Chips'n Twigs, Inc. v. Chip-Chip, Ltd.

• Decision Date: 19 May 1976
• Docket Number: Civ. A. No. 75-3295.
• Citation: 414 F. Supp. 1003
• Parties: CHIPS 'N TWIGS, INC., Plaintiff, v. CHIP-CHIP, LTD., Defendant.
• Court: U.S. District Court — Eastern District of Pennsylvania

414 F. Supp. 1003

CHIPS 'N TWIGS, INC., Plaintiff, v. CHIP-CHIP, LTD., Defendant.

Civ. A. No. 75-3295.

United States District Court, E. D. Pennsylvania, Civil Division.

May 19, 1976.

COPYRIGHT MATERIAL OMITTED

Ronald L. Panitch, Roberta Jacobs, Philadelphia, Pa., for plaintiff.

Jesse Rothstein, New York City, James A. Young, Philadelphia, Pa., for defendant.

OPINION

DITTER, District Judge.

Plaintiff, Chips 'N Twigs, Inc., instituted this suit against defendant Chip-Chip, Ltd., charging the latter with statutory trademark infringement and false designation of origin of goods in violation of sections 32(1) and 43(a) of the Lanham Act, 15 U.S.C. §§ 1114(1) and 1125(a), and common law unfair competition. Presently before the court is the plaintiff's motion for a preliminary injunction.¹ After careful consideration of the briefs and affidavits of the parties and the evidence adduced at the hearing, I make the following:

FINDINGS OF FACT

1. Plaintiff, Chips 'N Twigs, Inc., (hereafter "Chips") is a Pennsylvania corporation having a principal place of business at

Broad and Wallace Streets, Philadelphia, Pennsylvania 19130.

2. Defendant, Chip-Chip, Ltd., (hereafter "Chip-Chip") is a New York corporation having a principal place of business at 1441 Broadway, New York, New York 10018.

3. In 1916, Chips' predecessor in title, B. Schwartz & Co., commenced operations as a manufacturer of juvenile clothing. In 1951 B. Schwartz & Co. merged with Wm. Schwartz & Co., Inc., a corporation which had been organized in 1946. On May 7, 1956, by appropriate corporate action and statutory procedures Wm. Schwartz & Co., Inc., became Chips 'N Twigs, Inc. Chips 'N Twigs, Inc., is known in the trade as "Chips."

4. On July 20, 1944, Chips' predecessor B. Schwartz & Co., adopted the trademark "CHIPS OFF THE OLD BLOCK," and on March 13, 1945, received Registration No. 412,572 for the application of this mark to juvenile and boys' suits, sport coats and outer wearing apparel. This registration was republished under section 12(c) of the Lanham Act, 15 U.S.C. § 1062, on July 22, 1952, by Wm. Schwartz & Co., Inc., and became incontestable on May 19, 1958, when affidavits were filed and accepted pursuant to sections 8 and 15 of the Act, 15 U.S.C. §§ 1058, 1065. Registration No. 412,572 was assigned to Chips and was renewed for 20 years under section 9 of the Act, 15 U.S.C. § 1059, on March 13, 1965.

5. On July 20, 1944, B. Schwartz & Co. adopted the trademark "CHIPS." The United States Patent Office issued Registration No. 414,492 to B. Schwartz & Co. on June 12, 1945, for this trademark for juvenile and boys' suits, sport coats and outer wearing apparel. This registration was republished under section 12(c) of the Act on July 1, 1952, by Wm. Schwartz & Co., Inc., becoming incontestable on May 19, 1958, when affidavits were filed and accepted pursuant to sections 8 and 15 of the Act. Registration No. 414,492 was assigned to Chips and was renewed for 20 years under section 9 of the Act on June 12, 1965.

6. On October 5, 1955, Wm. Schwartz & Co., Inc., adopted the trademark "MR. CHIPS." The Patent Office issued Registration No. 637,481 on November 20, 1956, for this trademark for men's and boys' suits, jackets, coats, sport coats, topcoats, overcoats, snowsuits, pants, shorts, swimsuits, robes, beachwear and shirts. This registration became incontestable on May 17, 1962, when affidavits were filed and accepted pursuant to sections 8 and 15 of the Act. Registration No. 637,481 has also been assigned to Chips.

7. On August 1, 1955, Wm. Schwartz & Co., Inc., adopted the trademark "CHIPS 'N TWIGS." The Patent Office issued Registration No. 652,100 to plaintiff on September 24, 1957, for this trademark for young men's, boys' and children's suits, jackets, coats, sportcoats, topcoats, overcoats, snowsuits, pants, shorts, swimsuits, robes, beachwear and shirts. The registration became incontestable on August 6, 1963, when affidavits were filed and accepted pursuant to sections 8 and 15 of the Act.

8. On November 15, 1966, Chips adopted the trademark "BLUE CHIP." The Patent Office issued Registration No. 836,788 to plaintiff on October 10, 1967, for this trademark for men's and boys' suits, jackets, coats, sportcoats, topcoats, overcoats, pants, shorts, shirts, hats, and beachwear. This registration became incontestable when affidavits were filed and accepted pursuant to sections 8 and 15 of the Act.

9. Prior to November 1971, Chips adopted the trademark "CHIP KNITS" for young men's clothing made of knit fabric.

10. The registered trademarks "CHIPS OFF THE OLD BLOCK," "CHIPS," "MR. CHIPS," "CHIPS 'N TWIGS," and "BLUE CHIPS" and the unregistered trademark "CHIP KNITS" constitute the plaintiff's "CHIPS" family of trademarks.

11. Chips' trademarks have been used in commerce for suits, sportcoats, blazers, leisure suits, slacks, leatherware, overcoats, outerwear, and rainwear from the time of their adoption through the present time. However, there was no evidence that the "CHIPS" family of trademarks have been used in commerce for shorts, swimsuits, robes, beachwear, shirts or hats.

12. Chips has a conservative policy with respect to trademarks and has adopted no new marks since 1971. While the styles of wearing apparel sold by plaintiff have changed over the years, its trademarks have remained the same.

13. Most of plaintiff's labels and advertisements bear the "CHIPS" family of trademarks in a vine and woodsmen motif and some depict the figure of a man chopping wood. However, there are some other labels and advertisements that feature these marks in ordinary print or block lettering. The dominant portion of each of plaintiff's trademarks is the name it carries and the dominant portion of most of these names is the word "CHIP."

14. The apparel manufactured by Chips under its trademarks is intended for boys between the approximate ages of 6 to 16 who wear sizes 8 to 20. Chips' garments are purchased both by these young people themselves and on their behalf by adults.

15. The apparel manufactured by Chips is not intended for, but is in fact worn by slim or small men.

16. Chips manufactures and sells wearing apparel for young men in sizes 36-44 under the trademark "ACADEMY CLOTHES." The labels on these garments do not contain any of plaintiff's "CHIPS" family of trademarks or plaintiff's trade name, "CHIPS 'N TWIGS, INC." However, plaintiff does advertise its Academy line of clothing simultaneously with clothing sold under its "CHIPS" family of trademarks and in conjunction with its trade name, "CHIPS 'N TWIGS, INC."

17. The term "junior" is often used in connection with wearing apparel for boys to indicate the smaller size range. Plaintiff manufactures and sells, inter alia, boys' junior sportswear.

18. Chips has used its trademark since 1944 to identify its products and to distinguish them from those made and sold by others.

19. Plaintiff has engaged in extensive advertising of its "CHIPS" garments, during the past five years spending more than $200,000. to promote this family of trademarks.

20. Plaintiff has advertised its "CHIPS" trademarked goods to the public in the New York Times Magazine, Mens Wear Magazine, and newspapers throughout the country.

21. Gilbert Saft, Chips' executive vice president, has appeared on televised fashion shows sponsored by plaintiff in major cities throughout the country. These fashion shows featured clothes manufactured by Chips and sold by local department stores in the area of the telecasts.

22. As part of an advertising campaign, an ad promoting plaintiff's "CHIPS" trademarked goods appeared in every Playbill for every Broadway and "off-Broadway" theatre in New York City during the month of March, 1973.

23. In connection with its motion picture, Goodby, Mr. Chips starring Pete O'Toole, MGM productions approached plaintiff and Hystron Fibers about engaging in a joint advertising campaign that would promote the movie and Hystron's fiber "Trevira" as used in Chips' clothing. Chips and Hystron accepted the proposal. As part of this campaign, Gimbels placed a double-page ad in a New York newspaper featuring O'Toole with a group of boys dressed in plaintiff's clothing. Gimbels also devoted two display windows at its New York store to advertising the movie and the clothing. Similar promotional activities were carried out by other stores throughout the country.

24. Plaintiff also has engaged in extensive advertising of its "CHIPS" family of trademarks to the trade.

25. For at least the past ten years, plaintiff has reserved the inside front cover of Teens and Boys Magazine to advertise its "CHIPS" trademarked goods. Teens and Boys Magazine is a trade publication directed to members of the apparel industry who are interested in the boys' and young men's market. The young men's market includes males of high school and college age.

26. Plaintiff also advertises in the trade publications Apparel Retailer, The Daily News Record, and the Teens and Boys Trade Directory.

27. In addition to this advertising, Chips has received without cost to it the benefit of advertising and promotion by others:

(a) Department stores frequently feature plaintiff's trade name and trademarks in advertisements they place because they consider Chips' name to be prestigious and wish their names to be associated with it.

(b) To help sell their products, fabric manufacturers whose goods are used by Chips have featured plaintiff's name in their advertising.

28. The items of wearing apparel currently sold under the "CHIPS" family of trademarks are highly-styled and exemplify the now fashionable "European" cut.

29. All items of wearing apparel manufactured by Chips and its predecessors have been and are made in the United States in conformity with high standards of quality and workmanship.

30. Chips is the only manufacturer of boys' tailored clothes which has a national brand name recognized by the consumer. Chips is also...