McCabe-Powers Auto Body Co. v. American Truck Equip. Co.

• Decision Date: 28 February 1957
• Docket Number: Civ. A. No. 7725.
• Citation: 150 F. Supp. 194
• Parties: McCABE-POWERS AUTO BODY CO., Plaintiff, v. AMERICAN TRUCK EQUIPMENT COMPANY, Defendant.
• Court: U.S. District Court — District of Oregon

150 F. Supp. 194

McCABE-POWERS AUTO BODY CO., Plaintiff, v. AMERICAN TRUCK EQUIPMENT COMPANY, Defendant.

Civ. A. No. 7725.

United States District Court D. Oregon.

February 28, 1957.

Hart, Spencer, McCulloch, Rockwood & Davies, Portland, Or., by William W. Wyse, Portland, Or., for plaintiff.

W. E. Ramsey, J. Pierre Kolisch, Portland, Or., Alfred W. Petchaft, St. Louis, Mo., for defendant.

EAST, District Judge.

Parties and Jurisdiction

The Plaintiff, McCabe-Powers Auto Body Co., is a Missouri corporation, with its principal office and place of business in St. Louis, Missouri.

The defendant, American Truck Equipment Company, is an Oregon corporation, having its principal office and place of business in Portland, Oregon.

Jurisdiction of this Court is founded upon diversity of citizenship with the amount of the controversy involved exceeding $3,000. Further, that the suit is prosecuted under trade-mark laws of the United States, Act of July 5, 1946, C. 540, Title VIII, Sec. 43, 15 U.S.C.A. § 1125.

Statement of Case

The Plaintiff filed its complaint alleging, in connection with its merchandising affairs, first, unfair competition, second, trade-mark infringement, and third, false designation of origin on the part of the Defendant in its merchandising activities, and prayed for relief, in short, as follows:

1. Injunction from the use by Defendant of the designation, "American" in its corporate name or as trade-mark or in any way, manner or form whatsoever in connection with Defendant's merchandising of its product.

2. An accounting by the Defendant for profits and damages.

3. The appointment of a master herein.

4. Costs.

5. For such further equitable relief as the Court sees fit.

The Defendant's answer is, in short, a general denial of the allegations of Plaintiff's complaint, and by way of counterclaim the Defendant asserts that Plaintiff's action is filed wilfully, maliciously and in bad faith to harass the Defendant and for the sole purpose of damaging the Defendant rather than to protect any right Plaintiff might have, and prays, in short, for the following:

1. That Plaintiff's complaint be dismissed.

2. That Defendant be awarded $50,000 general damages and $50,000 exemplary damages.

3. For recovery of costs of action and further equitable relief as the Court deems just.

Statement of Facts

From the agreed facts in the pre-trial order admitted herein and the evidence adduced at the trial, the Court finds:

That the American Coach and Body Company, an Ohio corporation, (American Coach) was founded in 1922. American Coach maintained its principal office in Cleveland, Ohio, and was engaged in the business of manufacturing and selling throughout the United States metal bodies and vehicle mounted equipment used by public utility companies and authorities. American Coach, in promotion of its merchandise, advertised under the notation "American". These advertisements appeared in various magazines and publications throughout the United States.

There had been filed in the United States Patent Office application for registration of the trade-mark "American." The exact status of the trade-mark registration through the Patent Office of the notation, "American" is not clear. Suffice to say registration of the notation is of no concern to this litigation as the plaintiff claims a common law trademark in connection with the notation "American."

Salesmen of American Coach were generally known throughout the trade and referred to as "American" salesmen. Brochures and catalogues identified equipment and parts as "American." Orders for equipment and replacement parts were ordered from American Coach by the trade throughout the United States through the use of the word, "American" plus a serial or identification number.

That from 1922 until 1950, American Coach was the leader and in all probability the largest manufacturer in this particular field of merchandise in the United States, all with national distribution and good reputation. The trade-mark of American Coach was a shield with the letters "ACB" inscribed.

Prior to 1950 the plaintiff and American Coach had been competitors in this specialized field. The plaintiff had its original inception in Missouri in 1871 as the McCabe-Young Manufacturing Company and has been a corporation with its present name since 1923. The trademark of plaintiff had been "Powers" within an oval.

In 1950 the plaintiff, at a cost of over $1,000,000 purchased the business of American Coach as an addition to its business, acquiring all trade-marks, good will, patents, files and assets of every nature except real estate.

After the mentioned purchase, plaintiff, with an intent to consolidate the good will of the "Powers" company and the "American" company, combined the words "Powers" and "American" within the "Powers" oval. This combination was and is still being used in advertising, letterheads, brochures and catalogues. Plaintiff has expended approximately $600,000 for advertising within the field using the above designation during the six year period since the purchase.

Plaintiff has developed an intended plan whereby the "Powers" oval was to be gradually de-emphasized and the "ACB" shield dropped entirely. For this reason there would be a transitional period where both names would be used and therefore the application for registration of the trade-mark was allowed to drop.

The Defendant was organized in 1951. The principal stockholders and officers are Mr. Thomas R. Hall and his father, Mr. Fred Hall. Prior to the organization of Defendant, both of the mentioned men were in the employ of the Plaintiff and had been previously in the employ of American Coach. Mr. Fred Hall, for many years, had been a salesman for American Coach and later manager of their Oakland, California branch office.

Shortly before the purchase of American Coach by the Plaintiff, but after knowledge of the purchase and negotiations for future employee-employer relationship, the connection of the two men with Plaintiff was severed. The evidence does not clearly indicate the entire circumstances of the severance, however, it is clear there was an irreconcilable disagreement between the parties over the basis of future employment. It is evident from the evidence that the parting of the ways was not friendly or harmonious. Shortly after the severance of employer-employee relationship the Messrs. Hall organized the Defendant corporation, and engaged as principal stockholders and officers in its corporate management.

Contentions

It is the Plaintiff's contention that since at least 1924 and until 1950, the trade within the utility field had come to recognize merchandise bearing the notation "American" as emanating from and being the product of American Coach. That because of this, the word "American", although admittedly being geographic in its inception, had acquired a secondary meaning within the utility body and vehicle equipment field, and thus became a valid common law trade-mark.

Defendant contends that it adopted the word "American" in its corporate name because when it started business it was handling the products of at least two companies whose names included the name "American," and, further, that it was spreading nationally and was not to be confined to a local concern status.

Is the word "American" capable of trade-mark significance in the public utility field?

A leading case in this Ninth Circuit is North American Air Coach Systems, Inc., v. North Amercan Aviation, Inc., 1955, 231 F.2d 205, at page 208, wherein the following premise is made basic:

"The purposes for which plaintiff was organized, its history as a business concern, the relationship of the public to the activities so conducted and the good will built up in that business are important factors in determining the existence and extent of a secondary meaning of the name of plaintiff."

The Court points up a distinction between so-called "strong" and "weak" trade names and classifies "weak" names as words of common speech and those descriptive of the locality or area where services are performed, and that where facts warrant Courts will grant protection even to "weak" trade names or marks. The Court continues at page 210:

"The doctrine of secondary meaning is applied as to weak names and particularly as to descriptive or geographic designations. The question of whether a monopoly of such a title has been acquired depends upon its use in relation to goods, business or service to the point where the public identifies the name with a particular individual or entity. It is extremely difficult to give to a geographic term a proprietary connotation since under ordinary circumstances it cannot be used to exclude others who operate in the same area, as above noted. But this does not mean that a name of territorial origin may not acquire a secondary or fanciful meaning. When this occurs, the proprietorship in the designation or mark will be afforded as complete protection as if it were a `strong' mark at the inception."

See the following cases that reason a geographic name which has acquired a secondary meaning in connection with or in relation to a merchandise product will be protected: Phillips v. Governor & Co. of Adventurers of England Trading into Hudson's Bay, 9 Cir., 79 F.2d 971; American Automobile Insurance Co. v. American Auto Club, 9 Cir., 184 F.2d 407.

The defendant lays stress upon the case of American Wine Co. v. Kohlman, C.C., 158 F. 830, in suggesting that the word "American" is ordinarily incapable of being a trade-mark. This Court believes the mentioned case is distinguished from the case at bar for the reason that the single issue in The American Wine Co. case was whether a valid technical trade-mark had been established. Quoting from the case at pages 832-833:

"The bill in the case at bar does not proceed upon the ground of unfair competition in trade. There are no facts alleged in the bill which show that any injury

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