Quality Courts United v. Quality Courts

• Decision Date: 15 March 1956
• Docket Number: Civ. A. No. 5064.
• Citation: 140 F. Supp. 341
• Parties: QUALITY COURTS UNITED, Inc., Plaintiff, v. QUALITY COURTS, Inc., Defendant.
• Court: U.S. District Court — Middle District of Pennsylvania

140 F. Supp. 341

QUALITY COURTS UNITED, Inc., Plaintiff, v. QUALITY COURTS, Inc., Defendant.

Civ. A. No. 5064.

United States District Court M. D. Pennsylvania.

March 15, 1956.

COPYRIGHT MATERIAL OMITTED

Albert Aston, Andrew Hourigan, Jr., Allan M. Kluger, Wilkes-Barre, Pa., John Trenam, Tampa, Fla., for plaintiff.

Arthur A. Maguire, Joseph Serling, Wilkes-Barre, Pa., for defendant.

JOHN W. MURPHY, Chief Judge.

Plaintiff seeks to enjoin defendant from infringement of its registered trade mark and from unfair competition in the use of its trade mark, trade name, service mark and collective mark.¹ Jurisdiction arises from diversity of citizenship and the requisite amount in controversy, 28 U.S.C.A. § 1332(a) (1); and the presence of a federal question² joined with a claim of unfair competition, 28 U.S.C.A. § 1338(a, b). The case was tried to the court without a jury. The record consists of the pleadings, notes of testimony, and various exhibits. After appraising the evidence offered by and on behalf of the plaintiff, defendant did not offer any testimony. Based on the uncontradicted evidence, we make the following findings of fact.

Findings of Fact

1. Plaintiff, Quality Courts United, Inc., is a non-profit corporation organized and existing under the laws of the State of Florida since its incorporation on August 16, 1941. (An amendment to the charter was approved and filed December 16, 1953.)

2. Defendant, Quality Courts, Inc., incorporated under the laws of Pennsylvania on August 1953 has its principal office and place of business in Dallas, Pennsylvania, in this district, where it opened to the public on January 1, 1954, a newly constructed 24 unit motel.

3. Plaintiff and its immediate predecessor, Quality Courts United, an unincorporated association, have been actively connected with the motor court business since 1939.

4. The name "Quality", "Quality Court", "Quality Courts", "Quality Courts United" had never been used in connection with any motor court business prior to its adoption by plaintiff and its predecessor.

5. The purpose for which its predecessor was organized and plaintiff incorporated and for which it presently exists is to improve motor court business and facilities and to create and maintain through enforcement of high standards for member courts a reputation for excellence for the names Quality Court, Quality Courts, Quality Motor Court and Quality Courts United, so that the traveling public will associate with such names high standards of motor court accommodations and patronize motor courts owned by members of plaintiff's organization.

6. Plaintiff does not itself own or operate any motor courts. It simply prescribes standards of facilities and operation for motor courts which enjoy membership in plaintiff organization and conducts advertising and promotional activities for such courts.

7. Membership in plaintiff organization, upon approval by the Board of Directors, may be obtained and retained only by an individual with respect to a particular motor court. Payment of dues, compliance with the by-laws and maintenance of prescribed standards are requisites of continuing membership.

8. December, 1945, plaintiff organization had 51 members. January 1, 1954, there were 390 members in twenty-six states and two provinces in Canada. May, 1955, plaintiff had 430 members.

9. In the fall of 1953 there were nine member courts in Pennsylvania; thirty-eight in immediately contiguous states. At the time of trial there were sixteen member courts in Pennsylvania; forty-one in the surrounding states.

10. The competitive territory of a motor court covers a wide area. Potential customers are those in fast moving vehicles traveling long distances. Within one hundred miles competition is intense; less so over a one day driving area, about four hundred to six hundred miles.

11. Each year, at substantial cost, plaintiff publishes and distributes guide books which list the names and locations of member courts. The purpose of these guide books is to provide the traveling public with reliable, conveniently arranged information as to excellent motel accommodations; to advertise and promote courts which enjoy membership in plaintiff organization. Fifty thousand (50,000) copies were published and distributed in 1941. The number increased from year to year so that in 1954, 4,128,000 copies were published and distributed at a cost of $106,889.30. Since 1939 eighteen different guide books were published and distributed at a cost in excess of a quarter million dollars. 3,500,000 copies were contracted for in 1955.

12. In addition to the expenditures for guide books, plaintiff has spent large sums advertising and promoting member courts. Member courts have likewise spent considerable sums advertising their facilities and services and membership in plaintiff organization. Apart from time, money and services of the individual members over the years the organization spent $603,395.11 promoting its good will and reputation and that of its individual members. For 1955 alone $125,000 was budgeted for newspaper advertising.

13. Advertising media employed include travel guides, newspapers, posters, billboards, metal emblems, trade journals, and nationally circulated magazines.

14. Articles concerning or referring to plaintiff organization have appeared in Motor Court Age, December 1946 and 1947; American Motels, December 1947, April 1955; Tourist Court Journal, December 1949; The Saturday Evening Post of July 5, 1947 and of July 18, 1953; Readers' Digest of September 1947; Fortune of August, 1951; Esquire, Pageant, Pathfinder and Town Journal of June, 1954. In October 1954, an article on American Motels, including plaintiff organization, appeared in a magazine, Scottish Field, published and circulated in Scotland.

15. The name of plaintiff organization is considered by the American Automobile Association — which lists practically all of plaintiff's members' courts in its travel guides — five or six million copies annually — to be a mark of distinction.

16. During 1954, members of plaintiff organization served some 6,000,000 persons representing estimated gross receipts of $22,000,000.00.

17. Through service including its advance registration program and accommodations of uniformly excellent standards, and through proper advertising and generally outstanding public relations, plaintiff's members' courts have built up a large clientele.

18. Because of the good will achieved, greatly increased patronage and net income obtained, membership in plaintiff organization increases the sale price of member courts although membership is not per se transferable.

19. Each member court is designated and certified as such to the traveling public by a large metal emblem prominently displayed containing the words "Quality Courts". Each court must be inspected and reapproved annually.

20. Since 1941 plaintiff has used a seal as a symbol or emblem together with other media to advertise the organization and its member courts.

21. To protect the name Quality Courts and the emblem of the organization, under authority granted June 3, 1950, an application for registration of a collective mark for services was filed with the United States Patent Office on February 19, 1952, and registered under the Trade Mark Act of 1946 on the principal register on June 25, 1954. June 2, 1952, an application for a trade mark was likewise filed and registered on August 18, 1953.

22. It has become common practice for motor court patrons and travel editors and authors and those connected with the motor court industry to identify member courts of plaintiff organization simply as "Quality Courts" and to speak of "traveling Quality" when signifying use of plaintiff's members courts on automobile trips.

23. In front of its motel defendant displayed a large neon sign containing the words or name "Quality Courts". Several billboard advertisements and telephone directories carried the same name. On soap wrappers defendant used the name Quality Courts Inc.; on stationery, Quality Court Motel, Inc.; on registration cards, business cards and envelopes, match book covers and telephone directories, Quality Courts Motel, Inc.

24. Defendant's president having made a trip to Florida during 1953 thereafter knew, or was in a position to know, of plaintiff organization and its well publicized name prior to defendant's adoption of the word "Quality" as an integral part of its name.

25. Plaintiff did not consent to or acquiesce in defendant's use of the word "Quality" in its name. Upon discovery of such use, plaintiff, by letter to defendant dated January 26, 1954, registered objection with respect thereto. Thereafter, plaintiff made numerous requests and demands upon defendant for elimination of the word "Quality" from defendant's name. These requests and demands were ignored or rejected by defendant.

26. Defendant's adoption and use in substantial entirety of plaintiff organization's name has confused and deceived and tends to confuse and deceive members of the traveling public by generating the false belief or impression among travelers that someone connected with the defendant enjoys membership in plaintiff organization.

Conclusions of Law

1. The Court has jurisdiction over the parties and subject matter.

2. By virtue of long use, advertising, and other promotional activities of the plaintiff organization, the word "Quality" as used in connection with motor courts has acquired a secondary meaning, such word being associated in the minds of automobile travelers with courts owned by members of plaintiff organization.

3. Plaintiff has acquired a valuable property right in its name as such is related to the motor court business in the United States and for present purposes in Pennsylvania in particular.

4. Plaintiff's right to the natural expansion of its trade territory embraces that territory in which defendant's motor court is located.

5. By...