Metric & Multistandard Components Corp. v. Metric's, Inc.
| Decision Date | 19 December 1980 |
| Docket Number | 80-1147,Nos. 80-1121,s. 80-1121 |
| Citation | 635 F.2d 710,209 USPQ 97 |
| Parties | , 1978-81 Copr.L.Dec. 25,210 METRIC & MULTISTANDARD COMPONENTS CORPORATION, Appellee, v. METRIC'S, INC., Appellant. METRIC & MULTISTANDARD COMPONENTS CORPORATION, Appellant, v. METRIC'S, INC., Appellee. |
| Court | U.S. Court of Appeals — Eighth Circuit |
Robert E. Woods, Minneapolis, Minn., for Metric's, Inc.
Kurtis A. Greenley, Minneapolis, Minn., for Metric & Multistandard Components Corp.
Before LAY, Chief Judge, HEANEY, Circuit Judge, and PORTER, * District Judge.
Defendant-appellant Metric's, Inc., challenges a permanent injunction prohibiting it from using a misleading business name, from distributing certain copied sales catalogues and advertising material, and from otherwise engaging in acts that violate the Lanham Act, the Copyright Act or the unfair competition laws of the State of Minnesota. We affirm the order of the district court.
Plaintiff-appellee Metric & Multistandard Components Corporation was incorporated in 1963 for the purpose of selling metric dimensioned fasteners, tools and other industrial supplies. From the beginning, the bulk of Metric & Multistandard's sales were made through mail orders from its special sales catalogues which were delivered to potential customers. These catalogues contained detailed information about the products sold by Metric & Multistandard including descriptions of the parts and materials, engineering drawings, technical data, cross-references to other measuring systems and prices. The catalogues were designed and compiled by Metric & Multistandard over a period of years and were continually revised as market and supply conditions changed. In 1969, Metric & Multistandard purchased its own typesetting equipment and trained its employees to prepare, layout and typeset its catalogues and literature. The catalogues produced in this manner, beginning with No. 2006, were designed to sit on a shelf so that their bindings would be visible to potential customers. The word "METRIC" was printed on the catalogue binders vertically in large capital letters. 1
In 1972, defendant-appellant incorporated as Metric's, Inc., also for the purpose of selling metric industrial supplies. Shortly after incorporation, Metric's, Inc., obtained federal trademark registration for the name "Metrics." Like Metric & Multistandard, Metric's, Inc., sought to do business through mail orders from catalogues. Unlike the appellee, however, Metric's, Inc., did not design its own catalogues. Instead, it blatantly copied the work product of Metric & Multistandard. In its brief, Metric's, Inc., describes its procedure as follows:
Defendant, in preparation of its first catalogue, took selected pages from plaintiff's catalogues 2006 and 2007, covered plaintiff's name with tape, made certain changes, and took these "cut and pasted" mock-up pages to the printer. * * * This first 184 page catalogue of defendant was a hardcover, three-ring binder of looseleaf construction. It was of the same size and configuration as plaintiff's catalogues. It used the same page and catalogue format, the same divider titles, the same pictorial divider pages and the same index. It contained the same part arrangements, the same captions, descriptive illustrations, manner of tabulation, style of wording, photographs, drawings, illustrations, technical data, conversion information, charts of sizes, part names and descriptions. The pages of defendant's catalogue were the same page numbers as plaintiff's catalogue. Defendant's catalogue was printed with the same style of typesetting utilized by plaintiff in its catalogues.
Metric's, Inc., then used this copied catalogue to effect its sales.
In 1973, Metric & Multistandard produced its catalogue No. 2008, a 236-page revised and rearranged version of its earlier catalogues. In No. 2008, for the first time in any of its catalogues, Metric & Multistandard included a notice of copyright; subsequently, a Certificate of Registration of Copyright was issued to Metric & Multistandard. In 1974, Metric's, Inc., took pages from No. 2008 and, using the same procedure it had used with earlier catalogues, produced a cut and pasted mock-up that was 212 pages in length. Metric's, Inc., in its brief, described its revised catalogue in the following manner:
Defendant's revised 212 page catalogue was the same size and configuration as its earlier 184 page catalogue. The revised 212 page catalogue was printed in the same style of typesetting utilized by plaintiff. This catalogue, like plaintiff's catalogue 2008, was assembled in a hardcover binder which would stand on a customer's shelf with the visible end reading in large, vertical letters "METRIC'S." * * * As before, defendant's catalogue was bright yellow in color. * * * Plaintiff's catalogue 2008 read, on the visible binder end, "METRIC," and was red in color.
In addition, Metric's, Inc., used portions of catalogue No. 2008 in its "Mini Catalogue," an abbreviated version of the original book.
Not surprisingly, using these similar catalogues in the same market led to considerable misunderstanding among the customers of the two companies. The record contains numerous examples of customer confusion including misdirected orders, payments and complaints.
In March of 1975, Metric & Multistandard filed this action in federal district court. Seeking damages and injunctive relief, the appellee alleged that Metric's, Inc., had violated the Lanham Act, infringed appellee's valid copyright, and engaged in unfair competition under the common law. The matter was tried, by stipulation, before United States Magistrate Robert G. Renner. On December 14, 1979, after reviewing the report and recommendation of the magistrate, 2 District Judge Donald D. Alsop entered a memorandum order determining that Metric's, Inc., had willfully and deliberately (1) violated section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a); (2) infringed the valid copyright that Metric & Multistandard had in its catalogue No. 2008; and (3) engaged in acts of unfair competition by "palming off" its catalogues as those of Metric & Multistandard. 3 In addition, the district court found that the word "metric" was a descriptive term that had not acquired a secondary meaning and, therefore, it ordered cancellation of the trademark registration held by Metric's, Inc.
The court ordered Metric's, Inc., to destroy all copies of its catalogues in its possession, to notify its customers that its catalogues were not to be used in the future, and to otherwise refrain from violating the Lanham Act, the Copyright Act and the laws of Minnesota. The court also held that Metric & Multistandard was entitled to recover costs, attorney's fees and damages, including punitive damages, the amount of the recovery to be determined after a trial before a United States Magistrate. Pursuant to 28 U.S.C. § 1292(a)(1), Metric's, Inc., appealed the granting of the injunctive relief.
The district court found that Metric's, Inc., had violated section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a),
by entering into a competitive business with plaintiff and (1) choosing a tradename and trademark that closely resemble the name by which plaintiff has become known and which plaintiff has used for many years as its requested cable address; and (2) copying substantial nonfunctional portions of plaintiff's catalogues which had acquired a secondary meaning, the effect of which was to create the impression that defendant was identified with or related to plaintiff's business.
We agree with the conclusion of the district court. Section 43 of the Lanham Act 4 was designed to create a new federal remedy for the particular kind of unfair competition that results from false designation of origin or other false representation used in connection with the sale of a product. See Federal-Mogul-Bower Bearings, Inc. v. Azoff, 313 F.2d 405, 409 (6th Cir. 1963); F. E. L. Publications, Ltd v. National Conference of Catholic Bishops, 466 F.Supp. 1034, 1044 (N.D.Ill.1978). The key to finding a violation under section 43(a) is a determination that the materials used by the defendant created a likelihood of confusion, deception or mistake on the part of the consuming public. See New West Corp. v. NYM Co. of Cal., Inc., 595 F.2d 1194, 1201 (9th Cir. 1979); F. E. L. Publications, Ltd. v. National Conference of Catholic Bishops, supra, 466 F.Supp. at 1044.
There can be no doubt that the appellant created a great likelihood of confusion when it used the name "Metric's" in conjunction with catalogues that were nearly exact copies of appellee's sales materials. As the district court found, "Defendant's use of the significant word in plaintiff's tradename, 'Metric,' with duplicated portions of plaintiff's catalogues and advertising, tended to and did cause purchasers to believe that the products they bought from defendant were being purchased from plaintiff." The instances of actual customer confusion are well documented in the record.
Metric's, Inc., maintains, however, that because the word "Metric" is a generic mark, Metric & Multistandard is not entitled to appropriate the term to its exclusive use. 5 Metric's, Inc., asserts that Metric & Multistandard assumed the risk of potential customer confusion when it chose a name commonly used to denote an internationally recognized standard of measurement.
Although it is true that generic and merely descriptive marks are not entitled to trademark protection, 6 it is not true that Metric & Multistandard is necessarily left unprotected. Regardless of whether its mark is registered or even registrable, the plaintiff may show that its mark is "so associated with its goods that the use of the same or similar marks by another company constitutes a representation that its goods come from the same source." Joshua Meier Co. v. Albany Novelty Mfg. Co., 236 F.2d...
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