Admiral Corporation v. Price Vacuum Stores

• Decision Date: 22 June 1956
• Docket Number: Civ. A. No. 14127.
• Citation: 141 F. Supp. 796
• Parties: ADMIRAL CORPORATION, Plaintiff, v. PRICE VACUUM STORES, Inc., et al., Defendants.
• Court: U.S. District Court — Eastern District of Pennsylvania

141 F. Supp. 796

ADMIRAL CORPORATION, Plaintiff, v. PRICE VACUUM STORES, Inc., et al., Defendants.

Civ. A. No. 14127.

United States District Court E. D. Pennsylvania.

May 25, 1956.

As Amended June 22, 1956.

Wilkinson, Huxley, Byron & Hume, by Gerrit P. Groen, Chicago, Ill., Montgomery, McCracken, Walker & Rhoads, by Joseph W. Swain, Jr., and Walter H. Bartholomew, Jr., Philadelphia, Pa., for plaintiff.

Caesar & Rivise, by A. D. Caesar, and Max R. Millman, Philadelphia, Pa., for Morton Q. Klein, trustee in Bankruptcy and Price Vacuum Stores, Inc.

Leonard L. Creskoff, Philadelphia, Pa., for the trustee.

Charles V. Linshaw, Philadelphia, Pa., for Jack and Dorothy Price.

Isadore H. Schwartz, Philadelphia, Pa., pro se.

GRIM, District Judge.

Plaintiff, Admiral Corporation, has brought this action against Price Vacuum Stores, Inc., five of its wholly-owned subsidiaries,¹ its President and Treasurer, Jack Price, its Vice President, Dorothy Price,² and its Secretary, Isadore H. Schwartz.³ The action was brought August 22, 1952, for an injunction and for damages. The complaint charges defendants with infringement of plaintiff's registered trade-mark "Admiral" and unfair competition, by selling electric vacuum cleaners and sewing machines under the name "Admiral" from September 1, 1949, to August 31, 1952.

On September 2, 1952, I entered a temporary restraining order and on September 9, 1952, a temporary injunction restraining the use of the trade-mark "Admiral" in the distribution and sale of household equipment and appliances such as electric sewing machines and vacuum cleaners, and other infringement of plaintiff's registered trade-mark.

On November 8, 1954, the corporate defendants were adjudicated bankrupts.

The case has been tried before me without a jury.

This plaintiff on October 22, 1951, began a similar action against another of the subsidiaries of defendant Price Vacuum Stores, Inc., in the Western District of New York. In that action the plaintiff was granted a permanent injunction on August 8, 1952, restraining the defendant from competing unfairly with plaintiff in the distribution and sale of household equipment and appliances such as electric sewing machines and vacuum cleaners and any related products, and from infringing plaintiff's registered trade-mark "Admiral." Plaintiff was held not entitled to an accounting for profits. Admiral Corp. v. Penco, Inc., D.C.1951, 101 F.Supp. 677; Id., D.C. 1952, 106 F.Supp. 1015, affirmed by the Court of Appeals for the Second Circuit, 1953, 203 F.2d 517. The injunction ran against Penco, Inc., "its officers, agents, servants, employees, privies, successors and assigns."

Admiral Corporation, plaintiff, manufactures and sells, under the name "Admiral", a number of household devices which in recent years have come to be grouped under the term "appliances", they being radio sets, radio-phonograph combinations, electric refrigerators, electric cooking ranges, room air-conditioners, dehumidifiers, and power hand tools.

Plaintiff and its predecessors in title have registered the name "Admiral" in the Patent Office as a trade-mark for the appliances which it handles and for kindred goods, but not for vacuum cleaners or sewing machines.⁴

The first registration of the name "Admiral" for goods in the appliance field, August 5, 1930, No. 273,655, was for radio receiving sets, vacuum or electron tubes, and radio speakers. It was registered by Columbia Radio Corporation, assigned ultimately to Continental Radio and Television Corporation, a Delaware corporation, and renewed September 19, 1950. The second registration, for electric refrigerators, was issued January 11, 1944, to Continental on an application filed August 24, 1943. In November, 1943, Continental changed its corporate name to "Admiral Corporation." It is the plaintiff. All the other registrations were issued to Admiral. An attempt by Price Vacuum Stores, Inc., to cancel these registrations did not succeed.⁵

Price Vacuum Stores, Inc., applied in November, 1949, for registration of the name "Admiral" as a trade-mark for electric vacuum cleaners, sewing machines, and parts, Serial Numbers 587,206 and 587,207. In opposition proceedings begun in September, 1950, by Admiral Corporation, the Examiner of Interferences, in September, 1955, found the applicant not entitled to registration.

By the expenditure of many millions of dollars, plaintiff has succeeded in bringing the name "Admiral" and its products bearing that name to the attention of the public. From April, 1934, to August, 1955, its sales of appliances under that name amounted to $1,500,000,000. As a result of these advertising expenditures and sales, the name "Admiral", when used on household appliances, has come to mean to the public goods manufactured or sold by plaintiff. Further, the quality of the appliances made and sold by plaintiff under the name "Admiral" has caused the name to be known to the public favorably.

The word "admiral" is a common word. It has no spark of novelty, invention, or distinctiveness. Used as a trademark, therefore, it is one of those described in a number of cases, such as El Chico, Inc., v. El Chico Cafe, 5 Cir., 1954, 214 F.2d 721, and North American Aircoach Systems, Inc., v. North American Aviation, Inc., 9 Cir., 1955, 231 F. 2d 205, as "weak" marks, contrasted to arbitrary, coined, or fanciful marks, such as "Kodak" which are characterized as "strong." Also "Admiral", in combination with other words and standing alone, has been registered in the Patent Office to persons other than plaintiff some 35 times for a wide variety of goods, including, among others, anchors, paper bags, watches, lubricating oils, and razor blades.

Weak marks are afforded a much narrower orbit of protection than are the strong. Sunbeam Lighting Co. v. Sunbeam Corporation, 9 Cir., 1950, 183 F. 2d 969; National Drying Machinery Co. v. Ackoff, D.C.E.D.Pa.1955, 129 F.Supp. 389, affirmed 3 Cir., 1955, 228 F.2d 349.

In the case at bar I find that while the name "Admiral" is a "weak" one, and even though it has been used on a wide variety of articles many of which were not made by plaintiff, defendants' use of it on electric sewing machines and vacuum cleaners infringed plaintiff's rights in the name. The field of electrical household appliances is a narrow one. Plaintiff, by handling a large variety of goods in that field and by heavy advertising is so well known in the field that the average man contemplating the purchase of an appliance would probably think that all "Admiral" appliances come from a single manufacturer. Purchasers, therefore, are likely to be confused, mistaken, or deceived as to the origin of the goods. Admiral Corp. v. Penco, Inc., 2 Cir., 1953, 203 F.2d 517.

The defendant corporations operated retail stores in Pennsylvania, New York, New Jersey and Delaware cities, in all of which plaintiff's goods are sold. The principal method of selling vacuum cleaners and sewing machines was a system known to its admirers as "step-up", and to others as "switch" selling. The technique consisted of advertising used machines of well-known makes⁶ at extremely low prices to get in touch with a possible buyer, showing the prospect an appliance of that make in an uninviting⁷ condition, disparaging it, and trying instead to sell him a new vacuum cleaner or sewing machine bearing the name "Admiral." Effort was expended to discourage the prospect from buying the articles featured in the "bait" advertising.

If the sellers had applied no name to the goods they were trying to sell, or if they had applied some name not claimed by another, no manufacturer or merchant would have a cause of action of the kind asserted in this case. Therefore, the "step-up" or "switch" sales are important in the present case only in that they laid the groundwork for the palming-off of vacuum cleaners and sewing machines under the name "Admiral."

What gives rise to this suit, in addition to the actual use of the name, is the fact that when the salesman would produce a vacuum cleaner or sewing machine, with the name Admiral on it, the prospect would frequently make some comment or inquiry as to its being a product of the people who make "Admiral" television sets, refrigerators, etc.,: the plaintiff. At this point in the negotiations the salesman would often forego the opportunity to make a full and frank disclosure of the facts, and would resort to evasion or outright falsehood, deliberately leading the prospect to believe that the vacuum cleaner or sewing machine in question was made by the well-known and well-regarded manufacturers of "Admiral" television sets, refrigerators, etc.⁸

It is obvious from this that defendants' salesmen at times traded on plaintiff's name "Admiral", led prospects to believe that plaintiff was the manufacturer of "Admiral" vacuum cleaners and sewing machines, and, in short, palmed off these appliances as products of the plaintiff.

This palming-off by defendants' salesmen occurred so frequently in their selling efforts that the only conclusion that can be drawn is that the salesmen palmed off because they found it a very helpful method and that their superiors knew of it and raised no serious objection to it despite testimony to the effect that salesmen were instructed to deny any connection with the plaintiff. The acts of the salesmen were the acts of the corporate defendants.

Since confusion was likely to occur and did occur, it is no defense that other matters, such as demonstrations, were inducements bringing about sales.

The corporations were run as a single unit. Eighty per cent of the stock of each corporation was held by the individual defendants. Defendant Jack Price owned 55% of the stock. He was the president, treasurer, a director, and the directing head. He made the decision to use the name "Admiral." He was aware that the salesmen used the "step-up" or "switch" selling device and he condoned it. He was consulted by...