Beatrice Foods Co. v. Neosho Valley Coop. Creamery Ass'n, 6645.

• Decision Date: 22 November 1961
• Docket Number: No. 6645.,6645.
• Citation: 297 F.2d 447
• Parties: BEATRICE FOODS CO., a corporation, Appellant, v. NEOSHO VALLEY COOPERATIVE CREAMERY ASSOCIATION, a corporation, Appellee.
• Court: U.S. Court of Appeals — Tenth Circuit

297 F.2d 447 (1961)

BEATRICE FOODS CO., a corporation, Appellant, v. NEOSHO VALLEY COOPERATIVE CREAMERY ASSOCIATION, a corporation, Appellee.

No. 6645.

United States Court of Appeals Tenth Circuit.

November 22, 1961.

Neil McKay, Chicago, Ill. (William G. Mitchell and Winston, Strawn, Smith & Patterson, Chicago, Ill., and Stanley D. Campbell, Tulsa, Okl., with him on the brief), for appellant.

Robert D. Hovey, Kansas City, Mo. (Donald E. Johnson, of Hovey, Schmidt, Johnson & Hovey, Kansas City, Mo., Robert J. Woolsey, of Farmer, Woolsey, Flippo & Bailey, Tulsa, Okl., and Clark Fleming, Erie, Kan., with him on the brief), for appellee.

Before PHILLIPS, PICKETT and HILL, Circuit Judges.

PICKETT, Circuit Judge.

Beatrice Foods Company brought this action alleging that the defendant, Neosho Valley Cooperative Creamery Association, by the use of its trade name "Meadow Sweet" on its dairy products, was infringing its registered trademark "Meadow Gold", and engaging in unfair competition. In its answer Neosho denied the allegations that there was likelihood of confusion between the trademarks and that it was guilty of unfair competition. This is an appeal from a judgment denying injunctive relief and dismissing the complaint.

Since 1901 Beatrice Foods Company, or one of its predecessors, has engaged in distributing dairy products under the trade name of "Meadow Gold". Over the years its business has expanded to such an extent that it is now one of the nation's leading distributors of dairy products. Meadow Gold products are displayed to the public nationwide and locally by every media of advertising, and there can be little doubt of the public acceptance of its products or the awareness that they are produced by Beatrice Foods Company. Neosho does not contend otherwise.

In 1938 Neosho was incorporated as a cooperative association to engage, principally in southeastern Kansas, in the processing and sale of dairy products for the benefit of its members. Shortly after its organization, Neosho conducted a contest to select a brand name for its products. The winner, who received a $10.00 prize, suggested the name "Meadow Sweet", and thereafter its products were identified by that name. It is not contended that Neosho intended to create confusion, or that there was a conscious effort to imitate the Meadow Gold Trademark. During the following years Neosho's business grew, and its territory expanded. In 1958 it acquired the business of Puritan Dairies, Inc., and its subsidiaries, which resulted in an expansion of its sales territory into parts of Missouri and Oklahoma where Meadow Gold products were also sold. Beatrice had knowledge of Neosho's use of the brand name Meadow Sweet, but it did not object to that trade name until after the 1958 acquisition and expansion. An objection was then lodged, and upon refusal of Neosho to discontinue the use of its brand name this action was brought for an injunction. In dismissing the action the trial court found that "the trade marks `Meadow Gold' and `Meadow Sweet', when applied to dairy products, are not confusingly similar to purchasers using ordinary care." The principal question presented is whether the record sustained this finding.

The primary function of a trademark used in business or trade is to distinguish goods as the products of a particular manufacturer or trader and to prevent another from passing off its goods as those of the manufacturer or trader identified by the trademark. Avrick v. Rockmont Envelope Co., 10 Cir., 155 F.2d 568; Schneider Brewing Co. v. Century Distilling Co., 10 Cir., 107 F.2d 699; American Photographic Pub. Co. v. Ziff-Davis Pub. Co., 7 Cir., 135 F.2d 569. "With essential qualifications, one infringes the trade-mark of another if the designation he uses to identify his goods is `identical with or confusingly similar' to another's protected trademark." Avrick v. Rockmont Envelope Co., supra 155 F.2d 572. The development of advertising on a national scale caused trade-marks to perform an additional function in the field of advertising and sales promotion. Restatement, Torts § 715 (1938); Avrick v. Rockmont Envelope Co., supra.¹

The statutory test of infringement is whether the "use is likely to cause confusion or mistake or to deceive purchasers as to the source of origin of such goods * * *." 15 U.S.C.A. § 1114. This court has discussed the concept of trademark infringement on several occasions. In Schneider Brewing Co. v. Century Distilling Co., supra, 107 F.2d at 704, we said:

"The test is whether the similitude in the labels would probably deceive a purchaser who exercises ordinary prudence, not the careless buyer who makes no examination."

This test was quoted and followed in Nebraska Consol. Mills Co. v. Shawnee Milling Co., 10 Cir., 198 F.2d 36. In Avrick v. Rockmont Envelope Co., supra, 155 F.2d at 572, it was said:

"It is the generally accepted rule that a designation is confusingly similar to a trade-mark if an ordinary prospective purchaser, exercising due care in the circumstances, is likely to regard it as coming from the same source as the trademarked article. * * * The question is usually one of fact * * *, which in some cases may be determined by visual comparison, as where specific differences are so marked that the general appearance could not be confusing, * * or where it is inconceivable that an ordinary purchaser examining the two labels would be deceived. * * * In other cases extrinsic evidence may be necessary. * *"

To the same effect are National Nu Grape Co. v. Guest, 10 Cir., 164 F.2d 874, cert. denied 333 U.S. 874, 68 S.Ct. 903, 92 L.Ed. 1150, and Standard Oil Co. v. Standard Oil Co., 10 Cir., 252 F. 2d 65.² The rule as stated in Restatement, Torts § 728 (1938):

"A designation is confusingly similar to a trade-mark or trade name under the rule stated in § 717 if prospective purchasers are likely to regard it as indicating the source identified by the trade-mark or trade name"

was quoted with...