California Fruit Growers Exch. v. Sunkist Baking Co., 9326.

• Decision Date: 26 April 1948
• Docket Number: No. 9326.,9326.
• Citation: 166 F.2d 971
• Parties: CALIFORNIA FRUIT GROWERS EXCHANGE v. SUNKIST BAKING CO.
• Court: U.S. Court of Appeals — Seventh Circuit

166 F.2d 971 (1947)

CALIFORNIA FRUIT GROWERS EXCHANGE v. SUNKIST BAKING CO.

No. 9326.

Circuit Court of Appeals, Seventh Circuit.

December 23, 1947.

Rehearing Denied April 26, 1948.

Francis J. Coyle, W. Richard Stengel, and Bernard J. Moran, all of Rock Island, Ill., and Casper W. Ooms, of Chicago, Ill., for appellants.

Leonard S. Lyon and Irwin L. Fuller, both of Los Angeles, Cal., and Eugene R. Johnson, of Peoria, Ill., Frederick S. Lyon, of Los Angeles, Cal., and Miller, Westervelt, Johnson & Thomason, of Peoria, Ill., (George E. Farrand, of Los Angeles, Cal., and Marshall P. Madison, of San Francisco, Cal., of counsel), for appellees.

Before MAJOR, KERNER, and MINTON, Circuit Judges.

MINTON, Circuit Judge.

The plaintiff California Fruit Growers Exchange, hereafter referred to as Exchange, and the plaintiff California Packing Corporation, hereafter referred to as Corporation, obtained a judgment against the defendants in the District Court for the Southern District of Illinois, Northern Division, for unfair competition and infringement of the trade-marks "Sunkist" and "Sun-Kist," registered and owned by the plaintiffs, and an injunction against the use by the defendants of the name "Sunkist" or any colorable imitation thereof in the manufacture, advertising, offering for sale, distribution, or sale of bakery products of any nature whatsoever, including bread, raisin bread, and buns, and against competing unfairly with the plaintiffs, and other injunctive relief. From this judgment the defendants have appealed.

The court made findings of fact and stated its conclusions of law thereon in favor of the plaintiffs. From these findings of fact, it appears that the plaintiff Exchange is a non-profit co-operative marketing association incorporated under the laws of California and is engaged primarily in marketing and selling citrus fruits throughout the United States and in foreign countries. The plaintiff Corporation is a New York corporation engaged in the selection, preparing, packing, and marketing of canned and dried fruits and vegetables, including raisins, throughout the United States and in foreign countries.

Exchange has employed the trade-mark "Sunkist" in the sale of over two billion dollars worth of goods and has expended over forty million dollars in advertising the trade-mark. Certificates of registration for the trade-mark "Sunkist" have been issued to Exchange by the United States Patent Office for oranges, lemons, citrus fruits, oils and acids, pectin, citrus-flavored non-alcoholic maltless beverages as soft drinks, and concentrates for making soft drinks. Corporation has employed the trade-mark "Sun-Kist" since 1907 and has sold approximately fifty million dollars worth of goods bearing such trade-mark and has expended in excess of $350,000 in advertising it. Certificates of registration for the trade-mark "Sun-Kist" have been issued by the Patent Office to Corporation for canned and dried fruits and vegetables, milk, butter, walnuts, catsup, pickles, olive oil, jams, jellies, olives, coffee, tea, beans, pineapple juice, grape juice, tomato juice, raisins, grapes, and various other products. The joint and concurrent use of the trade-marks "Sunkist" and "Sun-Kist" by both plaintiffs has eventuated under and by virtue of an agreement between them whereby each has granted the other the right to employ the mark on the goods aforesaid.

The defendant Sunkist Baking Company is a co-partnership composed of Harry S. Coin and Nick S. Coin, who are citizens and residents of the State of Illinois and are engaged in baking and selling bread and buns, including white bread, whole-wheat bread, "Weet-Hart" bread and raisin bread, in interstate commerce, under the firm name and style of "Sunkist Baking Co.," in and about Rock Island and adjacent cities. Each loaf of bread sold by the defendants is enclosed in a wrapper bearing the name "Sunkist Baking Co." and also the words "Sunkist Bread." The name "Sunkist" appears on the defendants' place of business, their trucks, and their outdoor advertising, without any designation of the co-partnership name. The court also found that the defendants had improperly and unlawfully obtained registration from the State of Illinois for the trade-mark "Sunkist Bread," and from the State of Iowa for the trade-mark "Sunkist."

The court found that the plaintiffs' and the defendants' goods are sold in the same channels and may be consumed together, and that the defendants have endeavored to appropriate and capitalize upon the plaintiffs' trade-marks. The controlling findings 12, 13, 14, and 15 we set out in full as follows:

"12. The use of the word `Sunkist' by the defendants is likely to cause confusion or mistake in the minds of the public and to deceive purchasers. Bread belongs to the same general class of merchandise as the fruit and canned fruits and vegetables marketed by plaintiffs. Defendants' bread bearing the word `Sunkist' as used by defendants would naturally or reasonably be supposed to come from plaintiffs.

"13. The trade-marks `Sunkist' and `Sun-Kist' are purely fanciful in character, and to the public in general have acquired a secondary significance of being related to and associated with plaintiffs' products only.

"14. The goods sold by plaintiffs under the trade-marks `Sunkist' and `Sun-Kist,' and the bread and buns marketed by defendants bearing the name `Sunkist' and the name `Sunkist Baking Company' are goods of substantially the same descriptive properties.

"15. By using the plaintiffs' trade-mark `Sunkist' in defendants' trade-name, the defendants have competed unfairly with plaintiffs and have been guilty of unfair trade practice."

On these findings the court concluded that the trade-marks "Sunkist" and "Sun-Kist" were valid trade-marks owned by the plaintiffs and were infringed by the defendants' use of the name "Sunkist" and the trade-name "Sunkist Baking Co.," and that the defendants competed unfairly with the plaintiffs and were guilty of unfair trade practices. The court also concluded that the defendants have not distinguished this action from the ruling of the Circuit Court of Appeals for this Circuit in California Fruit Growers Exchange et al. v. Windsor Beverages, Ltd., et al., 7 Cir., 118 F.2d 149. Upon such conclusions of law, the court entered judgment for injunctive relief, and the plaintiffs waived any accounting for profits and damages.

The first question that we have to consider is whether the trade-marks "Sunkist" and "Sun-Kist," owned and used by the plaintiffs in the marketing and sale of fruits, vegetables, and their other products, are infringed by the defendants' use of their trade-name "Sunkist Baking Co.," and by the use of the word "Sunkist" on their bakery products. The parties concede that the Lanham Act¹ applies. The validity of the trade-marks is not questioned. To constitute infringement under the Lanham Act, a registered trade-mark must be used in such a manner as "* * * is likely to cause confusion or mistake or to deceive purchasers as to the source of origin of such goods * * *." Section 32(1) (a).²

The plaintiffs state in their brief:

"It is a confusion of origin or sponsorship and not confusion of goods which controls * * *."

If that is the controlling factor, and we think that it is, let us see if the court found it.

The court found that the use of the name "Sunkist" upon bread or buns is likely to cause confusion or mistake in the minds of the public and to deceive purchasers. The court did not find that there is any likelihood of confusion as to the origin of the bakery products. This confusion as to source is the very element the Lanham Act states is necessary to constitute infringement of a trade-mark and which the plaintiffs have stated is the essential fact in infringement. The court has wholly failed to find that there is likelihood of confusion as to the origin of the bakery products with the products marketed under the plaintiffs' trade-marks, except to find that bread belongs to the same general class of merchandise as fruit and vegetables, and that bread and fruit and vegetables are goods of substantially the same descriptive properties. These findings seem to have been drawn to cover infringement under the Act of February 20, 1905. 15 U.S.C.A. § 96. Such section provides:

"Any person who shall, without the consent of the owner thereof, reproduce * * * any such trade-mark and affix the same to merchandise of substantially the same descriptive properties as those set forth in the registration, or to labels * * * intended to be used upon or in connection with the sale of merchandise of substantially the same descriptive properties * * * shall be liable (for infringement)." (Italics ours.)

In Findings 12 and 14 of the District Court, the words "the same general class of merchandise" and "goods of substantially the same descriptive properties" are facts essential to infringement under the 1905 Act, and not under the Lanham Act. Finding 12 of the District Court is an integrated finding that the use of the word "Sunkist" by the defendants is likely to cause confusion or mistake in the minds of the public because bread belongs to the same general class of merchandise as fruits, canned fruits, and vegetables, and because the defendants' bread bearing the word "Sunkist" would naturally and reasonably be supposed to come from the plaintiffs.

Fruits and vegetables are not in the same general class of merchandise as bread, nor are they goods of the same descriptive properties as bread. About the only things they have in common are that they are edible and are usually sold in the same class of stores to the same class of customers. Fruits and vegetables are the product of nature's growth. Bread is a product of manufacture from many ingredients; it includes the skill of the baker and is usually produced locally. On the question of the same descriptive properties, in cases like the present, the...