Food Fair Stores v. Food Fair

• Citation: 83 F. Supp. 445
• Decision Date: 01 October 1948
• Docket Number: Civil Action No. 7375.
• Parties: FOOD FAIR STORES, Inc. v. FOOD FAIR, Inc.
• Court: U.S. District Court — District of Massachusetts

83 F. Supp. 445

FOOD FAIR STORES, Inc. v. FOOD FAIR, Inc.

Civil Action No. 7375.

United States District Court D. Massachusetts.

October 1, 1948.

Arthur L. Sherin, of Boston, Mass., and Stein & Stein, of Union City, N. J., for plaintiff.

Maurice Tobey, of Boston, Mass., for defendant.

WYZANSKI, District Judge.

Plaintiff seeks relief under general principles of tort law and under Mass.St.1947, c. 307, Mass.G.L.(Ter.Ed.) c. 110, § 7A, against defendant's alleged infringement of plaintiff's unregistered trade name, Food Fair.

Plaintiff is a Pennsylvania corporation. It operates a chain of super-markets which sell at retail groceries, provisions, fish, meats, fruits, vegetables and other products customarily sold in food stores. Originally it was incorporated under the name, "Union Premier Food Store, Inc.," and did much of its business through subsidiaries. Thus it organized Food Fair Stores of Maryland to operate super-markets in Maryland commencing in 1935; The Food Fair, Inc., of Pennsylvania to operate super-markets in Pennsylvania commencing in 1938; and Food Fair, Inc., to operate super-markets in Maryland and New Jersey commencing in 1938. In 1938 the first and third subsidiaries merged. In 1942 all plaintiff's subsidiaries merged with plaintiff which then changed its name to Food Fair Stores, Inc.

Thereafter plaintiff added stores not only in Maryland, New Jersey and Pennsylvania but also in Delaware, Florida, New York and West Virginia. This has been a constant growth. Now the super-markets operated by plaintiff number 103 and form the eighth largest retail food chain in the country. At present the annual rate of gross income approaches $150,000,000 and of net income approaches $2,700,000.

As far back as 1935 each of the super-markets operated in Maryland by plaintiff's local subsidiary was called Food Fair. The same name was used from the outset by most of the super-markets operated by plaintiff's subsidiaries or by plaintiff. However, there were some exceptions. In Florida some of the stores were originally called Food Lane, although of those, two changed their names to Food Fair after this suit was brought.

Before plaintiff operated any of its stores the words, "Food Fair" were commonly used as descriptive of casual markets conducted by a community, by an association of sellers or by a church group. Probably prior to 1935, as well as afterwards, they had also been used as a trade name by some concerns operating retail stores in various parts of the country. See Ex. 15 and Ex. M

Since 1935 plaintiff has expended in the states where it operates more than $4,000,000 in advertising its business and stores almost always, except in Florida, under the name Food Fair. These advertisements have, however, all been directed principally at prospective local customers. The advertising media have included newspapers, throw-aways, circulars, street-car cards, trade journals and local radio programs.

In plaintiff's stores many of the items of food sold either are unlabeled or bear the labels of nationally known producers or distributors. However, a substantial number of bottled and canned goods bear labels stating that the merchandise within has been packed for or is being distributed by Food Fair.

Neither in external nor in internal appearance is there uniformity among all the super-markets operated by plaintiff. There are, however, certain characteristics which repeat themselves in the preponderance of plaintiff's stores as, for example, the plain Egyptian lettering used for the exterior sign on which the name Food Fair appears. Other characteristics of plaintiff's stores which could be mentioned, such as the design of the directional signs in the store, the placing of the inscription Food Fair in terrazzo in the vestibule and the color scheme are somewhat different from what could be found in most modern super-markets.

In April, 1946, one of plaintiff's subsidiaries, Food Fair Stores Corporation, qualified to do business as a foreign corporation in Massachusetts. But neither plaintiff nor its subsidiaries have opened a store or made any sales in this Commonwealth. Negotiations for the acquisition of Massachusetts stores which have begun several times in recent years have proved abortive. But expansion to Massachusetts remains in active contemplation by officers of plaintiff.

The name Food Fair is associated with plaintiff and plaintiff's stores by four groups of persons in Massachusetts.

First, through the listing of the stock of plaintiff's company on the New York Stock Exchange and the daily reports in Massachusetts newspapers of the quotations of that stock and through transactions in which Massachusetts persons have bought and sold that stock, the name is known to and identified with plaintiff by investors and others in financial circles.

Second, through articles and comments in trade journals the name is known to and identified with plaintiff by most of those who operate super-markets, chain grocery stores and like retail outlets.

Third, through purchases of fish and other supplies in this region the name is known to and identified with plaintiff by wholesale suppliers of many types of foods.

Fourth, the name is also known to and identified with plaintiff by some average persons who are prospective Massachusetts customers of retail food stores. This identification would be made by many average persons who had lived in or travelled frequently through the Atlantic states. The exact percentage of average customers who would fall in this category is difficult to estimate. But, as defendant's own sampling study shows, 3 out of 76 average customers in Brookline, without being prompted, recalled having seen the name Food Fair and pointed to its use by a store which in fact belonged to plaintiff's chain. From the readiness of the customers' response, from the obvious chain store appearance of each of plaintiff's stores and from the failure of defendant to pursue the inquiry, I infer that these customers regarded Food Fair not only as a name already in use, but as a name in use by a chain, and that they would regard any modern super-market bearing that name as being part of the chain.

So far as it is a question of fact, it follows that plaintiff prior to 1947 had and now has a trade name Food Fair cf. Restatement, Torts, § 716 used in such a manner that in Massachusetts prospective investors, retailers, wholesalers and a minority of average customers are likely to regard it as the name of and the means of identifying plaintiff's super-markets Cf. Restatement, Torts, § 727.

Defendant is a Massachusetts corporation which was organized in April, 1947, chiefly by Benjamin B. Rodman. He is now and always has been its chief executive officer, a director and the person principally in charge of corporate operations and policy. Prior to 1947 Rodman had been a market man for a score of years. In that way he first learned of plaintiff. Ten years ago he considered opening his own super-market. At that time one of his consultants suggested a list of possible names. All these were names of existing super-markets or super-market chains. On this list, among other names, were Food Fair and Food Center.

In 1944 or 1945 Rodman engaged an architect to draw plans for a super-market. At that time the proposed name was to be Food Center. In 1947 Rodman, having in mind the list suggested a decade before by the consultant, decided to organize a Massachusetts corporation by the name of Food Fair, Inc., and to have that corporation operate a super-market at a site which he owned on Harvard Street, Brookline, Massachusetts. The plans for the super-market had been substantially completed prior to April, 1947. In March, 1947, Mr. Rodman's lawyer, Mr. Berger, made application to the Massachusetts Commissioner of Corporations for permission for Mr. Rodman and others to organize defendant. The Commissioner informed Mr. Berger that there was another corporation of a similar name and that (while no notice would be sent) that corporation or any other party believing itself affected would have thirty days to object to the application filed by Mr. Berger. No such objection was in fact made, and indeed there is no evidence that plaintiff knew of the application before it was acted upon.

After defendant corporation was organized, Rodman continued discussions with his architect Wexler. Together they went in the early summer of 1947 to visit various super-markets outside of New England. One of the markets they visited was plaintiff's Food Fair at 5220 City Line Avenue, Philadelphia. The two men were there for half an hour. And on leaving they discussed some features of the layout of the store and its internal and external appearance. But the visit and the discussion did not result in any significant change of the plans theretofore made for the Harvard Street store.

In December, 1947, defendant began to operate the store on Harvard Street of which complaint is made. Defendant called the store Food Fair. It bore a sign in plain large Egyptian lettering similar to that used in the newer stores of plaintiff. On the outside and inside the store resembled most of the super-markets built in recent years. But the resemblance (except in the color of the paint on the interior) was not strikingly closer to plaintiff's stores than to the stores of many other companies.

Virtually none of defendant's merchandise indicated that it was produced by, packed for or specially prepared for defendant. However, of the more than 3500 different items offered for sale a substantial number did bear tags which showed both the name Food Fair and the price of the merchandise. When these goods were delivered to customers, the defendant's store frequently used a truck which bore the lettering Food Fair.

Defendant, so far as appears, enjoys an excellent reputation with its customers and suppliers. Its credit standing with its suppliers is excellent.

While some...