Continental Connector v. Continental Specialties

• Citation: 207 USPQ 60,492 F. Supp. 1088
• Decision Date: 21 November 1979
• Docket Number: Civ.No. N-75-35.
• Court: U.S. District Court — District of Connecticut
• Parties: CONTINENTAL CONNECTOR CORPORATION v. CONTINENTAL SPECIALTIES CORPORATION.

492 F. Supp. 1088

207 USPQ 60

CONTINENTAL CONNECTOR CORPORATION v. CONTINENTAL SPECIALTIES CORPORATION.

Civ.No. N-75-35.

United States District Court, D. Connecticut.

November 21, 1979.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Ira Grudberg, and David L. Belt, Jacobs, Jacobs & Grudberg, New Haven, Conn., Harold James, James & Franklin, New York City, for plaintiff.

Anthony P. DeLio, DeLio & Montgomery, New Haven, Conn., for defendant.

MEMORANDUM OF DECISION

NEWMAN, Circuit Judge.^*

This trademark infringement suit involves the familiar but difficult problem of determining whether infringement has occurred absent proof of actual confusion. Section 32 of the Lanham Act, 15 U.S.C. § 1114 (1976), on which the principal question in this suit is based, prohibits the use of any trademark "likely to cause confusion or mistake or to deceive purchasers." Proof of actual confusion often satisfies this test; in many cases it will obviate the need for additional proof and vitiate any defense based on the absence of such proof. But actual confusion is often difficult to demonstrate; so courts frequently resort to the more indirect indicia of infringement, such as the similarity of the trademarks, competition between products, defendant's bad faith, and plaintiff's potential for business expansion. See W. E. Bassett Co. v. Revlon, Inc., 435 F.2d 656, 661-62 (2d Cir. 1970); Kiki Undies Corp. v. Promenade Hosiery Mills, Inc., 411 F.2d 1097, 1099 (2d Cir. 1969), cert. dismissed, 396 U.S. 1054, 90 S.Ct. 707, 24 L.Ed.2d 698 (1970); I.T.S. Industria Tessuti Speciali v. Aerfab Corp., 280 F.Supp. 581, 586-88 (S.D.N.Y.1967). This case, which is one where no actual confusion had been proved, necessarily turns on such considerations.

Plaintiff, Continental Connector Corporation, and defendant, Continental Specialties Corporation, both manufacture products that are used to connect the wiring in electrical devices. Many of the products are plastic panels with a number of recessed holes or sockets into which electrical leads are placed. Wires or metal strips connect the sockets to form a circuit. The visual impression is not unlike a cribbage board.

The design and construction of electrical devices using these connectors involves three distinct stages. The first stage, generally known as "breadboarding," involves the design of a rough model of the circuitry; next, a prototype of the device capable of functioning in the same manner as the device itself is built; and finally, production of the actual device is undertaken. Plaintiff is engaged in the manufacture of connectors used primarily for prototype and production purposes, although a few of its products are usable in breadboarding. Defendant's products are used primarily in breadboarding, although some may be used for prototypes. Both types of connectors are sold to engineers, universities, and others engaged in the design and construction of electrical devices; in addition defendant's breadboarding devices are sold to hobbyists. The products are generally shipped directly to the customer on order, or marketed through a distributor.

The plaintiff entered the electrical connector industry in 1952 and has gradually expanded to its present size, with sales in excess of $10,000,000. Since its inception it has labelled the bulk of its products either with the word "Continental" (alone or in combination with "Connector" or "Connector Corporation" or with the initials "CCC"). In 1975, it registered two trademarks with the United States Patent and Trademark Office, the first consisting of the word "Continental" superimposed on a "CCC" design, and the second consisting of the same word superimposed on what appeared to be a circle design.¹ The following year, plaintiff registered the letters "CCC". It has since applied for an additional registration of the term "Continental," by itself. Plaintiff had expended relatively modest sums on advertising; the major part of these expenditures have been devoted to catalogues, catalogue sections, and listings in trade directories.

Defendant was created by its parent, North American Specialties Corporation, in 1973. It labels its products with the words "Continental Specialties," the initials "CSC," or both. Defendant's total sales are substantially smaller than the plaintiff's, but its advertising budget is somewhat larger.

The dispute between the two parties began in 1974, when defendant filed an application to register the trademark "Continental Specialties" with the Patent and Trademark Office. Plaintiff successfully opposed this registration and, later in that year, sent defendant a written demand to cease and desist from using either "Continental" or "CSC" as its trademarks. Several months later, plaintiff filed several applications of its own; three of these were granted, despite defendant's opposition, in 1975. This lawsuit was instituted by the plaintiff that same year. It alleges violation of § 32 of the Lanham Act, 15 U.S.C. § 1114 (1976), and the common law of unfair competition. The relief it requests is an injunction against defendant's use of "Continental" or "CSC," against its further application for registration of these marks, and against its opposition to plaintiff's registration of related marks; in addition, plaintiff requests that defendant be required to deliver to plaintiff all items bearing the infringing marks, to provide an accounting for all profits derived from sale of electrical connector products, and to pay attorney's fees and costs. Defendant denies plaintiff's allegations; it requests that this Court order the Patent and Trademark Office to limit plaintiff's trademark to the specific types of electrical connectors that it actually produces,² and further requests an award of attorney's fees and costs.

At trial, plaintiff was unable to prove that any actual confusion of its products and those of the defendant had occurred. Its evidence of direct competition was limited to two of these products, and was open to serious attack by defendant as far as these two products were concerned. Plaintiff did establish, however, that its products moved in the same channels of trade as the defendant's, and that the two types of products often represent successive steps in the development of a single device. It also established that defendant's principal officers had knowledge of its trademarks when they adopted "Continental Specialties" and "CSC" as its own trademarks.

On the basis of this evidence, plaintiff argues that defendant's trademarks constitute direct infringement. Even if such direct infringement is not found, it argues, the likelihood that it will "bridge the gap" and begin producing products that compete directly with the defendant's renders defendant's trademarks and infringement in plaintiff's natural area of expansion. Defendant responds that its marks are sufficiently distinguishable from the plaintiff's, and that plaintiff's mark is a weak one in any event. Even if a similarity in trademarks is found, however, defendant argues that its products are basically different from the plaintiff's, so that no infringement has occurred. It also argues that plaintiff can provide no evidence that it is likely to bridge the gap between these products.

Before proceeding to assess these contentions, it is necessary to state the basic principles that govern this area of law. The best evidence that can be presented to satisfy the Lanham Act standard that the defendant's trademark is "likely to cause confusion or mistake or deceive purchasers" is proof of actual confusion. While such proof is not essential, see Polaroid Corp. v. Polarad Electronics Corp., 287 F.2d 492, 495 (2d Cir.), cert. denied, 368 U.S. 820, 82 S.Ct. 36, 7 L.Ed.2d 25 (1961); Maternally Yours, Inc. v. Your Maternity Shop, Inc., 234 F.2d 538, 542 (2d Cir. 1956); Glamorene Products Corp. v. Boyle-Midway, Inc., 538 F.2d 894, 188 USPQ 145, 148 (S.D.N.Y.1975), its absence necessarily presents the plaintiff with the more difficult and complex task of satisfying the Lanham Act standard by indirect means. The next best evidence, and the best evidence of an indirect nature, is proof that the trademarks are confusingly similar,³ and that the defendant's goods are in direct competition with the plaintiff's. Such proof, while it does not demonstrate that actual confusion has occurred, makes the probability of such confusion quite substantial. If direct competition cannot be proved, the plaintiff must resort to the most problematical type of proof. It still must demonstrate confusing similarity of trademarks; that would seem essential where actual confusion is not shown. In place of proving direct competition, it must prove that its trademark is sufficiently well known, or that the goods it sells and the goods sold by defendant have a sufficiently close relationship, to establish a likelihood of confusion. Proof that the goods involved are closely related may be based on either the nature of the goods themselves or the structure of the market in which the plaintiff and defendant operate.

This ordering of preferred proofs, and the remedies that are provided when such proof is successfully presented, are grounded in the policies that underlie the Lanham Act. The basic purpose of the Act is to protect an established trademark user from being injured by another's use of the same trademark; the types of injuries involved are loss of patronage, loss of reputation, and limitation on business expansion. Federal Telephone & Radio Corp. v. Federal Television Corp., 180 F.2d 250, 251 (2d Cir. 1950); S. C. Johnson & Son v. Johnson, 116 F.2d 427 (2d Cir. 1940). Proof of actual confusion virtually ensures that all three types of injuries have occurred.⁴ Proof that plaintiff's and defendant's trademarks are confusingly similar, and that the two companies are in direct competition, raises a serious possibility of all three types of harm. Thus, either type of proof...