North American Air. Sys. v. North American Aviation

• Decision Date: 07 November 1955
• Docket Number: No. 14271.,14271.
• Citation: 231 F.2d 205
• Parties: NORTH AMERICAN AIRCOACH SYSTEMS, Inc. (also known as North American Airlines Agency Corp., and North America Airlines Agency Corp.), Twentieth Century Air Lines, Incorporated, James Fischgrund, Jack B. Lewin and Stanley D. Weiss, Appellants, v. NORTH AMERICAN AVIATION, Inc., Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

231 F.2d 205 (1955)

NORTH AMERICAN AIRCOACH SYSTEMS, Inc. (also known as North American Airlines Agency Corp., and North America Airlines Agency Corp.), Twentieth Century Air Lines, Incorporated, James Fischgrund, Jack B. Lewin and Stanley D. Weiss, Appellants, v. NORTH AMERICAN AVIATION, Inc., Appellee.

No. 14271.

United States Court of Appeals Ninth Circuit.

September 28, 1955.

Rehearing Denied November 7, 1955.

COPYRIGHT MATERIAL OMITTED

Sidney Fischgrund, Robert S. Dickerman, Los Angeles, Cal., for appellants.

Chadbourne, Parke, Whiteside, Wolf & Brophy, Charles Pickett, New York City, Flint & MacKay, Edward L. Compton, Arch R. Tuthill, Los Angeles, Cal., for appellee.

Before STEPHENS and FEE, Circuit Judges, and LING, District Judge.

JAMES ALGER FEE, Circuit Judge.

North American Aviation, Inc., filed action for injunction on account of unfair competition, claiming the sole and exclusive right to use the name "North American" in connection with airplanes and aviation. Complete diversity of citizenship between plaintiff and all defendants founded jurisdiction in the District Court, where the action was initiated. It was charged by the complaint that defendants have unlawfully and fraudulently intended and undertaken to appropriate the name and the benefit of the celebrity and good will developed by plaintiff, which resulted in a secondary meaning acquired by the name in connection with all phases of aviation. The appropriation is said to have resulted pursuant to a fraudulent conspiracy in which the individual defendants were the prime movers. It was alleged that defendants have used the name "North American" in various ways in connection with airplanes and aviation industry, on tickets, uniforms, time and fare schedules, at ticket offices and airports in connection with business of buying, selling and reserving airline transportation, and have used the name upon airplanes. It was also pleaded that these actions of defendants were designed, intended and calculated to and did lead to confusion between plaintiffs and others using the name and deceived other persons into believing that a connection existed between plaintiff and organizations fostered by defendants. Defendants denied that plaintiff had any exclusive right to the use of the name "North American" except in the manufacture of aircraft, and denied any appropriation of the benefit of the reputation of plaintiff or that they caused the public to believe a connection existed between plaintiff and defendant.

After a lengthy trial before an experienced judge, Hon. Peirson M. Hall, findings were made in favor of plaintiff on all contentions. A permanent injunction against the use of "North American" by defendants was granted, and damages were awarded to plaintiff. This appeal followed.

It is the principal contention of defendants here that plaintiff did not have and could not acquire an exclusive use of the name "North American" as against others operating in the same geographic area. Especially, it is claimed defendants who operate ticket agencies in connection with air transportation have a right to use the name of the continent in which they do business. It is further urged that, since defendants do not manufacture airplanes for sale to governmental agencies, which defendants claim is the sole business of plaintiff, no injunction should be granted against use of the name in this limited field.

Under a situation where the name "North American" had not been appropriated exclusively in connection with all phases of aviation by plaintiff for a great number of years without challenge, there might have been some slight basis for the contention that there could be only a limited use of a geographic designation. But the identification of the name with plaintiff in such connection was shown by the evidence to be absolute for a long period of time before defendants began their activities. It is exactly this feature which causes plaintiff to seek relief in the courts. 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.

Plaintiff was organized in December, 1928. Manufacture of airplanes and other aircraft, carrying the mail and operation of air navigation facilities and incidental equipment were its specific objectives. "North American Aviation, Inc." was adopted as its name at that time. This was intended and aptly chosen for the purpose of identifying plaintiff with all phases of aviation. Plaintiff at that time was a holding and management company, owning stock in several companies operating in various phases of aviation. Some subsidiaries ran airlines, others manufactured aircraft and others made electronic equipment. The name "North American" was from the beginning better known generally than the names of the operating companies. Almost from its inception, the stock of North American Aviation, Inc., has been traded on the exchange, and the operating subsidiaries referred to themselves using such terms as "A Division of North American Aviation, Inc." In 1934, plaintiff ceased to be a holding company and became an operating aviation company with two divisions: (1) manufacturing, (2) air transportation. Plaintiff used the "North American" name in the operation of this air transportation division in that "air transportation activities were conducted under the name of Eastern Air Lines, Division of North American Aviation, Inc., which appeared in time tables which were distributed and available at offices maintained in several cities in the United States, on tickets and baggage checks and stickers issued to passengers, and on various other material used by plaintiff."

Plaintiff has spent a great deal of money over the years in the advertising and publication of the name "North American". Besides that, owing to the circumstances hereafter mentioned in connection with its activities during the war, plaintiff received a tremendous amount of unpaid publicity. Plaintiff has in this regard used the letters "NAA" together with a symbol or design devised by it, consisting of a triangle enclosing these letters and bearing a formalized drawing of a bird. This symbol was used by plaintiff on airplanes in 1935 and was registered in the United States Patent Office. Plaintiff also used extensively the slogan, "The North American way," since sometime in 1941.

In 1935, plaintiff built a new plant at Los Angeles Airport, which has been greatly expanded during the years and is still its headquarters. In 1938, apparently because of the approaching emergency, plaintiff sold the assets of its air transport division to a new independent corporation known since as "Eastern Airlines." Although plaintiff has not operated a scheduled airline since 1938, for many years it has been operating several airplanes to transport people doing business with it and its own employees.

Irrespective of the fact that its factories were located on the continent, the name of plaintiff had a world wide significance owing to its activities in a war industry. This is so well known that the Court would take judicial notice of it if it had not been proved. But there was exact and explicit proof. Airplanes manufactured by plaintiff and bearing its name were furnished to the government of the United States and flown all over the world. There is testimony to the effect that these planes carried the insignia of North American throughout the world. Defendants cannot avoid this record by pointing out that the advance trainers, of which plaintiff built about sixteen thousand through 1945 and which were the standard airplanes used for advance training of pilots by the United States and thirty-three different countries of the United Nations and of which many are still used throughout the world to train pilots, were popularly denominated "ATS" instead of "North American." The "B-25" or "Mitchell" bomber of "North American" manufacturing was used in the spring of 1942 in the initial raid on Tokyo from Shangri La. These were used throughout the war in the South Pacific and in Europe. Plaintiff built about ten thousand of them. North American P-51, popularly known as the "Mustang," was known at the time as the "most aerodynamically perfect pursuit plane in existence." It was the outstanding fighter of World War II. Sixteen thousand of these were built by plaintiff. These flew over both fronts in World War II. Since the end of World War II, plaintiff developed many new types of military aircraft: the North American F-86, "Sabrejet," maintained supremacy of the air for our country in Korea. In view of this, there is no substance to the contention of defendant that, since these aircraft were called popular names the activities of plaintiff did not strengthen its use of the name "North American."

The proof is irrefutable that "North American" in connection with aviation means the plaintiff solely and exclusively today as well as in the past. The finding of the trial court is that the name had "acquired a secondary meaning, with respect to plaintiff, in connection with airplanes and in the aviation industry. It identified, in connection with airplanes and in the aviation industry, plaintiff and no one else, and was associated, by persons in the aviation industry and by the general public, with plaintiff and no one else." The exclamation of the learned trial judge was only a reflection of the impression which anyone would obtain who impartially read the record:

"I have never seen, and I cannot imagine, any case where a secondary meaning has become so attached to a party or a business as the words `North American\' have to the plaintiff in this case in the entire aviation industry."

From the record and the findings, the nature of the secondary meaning of "North...