Locatelli v. Tomaiuoli

Citation129 F. Supp. 630
Decision Date10 March 1955
Docket NumberCiv. A. No. 795-50.
CourtUnited States District Courts. 3th Circuit. United States District Courts. 3th Circuit. District of New Jersey
PartiesLOCATELLI, Inc., and Umberto Locatelli, Giovanni Locatelli, Ercole Locatelli, Antonio Locatelli, Albert Locatelli, Alfredo Locatelli and Lodovico Locatelli, co-partners doing business as "Mattia Locatelli," Plaintiffs, v. Louis TOMAIUOLI and Frank Tomaiuoli, co-partners doing business under the firm name and style of "Lucatelli Packing Company," Defendants.

Hollander & Leichter, Union City, N. J., by Samuel F. Frank, New York City, for plaintiffs.

Charles F. Echentille, Union City, N. J., by Otto Riemenschneider, Union City, N. J., for defendants.

MODARELLI, District Judge.

This is an action based on unfair competition. Plaintiffs are Locatelli, Inc., a New York corporation, operating a wholesale Italian grocery business, and seven members of the Locatelli family, (citizens and residents of Italy) who are co-partners doing business as Mattia Locatelli (principal office in Italy). Defendants are Louis and Frank Tomaiuoli, (citizens and residents of New Jersey) co-partners doing business in New Jersey as Lucatelli Packing Company. Plaintiffs, who use the name "Locatelli," seek damages and an injunction against defendants from using the name "Lucatelli."

This court, sitting without a jury, heard argument by counsel only. The parties stipulated that the testimony and exhibits previously used in the litigation between the same parties in the United States Patent Office be used as the evidence in this case. That prior litigation was an opposition proceeding in which the defendants herein pursuant to the Lanham Trade-Mark Act of 1946, 15 U.S.C.A. § 1051 et seq., unsuccessfully sought to register on the Principal Register their name — "Lucatelli" — for edible oils.

The firm of Mattia Locatelli, plaintiffs' predecessor, began operations in or about the year 1860 at Lecco, Italy. The plaintiffs now produce, manufacture, sell, import, and distribute Italian food products throughout the United States. Plaintiffs began operations in the United States in 1904 when they opened an office in New York City. Today, 60% of their business is cheese; 15%, meat products; 10%, tomato paste; and 5%, antipasto.

Their annual sales for the years 1921 through 1949 ranged from $278,795 in 1941 to $3,670,912 in 1946; during the 18 years from 1922 through 1939, in 9 years, sales were at least $1,000,000, in 8 years, at least $2,000,000, and in 1928, $3,246,852. The 1946 sales figure was $3,670,912; 1947, $1,169,384; 1948, $1,893,838; 1949, $2,442,097. Their annual advertising expenses from 1921 through 1949 ranged from $964 in 1940 to $45,824 in 1935; from 1930 through 1938 plaintiffs spent $221,688; from 1921 through 1929, $35,261; from 1939 through 1949, $31,703. The evidence is that the name "Locatelli" was prominently displayed in the printed advertisements. Defendants did not submit any evidence as was done by plaintiffs to show the extent of its advertising expenses.

Since 1948, plaintiffs have imported olive oil into the United States totaling approximately 10,000 cases in 1948, 1949, and 1950; they sell it exclusively to importers, wholesalers, and jobbers. Plaintiffs first sales of olive oil under the label "Locatelli" were in 1928 when 100 cases were sold; subsequently, however, plaintiffs did not use that name on their oil product until 1948.

Defendant Frank Tomaiuoli first knew of plaintiffs' firm around 1920 or 1921. Defendants' explanation of their choice of the name "Lucatelli" is that Michael Anthony Lucatelli, who was born in 1872 in Vico del Gargano, Province of Foggia, Italy, was an "old friend of the family and a very distant relative of ours;" in late 1923, Lucatelli shipped about 75 cases of olive oil and dry olives from Italy to defendants in the United States; a few months later, defendants received another shipment of the same quantity of oil; and since Lucatelli was unable properly to package the oil, he authorized defendants to use his name on cans supplied by others. Lucatelli died in 1940.

Olive oil sales which were 60% of defendants' business in 1942, increased to about 90% in 1950. Defendants' sales for the period from 1942 through 1950 totaled $1,671,757.18, the highest amount having been $333,227.20 in 1950. Defendants sell to jobbers and retail grocers located in the metropolitan areas of New York City so that their allegedly unfair competitive conduct occurred in the states of New York and New Jersey.

The nature of the Italian food industry is such that the retail seller of cheese products also sells olive oil because both products are generally used together by the housewife, who usually is but not necessarily of Italian descent. There is no dispute that plaintiffs' reputation mainly is based on the calibre of their cheese products and that their name "Locatelli" mainly has been used in connection with cheese, meat, tomato paste, and antipasto.

For our purposes, all of the operative facts in this case occurred in New Jersey, which case is here by diversity of citizenship only, and the substantive law of New Jersey governs. As to the acts complained of which occurred outside New Jersey, that state's conflict of laws rule applies. Browning King Co. of New York v. Browning King Co., 3 Cir., 176 F.2d 105; Campbell Soup Co. v. Armour & Co., 3 Cir., 175 F.2d 795, certiorari denied 338 U.S. 847, 70 S.Ct. 88, 94 L.Ed. 518; Adam Hat Stores, Inc. v. Lefco, 3 Cir., 134 F.2d 101. As will be discussed below, however, in this case it is unnecessary for the court to decide what substantive law a New Jersey court would apply to the events occurring in New York State.

Although plaintiffs' counsel in his brief states that the action is based on unfair competition and infringement, the complaint does not allege the latter cause of action. Under New Jersey law, however, the distinction between the two theories now is unimportant. See American Shops, Inc. v. American Fashion Shops, etc., 13 N.J.Super. 416, 80 A.2d 575. Further, while the complaint does not allege that the name "Locatelli" is registered pursuant to the Federal Trade-Mark Act of 1905, 15 U.S.C.A. § 81 et seq., now replaced by the Lanham Trade-Mark Act of 1946, 15 U.S.C.A. § 1051 et seq., there is evidence that registration of the name Locatelli for cheese was issued May 15, 1934, and that there are six other registrations for cheese issued to plaintiffs; an eighth registration is of a design with the name Locatelli, used as a trade-mark for tomato paste.

As to the Lanham Act and the governing law thereunder, in Campbell Soup Co. v. Armour & Co., 3 Cir., 175 F.2d 795, at page 797, certiorari denied 338 U.S. 847, 70 S.Ct. 88, 94 L.Ed. 518, the court said:

"Here we have a claim for unfair competition generally and also a claim for trade-mark infringement with reliance upon the federal statute as to registration Federal Trade-Mark Act of 1905, 15 U.S.C.A. § 81 et seq., now replaced by the Lanham Trade-Mark Act of 1946, 15 U.S.C.A. § 1051 et seq. The unfair competition matter is, as said above, one for state law. * * * What about the trade-mark infringement in this instance?"

The court did not answer its question, but noted (a) the trade-mark registration statute expressly confers jurisdiction on federal courts for litigation arising under it, and (b) the matter is essentially one of state property law. Thus, the court indicated that the choice of law should be state law. Moreover, the court has not been referred to nor has it found a split of federal and state rules of unfair competition. Sears, Roebuck & Co. v. Johnson, 3 Cir., 219 F.2d 590; Q-Tips, Inc. v. Johnson & Johnson, 3 Cir., 206 F.2d 144, certiorari denied, sub nom. Johnson & Johnson v. Q-Tips, Inc., 346 U.S. 867, 74 S.Ct. 106, 98 L.Ed. 377.

Based on the foregoing, the court concludes that the governing law in this case is New Jersey's substantive law of unfair competition.

Under the applicable New Jersey law, plaintiffs must prove that their name "Locatelli" has gained a secondary meaning. French American Reeds Mfg. Co. v. Park Plastics Co., 20 N.J.Super. 325, 90 A.2d 50, was an action to restrain unfair competition in the manufacture and sale of plastic ukeleles. The court, although holding that secondary meaning had not been proved, applied the following test: Has the product (in the case at bar, the trade-name) been in the market a sufficient length of time and with such degree of success as to acquire a secondary meaning in that it is associated in the public mind with the first comer as the manufacturer or source so that the public will believe the goods have come from the first and will buy, in part, at least, because of that belief. Is the public moved in any degree to buy the item because of its source? 20 N.J.Super. at page 338, 90 A.2d at page 57, the court said:

"The ultimate test of secondary meaning must always remain whether plaintiff's product in its distinctive trade dress has become broadly known to the public as indicating a certain origin. The length of time required under this test cannot be measured as a matter of law by any positive criterion."

Has plaintiff herein successfully met this test?

The evidence relevant to the question of secondary meaning is: (a) the period of time the name has been used, (b) the nature and extent of advertising expenditures, (c) sales volume. Squeezit Corp. v. Plastic Dispensers, Inc., 31 N.J. Super. 217, 225, 106 A.2d 322; B. DiMedio & Sons, Inc. v. Camden Lumber & Millwork Co., Inc., 23 N.J.Super. 365, 93 A.2d 45; French American Reeds Mfg. Co. v. Park Plastics Co., supra. In this case, there is convincing evidence establishing an association between the name "Locatelli" and plaintiffs as the source of the Italian food products in the minds of a segment of the public. Plaintiffs have used the name "Locatelli" in the United States since the year 1904; the extent of plaintiffs' advertising expenses and sales volume is shown above....

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    ...Mfg. Corp., supra, 685 F.2d at 82; Faberge, Inc. v. Saxony Products, Inc., 605 F.2d 426, 428 (9th Cir. 1979); Locatelli, Inc. v. Tomaiuoli, 129 F.Supp. 630, 634 (D.N.J.1955). See also Ciba-Geigy, supra, 747 F.2d at 851-52; Boehringer Ingelheim v. Pharmadyne Laboratories, 532 F.Supp. 1040, 1......
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    ...advertising, and the fact of copying. Faberge, Inc. v. Saxony Products, Inc., 605 F.2d 426, 428 (9th Cir. 1979); Locatelli, Inc. v. Tomaiuoli, 129 F.Supp. 630, 634 (D.N.J.1955). That there has been extensive copying of Rubik's Cube was demonstrated by an admission made by appellant's counse......
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