Grocers Baking Co. v. Sigler

• Decision Date: 05 December 1942
• Docket Number: No. 9133.,9133.
• Citation: 132 F.2d 498
• Parties: GROCERS BAKING CO. v. SIGLER.
• Court: U.S. Court of Appeals — Sixth Circuit

132 F.2d 498 (1942)

GROCERS BAKING CO. v. SIGLER.

No. 9133.

Circuit Court of Appeals, Sixth Circuit.

December 5, 1942.

A. C. Van Winkle, of Louisville, Ky. (A. D. Kirk and Cary, Miller & Kirk, all of Owensboro, Ky., and Van Winkle & Becker, of Louisville, Ky., on the brief), for appellant.

Thos. E. Sandidge, of Owensboro, Ky. (Dewitt Chappell, of Evansville, Ind., on the brief), for appellee.

Before ALLEN, HAMILTON and MARTIN, Circuit Judges.

ALLEN, Circuit Judge.

The District Court dismissed an action for injunction instituted by appellant on the ground of infringement of trade-mark and unfair competition. Appellant, a baking company which manufactures and sells bread and similar products and is the owner of a registered trade-mark containing the words "Honey-Krust," charged that appellee had sold in Henderson County, Kentucky, bread in a package with a label containing the words "Hon-E-Krust," which constituted an infringement of its trade-mark. Appellant also charged that the label of the bread sold by appellee constituted a colorable imitation of appellant's trade-mark, which enabled the appellee unfairly to compete with appellant and to palm off on the public bread sold by the appellee as the product of the appellant.

Appellee is an individual distributor who since 1937 has bought bread manufactured and packaged by the Hi-Class Baking Company, Inc., in Evansville, Indiana, transported it in his own truck to Henderson, Kentucky, and distributed it in the original packages at private houses, serving no grocery stores. The principal features of the wrapper used by appellant for its bread are an oval-shaped figure about five inches in length having two symmetrical indentations at each end and the words "Honey-Krust" printed inside the figure in large capital letters. The wrapper on the bread sold by appellee has the words "Hon-E-Krust" printed within a figure of substantially identical shape and proportions and of substantially the same size as appellant's. The "Hon-E-Krust" wrapper has been used by the Hi-Class Baking Company since about 1932. Appellant first sold its "Honey-Krust" bread to grocers in Henderson in 1939. Learning of appellee's bread-route, appellant notified appellee that he was infringing appellant's trade-mark by using the "Hon-E-Krust" package. Upon his refusal to discontinue selling, this suit was instituted. The defense of the suit is conducted and financed by the Hi-Class Baking Company.

We think the District Court correctly decided that the trade-mark was not infringed. Appellant's design contains the words "Honey-Krust," but in each of its applications for registration of trade-mark, filed in 1922, 1929 and 1935 respectively, appellant specifically waived claim to the exclusive use of the words "Honey-Krust" apart from the design as shown, although waiving no common-law right to the use of the words, and making an express reservation to that effect in the 1929 and 1935 applications. The oval figure was adopted as an essential part of appellant's trade-mark in its application for registration made in 1929, and was also contained in a similar application made in 1935. Appellant's waiver presumably recognizes the fact that the name "Honey-Krust" is a descriptive term, and hence is not a proper subject for registration as a trade-mark. The term has been used as a trade name for bread in other parts of the country for a number of years. The words spelled exactly as appellant spells them have been used by the Southern Baking Company of Bluefield, West Virginia. A company at Goshen, Indiana, sells bread under the name "Honey Crust," and another company at Huntington, Indiana, as does appellee, uses the words "Hon-E-Krust." Its waivers precluded the appellant from claiming any exclusive right to the name under its trade-mark, and we therefore conclude that the District Court rightly dismissed the action for infringement. Shaler Co. v. Rite-Way Products, Inc., 6 Cir., 107 F.2d 82, 84.

The question of unfair competition is much closer. A state of facts may be sufficient to show unfair competition even though insufficient to support a claim of technical trade-mark infringement. Shaler Co. v. Rite-Way Products, Inc., supra; Socony-Vacuum Oil Co., Inc., v. Rosen, 6 Cir., 108 F.2d 632. Cf. Chesebrough Mfg. Co. v. Old Gold Chemical Co., Inc., 6 Cir., 70 F.2d 383. The record shows without contradiction that the words "Honey-Krust" have acquired a secondary meaning throughout the State of Kentucky and have come to signify a product of appellant both to the consuming public and to dealers generally. This was testified to by a qualified disinterested witness, we well as by several employees of the appellant. The record establishes that appellant is one of the largest distributors of bread in Kentucky. In the years from 1932 to 1938, average gross sales of "Honey-Krust" products were in excess of $1,750,000 a year. The words "Honey-Krust" were adopted for its products prior to 1916. While the original plant was set up in Louisville, other manufacturing plants were established or acquired successively in Lexington, Kentucky, Johnson City, Tennessee, New Albany and Bedford, Indiana, and Bowling Green, Kentucky, all prior to 1937. The Bowling Green plant was completed in 1936. In the spring of 1937 an agency was established at Madisonville as an outlet for that plant, and routes were opened from Madisonville into Webster and Union Counties, which are adjacent to Henderson County. One route ran very near the southern boundary of Henderson County. The plant in Owensboro, which is in the county to the east of Henderson County, was built in 1938 and supplied routes in the direction of Henderson County. Whenever appellant entered a new town for the sale of its products, it advertised extensively in the surrounding territory by road signs, billboards, and other means. It was shown that appellant's product was available in the grocery stores of Owensboro continuously after 1924 and that advertising embodying the trade-name was posted on the roads between Owensboro and Henderson at the time such sales began, and on roads leading into Evansville from New Albany and Bedford as early as 1931. Advertising was carried in newspapers of general circulation and on regular radio programs. During the period from 1926 to 1938, inclusive, approximately three-quarters of a million dollars were expended in advertising "Honey-Krust." Plainly the use of the words "Honey-Krust" had been sufficiently long and exclusive in Kentucky so that they had acquired a secondary meaning throughout the state. Artiste Permanent Wave Co. v. Hulsman, 271 Ky. 695, 113 S.W.2d 55.

Examination of the exhibits reveals that the Hi-Class Baking Company on its packages has adopted not only the name "Hon-E-Krust," which is pronounced exactly the same as the appellant's name, but the same unusual oval figure used by appellant in which the name is set. The District Court states that the designs are totally dissimilar; but as to the name and the figure surrounding the name, the features which stand out in high light on the package, the two wrappers are substantially identical. The District Court calls the figure in each case a potato-shaped figure, and ignores this feature in his finding that the designs are entirely dissimilar. What the appellant uses here is a trade name set off by a peculiar mark or symbol. As pointed out in N. K. Fairbank Co. v. Luckel, King & Cake Soap Co., 9 Cir., 102 F. 327, a trade name differs from a trade-mark in that it appeals to the ear more than to the eye. Here the two names are idem sonans. The identity of the oval lends additional emphasis to the identity of the sound. As pointed out in the above case, the character of the label or package is no answer to the charge that the names are so similar as to deceive purchasers.

The...