Natural Footwear Ltd. v. Schaffner
| Decision Date | 08 December 1983 |
| Docket Number | Civ. No. 79-2966. |
| Citation | 579 F. Supp. 543,221 USPQ 442 |
| Court | U.S. District Court — District of New Jersey |
| Parties | NATURAL FOOTWEAR LIMITED, Plaintiff, v. Hart SCHAFFNER & Marx and Roots, Inc., Defendants, and ROOTS, INC., Counterclaimant, v. Don GREEN, Michael Budman, and Natural Footwear Limited, Counterclaim Defendants. |
Crummy, Del Deo, Dolan & Purcell by John T. Dolan, Arnold B. Calmann, and Brian J. McMahon, Newark, N.J., for plaintiff and counterclaim defendants; Baker & McKenzie by Horst Werder and Leslie Bertagnolli, Chicago, Ill., of counsel.
Stryker, Tams & Dill by William J. Heller, Newark, N.J., for defendants and counterclaimant; Pattishall, McAuliffe & Hofstetter by Thomas Hofstetter and Patricia Smart, Chicago, Ill., of counsel.
This lawsuit involves the respective rights of Natural Footwear, Ltd., a Canadian corporation and Don Green and Michael Budman (collectively, "Natural") on the one hand, and Hart, Schaffner & Marx and Roots, Inc., (collectively, "Roots") to the use of the tradename and mark "Roots" in respect to the business of selling shoes, and other articles of apparel and as applied to the goods themselves.
Roots began operations in Jersey City in 1917 as a retail store founded by Adolph Root, selling articles of apparel and some housewares (such as curtains) of various brands. Eventually the store located in Summit, N.J. and it was there, in about 1950, that the founder's son, Perry Root, undertook a program to enhance the name by obtaining and selling what is called "private label" goods of a style and quality referred to as aimed at the "upscale market".
Private label goods are goods manufactured by others according to the style, materials, colors and other features selected by the merchant and with the merchant's label, sometimes alone and sometimes together with the manufacturer's label.
Perry Root also undertook to establish the name and reputation of the business and its goods beyond the geographic area directly served by the store through two major modes. One was an advertising campaign consisting of mail order ads in the New Yorker magazine, which has a national circulation, and the other by the building up of a list of customers both within and without the State of New Jersey, to whom seasonal brochures or catalogs were regularly mailed.
By 1965, his effort had achieved sufficient success to make the business an attractive one for acquisition, and in that year the assets, goodwill and the exclusive use of the name were sold to Hart Schaffner & Marx which placed its acquisition into a wholly-owned subsidiary, Roots, Inc., a New Jersey corporation. Since then the business has prospered, and sales have increased, under the management of Perry Root who has continued as president of Roots, Inc., and has opened a number of additional stores in New Jersey. There are plans for another Roots store to be opened in Boston, where Roots labeled merchandise has been sold on several occasions through the well-known Filene's store there. The name "Roots" has never been registered as a trademark under the Lanham Act although interstate sales have been made with the name Roots, both as a service mark and as the mark of the goods themselves, for a long period of time.
Whatever rights Roots has, then, are of common law origin as part of a tradename and as a trademark for its labelled goods.
Natural was begun in Toronto, Canada by Don Green and Michael Budman, both originally from Detroit, in about 1973. The historical account given is that while the pair were searching for a business to go into, they saw a pair of "earth shoes" that a friend had purchased at a store in Ann Arbor, and saw in that shoe a possible business opportunity. The earth shoe is described as one designed around a sole in which the heel of the foot is substantially below the level of the sole, an arrangement thought to provide a more natural mode for walking since the sole could not bend and was rocked, while walking, from heel to toe. It is said that the sole was the subject of a patent issued to an inventor in Denmark, but aside from oral testimony of the witnesses on the subject, and some printed articles in the newspapers or in advertising matter, no formal evidence of the patent was introduced. The basic design is called a "negative heel" shoe.
In any event, Don and Michael decided to try out the earth shoe. On their next visit to Detroit, they drove to Ann Arbor and each bought a pair at the store there (which sold only the earth shoe). They liked the shoe and felt it could be profitably sold in Canada, and so attempted to locate a representative of the manufacturer. They found a Mr. Jacobs, a distributor in New York, who was the U.S. representative and, together with Don Green's father, who evidently had extensive business experience as a manufacturer in the auto parts business, they went to New York and met Jacobs.
When they explained to him their interest in making arrangements for a Canadian franchise to market the earth shoe in Canada, he is said to have supported the idea but to have explained that it would not be commercially feasible to do so because of the added expense of customs duties to import the shoe to Canada. He suggested that if they were interested, they would do better to find a manufacturer in Canada to produce the shoe for them. This was in about August of 1972.
They left in an enthusiastic and high-spirited mood, and began searching for shoe manufacturers and a retail store location. They had also been interested in marketing a brand of ice cream and a brand of yogurt, and had made one phone call to the ice cream company but never approached the yogurt company, although neither brand was then marketed in Canada.
Between August and November, 1972 they visited at least 10 shoe manufacturers in the Toronto area after discovering (from yellow pages listings) that it was a shoe manufacturing center, although neither had any technical background at all in the shoe manufacturing business.
In November, 1972, Don, Michael and Don's father again visited Jacobs in New York, and were extremely disappointed. Jacobs' attitude seemed to have changed greatly, and he was very vague. He said he had just opened an earth shoe factory in Massachusetts, and when they said they would like to see it, he replied that he did not want them to visit it. He had just set it up and did not want any visitors at that time.
Having put months of energy into the effort, Don and Michael felt Jacobs was misleading them and was not interested in their opening a Toronto store, or manufacturing the shoe in Canada. He had changed completely from being very positive to very negative.
So, instead of seeking a Canadian franchise from Jacobs, they discussed making improvements to the earth shoe and making their own product. The literature for the earth shoe they had bought had a "patent pending" indication. Don's father said he would have his Detroit lawyer look into the patent, and as a consequence they learned that a Danish woman, Anna Kalso had a patent (in the U.S. only) on the sole of the shoe, specifically on the items of the arch support and the slope of the heel. How the patent aspect was resolved does not appear. It may have expired. If it did, this would explain the opening of the Jacobs factory and his changed attitude.
In late November, 1972, Don and Michael met the Kowalewski family in Toronto as the BOA Shoe Company, the first name they found in the yellow pages. Mr. Kowalewski had emigrated from Poland to Argentina, and after some years there emigrated to Canada where they settled in Toronto.
Mr. Kowalewski was a highly skilled shoemaker specializing in custom made shoes for customers with foot problems who needed shoes that would fit them properly. Their work was very customized and very little, mostly special orders, was sold to retail outlets. The business was successful but small, and in an effort to enter the mass production market and compete with existing factories, it lacked the facilities and manpower and got into debt. An ad was placed in a Toronto paper to sell the business or find a partner who could provide financial backing, and about this time (though not in response to the ad) Don and Michael showed up looking for someone able to make an improved and modified earth shoe with a negative heel.
They had worn their earth shoes for some months and found them severe and uncomfortable. The heel slope was severe and the arch support hit the foot in the wrong place.
Don and Michael showed Kowalewski the earth shoes they had and asked if he could make them. He said he could although the design and workmanship could be improved. Some elements for improvement came from Don and Michael, others from Kowalewski. The difficulties and their solutions were as follows:
1. The difference in level between the sole and heel was too great for comfort; it was decided to lower the level of the sole.
2. The arch support embodied in the sole was too far forward and too near the ball of the foot to be comfortable; it was decided to move it back.
3. The earth shoe had no heel counter (the stiffened part of the upper that hold the back of the foot in place); it was decided to add heel counters.
4. The toe of the shoe upper was unsupported, leaving the toes subject to injury; it was decided to use a box toe.
To manufacture prototypes or samples, gum rubber soles of the new design were needed. A Toronto company could form the soles but needed a mold. Working with a model presumably made by Kowalewski, molds were made in Italy for a size 9 shoe (which both Don and Michael wore). The molding company made some soles and the Kowalewskis built them into shoes as prototypes.
Everyone was pleased with the results, feeling that the prototype modification was superior to the original earth shoe.
The first sample mold was made in June, 1973. Michael thinks he called Jacobs in New...
To continue reading
Request your trial
- In re Wheat Rail Freight Rate Antitrust Litigation
-
Natural Footwear Ltd. v. Hart, Schaffner & Marx
...Natural's federal registrations, and awarded Roots an accounting of Natural's profits. The court denied Roots' request for counsel fees. 579 F.Supp. 543. Natural has appealed, and Roots has We conclude that the district court's decision was without basis in fact or law; that Roots is a loca......