Babee-Tenda Corporation v. Scharco Manufacturing Co.

• Decision Date: 25 November 1957
• Citation: 156 F. Supp. 582
• Parties: The BABEE-TENDA CORPORATION, Babee-Tenda License Corporation, and Metropolis Bending Company, Plaintiffs, v. SCHARCO MANUFACTURING CO., Inc., and David Scharaga, Defendants.
• Court: U.S. District Court — Southern District of New York

156 F. Supp. 582

The BABEE-TENDA CORPORATION, Babee-Tenda License Corporation, and Metropolis Bending Company, Plaintiffs, v. SCHARCO MANUFACTURING CO., Inc., and David Scharaga, Defendants.

United States District Court S. D. New York.

November 25, 1957.

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Kenyon & Kenyon, New York City, for plaintiffs. John A. Reilly, Hugh A. Chapin, Mary V. Kelly, New York City, of counsel.

Victor M. Helfand, New York City, for defendants.

FREDERICK van PELT BRYAN, District Judge.

Plaintiffs have moved to hold defendants in civil contempt for violation of a writ of injunction issued by this court on May 18, 1956, pursuant to a consent decree, and for filing a false affidavit of compliance with the injunction.

The writ enjoined the defendant Scharco Manufacturing Corporation (hereafter referred to as "Scharco"), its officers, agents, servants, employees and attorneys, the individual defendant Scharaga, who is president of this corporation, and all persons in active concert or participation with them, who received notice of the injunction, "from using the terms `Baby Tender' or `Tender' in connection with the business of the Scharco Manufacturing Corporation, or the business of David Scharaga, or on, or in relation to, any product which the Scharco Manufacturing Corporation, or David Scharaga, makes or sells, or any term so similar to `Baby Tender' or `Tender' or to `Babee-Tenda' or `Tenda' as to be likely to cause confusion or mistake or to deceive purchasers." The writ also directed that defendants file a report as to compliance within 120 days after service of the writ, pursuant to § 34 of the Trade-Mark Act of 1946, 15 U.S.C.A. § 1116.

The action in which the writ was issued was for infringement by defendants of plaintiffs' registered trademarks "Babee-Tenda" and "Tenda" covering combined tables and chairs for infants and juveniles, by defendants' sale of similar articles under the trademark "Baby Tender" and for acts of unfair competition related thereto. The action proceeded to trial and during the course of trial the parties signed a consent decree in settlement of the contested issues. Judge Walsh, the trial judge, wrote an opinion approving the decree which gave his reasons for so doing. Babee-Tenda Corporation v. Scharco Manufacturing Co., D.C., 139 F.Supp. 909. He held that the plaintiffs' registered trademarks were valid and that the use of terms "Baby Tender" or "Tender", regardless of spelling, in connection with any similar article would infringe those marks.

The writ of injunction, issued pursuant to the consent decree, was duly served on the defendants Scharco and Scharaga, and on the office manager and the freight traffic consultant for Scharco on May 28, 1956. On September 14, 1956 defendant Scharaga, for himself and as president of Scharco, filed an affidavit in this court, as directed by the writ, stating that the defendants had complied with the provisions of the injunction.

On November 5, 1956 the plaintiffs served an order to show cause on a motion seeking to hold defendants for contempt for violation of the injunction and for filing a false affidavit of compliance. Plaintiffs alleged that motor trucks bearing the name "Scharco Mfg. Corp." and the words "Baby Tender" were operating in the metropolitan area in violation of the injunction. Plaintiffs asked that a fine be imposed on the defendants for the benefit of the plaintiffs to reimburse them for the costs incurred in the proceeding to punish for contempt, including the fees of their attorneys and for damages suffered by reason of the alleged violations.

Upon the argument of the motion before me counsel for the defendant asked for a hearing under Civil Rules 12(b) and (d) of this court, and on March 25, 1957 I granted such a hearing. Thereafter such a hearing was held at which both sides presented evidence. The matter is now before me for decision on the basis of the evidence taken and the affidavits submitted by both parties upon the motion.

The facts are substantially as follows:

It appears that plaintiffs had been using the terms "Babee-Tenda" and "Tenda" in connection with their product since 1937, and since 1938 had spent over a million dollars in advertising these trademarks which were an important factor in their business.

Since some time prior to the institution of the action the defendants had used the words "Baby Tender" and "Tender" in connection with the sale of their somewhat similar juvenile products which represented some 15% of their business, and had widely circulated catalogues and literature using these legends. However, it appears that prior to the entry of the consent decree defendants had largely discontinued the general use of these terms in connection with its products and no longer considered them to be an important factor in their sales promotions.

Defendants delivered their products through Fusco Trucking Company, an independent trucking concern specializing in the delivery of juvenile furniture for various manufacturers. The products would be picked up by the Fusco trucks or trailers at the defendants' plant in Mt. Vernon and then were taken to the Fusco depot in the Bronx where they were reloaded in most instances upon trucks traveling various routes for delivery to stores and dealers in the metropolitan area which dealt in juvenile furniture. Fusco also transported the defendants' products interstate on long hauls under written contracts with the defendants.

The relationship between Scharco and its trucker had existed for some twenty years and was close and friendly. In 1950 or 1951 two of the some twenty trucks operated by Fusco and used in its deliveries had painted on them on both sides in large letters the words "Grow-Rite" "Scharco Mfg. Corp. Mt. Vernon, N.Y.", and underneath, the words "Baby Tender". This was done with the approval, if not at the instance, of defendant Scharaga, and the design was approved by him.

The two trucks of the Fusco fleet so marked were not necessarily used in the delivery of Scharco products, though on occasion they were. Generally the two marked trucks were used as an interchangeable part of the Fusco fleet engaged in making deliveries of products of the same general character as that produced by Scharco, to stores and other outlets.

Subsequent to the service of the writ of injunction these two trucks, with the legend upon them unchanged, and still bearing the words "Baby Tender", continued to operate, making deliveries in the metropolitan area in the same manner as previously. Though Fusco seems to have known of the injunction there is no evidence that any instructions were given to Fusco to remove the prohibited words from the trucks. Indeed, defendant Scharaga claims that he was unaware that the trucks had this lettering on them, though this is difficult to believe in view of the fact that he had directed and approved the lettering and design, and the indications that from time to time these very trucks came to the Scharco plant to pick up merchandise.

In any event, no steps were taken to have the offending legend removed from these trucks up to the time of the filing of the affidavit of compliance and for some time thereafter.

The order to show cause upon the present motion was served on defendants' counsel on November 5, 1956. Attached to the order to show cause, as part of the supporting papers, were photographs showing a Fusco truck with this legend on it, which had been taken shortly prior thereto. Whether or not defendants were aware prior to that time that the trucks so labelled were upon the streets, it is plain that they were fully apprised after November 5, 1956.

When the motion was argued before me, some two weeks later, the trucks were still operating in the same manner and the offending words had not been removed. Thereafter there were some lackadaisical efforts on the part of the defendants to persuade Fusco to remove the offending words. Fusco made a half-hearted effort in that direction by placing masking tape over the words "Baby Tender", which not only was ineffectual to conceal the words but soon became detached. No further efforts were made by the defendants to follow this up, nor, as far as the evidence shows, did the defendant Scharaga, or any representative of the corporation, take the trouble to look at the trucks, to ascertain what, if anything, had been done with respect to them, or to take any steps to insure that the directions of the injunction were carried out even though the contempt motion was pending.

On April 3, 1957 counsel had a conference with me with reference to fixing a date for the hearing which had been afforded at defendants' request. At that time counsel for the plaintiffs advised counsel for the defendants in my presence that he was informed that the two trucks had been seen together in New Jersey with the legend still upon them, although there was still some torn masking tape affixed to one of them. I rebuked defendants' counsel for his clients' failure to comply with the injunction even after the contempt motion had been argued. Within twenty-four hours thereafter the offending words were completely painted out.

Thus, it is plain that, for the better part of a year after the writ of injunction had been served on the defendants, there were still two trucks bearing the name and address of the corporate defendant which carried the words "Baby Tender" in letters which could easily be read by the public, and that these trucks regularly operated in the metropolitan area, making deliveries to stores and dealers selling juvenile furniture. Regardless of whether defendants, as they claim, were unaware that trucks bearing the prohibited words were roaming the streets prior to November 5, 1956, when the motion papers were served, they certainly were fully apprised of the situation after that. Their conduct prior to November 5 may have been due to mere negligence and lack of diligence. Thereafter...