Field Enterprises Educational Corp. v. Grosset & Dunlap, Inc.

• Citation: 256 F. Supp. 382
• Decision Date: 14 July 1966
• Docket Number: No. 62 Civ. 835.,62 Civ. 835.
• Parties: FIELD ENTERPRISES EDUCATIONAL CORPORATION, Plaintiff, v. GROSSET & DUNLAP, INC. and Wonder Books, Inc., Defendants.
• Court: U.S. District Court — Southern District of New York

256 F. Supp. 382

FIELD ENTERPRISES EDUCATIONAL CORPORATION, Plaintiff, v. GROSSET & DUNLAP, INC. and Wonder Books, Inc., Defendants.

No. 62 Civ. 835.

United States District Court S. D. New York.

July 14, 1966.

COPYRIGHT MATERIAL OMITTED

Paul, Weiss, Rifkind, Wharton & Garrison, New York City, for plaintiff. Jay H. Topkis, Allan Blumstein, New York City, of counsel.

Weil, Gotshal & Manges, New York City, for defendants. Edward C. Wallace, Marshall C. Berger, New York City, of counsel.

OPINION

BONSAL, District Judge.

In this action, tried before the court, plaintiff seeks an injunction and accounting for unfair competition and for willful infringement of its registered trademark, "How and Why," and defendants counterclaim for judgment declaring plaintiff's trademark invalid.

Plaintiff is a Delaware corporation; defendant Grosset & Dunlap, Inc. (Grosset) is a New York corporation; and defendant Wonder Books is a division of Grosset. Plaintiff and defendants are engaged in publishing and selling children's books.

Plaintiff's Books

Beginning in 1931, L. J. Bullard Company (Bullard), plaintiff's predecessor in interest, published and sold a series of children's books under the title, "The How and Why Library." The series consisted initially of three books, subsequently expanded to five, and in 1955 to six by the addition of a dictionary. The series was sold only in sets and was priced at $19.95 for the three-volume set, $34.90 for the five-volume set, and $45.90 to $69.90 for the six-volume set.

Bullard distributed its books through salesmen to parents and schools, employing approximately 350 salesmen on a year-round basis and adding some 150 to 200 school teachers during the summer months. Bullard did not advertise, except to exhibit its series at national and local conventions of teachers' organizations and at state fairs, flower shows, boat shows, and the like. In addition, in had a booth at the Century of Progress Exposition in Chicago in 1933 and at the New York World's Fair in 1939, where the series was displayed.

Between 1947 and 1960, Bullard sold from 8,000 to 12,000 sets of "The How and Why Library" annually. Its total dollar sales for the five years ending in 1959 were $2,900,000., 75% of which were attributable to "The How and Why Library" series.

On July 25, 1960, plaintiff entered into a contract with Bullard for the purchase of its business and assets for $197,600., and the purchase was closed on August 1. In August 1960 plaintiff applied, pursuant to the Lanham Act, to the Commissioner of Patents for registration of the trademark, "How and Why," for a series of books, including a dictionary, and on June 13, 1961 the trademark was registered.

Plaintiff received from Bullard 6,500 sets of "The How and Why Library." Plaintiff sought to sell the sets at $29.95 each and mailed 400,000 direct solicitations for that purpose. Plaintiff sold 819 sets of the series between August 1, 1960 and September, 1962 (of which 200 were resold to Bullard to satisfy Bullard orders). The dollar volume of these sales was approximately $20,000.

Between September 1962 and October 1963, plaintiff revised "The How and Why Library" into a new 15-volume series of children's books to be published under the name, "Childcraft, The How and Why Library." On October 1, 1963 plaintiff undertook a pre-publication sale of the revised series, the official publication date being January 2, 1964. The series is a reference work sold only in sets at a price of $129.00 ($75.00 if sold to schools) and is directed primarily to pre-school and primary grade children. For older children through the high school level, plaintiff publishes its World Book Encyclopedia, the World Book Atlas, and the World Book Encyclopedia Dictionary.

Plaintiff distributes all its publications by direct sales to parents and schools and maintains a sales force of approximately 70,000, 60,000 of whom (primarily teachers) work on a part-time basis. Plaintiff's advertising and promotional expenditures run approximately $3,000,000 a year, of which approximately 30% is allocable to "Childcraft, The How and Why Library." Plaintiff attempts, whenever possible, to sell its several publications as a unit and offers substantial discounts to purchasers who take the World Book Encyclopedia as well as the "Childcraft" series.

In the fiscal year ending September 1964, plaintiff sold approximately 140,000 sets of "Childcraft, The How and Why Library," the dollar volume totalling approximately $11,000,000. In its 1965 fiscal year plaintiff sold approximately 150,000 sets with a dollar volume of $12,000,000.

Defendants' Books

In 1959, defendants were considering the publication of a popularly priced and mass distributed series of children's books to capitalize on the revival of interest among young readers in scientific subjects, which they believed had resulted from the launching of the first Sputnik by the Russians.

In March 1959, a meeting of the Editorial Board of Wonder Books was held to consider such a series. At the meeting, the format was discussed and it was agreed that the series should consist of a number of individual titles on specific subjects. Each book would consist of a continuous narrative in which questions on the subject thought to be most often asked by children would be posed and answered. Mr. Siwek, president of Wonder Books, suggested the name "How and Why" as a title for the series, which he believed described its purpose. The testimony indicates that none of those attending the meeting had heard of or seen the Bullard series or any other books using the title "How and Why."

In April and May, 1959, defendants caused a "title" search to be made on "How and Why." Their counsel advised them of at least three other series of children's books and of a number of individual titles using "How and Why," including Bullard's "The How and Why Library." Counsel appeared most concerned by the "How and Why Series" edited by Gerald Bullett, published by A. & C. Black, London, and distributed in the United States by Macmillan Company. Defendants decided to add the word "Wonder" and to publish their series under the title—"How and Why Wonder Books."

Defendants began publication of "How and Why Wonder Books" in March 1960. Wonder Books distributed 50-cent paper-back editions through mass distribution channels, such as supermarkets, news-stands, drug stores, and the like. Grosset distributed hard-cover editions at $1.00 through book stores and other traditional channels. The content of the Wonder Books and Grosset editions was the same, the only difference being the covers.

Shortly after distribution of "How and Why Wonder Books" commenced, defendants received a letter dated May 4, 1960 from Loren J. Bullard, Jr., president of Bullard, plaintiff's predecessor, which questioned the defendants' publication of a series entitled "How and Why." Counsel for defendants replied on May 6 that the series was actually called "How and Why Wonder Books." Mr. Bullard then wrote defendants' counsel on May 9, 1960 that:

"It is our opinion that if HOW AND WHY, WONDER BOOKS had been used, that there would be no problems or questions concerning it and we suggest that you contact your client and advise them that the HOW AND WHY, WONDER BOOKS is acceptable, but certainly not the HOW AND WHY BOOKS, the HOW AND WHY SERIES, etc."

On June 2 defendants' counsel wrote Bullard that the first six titles of the Grosset series had been distributed under the title "How and Why," but that future printings of those six titles and all new titles published by Grosset would be called the "How and Why Wonder Books." When the contract between plaintiff and Bullard was closed on August 1, 1960, plaintiff had been informed of this correspondence.

Each of the first six Grosset editions printed under the name "How and Why" had a printing of 49,500 copies and approximately 200 copies of each edition had been distributed before the mistake was discovered. Defendants say it would have been impossible to change the title on these editions and they made no attempt to recall the copies already distributed or to stop distribution of the copies on hand. All subsequent editions have been printed and distributed as "How and Why Wonder Books."

Since 1960, defendants' series (both Grosset and Wonder Books) has expanded to more than 60 separate titles in the fields of science, history, nature, and the like. The series was originally designed for the 7 to 12 age group, but later titles have been written for the 10 to 14 years age group. Defendants have expended substantial sums of money in advertising and promoting their "How and Why Wonder Books" and have sold more than 22,000,000 copies.

Preliminary Matters

Before considering the merits of plaintiff's claims of unfair competition and trademark infringement, two preliminary matters may be disposed of summarily. First, defendants contend that plaintiff's failure to distribute books under the title "How and Why" between September 1962 when they stopped selling Bullard's "How and Why" books and October 1963 when they brought out their new series constitutes an abandonment of its trademark.¹ Between September 1962 and October 1963 plaintiff was developing its own "Childcraft" series to incorporate material from the Bullard volumes and commenced pre-publication sale of "Childcraft, The How and Why Library" on October 1, 1963. The lull in plaintiff's activities and its difficulty in disposing of the Bullard inventory are relevant to a consideration of the strength of plaintiff's trademark, which is discussed later on in this opinion. But these facts do not establish an abandonment. See, 3 Callmann, Unfair Competition and Trademarks (2d ed. 1950), § 79 et seq. and cases cited therein.

The second preliminary contention advanced by the defendants arises by reason of the Bullard letter of May 9, 1960 hereinbefore referred to. Mr. Bullard, president of plaintiff's...