Pennsylvania Dutch Co., Inc. v. Pennsylvania Amish Co.
| Decision Date | 26 August 1974 |
| Docket Number | 2 |
| Citation | 68 Pa. D. & C.2d 379 |
| Parties | Pennsylvania Dutch Company, Inc. v. Pennsylvania Amish Co. et al. (No. 3) |
| Court | Pennsylvania Commonwealth Court |
May Sessions, 1974.
George B. Faller and Rod J. Pera, of McNees Wallace & Nurick, for plaintiff.
James D. Flower, of Myers, Myers, Flower & Johnson and James C. McConnon, John F. McNulty and Paul & Paul, for defendants.
Adjudication in equity
This is the fourth and final opinion in a series of opinions by this court addressing the above-captioned case. Therein, plaintiff, Pennsylvania Dutch Co., Inc., seeks injunctive relief from the alleged unfair trade practices of defendant corporation. Plaintiff has attempted to establish a right to relief by proving that, in entering the same line of business, defendant has chosen a corporate name and manner of marketing deceptively similar to that already employed by plaintiff, the result of which has been to create a likelihood that consumers will confuse defendant's products with plaintiff's established name and reputation. Over 700 pages of testimony have been recorded in four separate hearing, including the submission of some 245 exhibits. All relevant issues of law and fact have been briefed and rebriefed in an attempt to resolve the entangled and competing interests of these parties.
After a careful review of the entire record in this case, it is the opinion of this court that plaintiff has failed to show by convincing evidence that the conduct and practices of defendant actually confused and deceived or that it is reasonably likely that the average purchaser will be deceived as to the source of defendant's goods. However, since there is convincing evidence to support the conclusion that defendant has considered altering the identifying characteristics of its labels in such a way as to cause a greater likelihood of consumer confusion, some delimitation of the privileged conduct of these parties is believed by this court to be in the best interest of the consuming public, and, therefore, the appropriate subject of an injunctive decree.
1. Plaintiff, Pennsylvania Dutch Co., Inc., is a Delaware corporation, duly qualified to do business in Pennsylvania with its principal offices located in Mount Holly Springs, Pa.
2. Plaintiff is the successor to Pennsylvania Dutch Candies, Inc., a Pennsylvania corporation which was engaged in the manufacture and distribution of candies, foods and novelties under the " Pennsylvania Dutch" and related labels, and from which plaintiff purchased all of the assets used in such business, including trademarks, trade names and good will, pursuant to an agreement of sale dated March 30, 1965.
3. The individual defendants were sole stockholders of Pennsylvania Dutch Candies, Inc., and were parties to the sales agreement of March 30, 1965, at which time defendant, Theodore A. Tichy, was the president of Pennsylvania Dutch Candies, Inc.
4. Pursuant to the terms of the sales agreement, two of the individual defendants, Theodore A. Tichy and Peter J. Shue, were employed by the plaintiff for a period of five years. The employment agreement of each of these two individual defendants contained covenants not to compete with plaintiff, which covenant, by their terms, expired December 31, 1971.
5. On or about July 29, 1971, defendant, Theodore A. Tichy, caused a Pennsylvania corporation to be formed under the name " Pennsylvania Amish Co., Inc."
6. Defendant, Pennsylvania Amish Co., Inc., is a Pennsylvania corporation having its principal offices in Mount Holly Springs, Pa.
7. On or about January of 1972 defendant, Pennsylvania Amish Co., Inc., commenced doing business from Mount Holly Springs, Pa.
8. Theodore A. Tichy is, and always has been, the president and sole shareholder of Pennsylvania Amish Co., Inc.
9. Since approximately December 1952, plaintiff and its predecessors have been engaged in the manufacture and distribution of confectionery, food products and novelty items, and have, in the course of this business, utilized the Dutch motif in advertising and promotional materials as well as labelling, sales displays, and, in general, all material issued by the plaintiff in connection with its business.
10. Since January 1972, Pennsylvania Amish Co., Inc., has been engaged in substantially the same business as plaintiff, also utilizing the Dutch motif in advertising and promotional materials as well as labelling, sales displays, and all other facets of its business.
11. Both companies offer for sale substantially the same products in containers of identical size and shape and by way of similar display materials, each company purchasing its products for resale from the same suppliers.
12. Both plaintiff and defendant companies utilize systems of distribution common to their trade, engaging independent brokers and mail order catalogues. Each company has, however, directed its brokers to seek out gift shop retailers rather than the candy and food store retailers more often sought by competitors in the field of confectionery and fine foods.
13. Each company solicits a substantial amount of its trade by means of a mail order price list similar in design and format to the other's. In comparison to plaintiff's, defendant's price list offers identical products at competitive prices and by way of substantially the same written text to describe them. Special " deals", by which plaintiff makes certain products available for sale together with accompanying display materials are also offered by defendant under identical conditions and by way of competitive prices.
14. Both plaintiff and defendant companies sell display merchandise to retailers, consisting of wooden cupboards, display racks and trees, and a " barber pole display" which are advertised in their respective mail order price lists. Where plaintiff has adopted a display item for use with a particular product or a class of products, defendant has generally adopted the same display for its competing products.
15. Both companies use display racks for their thin stick displays which are identical in over-all dimensions, color and finish of wood, each company identifying its rack by labelling it with the respective company name. The same similarity appears in the competing toffee racks, poly bag display trees, barber pole displays, the candy cupboards, and food cabinets. In each case the display item can be identified as to source by the respective company name embossed thereon.
16. When the display merchandise is presented to the consuming public it is stocked with containers of the respective company's products, which are themselves labelled with identifying name and trademark.
17. In many instances, Pennsylvania Amish Co., Inc. sells the same products as Pennsylvania Dutch Co., Inc., in the same size and type of containers. Where plaintiff sells its product in a waxed tub, defendant has placed its in a waxed tub; where plaintiff has sold its product in a tall tin, defendant has placed its in a tall tin; where plaintiff has sold its product in a flat tin, defendant has placed its in a flat tin; and where plaintiff has sold its products cello-wrapped, defendant has placed its in cello-wrapping.
18. In some instances, where suppliers have offered different containers for their products, Pennsylvania Amish Co., Inc. chose the same containers used by Pennsylvania Dutch Co., Inc.
19. Defendant relies solely on its name and labeling to distinguish its product from those competing products of plaintiff.
20. Defendant's label is primarily pale blue or purple in color, prominently displaying a large pinkish-purple, squashed heart with the name " Pennsylvania Amish" printed in script across the heart and the name of the product printed under the company name. Other Dutch related marks, such as the silhouette of a horse and carriage and hex signs generally appear on defendant's various product labels.
21. Plaintiff's label is primarily pale yellow or white in color, displaying a small Dutchman's head in an upper corner of the label, with the name " Pennsylvania Dutch" printed in dark red or blue block letters, across the label and the name of the product printed under the company name. Other Dutch related marks, such as distelfinks and flowery designs, generally appear on plaintiff's various product labels.
22. No actual confusion by the ultimate consumer as to the source of the defendant company's products has been proven.
23. Two incidents of misrepresentation were proven. In each, a broker falsely indicated that he was a representative of plaintiff while attempting to solicit an order for defendant's products. Neither broker succeeded in gaining an order. One retailer discovered the misrepresentation upon reading defendant's price list and noticing its distinct source. The other retailer admitted that he had relied solely on the broker's oral statement, and had not examined the price list until an authorized representative of plaintiff drew his attention to it. In each case, the retailer was initially deceived by the false statement of the broker and not be defendant's printed material.
24. Four retailers who had received defendant's price list in the mail testified to some initial confusion as to its source. Only one of those four actually placed an order by returning defendant's price list, thinking it to be plaintiff's. Daniel Green, a retailer in food from Newport News, Va., received defendant's price list, saw the name " Pennsylvania" and set it aside to read later. Mr. Green's wife later drew his attention to the fact that defendant's price list was from a company other than plaintiff. Aileen Gaterman, a flower and gift shop operator from Verden, Ill.,...
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