Red Devil Tools v. Tip Top Brush Co., A--21

• Citation: 50 N.J. 563,236 A.2d 861
• Decision Date: 18 December 1967
• Docket Number: No. A--21,A--21
• Parties: , 157 U.S.P.Q. 456 RED DEVIL TOOLS, a corporation of New Jersey, Plaintiff-Appellant and Cross-Respondent, v. TIP TOP BRUSH CO., Inc., et al., Defendants-Respondents and Cross-Appellants.
• Court: United States State Supreme Court (New Jersey)

Page 563

50 N.J. 563

236 A.2d 861, 157 U.S.P.Q. 456

RED DEVIL TOOLS, a corporation of New Jersey Plaintiff-Appellant and Cross-Respondent, v. TIP TOP BRUSH CO., Inc., et al., Defendants-Respondents and Cross-Appellants.

No. A--21.

Supreme Court of New Jersey.

Argued Oct. 23, 1967.

Decided Dec. 18, 1967.

Jerome C. Eisenberg, Newark, for Red Devil Tools (Clapp & Eisenberg, Newark, attorneys, Stuart L. Pachman, Newark, on the brief).

T. James Tumulty, Jersey City, for Tip Top Brush Co., Inc.

The opinion of the court was delivered by

JACOBS, J.

The Appellate Division sustained the Chancery Division's grant of an injunction to the plaintiff but set aside its order directing the defendants to account for profits. 92 N.J.Super. 570, 224 A.2d 336 (1966). Both parties sought and obtained certification. 48 N.J. 443, 226 A.2d 431 (1966).

The plaintiff is a New Jersey corporation which has for many years manufactured and sold a line of painters' and glaziers' tools under its well-known trademark 'Red Devil' accompanied by a picture of a devil's head. Its trademark dates back to 1902 and was registered in the United States Patent Office as early as 1912. It advertises extensively in all of the states and in foreign countries and in recent years its annual advertising expenditures approached $300,000. Its customers are wholesalers who deal in hardware, paint and paint sundries and its products are widely sold through retail paint outlets.

The tools manufactured and sold by the plaintiff include items such as putty knives, wall scrapers, zippers for opening stuck windows, tools for puttying windows, utility patches, taping knives, wood scrapers, etc. (92 N.J.Super. at 572, 224 A.2d 336). The plaintiff does not manufacture or sell paint brushes. The defendant Tip Top Brush Co. is a New Jersey corporation which does manufacture and sell paint brushes under many unregistered labels. It is the successor of a New York corporation of the same name which moved its manufacturing plant to New Jersey in 1961 when the New Jersey corporation was formed. In 1954 the New York corporation filed an application in the United States Patent Office to register the trademark 'Red Devil' as applied to its paint brushes. Its application was originally rejected but was later granted in 1957. The first significant use by the New York corporation of the Red Devil trademark was in 1959 and the defendant Tip Top began using it about September 1961. Although the defendants' sale of paint brushes is now quite substantial, their annual advertising expenditures have apparently never exceeded $6,000.

The Chancery Division found, on the basis of ample evidence, that the defendants' brushes are distributed in the same channels of trade and are sold over the same counters to the same classes of customers as are the plaintiff's painters' and glaziers' tools; that the potentiality of confusion is great and has been taken advantage of by the defendants; that the defendants have used display racks for their Red Devil brushes without designating any manufacturer's name and address; that these racks have been placed in hardware stores where the plaintiff's products were being sold; and that specified instances of actual confusion, have occurred where the defendants' brushes have been taken by the customers to be products of the plaintiff. In its conclusions, the Chancery Division found that the defendants had wrongfully appropriated the plaintiff's mark and had infringed upon it, and that their appropriation and infringement had been 'conscious and deliberate, having been carried out to take advantage of plaintiff's mark and established reputation for the purpose of selling more brushes with greater benefits to defendants than would have been possible without the use of plaintiff's mark.'

Rejecting various defenses which had been advanced by the defendants, the Chancery Division enjoined their continued use of the Red Devil mark in the sale of their brushes and ordered that they 'account to plaintiff for all profits realized by any of them since September 1, 1961, from the manufacture and sale, or either the manufacture or sale of brushes under the brand or name 'Red Devil'.' In the Appellate Division the injunction was sustained as having sufficient evidential support in the record (92 N.J.Super. at 574, 224 A.2d 336) but the order for accounting was vacated on the ground that the injunction, without any additional relief, adequately satisfied 'the equities of the case.' 92 N.J.Super. at 576, 224 A.2d 336; see Champion Spark Plug Co. v. Sanders, 331 U.S. 125, 67 S.Ct. 1136, 91 L.Ed. 1386 (1947); Q-Tips, Inc. v. Johnson & Johnson, 206 F.2d 144 (3 Cir.), cert. denied, 346 U.S. 867, 74 S.Ct. 106, 98 L.Ed. 377 (1953); National Dryer Mfg. Corp. v. National Drying Mach. Co., 136 F.Supp. 886 (E.D.Pa.), aff'd, 228 F.2d 349 (3 Cir. 1955), cert. denied, 351 U.S. 906, 76 S.Ct. 694, 100 L.Ed. 1442 (1956); Morgenstern Chemical Co. v. G. D. Searle & Co., 253 F.2d 390 (3 Cir.), cert. denied, 358 U.S. 816, 79 S.Ct. 25, 3 L.Ed.2d 58 (1958).

Although the plaintiff's federal registration did not in terms cover paint brushes, its long and prior use of the Red Devil trademark in connection with its business had given it certain well recognized common law rights. These included the right to restrain unfair trade practices which might endanger the good will it had established through many years of advertising and service. See Blue Goose Auto etc. v. Blue Goose Super etc., 110 N.J.Eq. 547, 551, 160 A. 316 (E. & A.1932); Eureka Fire Hose Co. v. Eureka Rubber Mfg. Co., 69 N.J.Eq. 159, 164, 60 A. 561 (Ch. 1905), aff'd, 71 N.J.Eq. 300, 71 A. 1134 (E. & A.1906). The fact that the plaintiff and the defendants were not in competition for the sale of paint brushes was not at all fatal to injunctive relief. See Great Atlantic & Pacific Tea Co. v. A & P Trucking Corp., 29 N.J. 455, 149 A.2d 595 (1959); Chemical Corp. of America v. Anheuser-Busch, Inc., 306 F.2d 433, 2 A.L.R.2d 739 (5 Cir. 1962), cert. denied, 372 U.S. 965, 83 S.Ct. 1089, 10 L.Ed.2d 129 (1963); Metropolitan Life Insurance Co. v. Metropolitan Ins. Co., 277 F.2d 896 (7 Cir. 1960); Guild & Landis, Inc. v. Liles & Landis Liquidators, Inc., 2 Ohio Misc. 169, 207 N.E.2d 798 (C.P.1959). Their products were related and were merchandised through the same channels. Confusion was not only likely but was almost inevitable. The plaintiff had expended large sums to popularize its own products and they had become well and favorably known to the purchasing public under the Red Devil name. That name was an arbitrary one which had no descriptive significance and when the defendants deliberately chose it, from the almost unlimited number of arbitrary names available, they invited the resulting confusion, undoubtedly seeking, as the Chancery Division found, to benefit from the plaintiff's established reputation. Surely in this day equity will not hesitate to restrain shenanigans of this sort. See 51 West 51st Corp. v. Roland, 139 N.J.Eq. 156, 50 A.2d 369 (Ch.1946); American Shops, Inc. v. American Fashion etc., Inc., 13 N.J.Super. 416, 80 A.2d 575 (App.Div.), certif. denied, 7 N.J. 576, 83 A.2d 379 (1951); Polaroid Corporation v. Polaraid, Inc., 319 F.2d 830 (7 Cir. 1963); cf. Chemical Corp. of America v. Anheuser-Busch, Inc., supra, 306 F.2d 433, cert. denied, 372 U.S. 965, 83 S.Ct. 1089, 10 L.Ed.2d 129; Guild & Landis, Inc. v. Liles & Landis Liquidators, Inc., supra, 2 Ohio Misc. 169, 207 N.E.2d 798.

After the plaintiff's action asserting common law rights and seeking common law relief was filed in the Chancery Division, the defendants removed the proceeding to the United States District Court. On plaintiff's motion, it was remanded to the State court in line with the federal precedents. See J. J. Smith Co. v. Jordan Marsh Company, 161 F.Supp. 659 (D.Mass.1958); M & D Simon Co. v. R. H. Macy & Co., 152 F.Supp. 212 (S.D.N.Y.1957). The defendants now renew their contention that the Lanham Act (15 U.S.C.A. § 1051 et seq.), under which Tip Top obtained its registration in 1957, preempted the field to the preclusion of common law claims, such as asserted by the plaintiff in the Chancery Division. Although registration under the Lanham Act was declared to constitute Prima facie evidence and constructive notice (15 U.S.C.A. §§ 1057(b), 1072, 1115(b)), the registered mark was clearly made subject by Congress to preexisting rights under state law, at least those acquired in good faith before the effective date of the Act (July 5, 1947). See 60 Stat., c. 540, § 49, 15 U.S.C.A. § 1051 at p. 541; cf. 15 U.S.C.A. § 1065; M & D Simon Co. v. R. H. Macy & Co., supra, 152 F.Supp. at 214; Proxite Products, Inc. v. Bonnie Brite Products Corp., 206 F.Supp. 511, 514 (S.D.N.Y.1962); Developments in the Law--Trade-Marks and Unfair Competition, 68 Harv.L.Rev. 814, 875, 878 (1955). See also Flexitized, Inc. v. National Flexitized Corporation, 335 F.2d 774, 779 (2 Cir. 1964), cert. denied, 380 U.S. 913, 85 S.Ct. 899, 13 L.Ed.2d 799 (1965); E. F. Pritchard Co. v. Consumers Brewing Co., 136 F.2d 512, 518 (6 Cir. 1943), cert. denied, 321 U.S. 763, 64 S.Ct. 486, 88 L.Ed. 1060 (1944); 4 Callman, Unfair Competition and Trade-Marks § 97.3(a), pp. 2068--69 (2d ed. 1950).

The decisions in Sears, Roebuck & Co. v. Stiffel Co., 376 U.S. 225, 84 S.Ct. 784, 11 L.Ed.2d 661 (1964) and Compco Corp. v. Day-Brite Lighting, Inc, 376 U.S. 234, 84 S.Ct. 779, 11 L.Ed.2d 669 (1964) do not stand in the way of relief here. In Stiffel the plaintiff brought a proceeding against Sears, Roebuck & Co. alleging that Sears had copied its 'pole lamp' thereby infringing its patent and engaging in unfair competition. The lower court held the patent invalid but nonetheless granted relief under the common law. The Supreme Court reversed, holding that the copying of an article which is not protected by a federal patent or a copyright may not be prohibited as unfair competition. Compco...