HD Lee Mercantile Co. v. JC Penney Co., 57.

• Decision Date: 17 November 1939
• Docket Number: No. 57.,57.
• Citation: 30 F. Supp. 179
• Court: U.S. District Court — Western District of Missouri
• Parties: H. D. LEE MERCANTILE CO. v. J. C. PENNEY CO.

30 F. Supp. 179

H. D. LEE MERCANTILE CO. v. J. C. PENNEY CO.

No. 57.

District Court, W. D. Missouri, W. D.

November 17, 1939.

Charles M. Blackmar and Ralph M. Jones (of Michaels, Blackmar, Newkirk, Eager & Swanson), both of Kansas City, Mo., for plaintiff.

Chas. H. Mayer, Roscoe P. Conkling, and Floyd M. Sprague (of Mayer, Conkling & Sprague), all of St. Joseph, Mo., for defendant.

REEVES, District Judge.

This is an action for unfair competition. The plaintiff manufactures and sells overalls and other apparel and clothing for laborers at its several places of business. Its trade is nation wide.

The defendant is engaged, among other things, in the sale at retail of overalls and other apparel and clothing for laborers.

In its petition the plaintiff alleges that in December, 1928, it "adopted a distinctive design for overalls known as `the four-in-one bib pocket', fitted with snap fasteners; that since on or about August 14th, 1929 said pocket has been crimped and mechanically folded with rounded corners at the bottom of the pocket; that said pocket was stitched with heavy thread in a manner to prominently outline the distinctive features of The H. D. Lee four-in-one pocket, so that the H. D. Lee overall was easily identified as such by visual inspection; * * *"

There is a further allegation that the plaintiff has continued the manufacture of such distinctive design and that, for the purpose of furthering the sale of its overalls, it has spent several hundred thousand dollars in advertising. By the long continued use of such design, and by extensive advertising it is asserted that "said four-in-one bib pocket overalls became identified with the goods of The H. D. Lee Mercantile Company and with that of no other manufacturer, and that said overalls were generally known to the work garment trade and to consumers; that said four-in-one pocket became known generally throughout the United States as the exclusive product of The H. D. Lee Mercantile Company."

It is then stated by the plaintiff that the defendant, after the adoption of such design, and after its continued use over a period of years, "for the purpose of competing unfairly with the plaintiff and taking advantage of the reputation of the plaintiff's overalls and to avail itself of the results of the national advertising campaign of the plaintiff, and for the deliberate and fraudulent purpose of taking advantage of the plaintiff's product, has placed upon the market an overall in which the four-in-one bib pocket is copied and simulated so closely in size, arrangement, shape and color that to the ordinary customer the defendant's overall is so much of a deceptive imitation of the plaintiff's overall that the two are indistinguishable to the ordinary customer."

There is the further allegation that because of the fact that the defendant maintains numerous stores throughout the United States and by the use of such deception it has deprived the plaintiff of the benefits arising from its design and the profits that would accrue to it by reason of its extensive advertising. It charges, moreover, that the defendant's actions have caused deception and confusion in the public mind, and that, as a result, the defendant has been able to appropriate to itself plaintiff's good will, trade, and advertising.

These acts, it is claimed by plaintiff, constitute fraud upon it, its retail dealers, and those members of the public disposed to purchase plaintiff's product. It has therefore asked for an injunction and an accounting of profits.

The defendant denies all of the averments of the petition with respect to simulation or imitation of plaintiff's product, but admits "since about the month of March, 1937, it has sold an overall with compartment pockets on the bib thereof; that said overall has been plainly and distinctly branded with the name J. C. Penney Company, and has been sold and advertised throughout the United States as the `Super Pay-Day Overall.'"

Upon a trial of the issues thus formulated by the pleadings it was made to appear that both parties were extensively engaged in handling overalls for laborers, both on the farm, and in the factory. The defendant did not manufacture, but sold at retail overalls of a type very similar in appearance to certain brands or types manufactured and sold by the plaintiff.

The testimony supported the averments of plaintiff's petition to the effect that a distinctive design had been worked out in the years 1928 and 1929, and that the plaintiff had expended approximately $800,000 in introducing to the public its overall thus designed and in creating a demand, a trade, and good will for such product.

Much of the advertising of the plaintiff was by pictorial illustrations wherein plaintiff's design was made conspicuous. The plaintiff's evidence further tended to show a likeness and similarity between a type or brand of overall sold extensively by the defendant and that of plaintiff. And, moreover, there was evidence that the defendant had copied the design of the plaintiff. This proof was practically admitted by the defendant as true. One of the principal witnesses for the defendant, being a large manufacturer of the alleged offending overall sold by defendant, testified that the design of plaintiff's product had, to a degree, been copied by him in manufacturing a similar article for defendant's trade.

It is contended by the defendant that it is the right of a competitor in business to copy the appearance and design of another's article, where not protected by the monopoly of a patent, copyright or trademark registration. Furthermore, it is the defendant's contention that there were distinctive features and marks of difference between the two garments and that the defendant was careful never to deceive the public in selling its particular merchandise.

The defendant offered testimony that other manufacturers and dealers sold a garment with a design similar to that of plaintiff.

Additional facts as they may become pertinent will be stated in the course of this memorandum opinion.

1. As a preliminary to a discussion of the law, and as a postulate for a proper decision of the case, it should be stated that the substantive law of trademarks is generally regarded as a branch of the broader doctrine of unfair competition. National Geographic Co. v. Classified Geographic, D.C., 27 F.Supp. 655, loc. cit. 660; G. & C. Merriam Co. v. Saalfield, 6 Cir., 198 F. 369, affirmed 241 U.S. 22, 36 S.Ct. 477, 60 L.Ed. 868; S. S. Kresge Co. v. Winget Kickernick Co., 8 Cir., 96 F.2d 978, loc. cit. 988; Hanover Star Milling Co. v. Metcalf, 240 U.S. 403, 36 S.Ct. 357, 60 L.Ed. 713.

Apparently the statutory law of trademarks is intended to provide a monopoly in the use of words, signs or symbols, whereas under the common law a competitor might have used such words, signs or symbols under circumstances that would not impinge upon the rights of the proprietor. In other words, a trademark, like a patent or a copyright, could not be used at all without the consent of the proprietor or owner, whereas, under the common law, a dealer could simulate the trademark of a competitor, provided he did so "with sufficient distinguishing marks normally to prevent the otherwise normally resulting fraud." Merriam Co. v. Saalfield, 6 Cir., 198 F. 369, loc. cit. 373.

It would follow from the above, by an analogy of reasoning, that the same rule of law applicable to trademarks should apply in cases of unfair competition.

Another rule which should be kept in mind is that the law of unfair competition is intended to prevent fraud and deceit. 63 C.J. Section 26, p. 330.

And, that, with the complexities of business and the multiplying of...