RB Davis Co. v. Davis

• Decision Date: 23 April 1935
• Docket Number: No. 7350.,7350.
• Parties: R. B. DAVIS CO. v. DAVIS.
• Court: U.S. District Court — Eastern District of New York

11 F. Supp. 269

R. B. DAVIS CO. v. DAVIS.

No. 7350.

District Court, E. D. New York.

April 23, 1935.

Nims & Verdi, of New York City (Wallace H. Martin and Stewart W. Richards, both of New York City, of counsel), for plaintiff.

Russell, Shevlin & Russell, of New York City (Matthew J. Shevlin and Charles M. Siegfried, both of New York City, of counsel), for defendant.

INCH, District Judge.

The plaintiff brings this suit by bill of complaint duly filed August 18, 1934, in which it asks that the defendant be restrained from manufacturing or selling, or offering for sale, a certain baking powder and a chocolate flavored malt product, made by defendant, in certain containers, bearing certain labels, offered in evidence, which plaintiff claims has enabled defendant to unfairly compete with plaintiff, and which violate plaintiff's trade-marks, etc.

The defendant duly answered, by pleading filed October 15, 1934, which answer puts in issue the material allegations of said complaint. The answer contains a counterclaim based on an alleged conspiracy and entrapment by plaintiff resulting in alleged damage to defendant; it being claimed that the said conspiracy and entrapment was a part of plaintiff's efforts to unlawfully destroy the business of defendant.

The plaintiff duly replied to this counterclaim by reply, filed October 30, 1934.

This court has jurisdiction of both suit and counterclaim.

A preliminary injunction was granted to plaintiff, which injunction was thereafter modified on appeal. This will be considered later in this opinion.

The first thing to be found are the facts. Thereafter will be considered the effect of the order of said appellate court, as indicated in its decision. Finally, the law applicable to the facts found will be discussed.

A great deal of testimony was taken, but the material facts appear to be, in substance, as follows:

In 1878 Robert Benson Davis commenced the manufacture of baking powder. In his label he emphasized two things. One was the word "Davis" the other the letters "O. K." The earlier specimens of this label are found in Plaintiff's Exhibits 2, 3, and 4. The business started in New York City, but in or about 1893 the factory was moved to Hoboken, N. J., where it still is.

In 1905 the plaintiff was incorporated under the laws of the state of New Jersey, and four years later plaintiff obtained its first trade-mark registration of Davis Baking Powder (Plaintiff's Exhibit 1).

In 1919 plaintiff obtained its trade-mark for the word "Davis" with an apostrophe (Plaintiff's Exhibit 5). Finally in 1932 plaintiff obtained another trade-mark registration for "Davis Baking Powder" (Plaintiff's Exhibit 4).

It is therefore a fact that, for over a half a century Davis Baking Powder has been on the market, and for the past quarter of a century, since obtaining its first United States trade-mark, this baking powder has been identified by the word "Davis."

Between the years 1918 and 1934 the annual sales have averaged 21,000,000 cans. This market covers not only the United States but foreign countries. At one time these sales reached almost 35,000,000 cans in a single year.

Substantially all the grocery stores, and certainly all the important stores of this character, not only handled Davis Baking Powder, but there is ample testimony that this product is commonly known and identified by the name "Davis."

To be sure, the letters "O K," at first more prominent, and under the new and more attractive labels less prominent, have been retained, but it is clearly proven from the testimony that it is this word "Davis" that uniformly identifies plaintiff's product to the consumer and grocer.

Naturally such a history in regard to a product, one which I think cannot be reasonably disputed, rests on two things: One the excellent method of manufacture; the other, wide advertising.

One of these alone might not be sufficient, for it is a waste of money to advertise an inferior product. Certainly this would be so for such length of time as we find here. On the other hand, unless an excellent product is widely and wisely advertised, the extent of its market remains limited.

The proof shows that plaintiff's method of manufacture comprises ingredients of highest quality, carefully tested by experts, and manufactured by expensive and adequate machinery, designed to insure its purity, and, from the time it consists of raw material until it reaches the consumer packed in its can, this product is not touched by human hands.

It also appears that for the past few years air-tight cans have been added to prevent deterioration; it having been discovered, in the continued efforts of plaintiff to perfect its product, that the slip cover can, then in general use, tended to permit such deterioration.

There is testimony that plaintiff supplies more than one-half of the total amount of the baking powder sold in the New York area.

In addition to this business of manufacturing and selling baking powder, plaintiff also manufactures a preparation named "coco-malt." This coco-malt business was purchased by plaintiff in 1925, and in the past ten years plaintiff has sold approximately 34,000,000 cans of this chocolate malted drink.

As to the second important thing, that of advertising of its baking powder and coco-malt, plaintiff has done a great deal. This consists of extensive advertising in newspapers, magazines, street car cards, and over the radio. The volumes of these advertisements offered in evidence by plaintiff covering a period from 1917 to date (Plaintiff's Exhibits 10, 11, 12, and 13) show the wide amount of this advertising.

Much of the later advertising relates to both the baking powder and "coco-malt."

This advertising also has been in newspapers of other languages except English.

All of the above has cost, and is costing, plaintiff a great deal of money.

Having briefly considered the plaintiff's business, we now turn to the business conducted by the defendant.

According to the testimony of Davis, he was born in 1892. Both his father and mother were Rumanians and came to this country before his birth. So far as he knows, his father, who is dead, was known as Davis, and defendant has always been known by that name. His mother was not produced as a witness. In 1911, when he was about nineteen years of age, he was employed by a shoe company. In 1918 he entered the Army and was discharged March, 1919, and then returned to this shoe company, where he continued to act as an accountant and manager, until 1921, when he left the shoe company to go into the real estate business. He was and is also a notary public. He had a small place of business at 176 Stagg street, Brooklyn. In 1932 he looked around for some other and additional occupation, and became interested in a magazine article which advertised a book by some one mentioning the various lines of business which might be gone into, and pursuant to this he considered the possibility of manufacturing and selling a baking powder.

He made inquiries at a small grocery store near by, and learned from the grocer that he bought his baking powder from a certain concern, and called upon this concern and arranged with it to pack a product for him in his own cans and under his label. He then had a commercial artist make cuts for a label, and the product was then packed by this company in defendant's cans shipped to and sold by defendant.

In April, 1933, he registered his label in the Patent Office, No. 308,688 (Defendant's Exhibit D).

The foregoing arrangement by defendant continued for a few months, when defendant changed to another concern in Jersey City.

This new concern followed the same plan, packing the cans for defendant and shipping same to him for sale by him, until February, 1934, when defendant obtained a formula from a chemical company and started to manufacture a powder himself and pack the cans by hand.

At his place of business, on the window of which is the advertisement of the real estate and insurance activities of defendant, the front portion is used as an office or store, and set aside is a small room, with a curtain at the doorway, in which room or compartment is his so-called manufacturing plant. He states that he still does "insurance and real estate and acts as notary public."

This plant consists of a 200-pound mixer, driven by a motor, and, after mixing the powder, it is discharged into a galvanized can, and from this can it is poured into a barrel, lined with moisture proof paper, and a cover is placed upon this barrel. Defendant then packs the cans by hand as needed.

Thus it is apparent that both the size of this so-called plant and the method pursued are somewhat primitive. His method of selling the product depends on his own efforts as salesman, with such assistants as he hires. His advertising likewise is limited, but his price is cheaper.

No fault can be found with such humble beginnings as it has often accompanied the start of a large and important industry. The trouble here is that defendant is attempting to succeed, not on the merits of his own baking powder, etc., but is intentionally appropriating the extensive good will and advertising of plaintiff in his attempt to sell his products.

So much for the facts concerning the history of the plaintiff and defendant.

We now turn to the decision of the Circuit Court of Appeals of this circuit, 75 F.(2d) 499, 500, on the motion for a preliminary injunction.

This motion was based on affidavits, the statements in which were followed substantially by many of the witnesses called at the trial.

Of course, if this decision was intended to direct, in a sense, the proper form of decision after the trial, such direction must and should be carefully followed by this court. But it does not seem to me that such was the intention and, in fact, a mere reading of the decision indicates, it seems to me, that pending a trial the appellate court, considering a motion confined merely...