Goebel Brewing Co. v. Esslingers, Inc.
| Decision Date | 23 March 1953 |
| Citation | 373 Pa. 334,95 A.2d 523,97 U.S.P.Q. 491 |
| Parties | GOEBEL BREWING CO. v. ESSLINGERS, Inc. |
| Court | Pennsylvania Supreme Court |
Action by a brewing company to enjoin defendant from imitating or using the trade-mark, trade-name, advertisements, bottle style or dress of plaintiff or any near similarity thereto upon or in connection with beer or with manufacture or sale thereof within plaintiff's sales area, and to enjoin defendant from using the name ‘ Goblet’ upon or in connection with sale of beer within plaintiff's sales area, and for other relief. The Court of Common Pleas No. 4 of Philadelphia County at No. 1546 September Term, 1951, In Equity, entered a decree adverse to the plaintiff and the plaintiff appealed. The Supreme Court, Jones, J., No. 86 January Term, 1953, held that the name ‘ Goblet’ which defendant brewing company called its ‘ steinie’ bottles of beer was so similar to the name ‘ Goebel’ that it would cause confusion in public mind and that use of the name ‘ Goblet’ was unfair competition as to plaintiff whose use of name ‘ Goebel’ preceded defendant's use of name ‘ Goblet’, regardless of whether defendant purposely adopted the name ‘ Goblet’ to confuse plaintiff's trade.
Decree reversed.
Goebels.
C. Russell Phillips, Philadelphia, Harry Allen Detroit, Mich., and Montgomery, McCracken, Walker & Rhoads Philadelphia, for appellant.
Lemuel B. Schofield and W. Bradley Ward, Philadelphia, for appellee.
Before STERN, C. J., and JONES, BELL, CHIDSEY and ARNOLD, JJ.
The plaintiff sued to enjoin the defendant from ‘ imitating or using the trademark, trade name, advertisements, bottle style or dress of the Plaintiff or any near similarity thereto, upon or in connection with beer or with the manufacture or sale thereof’ in Pennsylvania or elsewhere within the plaintiff's sales area and, more specifically, to enjoin the defendant from ‘ using the name ‘ Goblet’ upon or in connection with the sale of beer within the area aforesaid.' The bill also prayed for an accounting for profits to the defendant and damages to the plaintiff flowing from the defendant's allegedly unfair competition. The defendant answered to the merits. After a hearing, the learned chancellor dismissed the bill of complaint at the plaintiff's costs on the basis of an adjudication and decree nisi to which the plaintiff filed exceptions. The court en banc dismissed the exceptions and entered the decree nisi as the final decree. This appeal by the plaintiff followed. The material facts are not in dispute. The differences lie in the inferences to be drawn from then
The plaintiff, Goebel Brewing Company, is a Michigan corporation engaged in the manufacture and sale of beer and having its place of business and principal plants in that State. It began selling its product in Philadelphia in 1934. By 1939, its sales of beer were nation-wide. At that time, it commenced selling its beer in small ‘ steinie’ type bottles of seven-ounce capacity in Philadelphia and elsewhere. For the twelve-year period preceding the institution of the suit, the plaintiff's sales of its seven-ounce bottles of beer in Pennsylvania aggregated, in round figures, about 6,000,000 cases of twenty-four bottles each, of which sales ninety-five per cent were in Philadelphia. Throughout the years, Goebel Company has changed its labels, but it has always used the name ‘ Goebel’ thereon no matter what the form of the label happened to be.
The defendant, Esslinger, Inc., is a Pennsylvania corporation having its place of business and plant in Philadelphia. It, too, is engaged in the manufacture and sale of beer which it has brewed and sold since 1868. In 1939, Esslinger, Inc., also began selling beer in seven-ounce bottles in Philadelphia and vicinity. It sold beer so bottled under its trade name ‘ Esslinger’ as the rest of its beer was, and had been, sold in Philadelphia regardless of packaging. The Esslinger seven-ounce bottles were not ‘ steinies'; they were merely a smaller type of the conventionally shaped export bottles. The sales of the seven-ounce bottles labeled ‘ Esslinger’ were not good, possibly due to the fact that eight ounces of Esslinger beer from draught cost the customer five cents less than the seven-ounce bottle of the same beer, i. e., five cents more cost for an ounce less of beer. The costs of production were high because the export shaped seven-ounce bottle did not fit in the defendant's bottling machines thus requiring a change-over for the filling of such bottles. Breakage also was high and much time was consumed daily in effecting the necessary bottling change-over. As a result, the defendant, in August 1950, adopted the seven-ounce ‘ steinie’ shaped bottle, professedly, in order to reduce the breakage and to eliminate the necessity for a change-over in the bottling machines. At the same time, the defendant decided upon a different name for its new seven-ounce bottle and content so as to avoid the possibility of self-competition. The beer remained the same however. The name the defendant chose for the new package was ‘ goblet’ . An officer of the company, who had participated in the selection of the new name, testified that he knew that seven-ounce ‘ steinie’ bottles bearing the trade name ‘ Goebel’ were widely sold in Philadelphia but that, in selecting ‘ Goblet’, he had given no thought to Goebel's market. He further stated that the inspiration for ‘ Goblet’ as a name for a beer had come from souvenir goblets bearing the trade name ‘ Esslinger’ which the defendant had previously distributed to dealers in the Carolinas as a part of a sales campaign there.
The plaintiff, by letter of its attorneys dated December 15, 1950, protested the defendant's use of the name ‘ Goblet’ to identify its beer in ‘ steinie’ bottles. The exact time the defendant started marketing ‘ Goblet’ is not disclosed by the record, but it was some time between its decision in August 1950 to change to ‘ steinie’ bottles and adopt the name ‘ Goblet’ and the first advertisements of the product, so bottled and labelled, in April of 1951. Part of the defendant's advertising campaign was aimed at retailers and stressed the greater profits to be made by their sale of ‘ Goblet’ beer. Due to a differential in transportation costs in favor of Esslinger, the retailer in Philadelphia could make a cent more on the sale of a ‘ Goblet’ than a ‘ Goebel’ . During the summer and early autumn of 1951 the plaintiff, by extensive ‘ shopping around’, discovered considerable ‘ passing off’ by bartenders and tavern keepers of were frequently filled with ‘ Goblet’ without excuse or explanation by the server. The experience of six persons whom the plaintiff employed to go to taverns and ask for ‘ Goebel’ was that, in about half the instances, they were given ‘ Goblet’ without comment; and, not once, was a beer other than ‘ Goblet’ substituted when a ‘ Goebel’ was ordered.
The plaintiff, concluding on the basis of these facts that it was being subjected to unfair competition by the defendant, brought this suit in equity on the theory that ‘ Goblet’ is so similar to ‘ Goebel’, especially in sound and appearance, as to produce confusion and to make available to unscrupulous persons the means of exploiting the deception to the plaintiff's injury. The chancellor rejected the contention. In his nineteenth finding of fact he states that ‘ The name 'Goblet’ is not deceptively similar to the name 'Goebel' either in appearance, sound or meaning.' His third conclusion of law (really an ultimate conclusion of fact) found that ‘ It is not reasonably likely that the average purchaser will be confused, misled or deceived by any similarity between the two names.’
The development of the law of unfair competition in America was in large measure, the work of our federal courts during the period when they exercised the power, on the authority of Swift v. Tyson, 1842, 16 Pet. 1, 10 L.Ed. 865, to declare the law applicable to commercial transactions independently of local decision. See Nims, Unfair Competition and Trade Marks, 4th Ed., Vol. 1, pp. 25-26. It is local law, however, that governs questions of common law liability for unfair competition as well as for infringement of trade names. See Pecheur Lozenge Co., Inc., v. National Candy Co., Inc., 315 U.S. 666, 62 S.Ct. 853, 86 L.Ed. 1103; Anheuser-Busch, Inc., v. DuBois Brewing Co., 3 Cir., 175 F.2d 370; Campbell Soup Co. v. Armour & Co., 3 Cir., 175 F.2d 795. Since the overruling of Swift v. Tyson by Erie Railroad Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188, in 1938, the applicable law in federal courts in controversies such as the present is no longer independently declared but is the lex loci delicti . As a result of the situation that had grown up over almost a century under Swift v. Tyson, the law of unfair competition, as it existed in the various states at the time of the advent of the Tompkins case, was more or less outmoded or incomplete. See National Fruit Products Co., Inc., v. Dwinell- Wright Co., D.C.D.Mass.1942, 47 F.Supp. 499, 503-504 Pennsylvania, as well as New York and Massachusetts, happened to have a relatively sizeable and up-to-date body of substantive law on the subject, but it is small by comparison with the extensive jurisprudence in such connection to be found in the federal reports; and, as many of the decisions are peculiar to their separate factual bases, they furnish illustrations of the law as applied rather than principles. Consequently, their effect as pertinent authority is limited. A further source of authority lies in the federal cases which have originated subsequent to the Tompkins decision and which presumptively follow...
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