Gray v. Eskimo Pie Corporation

• Court: U.S. District Court — District of Delaware
• Citation: Gray v. Eskimo Pie Corporation, 244 F.Supp. 785 (D. Del. 1965)
• Decision Date: 12 July 1965
• Docket Number: Civ. A. No. 2266.
• Parties: Floyd L. GRAY, Gordon Gray, Edward Gray, a Partnership Doing Business as Snonuts Company, Plaintiffs, v. ESKIMO PIE CORPORATION, Defendant.

244 F. Supp. 785

Floyd L. GRAY, Gordon Gray, Edward Gray, a Partnership Doing Business as Snonuts Company, Plaintiffs, v. ESKIMO PIE CORPORATION, Defendant.

Civ. A. No. 2266.

United States District Court D. Delaware.

July 12, 1965.

Robert W. Wakefield, Walker, Miller & Wakefield, and Carl W. Mortenson, Wilmington, Del., for plaintiffs.

Richard J. Abrams, Richards, Layton & Finger, Wilmington, Del., Francis C. Browne and Richard G. Kline, Browne, Schuyler & Beveridge, Washington, D. C., of counsel, for defendant.

STEEL, District Judge.

Plaintiffs have sued defendant for infringement of plaintiffs' federally registered trademark "SNONUTS", their federally registered copyright, and for unfair competition.

Although the pretrial order of January 18, 1965 and the supplemental pretrial order dated January 15, 1965 state that plaintiffs likewise seek to recover for breach of an express and/or an implied contract which they had with defendant, it has been stipulated that these theories of recovery be dismissed with prejudice.¹

The issue of damages or other relief was reserved until the issue of liability is determined.

JURISDICTION

When the action was filed, Floyd L., Gordon, and Edward Gray were partners doing business under the name of "SNONUTS" Company. Since the action was begun, Edward, the father of the two other plaintiffs, has died. Floyd L. is and was a resident and citizen of Idaho. Gordon is and was a resident and citizen of California, as was Edward, prior to his death. The defendant, Eskimo Pie Corporation, is a Delaware Corporation having its principal place of business in Richmond, Virginia.

Jurisdiction of the unfair competition claim exists under the diversity of citizenship provisions of 28 U.S.C. § 1332 (a) (1), since the amount in controversy, exclusive of interest and costs, exceeds $10,000. Jurisdiction over the trademark and copyright infringement claims exists under 28 U.S.C. § 1338.

PRELIMINARY STATEMENT

During the 1940s, Edward Gray conceived the idea of an ice cream product, circular in configuration, and having a hole in the middle, (hereinafter sometimes referred to as an "ice cream donut"). In early 1955 he and the other two plaintiffs informally formed the present partnership to commercially develop and exploit the product under the name of "SNONUTS".

Over the years plaintiffs have manufactured several variations of the product. All had one thing in common — the hole in the middle. One variety had cookies on two sides of the ice cream, another on one side only, and a third had no cookies and was chocolate covered. This latter variety was produced by plaintiffs no later than early 1955.

Defendant is in the business of granting licenses or franchises to dairy manufacturing companies under which they manufacture a complete line of frozen confections under the trademark "Eskimo". In connection with these grants defendant sells equipment for use in the manufacture of the confections and also flavoring ingredients for the confections.

Prior to April 12, 1956 when plaintiffs first wrote to defendant about their idea of "SNONUTS", defendant had no comparable product on the market. Plaintiffs claim that it was only after they had made a complete disclosure to defendant in July 1956 of their idea of the product and name that defendant in 1960 introduced for manufacture and sale by its licensees the "ESKIMO Do-nut", which was a product similar in appearance to plaintiffs' "SNONUTS".

Plaintiffs claim that defendant appropriated from them the idea of the ice cream donut, and infringed their federally registered trademark and copyright. They also assert that defendant induced them to refrain from seeking the aid of other companies in developing equipment for the mass production of "SNONUTS" and in obtaining national distribution for "SNONUTS" by large dairy companies, during which time defendant was preparing to (and eventually did) enter the market with its "ESKIMO Do-nut". This was accomplished, plaintiffs say, by defendant pretending over a long period of time to be interested in doing business with plaintiffs, when in fact defendant had no thought of doing so. These tactics of deception, plaintiffs contend, constitute unfair competition in the nature of a fraud.

It is also claimed that defendant has competed with plaintiffs unfairly by "coercing" distributors of plaintiffs' "SNONUTS" to abandon that product.

TRADEMARK INFRINGEMENT — UNFAIR COMPETITION

Pursuant to an application filed on June 22, 1955, plaintiffs procured the registration on March 5, 1957, of the trademark "SNONUTS" on the principal register in the United States Patent Office as trademark No. 642,400. As trademarked, the name is written in capital letters in a slightly wavy manner, and each letter suggests that it has been formed of snow, with either ice or snow dripping from various parts thereof, and from the top hat of a snowman whose head peers over the top of the letter O. The registration covers "FROZEN CONFECTIONS — NAMELY, ICE CREAM SHAPED LIKE A DOUGHNUT AND DISPOSED BETWEEN TWO EDIBLE WAFERS — in CLASS 46." Defendant admits that plaintiffs have been the owners of this validly registered federal trademark since March 5, 1957.

Plaintiffs have used their trademark "SNONUTS" on labels in combination with such expressions as "The Ice Cream with the Hole" or "Tasty Delightful Deep Freeze Dairy Donuts", or both.

Pursuant to an application filed on December 27, 1957, defendant procured the registration on August 19, 1958, of trademark No. 666,130 for the word "DONUT" on the supplemental register of the United States Patent Office. The mark was for use in connection with "CHOCOLATE COATED ICE CREAM, in CLASS 46".

Defendant has never used the phrases "SNONUTS — The Ice Cream with the Hole" or "SNONUTS — The Ice Cream DONUT", or "SNONUTS" alone or in connection with any other expression. Nor is there evidence that any of its licensees have done so.

Defendant's registered mark "DONUT" is not a copy or colorable imitation of plaintiffs' registered mark "SNONUTS". Defendant has always prominently displayed its trademark "ESKIMO" on commercial labels bearing the expression "Ice Milk Do-nut" or "Do-nut". There is no proof that defendant has used its mark in such way as to cause confusion or mistake among buyers as to the source of its product, or to deceive buyers into purchasing its product when they desired the product of plaintiffs or anyone else. The likelihood of such occurrences is refuted by a comparison of the various materials on which plaintiffs' mark is used and those on which defendant's mark appears.

Plaintiffs argue that they are the owners of the common law trademark "DONUT", and that defendant has infringed it. This argument goes beyond the issues specified in the pretrial orders. See pretrial order dated January 18, 1965, pars. 1 and 4 (infringement of "SNONUTS" alone specified as a trademark infringement issue); par. 8 (proof of plaintiffs' trademark limited to "SNONUTS"). See also Supplemental Pretrial Order dated January 15, 1965, par. I, B.2 (specifies "federal laws" applicable to plaintiffs' claim of trademark infringement).

Furthermore, plaintiffs have agreed to defendant's proposed finding of fact 13 which states:

"* * * Plaintiff never used DONUTS OR DO-NUTS in the manner of a trademark * * *".

Since plaintiffs have not used "DONUTS" or "DO-NUTS" as a trademark, they have no claim to it as such.

"DO-NUT" has been registered as a trademark of defendant on the supplemental register in the United States Patent Office since August 19, 1958.² As previously stated, defendant has always prominently displayed its trademark "ESKIMO" on commercial labels bearing the expressions "Ice Milk Do-nut" or "Do-nut". There is virtually no possibility that confusion could arise as to the source of defendant's "DO-NUT" in the minds of the public or that defendant could use the term deceptively. Certainly there is no proof of such occurrences.

Defendant has not infringed plaintiffs' registered trademark "SNONUTS".

Plaintiffs have no common law trademark for "DONUT", and if they did have, it was not infringed by defendant. Defendant has not been guilty of competing unfairly with plaintiffs in its use of "DO-NUT" in its labelling or advertising practices.

COPYRIGHT INFRINGEMENT

In October 1956 the United States Copyright Office issued to plaintiffs a Certificate of Registration #KK 119755 of a claim to a copyright with respect to the artistic and printed matter appearing upon a paper bag, PX 9B, in which plaintiffs proposed to sell SNONUTS. It is plaintiffs' claim that the wrappers for defendant's ESKIMO DONUTS, PX 11 and 12, the cartons in which the ESKIMO DONUTS were shipped, PX 13, and defendant's advertisements of the product, PX 14, pp. 14-15, infringed plaintiffs' copyright.

Plaintiff has no valid copyright on PX 9B. While the light and deep blue rectangle and material therein contained which appears on the bag, PX 9B, constitute an artistic work which is subject to copyrighting, the other portions of the printed material on the bag do not. This other material simply describes the weight and content of SNONUTS, names plaintiffs as the manufacturer-distributor thereof, states that SNONUTS is plaintiffs' trademark, and describes SNONUTS as "The Ice Cream with the Hole". There is nothing unusual about the lettering which is used. Matters such as these — slogans, names, listing of ingredients or contents, are not subject to copyright. 37 C.F.R. § 202.1(a); Kitchens of Sara Lee, Inc. v. Nifty Foods Corp., 266 F.2d 541, 544 (2nd Cir. 1959).

The light and deep blue rectangle, and material in it, which alone was subject to copyrighting, was used by plaintiffs in the sale of their products in interstate commerce in 1955, both as an insert in a bag and as a label on a carton containing the product. Although only a small quantity of "SNONUTS" was involved, it was for public sale. This constituted...