Purolator, Inc. v. EFRA Distributors, Inc.

• Decision Date: 29 September 1981
• Docket Number: Civ. No. 80-2575.
• Citation: 524 F. Supp. 471
• Parties: PUROLATOR, INC., Plaintiff, v. EFRA DISTRIBUTORS, INC., Enrique Franceschini and Enrique Franceschini, Jr., Defendants.
• Court: U.S. District Court — District of Puerto Rico

524 F. Supp. 471

PUROLATOR, INC., Plaintiff, v. EFRA DISTRIBUTORS, INC., Enrique Franceschini and Enrique Franceschini, Jr., Defendants.

Civ. No. 80-2575.

United States District Court, D. Puerto Rico.

September 29, 1981.

Patrick J. Wilson, O'Neill & Borges, Hato Rey, P. R., William T. Boland, Jr., Allen I. Rubenstein and Charles B. Spencer, Kenyon & Kenyon, New York City, of counsel, for plaintiff.

Luis N. Blanco-Matos, Hato Rey, P. R., for defendants.

MEMORANDUM OPINION AND ORDER

CEREZO, District Judge.

This is a suit in equity brought by Purolator, Inc., a corporation organized under the laws of Delaware, to enjoin defendants Franceschini, father and son, and EFRA Distributors, Inc. (EFRA), a corporation created under the laws of the Commonwealth of Puerto Rico, from using the mark "Puro Filter" or any other equivalent name bearing the root word "PURO", alone or in combination, in connection with oil or air filter products; applying the said name or mark to stationery, pamphlets, signs or advertisements in the promotion of that class of products; from engaging in unfair competition practices against plaintiff and from representing that defendants' products are produced or authorized by Purolator. The action was filed on December 31, 1980, approximately three months after defendants began selling air and oil filters in the Puerto Rican market bearing the mark "Puro Filter". The complaint alleges that use of the mark "Puro Filter" or the name "Puro" by defendants infringes plaintiff's registered trademark Purolator in violation of federal trademark laws, 15 U.S.C. Sections 1114, 1116, 1117 and 1118 and the laws of Puerto Rico and constitutes unfair competition in violation of Section 43(a) of the Lanham Act, 15 U.S.C. Section 1125(a).

Defendants answered the complaint on February 26, 1981 and raised the following affirmative defenses — lack of subject matter jurisdiction, application of the doctrines of laches and license, failure to state a claim, the existence elsewhere of primary jurisdiction and the existence of adequate alternative remedies at law. On March 9, 1981 plaintiff requested leave to file a supplemental complaint to allege as additional infringing acts defendants' marketing of vehicle batteries and other automotive products using the trade name "Puro" and to include in its prayer for relief that defendants be required to assign to plaintiff and/or cancel its trademark "Puro Filter" issued to EFRA by the Department of State Trademark Office of the Commonwealth of Puerto Rico on March 2, 1981.

A hearing was held on March 5 and 13, 1981 on the motion for preliminary injunction at which both parties presented testimonial and documentary evidence. Upon agreement of the parties the testimony of Mr. Enrique Franceschini, Jr. was substituted by his deposition and briefly supplemented by testimony in open court. On June 1, 1981 the parties filed a Stipulation agreeing on the consolidation of the preliminary injunction hearing already held with the permanent injunction and waived any further hearing on the merits.¹

Purolator, Inc., a major producer of automotive filter products, sells air, oil and fuel filters under the registered trademark Purolator in the United States and Puerto Rico. It has been selling Purolator filters in the automotive market in Puerto Rico for approximately 30 years. As disclosed by the U.S. Patent Office records, Plaintiff's Exhibit 16, on October 26, 1925, Motors Improvements, Inc., a Delaware corporation, filed an application to register the trademark PUROLATOR which it had continuously used in its business since July 1, 1924 in connection with oil filters particularly adapted for automobiles. That trademark was duly registered and renewed on May 11, 1946 to Purolator Products, Inc., a Delaware corporation, upon a showing of ownership of the mark originally registered to Motors Improvements, Inc. A second renewal for a period of 20 years as of May 11, 1966 was made. On January 9, 1981 the Commissioner of Patents and Trademarks certified that the registration of PUROLATOR, Trademark 212,659, was in full force and effect as disclosed by the records of the U.S. Patent and Trademark Office which showed title to be in Purolator, Inc., plaintiff herein. The records further reveal that on December 30, 1975 the trademark PUROLATOR, as shown in Plaintiff's Exhibit 17, was registered for a term of 20 years from that date by plaintiff Purolator, Inc. for use on filters for land vehicles. This trademark, to which No. 1,028,571 was assigned in the Principal Register, appears impressed on plaintiff's air and oil filters. It is this mark which plaintiff claims has been infringed by defendants' adoption of "Puro Filter". The mark has a particular lettering style in print and two parallel lines above it which end with a wave on the left side.

Purolator, Inc. sells its filters locally through an exclusive distributor, Mascaró-Porter & Co., Inc., a corporation organized under the laws of Puerto Rico since 1949, which in turn sells them to retailers. Purolator products are available to the general public in Puerto Rico at auto parts and mass merchandise department stores as well as gas stations. Purolator sales in Puerto Rico to Mascaró-Porter in 1980 reached approximately 1.2 million and resale by that distributor to retail outlets surpassed the sum.

Mascaró-Porter promotes Purolator products in Puerto Rico by participating in trade shows, giving demonstrations of the different types of filters, distributing posters and by the activity of its salesmen. It employs ten traveling salesmen who sell Purolator products to retailers all over Puerto Rico and neighboring islands. Plaintiff has additionally spent substantial sums of money in the promotion of its trademark with respect to the sale of car filters.

Juan A. Dávila, actual sales manager of defendant EFRA, was an employee of Mascaró-Porter for 23 years. During that period he served as credit manager and sales manager at Mascaró-Porter. Another employee of Mascaró-Porter, Mr. Alberto Prieto, left his employment there as a counter salesman to work as a sales representative for EFRA.

EFRA Distributors, Inc., a corporation controlled by the Franceschini family, was established in 1965 as a manufacturers' representative and distributor of auto accessories such as tires, oil and filters. On September 1980 it started selling its own brand of oil and air auto filters using the name "Puro Filter". Prior to that it distributed Torite, Astro and Lee air and oil filters. Since opening this business in late 1980, EFRA sells its PURO filters throughout Puerto Rico to more than one thousand retailers such as gas stations, auto parts and mass merchandise stores like Sears and Barkers. Defendants' volume of sales for air and oil filters with the "Puro" mark totalled $16,000.00 during a five month period from mid-September 1980, date of the first sale at a gasoline trade show, until the February 24, 1981 Franceschini deposition. Annual total business of EFRA which encompasses the sales of other brands distributed by it have reached the approximate sum of six million dollars.

Defendants' "Puro" filters are 10% to 25% cheaper than plaintiff's filters and inferior in comparison to the latter. This was demonstrated by the results of quality comparison tests conducted on Puro and Purolator air and oil filters using standardized test procedures published by the Society of Automotive Engineers (SAE). Tests on the "Puro" oil filter specifically revealed: (1) a significant amount of built-in contaminant on the media migration test which is a measure of the inherent cleanliness of the filter itself, and, (2) contaminants bypassed the filter and entered into the engine because of poor workmanship. Due to differences in construction, life and efficiency values for "PURO" filters were very low. The paper filtering medium in the Puro samples tested, contrary to the Purolator filters, was not totally cemented to the end caps allowing contaminants to bypass the filtering paper. There was rust and corrosion on the metal parts of the PURO oil filters. Because of these and other deficiencies which are not apparent to a car owner and which cut down its efficiency, the "Puro" oil filter is likely to cause damage to a vehicle. Four different types of Puro and Purolator air filters were also tested to determine their their efficiency, resistance to the flow of air and their dust capacity. Designed to perform an identical function — to keep the dirt of the road out of the engine — the Puro air filters showed less dust capacity than Purolator for it took less dust to bring them to the point where the flow of air essentially stopped causing them to clog. Clogging causes the engine to stop functioning or to run roughly since the dust enters the carburator, mixes with the fuel and is distributed into the pistons producing excessive wear.

Both Puro and Purolator oil filters are packaged in boxes which have a transparent window in front. They have a similar color scheme — red, white and blue — and are approximately the same size. Both brands have a logo consisting of two parallel blue lines yet the shade of blue varies. The Purolator lines end in a wave while those on Puro products have small oil droplets between them and one larger drop falling from one end.

The names "Puro" and "Purolator" are impressed in the litigants' respective filters in identical lettering style. These marks are written in printing with eye-catching peculiarities such as an uncrossed "t" and identical type and size letters. They both have do-it-yourself installation instructions for the car owner printed on the boxes.

Defendants' Puro filters, air and oil, have conversion tables printed on them which indicate other brands or types of filters with which they are interchangeable. Puro Filter PF-49, an oil filter, for example, indicates in its conversion table that it can be replaced by, among...