Loctite Corp. v. National Starch & Chemical

• Citation: 516 F. Supp. 190
• Decision Date: 25 March 1981
• Docket Number: 78 Civ. 916 (LBS).
• Parties: LOCTITE CORPORATION and Woodhill/Permatex, Inc., and Loctite Puerto Rico, Inc., Plaintiffs, v. NATIONAL STARCH AND CHEMICAL CORP. and Permabond International Corp., Defendants.
• Court: U.S. District Court — Southern District of New York

516 F. Supp. 190

LOCTITE CORPORATION and Woodhill/Permatex, Inc., and Loctite Puerto Rico, Inc., Plaintiffs, v. NATIONAL STARCH AND CHEMICAL CORP. and Permabond International Corp., Defendants.

78 Civ. 916 (LBS).

United States District Court, S. D. New York.

March 25, 1981.

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Williamson & Williamson, New York City, for plaintiffs; Jerold Goldstein, and Gail Siegel, New York City, of counsel.

James & Franklin, P.C., New York City, for defendants; Harold James, and Neal Rosenberg, New York City, of counsel.

OPINION

SAND, District Judge.

This trademark and unfair competition suit concerns the rights of one manufacturer of cyanoacrylate adhesive to preclude a competitor's use of the term "Super Glue"¹ with reference to its cyanoacrylate adhesive product. Plaintiffs sue: under the Lanham Act, 15 U.S.C. Section 1114(1), for infringement of a federally registered trademark; under 15 U.S.C. Section 1125(a), for false designation, description, and representation of goods as to their nature and origin; for infringement of common law rights in a trademark; for unfair competition; for relief under N.Y.Gen.Bus. Law Section 368-d (McKinney); and under 15 U.S.C. Sections 1064 and 1119, for cancellation of a federally registered trademark. By way of relief, plaintiffs seek: (a) a permanent injunction prohibiting defendants' use of "Super Glue" and other injunctive relief; (b) an order directing the Commissioner of the United States Patent and Trademark Office (hereinafter "Commissioner") to amend the identification of goods on plaintiffs' registration of "Super Glue" on the Supplemental Register to "use on cyanoacrylate adhesive"; (c) an order directing the Commissioner to cancel defendants' registration on the Principal Register of a mark further identified below but including the term "Permabond"; (d) damages; and (e) attorneys' fees. Plaintiffs allege jurisdiction under 15 U.S.C. Section 1121 and 28 U.S.C. Sections 1332(a), 1338(a), 1338(b), 2201, and 2202.

Defendants counterclaim: to cancel plaintiffs' registration of "Super Glue" on the Supplemental Register, and for unfair competition. Defendants seek: (a) an order directing the Commissioner to cancel plaintiffs' registration of "Super Glue" on the Supplemental Register and other injunctive relief; (b) damages; and (c) attorneys' fees.

After a trial on the merits, in which the Court deferred consideration of damages, attorneys' fees, and the applicability of a laches defense which defendants sought to interpose,² the Court reaches the findings of fact and conclusions of law set forth below.

I. Facts

Plaintiffs and defendants manufacture³ cyanoacrylate adhesive, which is a rapid setting and strong bonding adhesive cement. So far as appears, the contents of plaintiffs' and defendants' tubes of cyanoacrylate adhesive are identical.⁴

As we noted in our earlier opinion, denying one and staying the second of defendants' summary judgment motions, see Loctite Corp. v. National Starch and Chemical Corp., No. 78-916 (S.D.N.Y. July 20, 1979), although cyanoacrylate has been marketed for industrial use for approximately twenty-five years, it was not sold in the consumer market until 1971. The marketing and sale to consumers of cyanoacrylate adhesives began with Messrs. Klaris and Plonchak. Mr. Klaris was, among other occupations, an importer of loose cultured pearls which he mounted for resale. He was dissatisfied with the adhesives used for this purpose and this led him to Mr. Plonchak who had a background in adhesives. They first perceived the existence of a consumer market for cyanoacrylate adhesives.

Messrs. Klaris and Plonchak first sold cyanoacrylate through the Rexco Corporation (hereinafter "Rexco"). Rexco came into existence in 1968 and was incorporated in 1969. Rexco's sole product was cyanoacrylate sold in the industrial market.

By 1971, Rexco had changed its name to Permabond International Corporation (hereinafter "PI"). In December of 1975, defendant National Starch and Chemical Corporation (hereinafter "National") acquired co-defendant PI. PI is presently a wholly-owned subsidiary of National.

PI (or Rexco) on September 16, 1969, acquired Trademark Registration No. 876,820 from an earlier unrelated company. This is a federal registration on the Principal Register of a mark consisting of a background letter "H" within which is the word "Perma-bond" and beneath that word, in smaller type, the words "Super Strength Glue."

In 1971, PI began marketing cyanoacrylate as a consumer product. As noted, it was the first company to do so. During 1971 and 1972, PI was the only company selling cyanoacrylate in the consumer market. Cyanoacrylate was then the company's only consumer product.

When PI began to market cyanoacrylate as a consumer product, it distributed the product through retail chains and mail order houses. In June of 1972, ProTel Products (hereinafter "ProTel") became the exclusive distributor for PI's product, and remained so until the end of 1972, after which it was a non-exclusive but predominant distributor.

PI's cyanoacrylate was sold to the consumer market in tubes on blister cards. At first, PI's blister card most prominently displayed the word "Permabond," and beneath that, in larger type, "Adhesive Power!". Starting at the end of 1972, PI's blister card was changed so that the heading read,

NEW PERMABOND ADHESIVE POWER IN SECONDS

The word in the largest type was "Permabond," and "Adhesive Power" was in the next largest type.⁵

PI spent several thousand dollars on advertising in 1972, not using the term "Super Glue." Sales in 1972 were between one million and one and a half million tubes.

In 1973, PI ceased to be the only company selling cyanoacrylate adhesives to the consumer market. Krazy Glue entered the market and conducted extensive television advertising. Other competing brands on the market included "Super Three Cement" and "Super Bonder," the latter being the brand put out by co-plaintiff Loctite Corporation (hereinafter "Loctite") but otherwise irrelevant to this litigation. Moreover, this is the year in which plaintiffs' relevant activities began.

The plaintiff now known as Woodhill/Permatex, Inc. (hereinafter "Woodhill") and formerly known as Woodhill Chemical Sales Corporation (in June of 1974 Loctite acquired Woodhill as a wholly-owned subsidiary), decided in February of 1973 to market a cyanoacrylate adhesive in the consumer market. Woodhill agreed to purchase its cyanoacrylate from a Japanese company whose cyanoacrylate was already available in the consumer market as "Super Three Cement." Woodhill commenced development of its marketing program. By May of 1973, Woodhill had chosen "Super Glue" as the name for its product. The first disclosure of its term to its sales force was in August, and in October, Woodhill's brand of cyanoacrylate adhesive was displayed and offered for sale at the Automotive Parts and Accessories Show. In November, 1973, Woodhill received the first orders for its product. From then through February 28, 1974, Woodhill continued to receive orders.

Meanwhile, PI's 1973 activities were as follows: In the latter part of 1973,⁶ PI decided to introduce a smaller blister card and to change the wording so that the smaller blister cards would not include the words "Adhesive Power" and instead would read,

PERMABOND THE SUPER GLUE THAT SETS IN SECONDS.

The word in the largest type was "Permabond" and the words in the next largest type were "The Super Glue." The graphics for this new small card were completed before the end of the year. The reason for the introduction of a smaller blister card was to save space on store counters. The reason defendants give for the abandonment of "Adhesive Power" was that "it was in this general period that the term `Black Power' antagonized many persons." Defendants' Post-Trial Brief at 37.

The new small card was not printed in 1973. However, a window banner for display by retailers was designed and printed in October or November of 1973.⁷ Defendants recite that it

carried a picture of two jeeps trying to pull apart two items held together by cyanoacrylate, and carried the prominent legend "The Super Glue That Sets in Seconds." These banners were first printed in November of 1973, were distributed to retailers immediately thereafter, and continued to be so distributed for many years thereafter until modified in 1976, primarily by being enclosed as a matter of routine in cartons containing the blister packs that were shipped to the stores.

Defendants' Post-Trial Brief at 38 (citations to record omitted). The text of the window banner was "Permabond The Super Glue That Sets in Seconds Available Here."

PI conducted television advertising during 1973, under ProTel's control.

PI's new small card was printed in January of 1974, and the first shipments were made to customers the same month.⁸ However, earlier in the month, Messrs. Plonchak and Klaris had become aware that the Consumer Products Safety Commission (hereinafter "CPSC") had announced a ban on cyanoacrylate adhesives. Plonchak and Harold Cole of ProTel sought and were granted a conference with the CPSC. An agreement was reached whereby a cautionary instruction would be placed on the tubes and packages of the adhesives and the CPSC ban would be lifted. The actions of the CPSC, which was a newly created governmental body, received significant public attention and media coverage, this being one of its first interventions on behalf of consumers.

The new small blister cards which PI printed and shipped in January contained the CPSC warning language. These small cards were thereafter used, together with larger cards, by PI. ProTel did not use these cards but continued to use cards bearing the "Adhesive Power" language.

On February 28, 1974, Woodhill made the first shipment of its cyanoacrylate. The blister card carried the language "Duro Super Glue." On November...