King-Size, Inc. v. Frank's King Size Clothes, Inc.

• Decision Date: 30 August 1982
• Docket Number: Civ. A. No. H-77-1777.
• Citation: 547 F. Supp. 1138
• Parties: KING-SIZE, INC., King-Size Knapp, Inc. of Texas, Plaintiffs, v. FRANK'S KING SIZE CLOTHES, INC., Frank W. Winker, Frank's King Size Clothes of Austin, Inc., Defendants.
• Court: U.S. District Court — Southern District of Texas

547 F. Supp. 1138

KING-SIZE, INC., King-Size Knapp, Inc. of Texas, Plaintiffs, v. FRANK'S KING SIZE CLOTHES, INC., Frank W. Winker, Frank's King Size Clothes of Austin, Inc., Defendants.

Civ. A. No. H-77-1777.

United States District Court, S. D. Texas, Houston Division.

August 30, 1982.

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Edward T. Robinson, Gaston Snow & Ely Bartlett, Boston, Mass., Julian Clark Martin and Fay E. Morisseau, II, Vinson & Elkins, Houston, Tex., for plaintiffs.

V. Bryan Medlock, Jr. and Herbert J. Hammond, Richards, Harris & Medlock, Dallas, Tex., for defendants.

FINDINGS OF FACT AND CONCLUSIONS OF LAW

CARL O. BUE, Jr., District Judge.

Introduction

Plaintiffs, King-Size, Inc. and King-Size Knapp, Inc. of Texas (unless otherwise indicated, hereinafter King-Size), brought this action for trademark and service mark infringement of federally registered marks pursuant to Section 32(1) of the Lanham Act, 15 U.S.C. § 1114(1) (1963), false designation of origin pursuant to Section 43a of the Lanham Act, 15 U.S.C. § 1125(a) (1982), and unfair competition under principles of Texas common law, against defendants Frank W. Winker, Frank's King Size Clothes, Inc., and Frank's King Size Clothes of Austin, Inc.

Defendants have counterclaimed against plaintiffs for cancellation of plaintiffs' federal trademark and service mark registrations alleging that the registrations were fraudulently procured, and in addition, that the alleged marks are not distinctive of plaintiffs' goods and services. Defendants seek also damages for the assertion of these fraudulently obtained registrations. Finally, defendants counterclaim for cancellation of plaintiffs' state trademark registration.

The cause was tried to the Court sitting without a jury. At the conclusion of the evidence, the Court requested additional briefing by the parties and took the case under advisement. Pursuant to Rule 52(a), Fed.R.Civ.P., the Court hereby enters the following Findings of Fact and Conclusions of Law detailing the reasons for its decision that plaintiffs have failed to sustain their burden of proving that defendants infringed plaintiffs' mark, that defendants had falsely designated the origin of their goods in violation of 15 U.S.C. § 1125(a), or that defendants had engaged in unfair competition under the principles of Texas common law, and that as a consequence thereof, defendants should prevail. The following Findings of Fact and Conclusions of Law reflect also the Court's conclusions that as plaintiffs' trademark and service mark registrations were not fraudulently obtained, and as plaintiffs' mark is not a common descriptive name of an article or substance, defendants' claim for cancellation of plaintiffs' federal registrations must be denied. The Court concludes further, however, that under existing Texas law plaintiffs' state trademark registration must be cancelled.

Findings of Fact

1. Plaintiff King-Size, Inc., is a Massachusetts corporation with its principal place of business in Brockton, Massachusetts. Admission of Fact.

2. Plaintiff King-Size Knapp, Inc. of Texas is a Texas corporation with a place of business in Houston, Harris County, Texas. Admission of Fact.

3. Defendant Frank W. Winker is a resident of Arlington, Texas. Admission of Fact.

4. Defendant Frank's King Size Clothes, Inc., is a Texas corporation with its principal place of business in Dallas, Texas. Admission of Fact.

5. Defendant Frank's King Size Clothes of Austin, Inc., is a Texas corporation with its principal place of business in Dallas, Texas. Admission of Fact.

6. On November 30, 1946, plaintiff King-Size's predecessor in title was incorporated to do business in the State of Massachusetts. The business for which the company was to be engaged included "the manufacture and sale of wearing apparel, and, the sale and purchase of real estate necessary thereto." Plaintiffs' Exhibit 1. See also Testimony of James Kelley; Plaintiffs' Exhibit 26; Defendants' Exhibit 74.

7. In 1947, King-Size's predecessor in title began using the name king size in the United States in connection with the marketing of men's shoes for large size feet through mail order catalogs. Testimony of James Kelley; Plaintiffs' Exhibit 26; Defendants' Exhibit 74.

8. Due to customer demand, King-Size's predecessor in title entered into the wearing apparel business in 1948 when it began marketing a line of outsize hosiery. Plaintiffs' Exhibit 26; Defendants' Exhibit 74.

9. By 1950, the mail order operations of the company had expanded to the point that the company had set aside $25,000 for advertising. The company's advertising at that time consisted of the placement of advertisements in newspapers and magazines, in addition to a direct mail program. Plaintiffs' Exhibit 26; Defendants' Exhibit 74.

10. On September 20, 1967, the Board of Directors of Knapp Brothers Shoes Manufacturing Corporation (hereinafter Knapp Shoes), unanimously authorized a merger of King-Size's predecessor in title, King-Size, Inc., a wholly-owned subsidiary of Knapp Shoes, into the parent company Knapp Shoes. The directors unanimously authorized also a plan which established upon consummation of the merger heretofore discussed, a division of Knapp Shoes known as "The King-Size Co." Plaintiffs' Exhibit 2.

11. On October 27, 1967, the President of King-Size's predecessor in title, Manuel Alter, authorized the use of the corporate name "King-Size, Inc." by a company named "King-Size, Inc." that had not yet been created. Plaintiffs' Exhibit 3.

12. On October 31, 1967, King-Size, Inc., executed and filed its Articles of Organization with the Secretary of the Commonwealth of Massachusetts. As described in its Article of Organization, King-Size, Inc. was formed for the following purposes:

To manufacture, buy, sell and deal, at wholesale, at retail, and by mail order, in clothing, headwear, footwear, gloves and wearing apparel and accessories of any and every kind, whether ready or custom made, for men, women and children; and generally to carry on the business of sellers of men's, women's and children's clothing apparel and accessories.

Plaintiffs' Exhibit 4. Such Articles of Organization were approved by the Secretary of the Commonwealth on the same day. Plaintiffs' Exhibit 4.

13. On March 27, 1967, the Articles of Incorporation of Knapp Brothers Shoes-Texas, Inc. were filed with the Secretary of State of the State of Texas. Plaintiffs' Exhibit 7. Following the receipt of the Articles of Incorporation and a finding that such articles conformed to law, the Secretary of State executed a Certificate of Incorporation of Knapp Brothers Shoes-Texas, Inc. Plaintiffs' Exhibit 7. Knapp Brothers Shoes-Texas, Inc. later changed its name to King-Size Knapp, Inc. of Texas. Plaintiffs' Exhibit 8.

14. On October 31, 1967, the Articles of Merger of Knapp Shoes and the former King-Size, Inc. were filed also with the Secretary of the Commonwealth of Massachusetts. Plaintiffs' Exhibit 5. The effective date of the merger, as stated in the Articles of Merger, was the close of business on October 31, 1967. Plaintiffs' Exhibit 5. Such Articles of Merger were approved by the Secretary of the Commonwealth on the same day. Plaintiffs' Exhibit 5.

15. On June 29, 1970, the President of Knapp King-Size Corp. executed an agreement transferring to King-Size, Inc., the assets of its King-Size Division, as well as "all claims and rights under contracts, the right to use the name `King Size', or any variant thereof, any and all trademarks, trade names ..., all as the same presently exist...." Plaintiffs' Exhibit 6.

16. On July 1, 1976, King-Size executed an agreement providing its wholly owned subsidiary, Knapp King-Size Corp., with the "right and license to use, and to grant sublicenses thereunder, the trademark and service mark `King-Size', ... in connection with offering for sale and the selling of wearing apparel, shoes and clothing for big and tall men." Plaintiffs' Exhibit 9.

17. Subsequently, Knapp King-Size Corp. executed a sublicense agreement with a related company, King-Size Knapp, Inc. of Texas, Plaintiffs' Exhibit 10, whereby King-Size Knapp, Inc. of Texas acquired the "right and license to use the trademark and service mark `King-Size', ... in connection with the offering for sale and the sale of wearing apparel, shoes and clothing for big and tall men." Plaintiffs' Exhibit 10.

18. Prior to 1968, King-Size's principal merchandising method was the utilization of mail order catalogs. Approximately 98% of King-Size's business was conducted through mail order catalogs, while the remainder of its sales were made in its outlet store. Testimony of James Kelley.

19. In 1968, King-Size entered the retail market by opening its first retail store in Boston, Massachusetts. At the present time, King Size has 22 retail stores located in major cities throughout the United States, e.g., Chicago, Philadelphia, Houston, Baltimore, Washington D. C., Boston, St. Louis and Pittsburgh. Its retail stores are located mainly in the East and Midwest. It also sells its merchandise in several large department stores. Presently, its retail stores contribute approximately 40% of the total sales made by King-Size. Testimony of James Kelley.

20. The heart of King-Size's mail order business is its customer lists. Names on these lists are obtained through potential customer inquiries as a result of King-Size's national advertising. Testimony of James Kelley. At the present time, approximately 600,000 persons residing in the United States, Canada and Europe are on plaintiffs' customer lists.

21. King-Size's business is dependent upon repeat business. Approximately 80%-90% of King-Size's customers are repeat customers. On the average, King-Size's customers buy merchandise from it 1.8 times a year. Testimony of James Kelley.

22. King-Size has a retail store located in the southwestern section of Houston. Testimony of James Kelley;...