Gordy v. Dunwody

• Decision Date: 24 February 1953
• Docket Number: No. 18105,18105
• Citation: 209 Ga. 627,74 S.E.2d 886
• Parties: , 98 U.S.P.Q. 200 GORDY v. DUNWODY et al.
• Court: Georgia Supreme Court

Page 886

74 S.E.2d 886

209 Ga. 627, 98 U.S.P.Q. 200

GORDY v.DUNWODY et al.

No. 18105.

Supreme Court of Georgia.

Feb. 24, 1953.

Rehearing Denied March 10, 1953.

Syllabus by the Court.

1.The use of the trade name 'Varsity Drive-in' is such an imitation of the trade name 'The Varsity' that a reasonably cautious person might confuse the two when they are engaged in identical kinds of business and employ the same methods of operation.

2.A trade-mark differs from a trade name in that the former identifies a product or its manufacturer but not the owner of the business selling it, while the latter primarily identifies the owner or operator of a business and may, but need not, identify the products handled.There being no allegations to show trade-mark infringement, all averments referring to trademark should be stricken from the petition.But there being no alternative pleadings, the allegations relating to trade name are not affected by this ruling as to the trade-mark.

3.While there is no direct market competition shown, yet encroachment by injury to good will and reputation is alleged and this is alleged to have been done for the purpose of deceiving the public; and, under Code, § 37-712, a case of unlawful imitation of a trade name is alleged.

4.The portions of the petition alleging that the petitioner contemplates future expansion that would be impaired by the operations of the defendants is too remote and speculative to constitute a basis for legal complaint, and the court did not err in sustaining the special demurrers thereto.

W. Frank Gordy, doing business as 'The Varsity,' and the plaintiff in error here, seeks injunctive relief against W. E. Dunwody, Jr., Kenneth W. Dunwody, and Mrs. Rose Jones Kingman, individually and as partners, doing business as 'Varsity Drivein,' for the alleged fraudulent simulation of his trade name and mark, 'The Varsity,' causing irreparable damage to the preestablished business and good will of the petitioner.The case comes to this court complaining of a judgment of the trial court, sustaining certain grounds of renewed general and special demurrers to the petitioner's amended petition.

The petition as amended alleges: The petitioner is the sole owner and operator under his trade name, 'The Varsity,' of eating establishments in Atlanta and Athens.The business has been in continuous operation since 1926, when the Atlanta establishment opened, and has been operated and publicized under the trade name, 'The Varsity,' since 1928; the Athens establishment opening and being in continuous operation since 1930.The Atlanta establishment feeds approximately 10,000 customers daily, over 8,000 of whom receive service in private automobiles in a parking area adjacent to the building, and about 20% being nonresidents of Atlanta, and includes a large number of students from the Georgia Institute of Technology with permanent homes in all parts of Georgia.The Athens establishment serves approximately 4,000 daily, about 20% being nonresidents of Athens, and includes large numbers of students from the University of Georgia whose permanent homes are located in all parts of Georgia and in other States.Over a period of years the name 'Varsity' has been publicized in connection with the petitioner's business through various types of advertising media to the population throughout Georgia.In 1937the petitioner registered his trade name affidavit in Fulton Superior Court, and in 1948 registered his trade name and trademark 'The Varsity,' with the Secretary of State of Georgia pursuant to Title 106,Chapter 1(Annotated Code).The petitioner has, at great expense, placed his trade name and mark upon glasses, spoons, sugar, matches, and cups used in the establishments.Through prompt and efficient service of delicious foods and beverages, none kept over 12 hours after preparation, he has built up the good will of the business until it occupies a unique and enviable position in this type of business and is recognized throughout Georgia under the trade name and mark, he being the first in Georgia to use the name 'Varsity' in any manner for the type of business operated by him, and the word when used in connection with eating establishments has become to the public synonymous with fine food and beverages, and he has acquired a property right in the name 'Varsity' and is entitled to its exclusive use.In 1951the petitioner first learned of the operation of the eating establishment in Macon, Georgia, operating under the name of 'Varsity Drive-in,' serving food and beverages to the general public in the same manner as the petitioner.The defendants purchased this business and have continued to advertise this establishment by large and conspicuous signs and in Macon newspapers and over the radio under the name of 'Varsity Drive-in.'Hundreds of thousands of people of Macon and middle Georgia have patronized the petitioner's establishments, and his business, trade name and mark are well known in that section.Many people have confused the defendants' business with that of the petitioner and some have complained that his Macon establishment is inferior to his Atlanta and Athens establishments, when in fact the petitioner is in no way connected with the ownership and operation of said business.Both defendants and their predecessors knew of the petitioner's business in Georgia, his trade name, the immense good will attached thereto, and have used and continue to use and advertise the word 'Varsity' in the name of that establishment for the purpose of benefiting from the reputation of the petitioner's goods and services which he has built up throughout many years and at great expense.The use of the word in their business is an imitation of the petitioner's business, trade name and mark and is likely to confuse and does confuse the public into believing that the petitioner is in some way connected with or is sponsor for their business, and the use of the name is with the intent to deceive and mislead the public.

The petitioner further alleges that he caters to college students in Athens and Atlanta; and Macon, where there are two colleges, is a likely area for the normal expansion of his business, and that, prior to learning of the defendant's establishment, he had under consideration the opening, under the trade name, an establishment in Macon similar to the others operated by him, but so long as the defendants use the name 'Varsity' in Macon he is deprived of the right to engage in business in Macon under his trade name, which he had, at great expense over the years, publicized and made known to the general public in Macon and throughout the State, and the appropriation by the defendants, if continued, will forestall the petitioner from extending his business to Macon and exclude him from an area where his business would normally expand.Immediately upon learning of the use by the defendants of the name 'Varsity', the petitioner then and ever since has continuously attempted to no avail to prevail upon them to desist from their use and infringement of his trade name and mark and their unfair competition thereby.The past, present, and future operation by the defendants is and will continue to be an infringement upon the petitioner's business, trade name and trade-mark, and has been, is and will be illegal and unfair competition which has worked, is working, and will work a fraud upon the petitioner and his business, causing him irreparable injury and damage for which he had no adequate remedy at law.The type of service offered and their methods of service are so similar to those of the petitioner that the general public is deceived and misled by the almost identical names into believing that the goods and services of the defendants are those of the petitioner and that he is connected with the defendants' business.

The prayers of the petition are for process, rule nisi; that the defendants jointly and severally, as partners and as individuals, be temporarily are permanently enjoined from advertising, displaying, or in any manner using the word 'Varsity' therein in conjunction, directly or indirectly, with the conduct and operation of their business establishment as described in the petition; and for all other relief as is just and proper.

The grounds of the general demurrer were that the petition sets out no cause of action against the defendant, that the petitioner is not entitled to the relief prayed, and that the allegations of the petition affirmatively show that there has been no unfair competition for which relief could be...