Nebraska Irr., Inc. v. Koch
| Decision Date | 18 November 1994 |
| Docket Number | No. S-93-476,S-93-476 |
| Citation | 523 N.W.2d 676,246 Neb. 856 |
| Parties | NEBRASKA IRRIGATION, INC., Appellee, v. Howard KOCH, Doing Business As Nebraska Irrigation Sales & Equipment, a Sole Proprietorship, Appellant. |
| Court | Nebraska Supreme Court |
Syllabus by the Court
1. Injunction: Equity. An action for injunction sounds in equity.
2. Equity: Appeal and Error. In an appeal of an equity action, an appellate court tries factual questions de novo on the record and reaches a conclusion independent of the findings of the trial court, provided, where credible evidence is in conflict on a material issue of fact, the appellate court considers and may give weight to the fact that the trial judge heard and observed the witnesses and accepted one version of the facts rather than another.
3. Actions: Injunction. An injunction is an extraordinary remedy and ordinarily should not be granted except in a clear case where there is actual and substantial injury. Such a remedy should not be granted unless the right is clear, the damage is irreparable, and the remedy at law is inadequate to prevent a failure of justice.
4. Names: Proof. In a case for trade name infringement, the plaintiff has the burden to prove by a preponderance of the evidence the existence of (1) a valid trade name entitled to protection, and (2) a substantial similarity between the plaintiff's and the defendant's names, which would result in either actual or probable deception or confusion by ordinary persons dealing with ordinary caution.
5. Names: Words and Phrases. Generic words, whose primary meaning is merely descriptive of the business to which they are applied or which are such as are in common use for that purpose, cannot be exclusively appropriated as a trade name.
6. Names. As a matter of law, no one is entitled to the exclusive use of descriptive adjectives of the language. These terms may be used by all the world in an honestly descriptive and nondescriptive manner.
7. Names. A combination of geographical names with other symbols or marks, even though the geographical name itself may not be a valid trademark, may be protected against unfair competition.
8. Names: Proof. The evil sought to be eliminated by trade name protection is confusion. The burden is upon the plaintiff to show whether the likelihood of such confusion exists.
9. Names: Proof. The likelihood of confusion in the use of trade names can be shown by presenting circumstances from which courts might conclude that persons are likely to transact business with one party under the belief they are dealing with another party. If the similarity is such as to mislead purchasers or those doing business with the company, acting with ordinary and reasonable caution, or if the similarity is 10. Names. No precise rules can be laid down to determine whether trade name confusion exists or is likely to arise. Among the considerations are (1) degree of similarity in the products offered for sale; (2) geographic separation of the two enterprises and the extent to which their trade areas overlap; (3) extent to which the stores are in actual competition; (4) duration of use without actual confusion; and (5) actual similarity, visually and phonetically, between the two trade names.
calculated to deceive the ordinary buyer in ordinary conditions, it is sufficient to entitle the one first adopting the name to relief.
11. Names. One trade name is not an infringement on another trade name if ordinary attention of persons would disclose the difference.
Tim O'Neill and Gregory D. Barton, of Harding & Ogborn, Lincoln, for appellant.
H. Daniel Smith, of Sherrets Smith & Gardner, P.C., Omaha, for appellee.
Howard Koch appeals an order of the district court for Chase County enjoining his use of the trade name "Nebraska Irrigation Sales & Equipment" to identify his business.
Plaintiff-appellee, Nebraska Irrigation, Inc., claimed in its petition for injunction that Koch's trade name is "deceptively and confusingly" similar to plaintiff-appellee's trade name "Nebraska Irrigation."
We vacate the judgment of the district court and remand the cause to that court with direction to dismiss plaintiff-appellee's petition.
Plaintiff-appellee was incorporated on April 27, 1979. However, the owners had used the trade name "Nebraska Irrigation" since approximately 1975 in connection with the business of selling parts and after-market equipment for center-pivot irrigation systems. Plaintiff-appellee does not sell or install complete irrigation systems.
Plaintiff-appellee has 1,200 customers located throughout the Western United States, Mexico, Central America, the Middle East, Europe, and Canada. Its manufacturing plant is located in Columbus, Nebraska, and 400 of its customers are located in Nebraska. Annual sales approximate $2.5 million.
In January 1988, defendant-appellant, Koch, began using the trade name "Nebraska Irrigation Sales & Equipment" for the business he acquired from Walter Reinke. Reinke had been doing business as Nebraska Irrigation Sales & Engineering since the early 1980's. Koch uses the trade name "Nebraska Irrigation Sales & Equipment" under an oral license from his wife, April Koch, who registered the trade name with Nebraska's Secretary of State on March 9, 1988. Since 1988, Koch has spent over $80,000 advertising under the name "Nebraska Irrigation Sales & Equipment."
Koch is a retailer of complete irrigation systems and parts and services. Ninety percent of his sales are new installations of Reinke Irrigation Systems. The other 10 percent of Koch's sales consist of services and replacement parts. The annual sales of Koch's business are approximately $900,000.
Koch's sales and service area is confined to a 100-mile radius of Imperial, Nebraska, with retail outlets located in Imperial and Bartley, Nebraska. "Several thousand dollars" of plaintiff-appellee's $2.5 million in annual sales are also within a 100-mile radius of Imperial.
As stated, plaintiff-appellee brought an action in equity seeking to permanently enjoin Koch from using the name "Nebraska Irrigation" in his business. In granting the injunction, the district court found that the name "Nebraska Irrigation" is not merely descriptive but is a combination of "Nebraska" and "irrigation," which is protected under statute and common law. The trial court also found that confusion does exist and that confusion is likely by the general public when both trade names are used. The trial court further found that the parties compete in the same area and sell basically the same types of goods and that Koch's use of the name "Nebraska Irrigation Sales & Equipment" Koch timely appealed to the Nebraska Court of Appeals. The case was removed to this court pursuant to our authority to regulate the caseloads of the appellate courts of this state.
exploits a name to the damage of plaintiff-appellee.
Koch claims that the district court erred by finding that (1) the name "Nebraska Irrigation" is not merely descriptive; (2) the name "Nebraska Irrigation" is protected under statute and also common law; (3) confusion does exist and that confusion is likely because the general public will not be able to tell the difference between "Nebraska Irrigation" and "Nebraska Irrigation Sales & Equipment"; (4) the parties sell basically the same types of goods; (5) Koch's use of the trade name "Nebraska Irrigation Sales & Equipment" exploits, to plaintiff-appellee's damage, plaintiff-appellee's trade name; and (6) plaintiff-appellee's right to an injunction is clear--the damage to plaintiff-appellee is irreparable and will continue to be irreparable unless an injunction is issued, and the remedy at law is inadequate. Koch also claims that the trial court erred in failing to address and hold that plaintiff-appellee's claim is barred by the doctrine of laches.
An action for injunction sounds in equity. Abboud v. Lakeview, Inc., 237 Neb. 326, 466 N.W.2d 442 (1991). In an appeal of an equity action, an appellate court tries factual questions de novo on the record and reaches a conclusion independent of the findings of the trial court, provided, where credible evidence is in conflict on a material issue of fact, the appellate court considers and may give weight to the fact that the trial judge heard and observed the witnesses and accepted one version of the facts rather than another. CAE Vanguard, Inc. v. Newman, 246 Neb. 334, 518 N.W.2d 652 (1994); Whitehead Oil Co. v. City of Lincoln, 245 Neb. 660, 515 N.W.2d 390 (1994).
An injunction is an extraordinary remedy and ordinarily should not be granted except in a clear case where there is actual and substantial injury. Nebraska Pub. Power Dist. v. Lockard, 237 Neb. 589, 467 N.W.2d 53 (1991). Such a remedy should not be granted unless the right is clear, the damage is irreparable, and the remedy at law is inadequate to prevent a failure of justice. Abboud, supra.
In a case for trade name infringement, the plaintiff has the burden to prove by a preponderance of the evidence the existence of (1) a valid trade name entitled to protection, and (2) a substantial similarity between the plaintiff's and the defendant's names, which would result in either actual or probable deception or confusion by ordinary persons dealing with ordinary caution. See, Dahms v. Jacobs, 201 Neb. 745, 272 N.W.2d 43 (1978); Ransdell v. Sixth Street Food Store, 174 Neb. 875, 120 N.W.2d 290 (1963).
We turn now to Koch's first and second assignments of error claiming that the district court erred in not finding the name "Nebraska Irrigation" merely descriptive and in determining that the name is a protectable trade name. Generic words, whose primary meaning is merely descriptive of the business to which they are applied or which are such as are in common use for...
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