Arrow Distilleries, Inc. v. Globe Brewing Co.

• Decision Date: 21 November 1939
• Docket Number: No. 2522.,2522.
• Citation: 30 F. Supp. 270
• Parties: ARROW DISTILLERIES, Inc., v. GLOBE BREWING CO.
• Court: U.S. District Court — District of Maryland

30 F. Supp. 270

ARROW DISTILLERIES, Inc., v. GLOBE BREWING CO.

No. 2522.

District Court, D. Maryland.

November 21, 1939.

Bartlett, Poe & Claggett and Robert D. Bartlett, all of Baltimore, Md., and Watson, Cole, Grindle & Watson and Harold F. Watson, all of Washington, D. C., for plaintiff.

Morton H. Rosen, of Baltimore, Md., and Mason, Fenwick & Lawrence, Charles R. Fenwick, and Edward G. Fenwick, all of Washington, D. C., for defendant.

COLEMAN, District Judge.

This is a proceeding originally begun as a suit in equity under Revised Statutes, § 4915, U.S.C.A.Title 35, Section 63, whereby the plaintiff, Arrow Distilleries, Inc., sought to restrain the Commissioner of Patents from cancelling a certain trade mark registration owned by it. Defendant, The Globe Brewing Company, counter claimed for alleged trade mark infringement. The action under Revised Statutes, § 4915, was, however, later dismissed and plaintiff has now amended its bill of complaint also alleging infringement of its trade mark by the defendant.

Plaintiff is a Michigan corporation with its principal place of business in Detroit and doing a nation-wide business in alcoholic liqueurs and cordials under the trade mark "Arrow." Defendant is a Maryland corporation located in Baltimore and engaged in the manufacture and sale of beer which it sells not only in Maryland but in the District of Columbia and various other States under the trade mark "Arrow." Plaintiff's trade mark was registered in the United States Patent Office on August 27th, 1935, and defendant's trade mark was first registered there in 1913. On September 16th, 1935, defendant instituted proceedings in the Patent Office for the cancellation of plaintiff's registration under the Trade Mark Act of 1905, 15 U.S.C.A. §§ 81-109. Plaintiff opposed these proceedings on the ground that the products of the respective parties are not of the same descriptive properties and that accordingly, there could be no confusion between the parties or their products. In the various stages of the litigation through the Patent Office decisions were adverse to the plaintiff. Thereupon, the plaintiff brought the present suit under Revised Statutes, § 4915, in accordance with the right so to do given by this statute, but later abandoned this ground of action, as already explained. The parties have waived any claim for an accounting.

The Court finds that the defendant has established, pursuant to its counter claim, its right to preclude the plaintiff from the use of the trade mark "Arrow," subject to certain restrictions which will be hereinafter referred to.

The Court is unwilling to place this mark "Arrow" in the same class with words such as "Standard", "Gold Medal" and "Blue Ribbon." I shall not attempt to review the decisions under this branch of trade mark law. Suffice it to say, regardless of how far the law has gone or ought to go with respect to prohibiting the use of the same mark on non-competitive articles, it is clear that the present defendant is entitled to protection in the entire field of alcoholic beverages, subject to certain territorial limitations hereinafter explained, because, apart from the paucity of evidence in this case on the point of confusion, it is obvious that confusion may occur to any reasonable person. In other words, if beer is sold under the name "Arrow," and liqueurs or cordials are sold under a similar label using the same trade name "Arrow", all are sold by the same sort of stores, the same kind of distributing agents, and a confusion may very likely occur, — namely, the public may very well suppose that all are manufactured by one and the same. This is self-evident. Therefore, while I have no disposition to say that the distinction between the two classes of cases cited, which has been elaborately argued, is not sound, on the particular facts that may have arisen in those cases, I am not willing to narrow the rights under the word "Arrow" in this case as plaintiff claims should be done.

I am impelled to this conclusion to a very large extent by what I have been able to visualize at the trial. That is to say, the demonstration by defendant's counsel was very significant when he took one of the labels, quite at random, from the great variety of plaintiff's labels which were introduced in evidence, and placed it upon one of defendant's bottles of Arrow beer. Then he also took one of the bottle caps of the plaintiff that are in evidence and put it upon one of defendant's beer bottles. It very closely resembled in appearance defendant's bottles bearing defendant's "Arrow" labels.

Furthermore, there is very definite competition here, in the broad sense at least, even though direct competition does not exist in the sense that beer is purchased in place of cordials, liqueurs, etc., or vice versa, for it is correct to say that they all fall within the same general field,—the same general descriptive class of alcoholic beverages. That being true, such outweighs all of the other considerations that have been advanced on behalf of plaintiff.

I do not think that such rights in the word "Arrow" as the earlier Peoria company, referred to in the course of the trial, may have had, can be availed of here by plaintiff. It must stand or fall upon its own status with relation to the defendant. Intent is not the criterion. It is true there is no evidence that plaintiff adopted its corporate name because the defendant company had been successful. On the contrary, it is claimed that the reason why the name was adopted was because the old, dissolved Peoria company used it and one of its originators, an officer who became connected with the plaintiff company, merely wanted to perpetuate that name. However that may be, we have here priority of use over a number of years by the defendant company in the same general field. It having spent, up to the time that plaintiff entered the field, namely, February 20th, 1934, approximately a half a million dollars in advertising its "Arrow" Beer; and up to that time it had done approximately $12,000,000 of gross business and had in addition, established a national advertising campaign of large proportions. Likelihood of confusion in the public eye or mind, as to the origin, that is, the creator or manufacturer of the product itself, is just as much the criterion, — the test, — as is likelihood of confusion with respect to the articles themselves. I conclude that it is very likely that one going into a retail liquor store or to a wholesale liquor distributor, knowing of the well established "Arrow" Beer, hearing or seeing that alcoholic beverages of any kind were being sold there under the label "Arrow", might be confused and think that both were produced by one and the same concern.

The point has been made that since a liqueur or cordial is not as pure a product as beer and, therefore, is more capable of dilution or reduction into an inferior quality, which means is more susceptible to price-cutting, these factors should weigh in favor of defendant's contention. I think that is true. All of this corroborates the conclusion here reached that we must look at this question of possible confusion in its broadest aspects. It remains, then, to be determined how extensive shall be the relief granted to the defendant.

The question of the extent of interstate rights under registered trade marks is not free from some difficulty, because the full effect of federal registration upon common law rights, resulting from the Trade Mark Act of February 20, 1905, 15 U.S.C.A. §§ 81-109, has never been directly adjudicated by the Supreme Court of the United States. The basic question presented here is whether the defendant, having the prior registration of the trade mark "Arrow" in connection with alcoholic beverages in the Patent Office under the Trade Mark Act of 1905, 15 U.S.C.A. Secs. 81-109, is entitled to exclude the plaintiff from, or to monopolize markets that defendant's trade mark has never entered, either in intra-state or inter-state business, or where the use of defendant's mark has, in any business, been subsequent in point of time?

Defendant stresses the decision in Standard Brewery Co. of Baltimore City v. Interboro Brewing Co., 229 F. 543, a decision rendered by the Circuit Court of Appeals for the Second Circuit, in 1916. There, plaintiff had adopted and continuously, used the trade mark "Bismarck" on beer since 1904. Registration of the mark was granted in 1907 under the Act of 1905. Some six years later defendant began selling beer under the same trade mark. In enjoining the defendant the Court said (229 F. page 544): "Trademark registered under the statutes of the United States is declared upon. The rights which a person obtains by registration of a trade-mark under those statutes are co-terminous with the territory of the United States." This, however, is the only decision of which we are aware which so broadly construes the rights of the registrant. As already stated, the Supreme Court has never adjudicated the question, although an approach to its solution is found in at least four cases: Hanover Star Milling Co. v. Metcalf, 240 U.S. 403, 36 S.Ct. 357, 60 L.Ed. 713, decided in 1916; United Drug Co. v. Theodore Rectanus Co., 248 U.S. 90, 39 S.Ct. 48, 63 L.Ed. 141, decided in 1918; United States Printing & Lithograph Co. v. Griggs, Cooper & Co., 279 U.S. 156, 49 S.Ct. 267, 73 L.Ed. 650, decided in 1929; and American Trading Co. v. H. E. Heacock Co., 285 U.S. 247, 52 S.Ct. 387, 76 L.Ed. 740, decided in 1932.

In the first of these cases it was held that the earlier adopter of a trade mark may not monopolize markets that his trade has never reached, and where the mark signifies not his goods but those of another. But no trade mark statute was involved. The Court said (240 U.S. at page 410, 36 S.Ct. at page 359, 60 L.Ed. 713): "It should be added that, so far as appears, none of the parties here concerned has registered the trademark under any...