Pennzoil Co. v. Crown Central Petroleum Corporation

• Citation: 50 F. Supp. 891
• Decision Date: 15 July 1943
• Docket Number: Civil Action No. 1293.
• Parties: PENNZOIL CO. et al. v. CROWN CENTRAL PETROLEUM CORPORATION.
• Court: U.S. District Court — District of Maryland

50 F. Supp. 891

PENNZOIL CO. et al. v. CROWN CENTRAL PETROLEUM CORPORATION.

Civil Action No. 1293.

District Court, D. Maryland.

July 15, 1943.

John S. Powers, of Buffalo, N. Y., Southgate L. Morison and Ritchie, Janney, Ober & Williams, all of Baltimore, and Joseph W. Milburn, of Washington, D. C., for plaintiffs.

Karl F. Steinman and Edwin H. Brownley, both of Baltimore, Md., and Edward G. Fenwick, of Washington, D. C., for defendant.

CHESNUT, District Judge.

In this case the plaintiffs seek an injunction and accounting for profits and damages from the defendant for alleged infringement of a federally registered trademark and for related unfair competition. The defenses are (1) that the plaintiffs' trade-mark is invalid because descriptive; (2) the defendant's mark is not an infringement by colorable imitation or otherwise; (3) that there was no unfair competition either actual or constructive and (4) laches.

The evidence has been presented, on the part of the plaintiffs, primarily by depositions of many trade witnesses and including the testimony of some of the defendant's officers or agents taken for purpose of discovery. Evidence on behalf of the defendant, in addition to the testimony of its officers taken by deposition, has been principally by examination of witnesses in court. Numerous exhibits have been filed by the parties respectively. The principal facts developed in the evidence are —

1. The plaintiffs are The Pennzoil Company (of Pennsylvania) and its subsidiary The Pennzoil Company (of California). They, and their predecessors, have for many years been engaged in refining and marketing motor lubricating oils, principally for automobiles. They refine and sell a type of lubricating oil known as Pennsylvania Oils, which emanate from wells in the Appalachian strip running from southwestern New York through western Pennsylvania and extending partly into West Virginia and Ohio. These oils are generally known in the trade as Pennsylvania oils and differ from lubricating oils produced in Texas and California generally in that the Pennsylvania oils have a paraffine base while the Texas and California oils have an asphalt or naphthene base. There are 175 or more separate distributors of these Pennsylvania oils. The Pennsylvania corporate plaintiff sells and distributes its oils in all the States of the Union east of the Rocky Mountains and the California Company in those States west of the Rocky Mountains.

2. Prior to 1915 the plaintiffs, or their corporate predecessors, sold the oils under the mark of "Pensoil", but in 1915 both Companies adopted, and in 1916 registered, their trade-mark "Pennzoil". This is Plaintiffs' Exhibit No. 1, No. 111,759. Their product has been nationally advertised on a large scale at an aggregate cost of about $12,000,000. The mark has also been registered in numerous foreign countries with export sales of over 5,000,000 gallons. About 150,000,000 gallons of Pennzoil have been sold by the plaintiffs. Their refineries are at or near Oil City, Pennsylvania.

3. The defendant, Crown Central Petroleum Corporation, was originally a Delaware corporation, subsequently by merger becoming a Maryland corporation. For many years it has also been very extensively engaged in the production and distribution of motor lubricating oils. Its refineries are in Texas, and its products are marketed in many States east of the Rocky Mountains and particularly in the south and southeastern States of the Union. Its principal business office is at present in Baltimore, Maryland. In January 1930 it prominently advertised one of its products under the trade-mark or trade name of "Greenzoil". At that time the defendant was marketing its automobile gasoline under the trade name of "Crownzol". For some time prior to 1930 the defendant's research department had been engaged in efforts to produce a motor lubricating oil that would have a pleasing greenish cast. Prior thereto its oil when held up to the light had a reddish color but its cast (reflected light) was an undesirable shade of blue. By 1930 oil had been produced with a satisfactory greenish cast and was ready to be marketed. A meeting of its principal sales agents was held in St. Louis and at that conference, after considering various suggested names for the new oil, "Greenzoil" was adopted as the most satisfactory. "Crownzol" and other names ending in "zol" were considered too closely identified with gasoline to be desirable for the lubricating oil. In January 1930 and at various times thereafter through 1931, the defendant advertised in trade journals its new motor lubricating oil under the prominently displayed name of "Greenzoil" and described it as a "clear green oil".

4. On February 7, 1930, attorneys for the plaintiffs wrote a letter to the defendant protesting its use of "Greenzoil" as an infringement of the plaintiffs' mark "Pennzoil". In March 1930, a Mr. Matthews, then connected with the sales department of the Pennzoil Company, called at the New York office of the defendant and conferred with Mr. Bowles, secretary and technological officer of the defendant, with regard to its adoption and use of "Greenzoil". Mr. Bowles referred to the plaintiffs' letter upon the subject and said that the letter had been referred to counsel for the defendant. Mr. Matthews stated that he did not know the matter had progressed so far and was unaware that the letter had been sent. He further stated that if the mark "Greenzoil" was filed for registration it would lead to litigation. On May 23, 1930, the defendant's attorneys replied to the plaintiffs' protesting letter stating courteously but firmly that they considered its "Greenzoil" mark entirely legal and proper and the defendant would continue to use it. The defendant thereafter continued its advertising of "Greenzoil" for a year or more and continued to sell its lubricating oil under this name in substantial quantities during 1930, 1931 and 1932. Said to be due to water damage, the sales records of the defendant's predecessor (the Delaware corporation) are not complete prior to 1937, and there are no available records to show the marketing of "Greenzoil" in 1934, 1935 and until the latter part of 1936; but thereafter the records show that "Greenzoil" was sold in large quantities through 1937-1942. The defendant did not file the mark "Greenzoil" for registration. The plaintiffs took no further action by correspondence, negotiations or otherwise in opposition to the defendant's use of the term "Greenzoil" until the filing of the suit in this case on July 31, 1941.

5. Prior to about 1936 motor lubricating oils were generally supplied to filling stations in bulk; but beginning about that time the oil companies quite generally adopted the practice of supplying automobile lubricating oils in quart cans bearing distinctive labels of the respective companies with the trade names or trade-marks displayed thereon. Both the plaintiffs and the defendant adopted this changed practice.

6. The customary sales procedure for motor oils at filling stations doubtless varies for different stations, but what is probably a fairly typical procedure is found in the testimony of Frank Nix called as a witness by the defendant, who gave his testimony in open court. For 15 years or more he has operated as the proprietor, a so-called independent filling station at Clifton, N. J. He carries 10 different brands of motor oils including Pennzoil and Greenzoil. He testified that regular customers generally had an established preference for a particular brand of motor oil, as a result of his information to them, and that unless instructed to the contrary he supplied the brand they habitually used. New customers or casual purchasers usually asked for motor oils of a particular price rather than by brand name. Thus some motor oils sell from 30 to 35 cents per quart, as is the case with Pennzoil, other brands for 25 cents, some for as low as 15 cents or two quarts for a quarter. He sold Greenzoil for 20 cents per quart. It is the exception rather than the rule that a chance or casual customer asks for any particular brand of motor oil. He also testified that it was his uniform custom in supplying a quart can of motor oil, to open it in the presence of the purchaser so that the particular brand as displayed on the can could be plainly seen if the purchaser desired to do so. He had never known of any instance of a confusion between Pennzoil and Greenzoil in his sales experience. Joseph E. Chapman, also an independent filling station operator at Clifton, testified generally to the same effect, as did also Marcus Mooney of Shelby, North Carolina. The plaintiffs offered the depositions of other numerous filling station operators or attendants at various places principally in the southeastern States. None of them testified to any instance within their knowledge of actual confusion in purchase between the two brands, but many of them testified that purchasers called attention to the cans of Pennzoil and Greenzoil when displayed in racks at the filling stations and some purchasers asked the question as to whether the two oils were put out by the same company or what was the difference between them or whether they were "sister oils", and a few purchasers had said to attendants they assumed "Greenzoil" was a product of the "Pennzoil" company, and other attendants testified to casual or temporary seeming confusion of customers between the two brands due to the similarity of the syllable "zoil" in both names. There was also evidence that some of the distributors of motor oils sell two grades of oil under variant trade names, as for instance, Veedol and Tydol, both products of the Tidewater Oil Company of Pennsylvania.

7. As to the issue of unfair competition, there is no evidence in the case of any intentional simulation by the defendant of the plaintiffs' product and none by the distributors of the defendant's oil, nor any deceptive...