Lever Bros. Co. v. American Bakeries Co., Inc., 78 CV 1648 (ERN).
| Decision Date | 01 April 1982 |
| Docket Number | No. 78 CV 1648 (ERN).,78 CV 1648 (ERN). |
| Citation | 537 F. Supp. 248 |
| Parties | LEVER BROTHERS COMPANY, Plaintiff, v. AMERICAN BAKERIES COMPANY, INC., Defendant. |
| Court | U.S. District Court — Eastern District of New York |
Brumbaugh, Graves, Donohue & Raymond by Joseph D. Garon, Eugene V. Handy, Jr., New York City, for plaintiff.
Holland, Armstrong, Wilkie & Previto by Joseph J. Previto, New York City (McWilliams, Mann & Zummer by Thomas F. McWilliams and Dennis M. McWilliams, Chicago, Ill., of counsel), for defendant.
This action for injunctive relief against alleged infringement of plaintiff's trademark AUTUMN was tried by the court upon the facts. Jurisdiction is grounded upon 15 U.S.C. § 1121 and 28 U.S.C. §§ 1332 and 1338. The facts and legal discussion which follow constitute the court's findings and conclusions, Rule 52, F.R. Civ.P.
Plaintiff, Lever Brothers Company ("Lever"), is a Maine corporation having its principal place of business in New York City. Lever, which has conducted business in the United States since 1895, sells a variety of consumer products, including detergents, soaps, toothpaste and food products. Among its food products is margarine sold under the trade names AUTUMN, PROMISE and IMPERIAL, and such items as MRS. BUTTERWORTH'S syrup and pancake mix, LUCKY WHIP dessert topping and SPRY shortening. AUTUMN margarine, which came on the market in 1975, was developed and advertised as a natural margarine product, and in October 1975 Lever obtained a trademark registration for AUTUMN without opposition.
Defendant, American Bakeries Company, Inc. ("American"), is a Delaware corporation having its principal place of business in Chicago, Illinois. American sells bread and other bakery products throughout the United States. These are produced and distributed by a number of primary baking divisions utilizing the trade names Taystee, Merita, Langendorf and Cook Book.
The controversy between the parties arises out of American's decision in April 1977 to adopt AUTUMN GRAIN as a trade name for a grain-type bread it had developed to meet competition from others. The decision was made after a trademark search and advice from house counsel had cleared AUTUMN GRAIN for use. The search disclosed Lever's registration for AUTUMN, as well as similar registrations by others: AUTUMN GOLD (frozen turkeys), AUTUMN LEAVES (candy), AUTUMN CRISP (apples), AUTUMN CHERRY (wine), and AUTUMN WIND (whiskey).
On April 22, 1977, American filed its application for registration of AUTUMN GRAIN, and notice for opposition purposes was published by the Patent and Trademark Office on December 13, 1977. The application disclaimed any exclusive right in the term GRAIN apart from its use in the composite mark AUTUMN GRAIN. In July 1978, Lever filed a notice of opposition against American's application on the basis of its prior registration for AUTUMN. After commencement of this action, however, Lever moved to suspend the opposition proceeding, and that motion was granted on February 5, 1979, by the Trademark Trial and Appeal Board.
Lever's AUTUMN margarine is sold in two different forms, tub and stick, and the packaging for each prominently displays the AUTUMN trademark in a distinctive typeface. The primary color scheme for the packaging is red, white, brown and gold, representing the colors of autumn, and is designed to create the image of a "natural" margarine product. Lever's name appears in small type on the bottom panel of the packaging; therefore, the trademark forms the principal basis for consumer recognition.
Original marketing of AUTUMN margarine began in California in 1975 after initial sales in interstate commerce earlier that year from Lever's office in Edgewater, New Jersey to retail stores in Massachusetts and Maine. The initial marketing effort, however, was concentrated in Los Angeles because that area was known to have a relatively high interest in natural-type products. The promotion was accompanied by extensive television commercials and print advertising portraying the use of AUTUMN margarine on bread or crackers. The print advertisements also featured recipes using AUTUMN margarine for making bread and stuffing. The impact of the television advertising was tested by means of consumer surveys in which people were interviewed as to their recall of television commercials for AUTUMN margarine within 24 hours of the commercial. AUTUMN margarine scored a significantly high recall rating of approximately 30%, which compared favorably to the 20% rate for most food products.
That a considerable investment for advertising was made by Lever in promoting AUTUMN margarine is evident from the following table of expenditures for such purpose:
1975 $ 223,000
1976 524,000
1977 405,000
1978 205,000
1979 1,316,000
1980 945,000 (10 months)
Since AUTUMN margarine is generally sold to housewives, Lever's advertising of the product is directed to women, particularly those between the ages of 21 and 35. In both television commercials and print advertising, two basic themes are presented: that AUTUMN margarine is the first natural margarine, i.e., one free from artificial preservatives or coloring, and that it tastes good.
AUTUMN margarine, which generally retails for between 89¢ and 93¢ a package, is sold through two basic channels of trade: (1) directly to large supermarket chains; and (2) to wholesalers who, in turn, sell and distribute it to smaller retail accounts, usually chain supermarkets, independent supermarkets, and small grocery stores. Total sales of the product since 1975 have been as follows:
1975 $ 247,000
1976 1,198,000
1977 1,152,000
1978 1,211,000
1979 4,056,000
1980 3,864,000 (10 months)
American presently uses the mark AUTUMN GRAIN only on bread. The bread wrappers bear the mark in lettering almost identical with Lever's AUTUMN mark except for color and the added expression "natural grains." Aside from the prominent designation "AUTUMN GRAIN Bread," the source of the product is identified by the "house mark" of the regional bakery, i.e., Merita, Langendorf, Taystee or Cook Book, displayed in white lettering in red ovals on the panels of the wrapper. American's name appears only inconspicuously on a side panel.
American's AUTUMN GRAIN bread is generally displayed and sold from "self-service" shelves in the same type of stores as AUTUMN margarine, i.e., retail grocery stores and supermarkets. Its sale is also promoted through advertisements in newspapers and television commercials, which are directed toward women, particularly housewives, and stress the "natural" qualities of its ingredients and taste.
Since April 1977, when it was introduced, American has sold some 50 to 60 million loaves of AUTUMN GRAIN bread, which wholesales at about 65¢ a loaf, for a total value of about $43,000,000. The majority of these sales occurred in the southeastern portion of the United States, in contrast to the bulk of AUTUMN margarine sales which have been made in California, Oregon and Washington.
Although Lever charges American with trademark infringement, unfair competition, false designation of origin and dilution of its valuable trademark AUTUMN on margarine, it acknowledges that it has not uncovered any evidence of actual confusion, and the court finds no evidence of actual competition between the parties. Nevertheless, Lever contends it has made a sufficiently strong showing of a likelihood of confusion among ordinary purchasers as to the source of origin of American's bread. Lever emphasizes the virtually identical lettering of AUTUMN as it appears on the packaging of the respective products, the "peculiar" circumstances of American's adoption of AUTUMN and its disclaimer of any registration for GRAIN, the imitative tenor of American's advertising themes, the functional interrelatedness of margarine and bread, and the possibility that Lever will extend its line of food products to include a long shelf-life bread product now being marketed in Europe by its parent company, Unilever.
American, denying any infringement or bad faith in its adoption and use of AUTUMN GRAIN, stresses the dissimilarity of the products, their different handling in stores selling them, the absence of any evidence of actual confusion on the part of purchasers, the prevalence of autumn colors in bread packaging and of the expression "natural" in the food field, and the apparent acceptance of AUTUMN GRAIN by the Patent and Trademark Office despite the other AUTUMN registrations. Essentially, American argues that under the precedents in this Circuit, the court should conclude that there is no likelihood of confusion based upon the simultaneous use of AUTUMN for margarine and AUTUMN GRAIN for bread, and that in any event, the balancing of equities as between the parties should preclude injunctive relief which could only seriously disadvantage American economically and would not advantage Lever in the circumstances.
There is no question that the products involved in this trademark controversy, although different and noncompeting, are closely related in point of purchase and use. The crucial question is whether the use of AUTUMN on these differing but related products, and in their promotion, creates "any likelihood that an appreciable number of ordinarily prudent purchasers are likely to be misled, or indeed simply confused, as to the source of the goods in question." Mushroom Makers, Inc. v. R. G. Barry Corp., 580 F.2d 44, 47 (2d Cir. 1978), cert. denied, 439 U.S. 1116, 99 S.Ct. 1022, 59 L.Ed.2d 75 (1979). As pointed out by the District Court in Mushroom Makers, the fact that "the products are not identical does not foreclose relief to the senior owner of the trademark if they are sufficiently related to make...
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