Hemmeter Cigar Co. v. Congress Cigar Co.

• Decision Date: 14 March 1941
• Docket Number: No. 8505.,8505.
• Citation: 118 F.2d 64
• Parties: HEMMETER CIGAR CO. v. CONGRESS CIGAR CO., Inc.
• Court: U.S. Court of Appeals — Sixth Circuit

118 F.2d 64 (1941)

HEMMETER CIGAR CO. v.CONGRESS CIGAR CO., Inc.

No. 8505.

Circuit Court of Appeals, Sixth Circuit.

March 14, 1941.

COPYRIGHT MATERIAL OMITTED

David S. Kane, of New York, City (Duell & Kane and Philip T. Dalsimer, all of New York City, on the brief), for appellant.

Harold H. Armstrong, of Detroit, Mich.(Armstrong, Weadock, Essery & Helm, of Detroit, Mich., on the brief), for appellee.

Before HICKS, SIMONS, and MARTIN, Circuit Judges.

MARTIN, Circuit Judge.

This is an appeal from a final decree denying relief in a trade-mark infringement and unfair competition suit, brought in the District Court to protect appellant's registered trade-mark, "Champion," used in relation to its principal brand of cigars.The District Judge, in dismissing the complaint, adopted the opinion-report, findings of fact and legal conclusions of a Special Master, to whom he had referred the cause.

The Findings of Fact

The Special Master found that since 1895the appellant company, whose president's father was its founder, has manufactured and distributed to some extent in thirty-seven states of the Union — although the great bulk of sales were made in Michigan, Ohio and Indiana, with Michigan sales predominating — the brand of cigars in controversy "either under the mark `Champion' or `Hemmeter's Champion'(it being sharply contested between the parties as to which of these has been used as its mark)"; that, quite clearly, the appellant has been using its mark in interstate commerce; and that the registration of the trade-mark "is now in force."

The Master found further that appellant has built up in the territory of distribution considerable goodwill attributable to the quality of its "Champion" Cigars and to diversified advertising, including counter displays, window streamers, billboards, and radio and newspaper advertisements, of which last mentioned the most recent were "built around a sport motif, the similarity between champions in athletics and Champion Cigars having been stressed."

In recent years, appellant made some effort to expand its sales westward, but with small success.Appellant manufactures two other brands of full-size cigars and two brands of small cigars, but the marketing of these off brands has been quite limited.

In most of its advertisements, the two words, "Hemmeter's Champion," have been combined, but a foil card issued in various color combinations for window display and distributed prior to 1932 bore the single slogan, "Enjoy a Champion 5¢ Cigar."

According to the Master, "the evidence indicates" that the cigar has been known to customers "in the wholesale jobbing trade and in the retail field as well as to the consuming public by several names, including `Hemmeter's Champion,'`Hemmeter's,'`Champion,' and `Champs.'"Conceding conflicting testimony of retailers and consumers, the Master infers that "generally speaking," the cigars "are called for by the full name `Hemmeter's Champion,' or `Champion' and very rarely by the contraction `Champ' or `Champs.'"The record contains numerous orders received by appellant, chiefly from jobbers, for "Champ" or "Champs," but the cigars have never been advertised under such names.

The appellant bases its cause of action against the appellee company, a subsidiary of one of the leading cigar manufacturers of the United States, upon the use by appellee of the word "Champs" in connection with a brand known as "Portina Champs," imported from Porto Rico and first marketed in the summer of 1936 as an addition to a complete line of Portina cigars, widely distributed throughout the south.

According to the testimony of the vice-president of appellee company "Portina Champs" were put upon the market to meet the increased demand, since the depression of 1929, for cheap machine-made cigars, packed several to the carton.The witness asserted that the selection of the name "Champs" was made without knowledge of the existence of appellant's product and that the registry of trade-marks was not checked, because the term "Champs" was to be confined to use as a "frontmark," which is a kind of grademark to denote the shape and size of a cigar.

The Master considered this testimony "convincing" and found "as a conclusion of fact that defendantappellee had no intention (other than the constructive intent which might arise from its failure to make an adequate investigation of existing trade-marks on cigars) to simulate the plaintiff's appellant's trade-mark or style of packaging, or to capitalize on the goodwill created by the sale of plaintiff's cigar."He added that the packages of the contending parties bear no remote resemblance and he deemed it "unlikely" that a cigar company of the "magnitude" of appellee, "in bringing out a brand for national distribution, should deliberately name and design it in such a way as to steal the goodwill of a relatively small company whose business is largely confined to one state."

Appellee's Portina Champs are smallsize cigars or "Cheroots."They are machine-processed, with an unfinished wrapper of tobacco leaf and are packed in units of five in a paper and cellophane wrapper, with the brand name "Portina Champs" imprinted in red and white on paper with a brown background.These cigar packages are enclosed in a red cardboard container, on the outside cover of which appear the words "Portina Champs," the word "Champs" being distinctively set off in letters of smaller size and different style from the printing of "Portina."On the cover of the paper container are displayed five athletic figures: a baseball player, a polo player, a golf player, a tennis player and a swimmer in the act of diving.There is also displayed the slogan, "5 for 10."

The Special Master thus describes appellant's full-size cigar, which, in two different shapes, is retailed at five cents: "It is packed in cigar boxes of the usual size and shape with the name imprinted inside of the cover in large letters in a combination of red, white and gold as `Hemmeter's Champion,' the word `Hemmeter's' being in a slightly larger and somewhat different style of type than `Champion.'The same `Hemmeter's Champion' also appears on both ends of the outside of the box in similar style; and also on three of the inner sides of the box, the `Hemmeter's' being in type of the same size as `Champion' and the words coming into view as cigars are withdrawn from the box.The cigar, itself, has been wrapped in a variety of ways over the period of its manufacture.At one time the words `Hemmeter's Champion' were impressed upon the cigar itself, with no additional wrapping.For about the last two years, however, each cigar has been wrapped in foil with the word `Champion' impressed in small letters on the foil.The cigar band bears the name, `Hemmeter's Champion.'"

The Master thus concludes his findings of fact: "No evidence was submitted by plaintiffs in the trial of this cause of any actual instances of confusion of its customers, reliance being placed rather upon the alleged likelihood of confusion which the court might infer from the evidence as to the use of the respective marks by plaintiff and defendant and upon the results of an investigation made by special investigators hired by plaintiff. * * *"

The Law of the Case

I.It was the unsuccessful contention of appellee before the Master, repeated here, that the registered trade-mark of appellant is invalid for the reason that "Champion" is a descriptive term, denoting the "character or quality" of the product.

A similar contention was rejected by this court in Thomas G. Plant Co. v. May Co., 105 F. 375, in which it was held that the word "Queen," used by a manufacturer of ladies' shoes to designate its product, is not essentially one which signifies quality, so as to preclude its appropriation as a trade name.It was pointed out that such words as "King,""Monarch,""Kaiser,""Royal,""Victor,""King Bee" and "Pillsbury's Best" have been judicially sanctioned as trade names.

In our judgment, the word "Champion" plainly falls within the same category and may lawfully be appropriated as a trade-mark.Recognition of its validity has been accorded by the United States Patent Office, and registration by the Patent Office raises a presumption of validity.Chapin-Sacks Mfg. Co. v. Hendler Creamery Co., 4 Cir., 254 F. 553, 556.CompareHughes v. Alfred H. Smith Company, D.C., 205 F. 302, affirmed in2 Cir., 209 F. 37, in which the word "Ideal" was held to be a valid trade-mark as applied to brushes.

II.Appellee submits that because the distribution of "Portina Champs" was exclusively intrastate,appellant has no cause of action for trade-mark infringement.The question seems academic, for the reason that in Hurn v. Oursler, 289 U. S. 238, 53 S.Ct. 586, 77 L.Ed. 1148, where a claim of copyright infringement was embraced in the same bill with a claim for unfair competition under state law, both claims being based on the same acts, the Supreme Court held that, although the federal copyright claim must be rejected on its merits, the federal court still had jurisdiction to decide the unfair competition claim on its merits, because a federal question had been raised on the pleadings.

The same situation is found here.Therefore, jurisdiction should be retained to grant appropriate relief; not embracing any specific remedies provided by the Federal Act, but within the broad confines of the field left open by the express provision of the Act of 1905, Section 23, 15 U.S.C.A. § 103, to the effect that "Nothing in this Actsubdivision of this chapter shall prevent, lessen, impeach, or avoid any remedy at law or in equity which any party aggrieved by any wrongful use of any trade-mark might have had if the provisions of this Act said subdivision had not been passed."

III.We are unable to concur in the legal conclusion of the Special Master, thus expressed: "While certain advertising material put in evidence referred to `Champio...