QUALITY CHEKD DAIRY PROD. ASS'N v. Gillette Dairy of Black Hills, Inc.

• Decision Date: 30 August 1971
• Docket Number: Civ. No. 71-30W.
• Citation: 337 F. Supp. 239
• Parties: QUALITY CHEKD DAIRY PRODUCTS ASSOCIATION, a Cooperative, and Brown Swiss Milk Company, Inc., a Corporation v. GILLETTE DAIRY OF the BLACK HILLS, INC., a Corporation.
• Court: U.S. District Court — District of South Dakota

337 F. Supp. 239

QUALITY CHEKD DAIRY PRODUCTS ASSOCIATION, a Cooperative, and Brown Swiss Milk Company, Inc., a Corporation v. GILLETTE DAIRY OF the BLACK HILLS, INC., a Corporation.

Civ. No. 71-30W.

United States District Court, D. South Dakota, W. D.

August 30, 1971.

Joseph M. Butler, Rapid City, S. D., for plaintiffs.

Horace R. Jackson, Rapid City, S. D., for defendant.

MEMORANDUM OPINION

BOGUE, District Judge.

Quality Chekd Dairy Products Association, a Wisconsin cooperative, is the owner of the Quality Chekd trademark. The trademark is duly registered with the United States Patent Office under the Lanham Act. The trademark is used on various dairy products.

Brown Swiss Milk Company, Inc., is a South Dakota corporation which distributes dairy products primarily throughout the Black Hills area of South Dakota. By virtue of a licensing agreement, plaintiff's exhibit 23, Brown Swiss claims to be a licensee of Quality Chekd Dairy Products Association. As a licensee of Quality Chekd Dairy Products Association, Brown Swiss claims the express authority of Quality Chekd to use the Quality Chekd trademark on Brown Swiss' dairy products. Brown Swiss has paid dues regularly for ten years to the Quality Chekd Dairy Products Association for the continued use of the Quality Chekd trademark.

Gillette Dairy of the Black Hills is a South Dakota corporation which began processing and distributing dairy products throughout the Black Hills area of South Dakota in 1968. Gillette Dairy of the Black Hills is not a licensee of the Quality Chekd Dairy Products Association.

On May 17, 1971, Gillette Dairy began distributing its dairy products using the Quality Chekd trademark on the containers, as well as a design and color scheme similar to the milk containers of Brown Swiss. Brown Swiss then brought the pending action claiming trademark infringement and unfair competition.

The first question to be determined is whether Quality Chekd Dairy Products Association has a claim to the Quality Chekd trademark that is superior to that of Gillette Dairy of the Black Hills, the defendant, thus allowing it to claim trademark infringement. Quality Chekd Dairy Association introduced into evidence plaintiff's exhibits one through six which are registration certificates from the United States Patent Office. These certificates show ownership of the Quality Chekd trademark to be in the Quality Chekd Dairy Association. As the owner of the trademark, Quality Chekd Dairy Association has a subsisting and superior right to the trademark over Gillette Dairy which has shown no right in the trademark. Gillette Dairy marketed its lowfat milk and vitamin D milk in half-gallon containers that bore the Quality Chekd trademark and which bore a similar color scheme to the milk cartons marketed by licensees of Quality Chekd Dairy Association. The infringement of a trademark is present when another uses or imitates the trademark on his goods in such a manner that purchasers of the product are actually deceived or there is a likelihood of confusion, thus inducing consumers of the product into believing that the goods they are purchasing were marketed under the auspices of the trademark owner or licensee. American Foods, Inc. v. Golden Flake, Inc., 312 F.2d 619 (5th Cir. 1963); Tisch Hotels, Inc. v. Americana Inn, Inc., 350 F.2d 609 (7th Cir. 1965); National Ass'n of Blue Shield Plans v. United Bankers Life Ins. Co., 362 F.2d 374 (5th Cir. 1966); Continente v. Continente, 378 F.2d 279 (9th Cir. 1967); Sweetarts v. Sunline, Inc., 380 F.2d 923 (8th Cir. 1967); Friend v. H. A. Friend & Co., 416 F.2d 526 (9th Cir. 1969); Procter & Gamble Co. v. Conway, 419 F.2d 1332, 57 C.C.P.A. 865 (1970). From the testimony given in court and from the marked similarity in milk cartons and the identical trademarks on both Brown Swiss Dairy products and Gillette Dairy products, the court finds there is a strong likelihood that the buying public will be confused when buying dairy products in the Black Hills area of South Dakota. The preservation of a trademark as a means of identifying products serves an important public purpose.

"It (trademark) makes effective competition possible in a complex, impersonal marketplace by providing a means through which the consumer can identify products which please him and reward the producer with continued patronage. Without some such method of product identification, informed consumer choice, and hence meaningful competition in quality, could not exist." Smith v. Chanel, Inc., 402 F.2d 562, 566 (9th Cir. 1968).

Therefore, Quality Chekd Dairy Products Association is entitled to an injunction to enjoin Gillette Dairy of the Black Hills from the unauthorized use of the Quality Chekd trademark.

Plaintiff Brown Swiss Milk Company is also entitled to an injunction enjoining Gillette Dairy of the Black Hills from distributing dairy products with the Quality Chekd trademark. 28 U.S. C.A. § 1338 states that the "district courts shall have original jurisdiction of any civil action asserting a claim of unfair competition when joined with a substantial and related claim under copyright, patent or trademark laws."

Brown Swiss claims that it is entitled to an injunction on the theory of either trademark infringement or unfair competition under 28 U.S.C.A. § 1338. To maintain an action for trademark infringement, Brown Swiss must establish that its claim to the Quality Chekd trademark is superior to the claim of Gillette Dairy of the Black Hills. Brown Swiss claims that it is a licensee of the Quality Chekd Dairy Products Association and thereby expressly licensed to use the Quality Chekd trademark in the Black Hills area. Gillette Dairy of the Black Hills maintains that Brown Swiss did not follow the proper procedure in obtaining a license from Quality Chekd Dairy Products Association...