Classic Instruments, Inc. v. VDO-Argo Instruments, Inc.

• Decision Date: 22 May 1985
• Docket Number: VDO-ARGO
• Citation: 73 Or.App. 732,700 P.2d 677
• Parties: , 226 U.S.P.Q. 894 CLASSIC INSTRUMENTS, INC., an Oregon corporation, Appellant, v.INSTRUMENTS, INC., and VDO Instruments, Inc., Delaware corporations; Teleflex, Inc., a Delaware corporation; Classic Motor Carriages, Inc., a Florida corporation; Classic Motor Carriages Leasing Co., a Florida corporation; Respondents, and GGL Industries, a Florida corporation, Defendant. A8111-07222; CA A30774.
• Court: Oregon Court of Appeals

Page 677

700 P.2d 677

73 Or.App. 732, 226 U.S.P.Q. 894

CLASSIC INSTRUMENTS, INC., an Oregon corporation, Appellant, v. VDO-ARGO INSTRUMENTS, INC., and VDO Instruments, Inc Delaware corporations; Teleflex, Inc., a Delaware corporation; Classic Motor Carriages, Inc., a Florida corporation; Classic Motor Carriages Leasing Co., a Florida corporation; Respondents and GGL Industries, a Florida corporation, Defendant.

A8111-07222; CA A30774.

Court of Appeals of Oregon.

Argued and Submitted Nov. 21, 1984.

Decided May 22, 1985.

David J. Sweeney, Portland, argued the cause for appellant. With him on the briefs were Mark B. Weintraub, and Gilbertson, Brownstein, Rask, Sweeney, Kerr & Grim, Portland.

Dennis E. Stenzel, Portland, argued the cause for respondents VDO-Argo, Instruments, Inc., and VDO Instruments, Inc., Delaware corporations. With him on the brief was Chernoff, Vilhauer, McClung, Birdwell & Stenzel, Portland.

Robert B. Hopkins, Portland, argued the cause for respondent Teleflex, Inc., a Delaware corporation. With him on the brief were Randall L. Dunn, David N. Gouler, and Copeland, Landye, Bennett and Wolf, Portland.

Arthur L. Whinston, Portland, argued the cause for respondents Classic Motor Carriages, Inc., and Classic Motor Carriages Co., Florida corporations. With him on the brief was Klarquist, Sparkman, Campbell, Leigh & Whinston, Portland.

No appearance by respondent VDO Instruments, Inc.

Before GILLETTE, P.J., and VAN HOOMISSEN and YOUNG, JJ.

VAN HOOMISSEN, Judge.

Plaintiff sued defendants for trademark infringement and unfair competition, unlawful trade practices, trademark dilution, interference with a business relationship breach of contract and breach of fiduciary relationship by conversion of designs and art work. The trial court granted defendants motions for summary judgment, except as to plaintiff's claim against Teleflex for breach of contract. Plaintiff appeals. ¹ We affirm in part and reverse in part.

Plaintiff produces and markets automobile gauges to the "replicar" and "street rod" car markets. Hettick, plaintiff's president and owner, began designing automobile gauges in 1975 for a replica of a 1927 Bugatti that he had purchased from defendant Classic Motor Carriages, Inc.'s (CMC) predecessor. In 1977, Hettick solicited CMC to purchase his gauges for its replicars. He showed CMC several gauges that he had produced: speedometer, tachometer, fuel, ammeter, oil pressure, battery volt meter and cylinder head temperature. Hettick drew all the gauge face designs, but he did not manufacture the instrument bases or the bodies for the gauges. A manufacturer supplied the bases, and defendant Teleflex, Inc., supplied tachometers and speedometers. In September, 1977, plaintiff registered an assumed business name with the state of Oregon. In March, 1978, it began shipping gauges to CMC. Shipments continued until April, 1981.

In late 1980, CMC requested that defendant VDO-Argo Instruments (VDO), its former gauge supplier, bid for gauges similar to those then being supplied by plaintiff. VDO made about 1,000 gauges on an order from CMC. The primary differences in appearance between plaintiff's and VDO's gauges were the "Classic" and "VDO" logos on the face of VDO's gauges, rather than plaintiff's "Classic Instruments" logo. CMC later decided that the VDO gauges were unacceptable, and it purchased none. VDO independently marketed about 500 of its gauges.

In 1981, CMC requested that Teleflex manufacture gauges. In July, 1981, Teleflex began shipping gauges to CMC. Teleflex's gauges were similar in appearance to plaintiff's, except that the "Classic" logo appeared on the face of the Teleflex gauges and the Teleflex logo, a stylized "T," appeared on their backside.

Plaintiff publicized its gauges by advertising in magazines that cater to the replicar, street rod and specialty automotive markets. It also had booths at trade shows in various cities. After it terminated its relationship with plaintiff, CMC continued to use plaintiff's gauges in its replicar shows and displays nationwide, and it continued to display plaintiff's gauges in its catalogue.

Plaintiff's several assignments of error present essentially the same legal issue: whether plaintiff presented genuine issues of material fact precluding the granting of defendants' summary judgment motions. ORCP 47. We view the record in the light most favorable to plaintiff, the party opposing the motions, and draw all reasonable inferences from the affidavits and depositions against defendants, the moving parties, even as to those issues as to which plaintiff would have the burden of proof at trial. Seeborg v. General Motors Corporation, 284 Or. 695, 699, 588 P.2d 1100 (1978); Uihlein v. Albertson's Inc., 282 Or. 631, 634, 580 P.2d 1014 (1978).

Plaintiff's first assignment of error involves its claims for trademark infringement and unfair competition against all defendants. All defendants are alleged to have directly infringed plaintiff's trademark. As to plaintiff's claim for "intentionally passing off," CMC is alleged to have acted directly, VDO and Teleflex are alleged to have acted contributorily. ² Plaintiff's second assignment of error involves its claim for interference with a business relationship against VDO and Teleflex. Plaintiff's third assignment of error involves its claim for breach of fiduciary relationship against Teleflex.

I. UNFAIR COMPETITION; FEDERAL AND STATE TRADEMARK LAW

Plaintiff's first assignment of error raises the questions (1) whether a genuine issue of material fact exists that there is a protectible interest under federal or state law in the name "Classic Instruments", (2) whether plaintiff's claim for a protectible interest in its gauge designs under state common law is preempted by federal law, (3) whether plaintiff raised a genuine issue of material fact that defendants had "passed off" their gauges as plaintiff's gauges, and (4) whether a genuine issue of material fact exists that there is a protectible interest under federal law in the overall design of plaintiff's gauges. ³

The law of trademarks is a species of the genus "unfair competition." Milgrim Bros. v. Schlesinger, 168 Or. 476, 482, 123 P.2d 196 (1942); McCarthy, Trademarks and Unfair Competition, § 2:2 (2d ed. 1984) (hereinafter, McCarthy, Trademarks ). In Oregon, common law trademark cases typically have involved the alleged invasion of a protectible interest in a tradename. See e.g., Frostig v. Saga Enterprises, Inc., 272 Or. 565, 539 P.2d 154 (1975); Lift Truck v. Bourne, 235 Or. 446, 385 P.2d 735 (1963); Western Bank v. Western Bancorp., 47 Or.App. 191, 617 P.2d 258 (1980). ⁴ Trademarks and tradenames are protectible under common law on the same principles. McCarthy, Trademarks, supra, at § 4:4. In an action for trademark infringement, the question is whether customers or users of goods or services are likely to be confused about the source of the goods or services. Airwick Industries, Inc. v. Alpkem Corp., 384 F.Supp. 1027, 1030 (D.C. Or.1974). A determination of whether confusion between goods is likely generally involves consideration of several factors: the strength of the trademark, the similarity of the trademarks, marketing channels and methods, proximity of the goods, evidence of actual confusion and the degree of care likely to be exercised by a potential customer. AMF, Inc. v. Sleekcraft Boats, 599 F.2d 341, 348 (9th Cir.1979).

1. Is There A Protectible Interest Under Federal Or State Law In The Name "Classic Instruments"?

For purposes of analysis, terms that are alleged to be trademarks are regarded as falling on a continuum divided into four categories: generic, descriptive, suggestive, arbitrary and fanciful. A generic term refers to the basic nature of goods and, in the majority view, cannot be protected as a trademark. Abercrombie & Fitch Co. v. Hunting World, Inc., 537 F.2d 4, 9-11 (2nd Cir.1976); McCarthy, Trademarks, supra, § 12:1. A descriptive term portrays a characteristic of the article to which it refers. Keebler Co. v. Rovira Biscuit Corp., 624 F.2d 366, 374 n. 8 (1st Cir.1980). It qualifies for trademark protection only if it has acquired a secondary meaning:

" '[A] name, mark, or symbol by long and exclusive use and advertising by one person in the sale of his goods * * * may become so associated in the public mind with such goods * * * that it serves to identify them and distinguish them from the goods * * * of others. When such an association exists, the name, mark, or symbol is said to have acquired a "secondary meaning," in which the original user has a property right which equity will protect against unfair appropriation by a competitor.' * * *

" 'A trade-mark or a trade name may have acquired a secondary meaning in one locality but lack such a meaning in another.' " Shoppers Fair of Arkansas, Inc. v. Sanders Co., 328 F.2d 496, 499 (8th Cir.1964), quoting from Liberty Mutual Ins. Co. v. Liberty Ins. Co. of Texas, 185 F.Supp. 895, 903 (E.D.Ark.1960).

See Carter-Wallace, Inc. v. Proctor & Gamble Company, 434 F.2d 794, 802 (9th Cir.1970).

A suggestive term denotes secondarily a particular product type and requires imagination to picture the nature of the product. AMF, Inc. v. Sleekcraft Boats, supra, 599 F.2d at 349. An arbitrary term has no logical connection between the name and the product. Suggestive and arbitrary terms do not require proof of secondary meaning in order to be protectible as a trademark. Keebler Co. v. Rovira Biscuit Corp., supra, 624 F.2d at 374 n. 8; AMF, Inc. v. Sleekcraft Boats, supra, 599 F.2d at 349.

Defendants argue that summary judgment was proper on plaintiff's state common law and federal law claims for infringement of its name "Classic Instruments" because, as between plaintiff and CMC, CMC is a "senior user" of the term "Classic" and, therefore, cannot be precluded from its use. Alternatively, defendants VDO and Teleflex argue that the term "Classic" is...