House of Westmore v. Denney

• Decision Date: 21 August 1945
• Docket Number: No. 8707.,8707.
• Citation: 151 F.2d 261
• Parties: HOUSE OF WESTMORE, Inc., v. DENNEY.
• Court: U.S. Court of Appeals — Third Circuit

151 F.2d 261 (1945)

HOUSE OF WESTMORE, Inc., v. DENNEY.

No. 8707.

Circuit Court of Appeals, Third Circuit.

Argued February 6, 1945.

Decided August 21, 1945.

COPYRIGHT MATERIAL OMITTED

Wm. Barclay Lex, of Philadelphia, Pa. (John Ross Kennard N. Ware, Norris, Lex, Hart & Eldredge and Howson & Howson, all of Philadelphia, Pa., on the brief), for appellant.

Samuel E. Darby, Jr., of New York City (Paul & Paul, of Philadelphia, Pa., and Walter A. Darby and Abraham I. Menin, both of New York City, on the brief), for appellee.

Before BIGGS, Circuit Judge, and FORMAN and LEAHY, District Judges.

FORMAN, District Judge.

Appellant, Frances Denney, is the manufacturer of a cosmetic preparation sold under the registered trade-mark "Over-Tone," issued January 21, 1941, as No. 384,464. The product consists of a solid dry cake packaged in a round flat compact, distinctive in color and design.

Appellee, House of Westmore, Inc., is the manufacturer of a cosmetic preparation sold under the registered trade-mark "Overglo," issued January 5, 1943, as No. 399,428. Its product is in liquid form and is packaged in a bottle distinctive also in color and design.

The parties will be referred to in this memorandum by the name of their product for the purpose of simplifying what appears to be a complicated history of the case.¹

On May 4, 1943, Overglo filed its amended complaint seeking a declaratory judgment of invalidity, and of non-infringement, of the trade-mark Over-Tone; an injunction restraining Over-Tone from asserting that a use of the product Overglo constituted an infringement of the mark Over-Tone and restraining Over-Tone from threatening Overglo's customers with legal action for such use of the product Overglo; and for damages by reason of said unfair competitive practices.

Over-Tone answered the amended complaint by denying that it intimidated the customers of Overglo and that its trademark is invalid, but asserted that the trade-mark Overglo is invalid in that it is confusingly similar to the trade-mark Over-Tone; that it notified Overglo and its customers of its rights under its mark and that it intended to bring suit if there was a continued violation of its rights; and that its mark is valid, distinctive and of great value to it. Along with its answer Over-Tone counterclaimed for an injunction restraining Overglo from the use of its product under that name, and for damages caused by Overglo's infringement of the mark Over-Tone and by its unfair competition.

Overglo filed a general denial in reply to Over-Tone's counterclaim, and alleged that the mark Over-Tone is invalid and not infringed by the mark Overglo.

At the trial it was brought out that the appearance of the two products and their containers are distinctly dissimilar; that both products are used for the identical purpose, i.e., as bases or foundations to which other cosmetics are to be subsequently applied; and that both products retail for the same price. It appeared that upon the disagreement of the parties concerning the questions of infringement and unfair competition, Over-Tone wrote letters to approximately all of the customers of Overglo stating that it believed that the name Overglo infringed its trade-mark and urged these customers to discontinue its sale. Evidence was admitted relating to the history of the manufacture and sale of the two products and the extent to which they were sold and advertised. Several paid investigators testified on behalf of Over-Tone to show the confusing similarity between the names of the two products.

The trial court found that the combination of words contained in the mark Over-Tone was descriptive of a quality or characteristic of the article sold, and concluded that the trade-mark was invalid. It also found that if Over-Tone was held to be a valid trade-mark, Overglo infringed.²

The court found, in addition, the following:

"I find that the defendant was not guilty of bad faith in sending out the notices of infringement, that it did so not for the purpose of destroying the plaintiff's business but for the purpose of protecting its trademark."

The judgment of the lower court follows:

"This cause having come on to be heard on final hearing upon the pleadings and proofs taken on behalf of both of the parties hereto, and counsel for the respective parties having been heard, and due consideration having been had, and the Court's findings and conclusions having heretofore been filed, now it is

Ordered, adjudged and decreed, as follows:

"1. That defendant's trade mark `Over-Tone' is invalid.

"2. That the complaint herein, insofar as it prays for a declaratory judgment of non-infringement and an accounting for damages because of alleged unfair competition, be and the same hereby is dismissed.

"3. That defendant's counterclaim be and the same hereby is dismissed.

"4. No costs are awarded."

"There is no such thing as property in a trade-mark except as a right appurtenant to an established business or trade in connection with which the mark is employed." United Drug Co. v. Theodore Rectanus Co., 248 U.S. 90, 97, 39 S.Ct. 48, 50, 63 L.Ed. 141. See also Certain-Teed Products Corp. v. Philadelphia & Sub. Mortg. G. Co., 3 Cir., 49 F.2d 114. Where a trade-mark is so connected with a product it is a symbol which indicates the origin of the particular product. It is at this time that the user of the mark has a right to prevent his product from being confused in the trade with another product. The diversion of established business by means of unfair business practices on the part of another is the basis of the user's complaint when this right is invaded. Industrial Rayon Corp. v. Dutchess Underwear Corp., 2 Cir., 92 F.2d 33, 35, certiorari denied, 303 U.S. 640, 58 S.Ct. 610, 82 L.Ed. 1100. The cause of action known as unfair competition is the means whereby a person aggrieved obtains relief against such unfair competitive practices. This action exists today separate and apart from any statutory rights which the owner of a trademark possesses. The trade-mark law as it exists is but a part of the broad field of action of unfair competition which covers the former and other assaults upon the product of good will built up through business practice. Hanover Star Milling Co. v. Metcalf, 240 U.S. 403, 412-414, 36 S.Ct. 357, 60 L.Ed. 713. Unfair competition is based on equitable principles and may be distinguished from infringement of a trademark in that it does not involve the violation of the exclusive right to use a word, mark or symbol, but rather involves any violation of a right arising from the operation of an established business. G. W. Cole Co. v. American Cement & Oil Co., 7 Cir., 130 F. 703; Dennison Mfg. Co. v. Thomas Mfg. Co., C.C., 94 F. 651. Quite aside from the statutory rights granted under the Trade-Mark Acts, a proprietor of a trademark or trade name identified with his business and characterized by advertising and good will built by him, has a cause of action against one who by unfair means usurps the good will and distinctive attributes of the business so constructed by the other. See Hanover Star Milling Co. v. Metcalf, supra.

The Trade-Mark Act of 1905, 15 U.S.C.A. § 81 et seq., was not intended to change the common law principles of trademarks as embodied in...