was accorded a trade-mark merely to prevent the public from being deceived as to origin and quality, or also to prevent loss to the trade-mark owner of his market. The more recent cases have recognized that protection is afforded a trade-mark both for the benefit of the public and the trade-mark owner. The express purpose of the Lanham Act is to assure the trade-mark owner the advantages rightfully accruing to him from his use of the mark as well as to protect the public from deceit.⁹

Because a trade-mark performs none of its functions apart from its use in connection with the sale of goods or services, the common law did not protect a mark as a trade-mark unless it was in fact in use. It is clear that the Lanham Act did not change the law in this respect. Registration under the Act does not in itself constitute a grant of the exclusive right to control a mark. The mark must be in use as a trade-mark or service-mark to entitle it to registration under the Act, and it must remain in use in order to receive the protection afforded by the Act. Sections 1, 3, 14, 45.

The difficult question here is: what type of use is contemplated by the Act? At common law a mark was not protected as a trade-mark unless it was used by affixing it to goods on the market to indicate the origin of the goods. The philosophy of the common law was that a mark was not in need of protection unless it had become associated in the mind of the consuming public with a particular product. However, if a mark was the proper subject of a trade-mark and had been continuously used by affixing it to goods with the...