Holland Furnace Co. v. New Holland Mach. Co.

• Decision Date: 15 October 1927
• Docket Number: No. 4007.,4007.
• Citation: 24 F.2d 751
• Parties: HOLLAND FURNACE CO. v. NEW HOLLAND MACH. CO.
• Court: U.S. District Court — Western District of Pennsylvania

24 F.2d 751 (1927)

HOLLAND FURNACE CO. v. NEW HOLLAND MACH. CO.

No. 4007.

District Court, E. D. Pennsylvania.

October 15, 1927.

Howson & Howson, of Philadelphia, Pa., for plaintiff.

Theodore S. Paul, of Philadelphia, Pa., for defendant.

KIRKPATRICK, District Judge.

The plaintiff is a Michigan corporation, having its principal office and its original manufacturing plant at Holland, Mich., at which place it has conducted the business of making warm-air furnaces since its incorporation in 1906. It now has two additional plants and more than 500 branch offices throughout the United States, from which it not only sells direct to customers, but also installs and renders maintenance service. It is the largest manufacturer of warm-air furnaces in the United States. In the last seven years its total sales have grown from $4,500,000 to $15,500,000, and its sales in Pennsylvania from about $25,000 to nearly $2,000,000. In 1926 it expended over $67,000 for advertising in Pennsylvania alone. More than 20 of its branch offices are located in the section known as southeastern Pennsylvania, and it has one of its manufacturing plants at Bethlehem, Pa. The plaintiff sells its furnaces under the name "The Holland," which words, while geographical in their origin, have acquired a secondary meaning, associated in the minds of the public with the plaintiff's product. The name is known in connection with the plaintiff's furnaces throughout most of the United States and particularly in southeastern Pennsylvania.

The defendant is a Pennsylvania corporation, with plant and offices at New Holland (near Lancaster), Pa. It has no branch offices. The business now carried on by the defendant was begun in 1895, at New Holland, under the name of "New Holland Machine Works." In 1903, the owners of the business incorporated under the name "New Holland Machine Company," and have ever since carried on their business at New Holland, Pa. Until October or November, 1926, the business of the defendant was confined to manufacturing and selling farm machinery, specifically feed mills, gasoline engines and trucks, circular saws, rock crushers, portable stone bins, and other similar pieces of machinery. The defendant had a foundry, and also made foundry castings to order. The defendant has never made or sold furnaces, or other closely related products. The machinery constituting the defendant's original line is not a product of the same class as, or associated in the public mind with, warm-air furnaces. The business of the defendant is principally in Lancaster county, Pennsylvania, where it has built up a good will, which, while valuable, arises out of and is related to the products above mentioned, and has very little value in connection with the sale of furnaces.

In October or November, 1926, the defendant began to manufacture and sell warmair furnaces in Lancaster county, Pennsylvania. The furnaces made by the defendant were close imitations of the plaintiff's furnaces, both in structure and outward appearance, and bore the name "New Holland" on the door at a place corresponding to that in which the plaintiff's furnaces bears the name "The Holland." The defendant's furnaces also bear the words "New Holland Machine Company, New Holland, Pennsylvania," in the same kind of lettering and at a place corresponding to that in which the words "Holland Furnace Company, Holland, Michigan," appear on the plaintiff's furnaces. The structural features imitated are common to the trade, and not the exclusive property of the plaintiff; but the imitation is carried considerably beyond the necessities of construction. On November 1, 1926, the defendant took into its employ an experienced salesman, theretofore employed by the plaintiff, who had a detailed knowledge of the plaintiff's furnace and its installation and sales methods. For several weeks prior to leaving the plaintiff's employ, this man was spending a large part of his time in working out plans of sales, installation, and service for the defendant. When he left the plaintiff's employ, he took with him plans relating to the construction of the Holland furnace. He also attempted to persuade a number of the plaintiff's employees to leave its employ and enter that of the defendant, and was successful in two instances. After November 1st, he was engaged in selling the defendant's furnaces, following the plaintiff's methods in all particulars, duplicating the plans of the plaintiff, and demonstrating by means of a model identical with that of the plaintiff. He has made actual sales of three or four of the furnaces.

The defendant, at the time that it entered the field of making and selling warm-air furnaces, had knowledge of the general character and extent of the plaintiff's business, and was familiar with the construction and design of the plaintiff's furnaces. The defendant's normal business had been declining for some time. Its plant was equipped to manufacture furnaces, but the furnace business was not a natural development or side line of the defendant's business. In entering the field, the defendant did so with the intent to take advantage, so far as possible, of the confusion which would naturally arise in the minds of the public from the similarity of its name to that of the plaintiff, and with the purpose of availing itself, through the medium of that confusion, so far as possible, of the reputation established by the plaintiff's advertising and the merits of its products.

Up to March 16, 1927, the defendant sold nine furnaces bearing the name "New Holland." Since that time, the name "Conestoga" has been substituted, and appears upon the furnaces in place of "New Holland," but in other particulars the furnace is unchanged, and the corporate name still appears upon it in the same place as before. Since making the change the defendant has advertised, without mentioning any name for the furnace, but prominently featuring its own corporate name in the advertisement.

The plaintiff's bill asks that the defendant be enjoined (a) from the use of the name "New Holland" upon its furnaces; (b) from marking its furnaces with the name of "New Holland Machine Co.," or any other name sufficiently similar to the plaintiff's to be mistaken therefor; and (c) from selling furnaces like the plaintiff's in form and appearance. Under the facts as found, the plaintiff is clearly entitled to restrain the defendant from using the name "New Holland" as a name or trade-mark for its furnaces. The fact that the similarity of this name to "The Holland" will cause confusion and deceive customers is obvious. The use of these words as a name is particularly detrimental to the plaintiff, because the impression naturally created would be that the furnace is not only made by the makers of "The Holland," but that it is a new and improved form or style. The fact that this name forms part of the defendant's corporate title does not give it any additional rights, so far as its use upon its goods as a trade-mark is concerned. Nor will testimony of the defendant's secretary and treasurer that the use of this name has already been discontinued deprive the plaintiff of its right to an injunction. Westinghouse Machine Co. v. Press Publishing Co. (C. C.) 127 F. 822. The relief asked by the plaintiff upon this point will be granted.

The question of whether or not the defendant should be restrained or limited in the use of its corporate name in connection with the sale of furnaces presents greater difficulty. The conditions of the question as here presented will first be briefly stated. The defendant's name is sufficiently like that of the plaintiff to cause confusion in the trade, and to result in purchasers being misled as to whose product they are ordering. The defendant argues that,...