Avon Shoe Co. v. David Crystal, Inc.

• Decision Date: 09 February 1959
• Citation: 171 F. Supp. 293
• Parties: AVON SHOE CO., Inc., and Haymaker Shoe Corp., Plaintiffs, v. DAVID CRYSTAL, INC., Haymaker Sports, Inc., B. Altman & Co., Best & Co., Inc., and John Wanamaker, Defendants.
• Court: U.S. District Court — Southern District of New York

171 F. Supp. 293

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

United States District Court S. D. New York.

February 9, 1959.

COPYRIGHT MATERIAL OMITTED

George H. Corey, New York City, for plaintiffs. Corey, Hart & Stemple, New York City, Dayton R. Stemple, Jr., Max Block, Jr., and Ludwig Wilson, New York City, of counsel.

Arnold M. Grant, New York City, for defendants. Lynton & Saslow, New York City, Bernard A. Saslow, Harold A. Axel, and Arthur H. Seidel, New York City, of counsel.

HERLANDS, District Judge.

This trademark litigation involves the problem of non-competing products in adjacent markets where women are the ultimate consumers.

The non-competing products are, on the one hand, plaintiffs' women's casual, comfortable walking shoes of the moccasin type and, on the other hand, defendants' women's fashionable and stylish sportswear apparel, such as dresses, skirts and waists. Certain styles of the plaintiffs' shoes are made and sold under the trademark "Haymakers." Certain styles of the defendants' apparel are made and sold under the trademark "Haymaker."

The controversy concerns chiefly the nature and scope of the parties' respective rights in the trademarks "Haymakers" and "Haymaker." The decision involves the resolution of sharply disputed questions of fact and law presented at a protracted trial, covering 4,239 pages of testimony and hundreds of exhibits.

By spotlighting the following salient features, the issues will be sharply focused:

(1) The plaintiffs first used the name "Haymakers" on their moccasin shoes in 1941, but not until November 15, 1948 did the plaintiffs file an application to register the "Haymakers" mark; and the plaintiff Haymaker Shoe Corp. was not organized until 1950.

(2) Meanwhile, in April 1945, the defendants began to use the mark "Haymaker Sports" and, in December 1945, the mark "Haymaker" on stylish, sophisticated women's sportswear.

(3) The defendants, owned and operated by well-known persons of excellent reputation in the women's apparel business since 1905, in using the marks "Haymaker" and "Haymaker Sports" acted reasonably, in good faith, without any knowledge of plaintiffs' "Haymakers" shoes, and without any design or intention to get a "free ride" on plaintiffs' mark.

(4) In 1945, when the defendants first began to use "Haymaker Sports" and "Haymaker" on their women's sportswear: (a) the plaintiffs' shoe mark "Haymakers" was not independently conceived but was borrowed from a glove concern, The Daniel Hays Company, Inc. During the period prior to 1945, the word "Haymakers" and variants of that word, if arguendo signifying any source of origin, signified two sources of origin, plaintiff Avon Shoe Co., Inc. and The Daniel Hays Company, Inc.; (b) plaintiffs' mark was not well-known; (c) plaintiffs' mark was, to be accurate, not an independent mark to indicate the source of their women's moccasin shoe, but a style or pattern name within plaintiffs' "Avonette" shoe line, and the name "Haymakers" was latched on and subordinated to the better-known and general name of "Avonette"; (d) "Haymakers" shoes had received scant advertising and did not possess a secondary meaning.

(5) In the years following 1945, the defendants made a great and rapid success of their "Haymaker" women's sportswear and conducted extensive and expensive promotional and advertising campaigns, partly on their own account and partly on a cooperative basis with the large department stores and women's specialty shops that marketed their products.

(6) There has been only about a one percent overlap in the sales outlets that sell both plaintiffs' and defendants' products.

(7) There has been virtually no credible proof of any actual consumer confusion as to the source or origin of the plaintiffs' and defendants' products; and such evidence as has been offered by plaintiffs, if believed, would constitute a de minimis situation.

(8) The likelihood of mistake, confusion or deception as to the origin or source of plaintiffs' and defendants' products is remote and unsubstantial.

(9) The plaintiffs never had, and now do not have, the intention to make or sell women's sportswear, the product made and sold by defendants. The plaintiffs' expansion into the defendants' field is admitted by plaintiffs to be only a mere possibility and nothing more.

(10) Not until March 1952 did the defendants become aware of the fact that the plaintiffs were marketing "Haymakers" shoes.

(11) The plaintiffs claim that they had no notice of defendants' use of the "Haymaker" trademark on women's sportswear until February 25, 1952.

(12) Plaintiffs' trademark "Haymakers" for shoes was registered by the United States Patent Office for the first time on March 25, 1952, two months after defendants' trademark "Cynthia of Haymaker" had been registered there on January 22, 1952 for items of women's sportswear, and while defendants' trademark application for registration of the trademark "Haymaker" for items of women's sportswear was pending.

(13) June 25, 1953 was the date when plaintiffs' attorneys first sent a "cease and desist" letter to defendants.

(14) During the period of over eight years of concurrent use of the "Haymaker" name prior to the institution of this action, defendants' fashionable line of women's sportswear was more widely publicized than plaintiffs' moccasin shoe. Today, defendants' line of "Haymaker" sportswear is more widely known than the "Haymakers" moccasin shoe.

(15) The sales volume of defendants' "Haymaker" women's sportswear, at all times larger than the sales volume of plaintiffs' "Haymakers" shoe, is now triple the sales volume of the "Haymakers" shoe.

(16) At no time has the name "Haymakers" become associated in the public mind and in the shoe and fashion and ladies' apparel trades with the plaintiffs.

(17) Plaintiffs have not been damaged in any way by defendants' use of the trademark "Haymaker" on women's sportswear.

(18) Defendants have paid their own way in the promotion and advertising of their fashionable sportswear line and have not ridden on plaintiffs' coattails.

(19) On October 28, 1953 — after more than eight years of concurrent use of the "Haymaker" name by plaintiffs and defendants, and after defendants had established a nationwide business running into the millions — plaintiff started this lawsuit.

(20) This is not a suit between competitors. Plaintiffs have never manufactured or sold women's sportswear; defendants have never manufactured or sold women's shoes.

All of the foregoing facts, together with other relevant circumstances and their legal consequences, are elaborated upon in the detailed findings of fact and conclusions of law recited below in this opinion.

The action is based upon alleged infringement of registered shoe and glove trademarks claimed by plaintiffs, and upon unfair competition.

The defendants David Crystal, Inc. and Haymaker Sports, Inc. counterclaim: (1) for a declaration that defendants' trademark "Haymaker" on women's sportswear does not infringe any of plaintiffs' trademark rights; (2) for a direction to the Commissioner of Patents to cancel plaintiffs' said registered shoe and glove trademarks and to dismiss and dissolve the pending opposition of plaintiff Avon Shoe Co., Inc. to the registration of the mark "Haymaker" for items of women's sportswear and to issue registration to defendant Haymaker Sports, Inc. of the mark "Haymaker" pursuant to its pending application; and (3) for costs, disbursements and counsel fees.

Jurisdiction is based on the Lanham Act, 15 U.S.C.A. §§ 1114, 1121, with pendent jurisdiction under 28 U.S.C.A. § 1338(b) as to the claim of unfair competition. Jurisdiction is also based on diversity of citizenship, 28 U.S.C.A. § 1332, with respect to the counterclaim only.

The discussion of the governing legal rules must be prefaced with the observation that we are here dealing with the question of the right to use trademarks, as distinguished from the right to register them. See Westgate-Sun Harbor Co. v. Watson, 1953, 92 U.S.App.D.C. 341, 206 F.2d 458, 460; Willson v. Graphol Products Co., 1951, 188 F.2d 498, 502, 38 C.C.P.A. 1030.

The controlling principles applicable to the use of similar trademarks on noncompeting products have been expounded in a series of leading cases in this Circuit. S. C. Johnson & Son, Inc. v. Johnson, 2 Cir., 1949, 175 F.2d 176, certiorari denied 338 U.S. 860, 70 S.Ct. 103, 94 L.Ed. 527; Federal Telephone & Radio Corp. v. Federal Television Corp., 2 Cir., 1950, 180 F.2d 250; Hyde Park Clothes, Inc. v. Hyde Park Fashions, Inc., 2 Cir., 1953, 204 F.2d 223, certiorari denied 1953, 346 U.S. 827, 74 S.Ct. 46, 98 L.Ed. 351 and G. B. Kent & Sons, Limited v. P. Lorillard Co., D.C.S.D.N.Y.1953, 114 F.Supp. 621, affirmed 2 Cir., 1954, 210 F.2d 953 on Judge Weinfeld's opinion below.

These and similar cases evince a judicial struggle to escape from the literalism of the statute (15 U.S.C.A. § 1114 (1) and to establish equitable principles consistent with Congressional policies. The consumer's confusion over the source or origin of the defendant's goods is the sole criterion of illegality literally prescribed by the statute. This single ingredient of illegality has been judicially diluted into a mixture of equitable considerations.

The courts have had occasion to express varying opinions about the relative weight to be given to the element of actual or likely consumer confusion or deception with respect to the source or origin of the goods and — on the other hand — the weight to be given to such elements as the good faith and reasonableness of the defendant's conduct; the likelihood of plaintiff's expansion into the adjacent market; whether the defendant is attempting to get a free ride on the mark built up by plaintiff; whether plaintiff's mark has obtained a secondary...