Polaroid Corporation v. Polarad Electronics Corp., Civ. No. 17132.

• Court: United States District Courts. 2nd Circuit. United States District Court (Eastern District of New York)
• Citation: 182 F. Supp. 350
• Docket Number: Civ. No. 17132.
• Parties: POLAROID CORPORATION, Plaintiff, v. POLARAD ELECTRONICS CORPORATION, Defendant.
• Decision Date: 29 March 1960

182 F. Supp. 350

POLAROID CORPORATION, Plaintiff, v. POLARAD ELECTRONICS CORPORATION, Defendant.

Civ. No. 17132.

United States District Court E. D. New York.

March 29, 1960.

Silver, Saperstein & Barnett, New York City, for plaintiff, Donald L. Brown, Cambridge, Mass., and Isaac M. Barnett, New York City, of counsel.

Darby & Darby, New York City, for defendant, Morris Relson and Howard C. Miskin, New York City, of counsel.

RAYFIEL, District Judge.

This action was commenced on December 11, 1956. The complaint states three causes of action. The first and third allege infringement of trademarks registered respectively in the United States Patent Office and in the office of the Secretary of State of the State of New York. The second is for unfair competition. All are based on the claim that the defendant's trade name and trademark are confusingly similar to those of the plaintiff.

The answer denies generally the allegations of the complaint, sets up, among others, the affirmative defense of estoppel by reason of laches, and counterclaims for the following relief:

(a) a declaratory judgment decreeing

(1) non-liability, or, as an alternative,

(2) that the plaintiff be adjudged to have infringed upon the defendant's trade name, and to have competed unfairly with it as to products in the field of television manufactured by the defendant, and

(b) that the plaintiff's registrations be cancelled and adjudged null and void.

The plaintiff is a Delaware Corporation, having its principal offices at No. 730 Main Street, Cambridge, Massachusetts, and the defendant a New York corporation, with principal offices at 43-20 34th Street, Long Island City, New York. Jurisdiction arises under Sections 1114(1) and 1121 of Title 15, and Sections 1332 and 1338 of Title 28, of the U.S.C.

The history of the parties follows. The plaintiff was organized in 1937. In 1938 it acquired from Sheet Polarizer Company, Inc., the then owner thereof, the trademark "Polaroid", which had been registered in the United States Patent Office in 1936 under No. 337404. The plaintiff is also the owner of 21 additional registrations of said trademark, filed in said Patent Office between 1941 and 1956, all of which are referred to in, and form the basis of, the complaint.

The defendant's earliest predecessor was organized in December, 1944, when Paul H. Odessey, presently Chairmen of its Board, filed his certificate of doing business under the assumed name "Polarad Electronics Co." In December, 1945 he formed a partnership with D. Lawrence Jaffe, which continued to conduct business under said assumed name. In August, 1948 the partnership business was incorporated under the name Polarad Television Corp., and by a certificate filed in June, 1949 the corporate name was changed to Polarad Electronics Corporation. The names "Polaroid" and "Polarad" have been used uninterruptedly by the plaintiff and the defendant respectively, the former since 1936 and the latter since 1944.

Section 1114(1), supra, the basis of the first cause of action herein, reads, in pertinent part, as follows: "Any person who shall, in commerce, (a) use, without the consent of the registrant, any reproduction, counterfeit, copy, or colorable imitation of any registered mark in connection with the sale, offering for sale, or advertising of any goods or services on or in connection with which such use is likely to cause confusion or mistake or to deceive purchasers as to the source of origin of such goods or services; * * * shall be liable to a civil action by the registrant * * *."

The third cause of action, charging infringement of plaintiff's trademark registered in the office of the Secretary of State of the State of New York, is predicated on Section 368-b of the General Business Law of the State of New York, which is substantially identical with Section 1114(1), supra. Section 368-d of said General Business Law preserves the common law right to trade marks as well as the right to enforce them.

The second cause of action is based on the claim that the use by the defendant of a name and mark allegedly confusingly similar to those of the plaintiff constitutes unfair competition. There is nothing particularly distinctive about the plaintiff's trademark. It is chiefly upon the similarity of the trade names that the plaintiff bases its claim for relief. Despite the fact that the issues are, in the opinion of this Court, relatively simple, the trial record is upwards of 1600 pages in length, the briefs 400 pages long, and the exhibits several hundred in number.

The issues are:

(a) Has the public purchased products or services from the defendant in the belief that they were those of the plaintiff?

(b) If not, is there likelihood that that may occur in the future?

(c) Has the defendant, through and by reason of the similarity of the names of the parties, competed unfairly with the plaintiff?

To begin with, there is, in my considered opinion, a similarity, though not a confusing one, between the trade names of the parties, but mere similarity, absent a resemblance between their products, does not constitute infringement or unfair competition. American Steel Foundries v. Robertson, 269 U.S. 372, 46 S.Ct. 160, 70 L.Ed. 317. There must be more than that. There must be proof that such similarity has resulted or may result in confusion in the minds of consumers as to the source or origin of the products involved, confusion which has led or might lead a purchaser of defendant's goods to believe he was purchasing those of the plaintiff. It was therefore necessary for the latter to establish that the defendant's products or services are similar to those of the plaintiff. In this, for reasons hereinafter stated, it has failed.

The crucial date involved here is December, 1944, for the plaintiff, if it is to prevail, must establish that the defendant, which was organized on that date, unlawfully appropriated a trade name and mark which was likely to create confusion in the minds of those seeking plaintiff's products. In the case of Federal Glass Company v. Loshin, 2 Cir., 224 F.2d 100, at page 102, the Court of Appeals, in affirming an order of the United States District Court of Connecticut (Judge Smith) denying the plaintiff's motion for a summary judgment in its action to enjoin the use by the defendant of its trade name, which was identical with that of the plaintiff, said, "Judge Smith was clearly correct in deciding that plaintiff would have to show its reputation with the general public in 1926 * * *. And 1926 was the proper date for establishing this reputation, since it was then that the defendants began to operate under their trade name".

The defendant, as hereinabove stated, was organized in 1944. Prior to 1944 plaintiff's business activities, except for certain Government work hereinafter in this paragraph referred to, were confined, virtually in their entirety, with exceptions not here pertinent, to sheet polorizing material and products made therefrom, optical goods, desk lamps, stereoscopic viewers, optical filters and photographic prints. During World War II the plaintiff was engaged almost exclusively in Government work. In addition to supplying some of the aforementioned products the plaintiff performed services for the Government in research and development, involving a number of articles for use in the prosecution of the war. Most of these were optical goods of various kinds, but a few were, either wholly or in part, in the field of electronics, and, according to the record, were the first in that field manufactured by the plaintiff since the establishment of its business. It may be added that the plaintiff, since World War II, has virtually abandoned the production of articles in that field. It is true that a part of the plaintiff's gross business prior to 1944 represented the sale of corrector plates to the television industry, but it was comparatively small in volume and the plates, when installed, even if bearing the trade name of the plaintiff, occupied but an inconspicuous place in the set. That was the plaintiff's only association with the electronics field, and cannot be said to put it in that industry. But even if it were engaged in that field, it could not isolate the defendant therefrom, since the industry is so vast in scope that the defendant's operations therein, extensive as they are, cover only a minimal part of the electronics field.

Since 1944, and more particularly since the advent of its well-known 60-second Land Camera in 1948, the character of the plaintiff's business has undergone material change, and its volume, dollarwise, has increased vastly. Its advertising budget is proportionately greater. Whereas, prior to 1944, its expenditures for advertising were small, averaging some $20,000 for the years 1937 through 1944, the average for each of the last four of those years being slightly in excess of $15,000, they have increased regularly since then, and in substantially larger amounts. But this has been due, not to the expansion of plaintiff's general business, the volume of which varies little from that of the pre-1948 years, but, rather, to the greatly increased use of television and other media for publicizing its Land 60-second Camera and film, which, in 1956, 1957 and 1958, together with polarizing material, accounted for 96 per cent of its total gross business.

The plaintiff contends that the parties are in direct competition and that their fields of activity overlap. To support its position it refers, among other things, to a number of its products which it claims are electronic in character, and as to which it claims that the defendant is competing unfairly. Among them are articles the production of which has long been abandoned, and others which are not in the electronics field. Further, the plaintiff has failed to show that any of the defendant's products compete with those made by it. The plaintiff, it is true, produces a few...