Hyde Park Clothes v. Hyde Park Fashions

• Decision Date: 29 April 1953
• Docket Number: Docket 22342.,No. 24,24
• Citation: 204 F.2d 223
• Parties: HYDE PARK CLOTHES, Inc. v. HYDE PARK FASHIONS, Inc.
• Court: U.S. Court of Appeals — Second Circuit

204 F.2d 223 (1953)

HYDE PARK CLOTHES, Inc. v. HYDE PARK FASHIONS, Inc.

No. 24, Docket 22342.

United States Court of Appeals Second Circuit.

Argued January 7, 1953.

Decided April 29, 1953.

Truman A. Herron, Cincinnati, Ohio, for appellant, Wood, Herron & Evans, Cincinnati, Ohio, and Hays, Wolf, Schwabacher, Sklar & Epstein, New York City, of counsel.

Oscar Levine, New York City, for appellee.

Before SWAN, Chief Judge, and CLARK and FRANK, Circuit Judges.

SWAN, Chief Judge.

This is an appeal by the plaintiff from a judgment dismissing its complaint on the merits, after a trial, in a suit charging infringement of a registered trade-mark and unfair competition. Federal jurisdiction was based on the Trade Mark Act of 1946, 15 U.S.C.A. §§ 1114, 1121, with pendent jurisdiction under 28 U.S.C.A. § 1338(b) as to the claim of unfair competition, and also on diversity of citizenship, 28 U.S. C.A. § 1332. Plaintiff's trade-mark, registered January 2, 1923 as No. 163,111 under the Act of February 20, 1905, showed the words "Hyde Park" in combination with a golfing scene. The trial court found no infringement of this trade-mark, and this finding is not challenged by the appellant.¹ The court also found that the plaintiff had a good common-law trade-mark in the words "Hyde Park" for men's clothes manufactured by it and that this mark was not infringed by the defendant either by the use of its corporate name, "Hyde Park Fashions, Inc.," or by using the words "Hyde Park" in its advertising and on the labels it attaches to the garments it manufactures and sells. The trial court further held that the defendant in the manufacture and sale of its ladies' suits and coats does not compete unfairly with plaintiff in its manufacture and sale of men's suits and coats. Only this conclusion as to the non-existence of unfair competition is attacked by the appeal.

The trial court made detailed findings of fact and wrote an opinion (unreported). The appellant does not object to the court's findings on factual questions; it disputes only the legal conclusions drawn therefrom. The parties are not in direct competition. Plaintiff and its predecessors in the business have been engaged in the manufacture and sale of men's clothing, particularly suits, and since 1922 have used the words "Hyde Park" on their labels. Plaintiff has never manufactured or sold women's garments. Defendant was incorporated in 1945 and deals exclusively in women's clothing, classified in the garment trade as "Junior Miss Sizes and Models." When defendant adopted its corporate name it had no knowledge of the existence of plaintiff. It chose a name which its predecessor had used in his business and which the New York Secretary of State informed it was available.² Both plaintiff and defendant sell their garments nationally in practically all the states. They deal with retailers who sell to the public. As applied to both plaintiff and defendant the trade-mark "Hyde Park" does not have a geographical connotation but has a secondary connotation connoting style or quality. Persons engaged in the manufacture and retailing of men's suits and coats associate the words "Hyde Park" in the men's clothing field with the plaintiff; those engaged in the manufacture and retailing of women's suits and coats associate the words in the women's clothing field with the defendant. The defendant has not attempted to palm off its product as the product of the plaintiff. It has not diverted any of the plaintiff's customers; nor has the plaintiff sustained any loss or damage as the result of any similarity in the corporate names of plaintiff and defendant. Such similarity has caused no "confusion" in the trade and the purchasing public has not been misled into believing that plaintiff is the source or origin of defendant's merchandise. The plaintiff's garments are priced somewhat higher than defendant's, but this difference in price does not adversely affect plaintiff's reputation or good will. The defendant has spent more, in proportion to gross sales, in advertising than has the plaintiff; and its product is highly considered among department and specialty store buyers, because of its quality and its patented style of skirt. In its advertising and merchandising defendant refers to its suits as "Drum Skirt" suits.

The appellant urges that the first question for determination is whether federal law or state law is controlling in a cause of action for unfair competition in which federal jurisdiction rests solely on diversity, although jurisdiction was also claimed as pendent to an action on a federally registered trade-mark which the court found valid but not infringed. It is said that the question is "so controversial" that it should be decided "even though in appellant's view the result of the case should not turn on the decision," because it is entitled to prevail regardless of whether federal or state authorities are applied.³ Judge Clark is of opinion that because of the Lanham Act federal law controls, but a majority of the court thinks that a decision as to which law should be applied is unnecessary, since in our opinion the application of either federal or state law requires affirmance.

If it be assumed that federal law is to be applied, there is no need to add anything to Judge Leibell's opinion. He analyzed the principal cases in this circuit involving competition in related fields.⁴ As these cases point out, the interests of the owner of a trade-mark who seeks to extend it to cover goods on which he has never used it are two: (1) the possibility that trade practices of the defendant may stain the reputation of the plaintiff in the minds of his customers; and (2) the possibility that some time in the future the plaintiff may wish to extend his business into the market which the defendant has already begun to exploit. These interests must be weighed against the interests of the defendant to preserve whatever good will he has acquired by selling his goods under the name and marks he has adopted.⁵ Judge Leibell then demonstrated by a discussion of the facts that the plaintiff had not shown any basis for injunctive relief.⁶ We agree. Our recent decision in Admiral Corporation v. Penco, Inc., 2 Cir., 203 F.2d 517, involves a different situation for there the court found intentional palming off and actual confusion.

Nor do the New York cases, if state law rather than federal be applicable, lead to a different conclusion when no intentional palming off exists and no actual or likely confusion has been found.⁷ According to the appellant "the latest pronouncement of the New York courts on this subject" is Time, Inc., v. Life Color Laboratory, Inc., 198 Misc. 1038, 101 N.Y.S.2d 586, 587. There the trial judge found that there had been no palming off, no confusion, no inferiority in the defendant's work which might discredit the plaintiff if confusion existed, and no damage to the plaintiff. Yet he felt constrained to grant an injunction, saying "Upon such facts, it would appear that an injunction ought not issue, but the law of `unfair competition' is to the contrary."⁸ But in relying on this decision the appellant was evidently unaware that the judgment had been reversed by the Appellate Division and its decision affirmed by the Court of Appeals.⁹ This disposition of the case by the appellate courts confirms our view that on this subject the state law is not at odds with our own cases and that under either state or federal authorities affirmance of the judgment on appeal is required.

Judgment affirmed.

CLARK, Circuit Judge (dissenting).

Plaintiff-appellant has had the misfortune — so it seems to me — to come before a panel of this court allergic to the doctrine historically associated with us because of its nurture by our most illustrious judges¹ of protecting trade names against competition which will create confusion as to the source of goods sold under such names. The chance of the assignment calendar which has so operated against plaintiff might as easily have brought it success, to judge by the three most recent cases on this issue before us, the unanimous decision in each instance — two in fact reversing decisions below — of another panel. Miles Shoes, Inc. v. R. H. Macy & Co., 2 Cir., 199 F.2d 602, certiorari denied 345 U.S. 909, 73 S.Ct. 650; Pastificio Spiga Societa Per Azioni v. De Martini Macaroni Co., 2 Cir., 200 F.2d 325; Admiral Corp. v. Penco, Inc., 2 Cir., 203 F.2d 517. These cases all present the issue of confusion as to source, but to my mind no more and even perhaps less sharply than does this.² And many earlier cases may be cited, ranging from the settled view disclosed in Aunt Jemima Mills Co. v. Rigney & Co., 2 Cir., 247 F. 407, L.R.A.1918C, 1039, certiorari denied 245 U.S. 672, 38 S.Ct. 222, 62 L.Ed. 540, and Landers, Frary & Clark v. Universal Cooler Corp., 2 Cir., 85 F.2d 46, through the holding, somewhat questioned, it is true, in the concurrence, of Standard Brands v. Smidler, 2 Cir., 151 F.2d 34; to the majority decisions in such striking cases as La Touraine Coffee Co. v. Lorraine Coffee Co., 2 Cir., 157 F.2d 115, certiorari denied 329 U.S. 771, 67 S.Ct. 189, 91 L.Ed. 663, and Triangle Publications v. Rohrlich, 2 Cir., 167 F.2d 969. True, there are other recent cases reflecting the apparently developing wave which the opinion herewith represents and adequately illustrated by the two cases it particularly cites: Federal Telephone & Radio Corp. v. Federal Television Corp., 2 Cir., 180 F. 2d 250 (in theme, if not necessarily in result), and S. C. Johnson & Son v. Johnson, 2 Cir., 175 F.2d 176 (where I stressed in dissent the effect of the holding in falsifying our earlier finding of wrongdoing, 2 Cir., 116 F.2d 427, by refusing any realistic relief). Differences of view on such issues seem to me not unnatural and, while inconvenient, need no apology. I think we ourselves should recognize the existence of such divergence, just as others are doing, e....