Avon Shoe Co. v. David Crystal, Inc.

• Decision Date: 13 June 1960
• Docket Number: No. 223,Docket 25654.,223
• Citation: 279 F.2d 607
• Court: U.S. Court of Appeals — Second Circuit
• Parties: AVON SHOE CO., Inc., and Haymaker Shoe Corp., Plaintiffs-Appellants, v. DAVID CRYSTAL, INC., Haymaker Sports, Inc., B. Altman & Co., Best & Co., Inc., and John Wanamaker, Defendants-Appellees.

279 F.2d 607 (1960)

AVON SHOE CO., Inc., and Haymaker Shoe Corp., Plaintiffs-Appellants, v. DAVID CRYSTAL, INC., Haymaker Sports, Inc., B. Altman & Co., Best & Co., Inc., and John Wanamaker, Defendants-Appellees.

No. 223, Docket 25654.

United States Court of Appeals Second Circuit.

Argued April 6, 1960.

Decided June 13, 1960.

COPYRIGHT MATERIAL OMITTED

Max Block, Jr., New York City (Ludwig M. Wilson, Rudolph Callman, Goldstein, Golenbock & Barell, and Seymour Kleinman, New York City, on the brief), for appellants.

Bernard A. Saslow, New York City (Arnold M. Grant, Lynton & Saslow, Harold A. Axel, Arthur H. Seidel and Daniel A. Gutterman, New York City, on the brief), for appellees.

Before CLARK, HINCKS and FRIENDLY, Circuit Judges.

HINCKS, Circuit Judge.

After a lengthy trial, Judge Herlands dismissed the plaintiffs'¹ complaint in which they sought an injunction prohibiting the defendants'² use of the word "Haymaker" in connection with the manufacture, sale, distribution and advertising of their women's sportswear which includes blouses, shirts, skirts and dresses. On the basis of voluminous findings, the Court concluded that the defendants' trade mark use of the "Haymaker" mark did not infringe the plaintiffs' "Haymakers" and "Haymakers by Avon" trade marks which were registered for men's, women's and children's shoes³ under the Lanham Act, 60 Stat. 427, 15 U.S.C.A. §§ 1051-1127, on March 25, 1952 and February 24, 1953, respectively. The Court also held that the defendants had not competed unfairly in the use of the "Haymaker" mark. And the Court granted so much of defendants' counterclaim as requested an order directing the Commissioner of Patents to dismiss plaintiffs' pending opposition to defendant's registration of its "Haymaker" mark for items of women's sportswear and to issue said registration.

While we agree with the result reached below, we affirm on the specific grounds mentioned herein which we deem dispositive of this case. Since we refrain from expressing any view on the alternative theories suggested by Judge Herlands, we shall review and discuss only those findings relevant to our holdings. Numerous other findings of fact which were relied upon below and which depict in greater detail the events surrounding this litigation are set out at 171 F.Supp. 293. And Judge Murphy's opinion denying plaintiffs' motion for a temporary injunction is reported at 117 F.Supp. 548.

The "Haymakers" mark, which as applied to women's shoes is fanciful and arbitrary, was first suggested to the plaintiffs by one of their large department store retail outlets, Saks Fifth Avenue. After obtaining permission from the Daniel Hays Company, Inc., which owned a registered "Haymaker" mark for men's gloves, the plaintiffs first used their mark in 1941 by affixing it to the sockliners of their shoes, which were characterized below as "women's casual, comfortable walking shoes of the moccasin type." Thereafter, as Judge Herlands found, the plaintiffs carried on a trade mark use of the "Haymakers" mark for upwards of three years prior to the defendants' first use of their mark in 1945.

The extent of the plaintiffs' early sales and advertising was not clearly established at trial, due, in large part, to the plaintiffs' failure to produce important pre-1950 records. The Court attributed this failure to produce to the plaintiffs' gross negligence in destroying their records while this action was pending. Be that as it may, it is clear that the plaintiffs' early production capacity was greatly curtailed by war shortages and that prior to 1945 they daily produced approximately only 200 pairs of shoes. This production figure when considered in conjunction with the plaintiffs' insubstantial pre-1945 advertising⁴ supports the finding below that the plaintiffs' mark was relatively unknown to both women consumers and members of the women's apparel trade when the defendants first used the "Haymaker" mark in 1945.

As noted, the defendants in 1945 first began using the "Haymaker" mark on their goods, which were characterized below as "women's fashionable and stylish sportswear apparel, such as dresses, skirts and waists." Between April and November of that year the defendants sold their goods under the mark "Haymaker Sports" and thereafter the mark was shortened to "Haymaker," which has been used continuously to the present time. While defendants themselves did not incur large advertising expenditures in the early years of production, there is little dispute that their sportswear swiftly met with widespread sales and an excellent public recognition and reputation. The extensive advertising of defendants' goods by those department stores and women's specialty shops which carried them was a significant factor in the rapid development of defendants' "Haymaker" mark. While a comparison of the parties' actual advertising expenditures is impossible since the plaintiffs' schedules, which were properly discredited below, are unreliable, we are satisfied that the Court below was correct in concluding that the defendants' Haymaker line from soon after its inception has been far more widely known than that of the plaintiffs.

During the parties' eight year period of concurrent use which antedated the commencement of this action, they made numerous attempts to register their marks. The plaintiffs were finally successful in 1952, as noted above, after they obtained a letter of consent from the glove company which had earlier registered the "Haymaker" mark. The defendants' efforts were less rewarding. Their 1945 application to register "Haymaker Sports" was rejected in July 1945, because of the outstanding marks issued to the glove company, and their 1949 and 1952 applications for "Haymaker" met with similar denials. In June of 1953 the defendants' application was rejected because of the intervening registration of the plaintiffs' mark, but a subsequent application was finally passed for publication by the Patent Office after that office found that the mark, when applied to the defendants' goods, was not confusingly similar to any registered mark. The plaintiffs' impending opposition has prevented the issuance of a registration to the defendants who published their mark in 1954.

Thus far, at least, the controlling facts are not in serious dispute. We will now examine two critical findings which the plaintiffs strenuously assail. First, the Court concluded that the defendants' adoption and use of their "Haymaker" mark was in complete good faith — without knowledge of the plaintiffs' prior use and without desire to reap any benefits which might flow to a junior user of the Haymaker mark on goods related to those of the first user. We accept this finding, notwithstanding the plaintiffs' contention that the defendants' knowledge of the registered glove trade marks, be it actual, constructive, or imputed, was an infirmity attaching to their adoption of the Haymaker mark. The Court accepted the defendants' testimony that they were first advised by their trade mark Service of the glove mark use in 1949 and first learned of the plaintiffs' use in 1952. We have no valid reason to disturb these credibility determinations. Indeed, the meagerness of the plaintiffs' pre-1945 advertising and sales lends credibility to the defendants' testimony that they had no actual knowledge of the plaintiffs' prior shoe use when they commenced using their "Haymaker" mark in 1945.

Nor can the defendants be charged with constructive notice of the glove marks which were registered under the earlier Act of 1905 since that Act had no counterpart to the constructive notice provisions of the Lanham Act, 15 U.S. C.A. § 1072. It is true that the Lanham Act indeed prevents a junior user from claiming good faith when his use begins subsequent to a prior user's registration under the Act. But that provision is inapplicable here. For the defendants' use commenced more than two years prior to the effective date of that Act.

Whether the uncommunicated knowledge of the defendants' agent, their trade mark Service, can, as the plaintiffs contend, be so imputed to the defendants as to establish their bad faith, we need not decide. For the defendants' good faith in adopting and initially using their mark is not impugned by any knowledge which they might have subsequently⁵ received of a Haymaker mark used only on men's gloves.⁶ And such knowledge, whenever received, would obviously not have put the defendants on notice of the plaintiffs' use of such a mark on women's shoes. We conclude that the finding as to the defendants' good faith may not be disturbed.

The second critical finding which is sharply attacked by the plaintiffs is that the defendants' use of the "Haymaker" mark has not caused, nor is it likely to cause, confusion as to the source of origin of the defendants' goods. This finding we cannot sustain. Confusion as to source of origin is, of course, the keystone of an action based upon infringement of a registered mark. 15 U.S.C.A. § 1114(1). Thus, a crucial question here was whether there was a likelihood that an appreciable number of ordinary prudent purchasers of the defendants' women's sportswear might, by reason of the "Haymaker" mark, be misled into believing that the defendants' goods came from the same source as the plaintiffs' shoes. Maternally Yours, Inc. v. Your Maternity Shop, Inc., 2 Cir., 234 F.2d 538. We think this question should have been answered in the affirmative.

We need not pause to consider the trial court's ruling that those instances of actual confusion which the plaintiffs attempted to establish were de minimis. For we hold that a finding of likelihood of confusion as to origin was amply required by other more substantial proofs. This is a case where distinctive marks, which for all practical purposes are identical, are used on closely related goods which serve both common functions and common purchasers. Moreover, the defendants' goods are...