Safeway Stores v. Sklar
| Decision Date | 26 November 1947 |
| Docket Number | Civ. A. No. 5696. |
| Parties | SAFEWAY STORES, Inc., v. SKLAR. |
| Court | U.S. District Court — Western District of Pennsylvania |
Evans, Bayard & Frick and Philip H. Strubing, all of Philadelphia, Pa., for plaintiff.
Caesar & Rivise, A. D. Caesar, Max E. Cohen and Benjamin Frank, all of Philadelphia, Pa., for defendant.
In this action for alleged infringement of a trade-name and unfair competition, the plaintiff, Safeway Stores, Incorporated, seeks (1) to restrain the defendant from using the name "Safeway Stores" in connection with his retail grocery store, (2) to require him to account for and pay over to it all profits derived by him from the use of the name "Safeway Stores", and (3) to obtain such other relief to which it may be entitled.
From the evidence presented to it, the court makes the following special
Findings of Facts.
1. The plaintiff is Safeway Stores, Incorporated, a corporation organized and existing under the laws of the State of Maryland.
2. The defendant is David Sklar, a citizen of the Commonwealth of Pennsylvania, and trades as Safeway Stores.
3. The amount in controversy, exclusive of interest and costs, exceeds $3,000.
4. Plaintiff was incorporated under the name Safeway Stores, Incorporated, on March 24, 1926, and since that time has carried on business under that name.
5. Except for a short time between May 8, 1941 and December 31, 1942, in which it directly operated retail self-service stores in several states, the retail operations of its organization in the United States from 1926 to the end of 1942 were carried on by wholly owned subsidiaries of the plaintiff. During the latter period, some of the stores were operated under the name "Safeway". Since the beginning of 1943, all assets, business and good will of its subsidiaries operating in the United States were acquired by the plaintiff and from that time all its stores, which are of the self-service type, trade under the name "Safeway". Under this same name, plaintiff's subsidiary Safeway Stores, Limited, has been operating a number of grocery stores in the provinces of the Dominion of Canada, from 1929 to the present.
6. On January 8, 1943, plaintiff procured a certificate of authority from the Commonwealth of Pennsylvania authorizing it to conduct the operation of a retail chain grocery store business and activities incidental thereto in the Commonwealth.
7. On June 10, 1944, the plaintiff registered its corporate name Safeway Stores, Incorporated in the Trade-Mark Division of the United States Patent Office.
8. In May of 1945, the plaintiff began operating in Manheim, Lancaster County, Pennsylvania, an egg center under the name Brantwood Egg Company, Division of Safeway Stores, Incorporated, for the purpose of purchasing, grading and packaging of eggs and shipping them to its various stores in New York and New Jersey. It made no retail sales of eggs in Pennsylvania, but it did sell undergrade eggs at wholesale to various large scale users of that grade of eggs. Manheim is at least 90 miles from Hatboro, Pennsylvania.
9. Although it has not done so on a nationwide scale, the plaintiff has expended annually large sums of money for the advertisement of food products in connection with its stores. These advertisements, which are confined to the immediate vicinity where the plaintiff has its retail stores, prominently feature the name "Safeway". Plaintiff's annual report indicates that it has spent $4,305,151.76 for advertisements during the year of 1945 and that a breakdown of this amount is as follows: Local newspapers, $1,945,319.36; shopping news and free distribution papers, $15,869.05; posters, $5,498.19; handbills, $3,508.91; radio, $56,788.52; and miscellaneous, $96,243.64. The radio advertisements, which emanated from Station WTOP in Washington, D. C., consisted of a half hour, five days a week program featuring several of plaintiff's sponsored brands sold exclusively at its stores. The program is not heard in Hatboro, Pennsylvania, and its environs.
10. Plaintiff's stock is listed on the New York Stock Exchange and is designated in daily published quotations of stock prices under the name "Safeway".
11. On occasions the plaintiff has made seasonal produce buying operations in the Commonwealth of Pennsylvania, but it has not operated a single grocery store or advertised the name "Safeway" in this Commonwealth.
12. However, the plaintiff does operate a number of its stores in parts of states bordering Pennsylvania, namely: 147 stores in the New York City area of New York, 77 in the northern half of New Jersey, and 30 in the southeastern area of Maryland. It also has 124 stores in Washington, D. C. and 81 in the northeastern part of Virginia. Plaintiff's store nearest to Hatboro, Pennsylvania, is located in Plainfield, New Jersey, which is 37 miles away.
13. As shown by its annual report for the year 1945, the number of stores operated by the plaintiff in the United States totaled 2,302. These stores with the exception of those referred to in paragraph 12, above, are located in states west of the Mississippi River.
14. The number of stores, including those managed by its Canadian subsidiary, operated by the plaintiff and the gross receipts made by them for the years 1936 to 1945, inclusive, are as follows:
Number of
Year Stores Gross Receipts
1936 3,370 $346,178,061
1937 3,327 381,868,220
1938 3,227 368,254,991
1939 2,967 385,882,083
1940 2,671 399,322,122
1941 2,660 475,124,885
1942 2,697 611,139,477
1943 2,493 588,833,620
1944 2,463 656,571,505
1945 2,452 664,771,549
15. Although the name "Safeway" is known to wholesale dealers in food supplies, as far as the general public of the Commonwealth of Pennsylvania, and more particularly of Hatboro and its surroundings, the name has not become synonymous with, or acquired a special significance with respect to, plaintiff's stores.
16. On September 20, 1945, the defendant registered under the Pennsylvania Fictitious Names Act to do business under the name "Safeway Stores" in Hatboro, Montgomery County, and the City and County of Philadelphia.
17. Since September 28, 1945, the defendant has been operating a self-service retail grocery store under the name "Safeway Stores" in Hatboro, Pennsylvania.
18. This store is located in a housing project accommodating approximately three hundred families and it is so situated with respect to the houses in the project that shoppers from the project do not cross any arterial highways in going to and from it.
19. Despite the fact that he had not owned and operated, either immediately before September 28, 1945, or thereafter, any other retail grocery store, the defendant had in connection with the opening of his store advertised it as "another Safeway Store" and referred to "our buyers" and "their ability" to obtain foods at low prices. In addition, the name "Safeway Stores" appears conspicuously both outside and inside defendant's store, and it was advertised frequently in the local newspaper and in circulars or handbills distributed to customers who frequented the store. Both in the signs on the store and the advertisements, the name "Safeway" appeared more prominently than the word "Stores".
20. Except for several brand names, the food products and articles sold by the defendant at his store are the same as, or related to, those sold by the plaintiff at its stores.
21. To the people of Hatboro and its neighborhood, the plaintiff's stores are unknown; in their minds the name "Safeway" is associated only with defendant's store.
22. Therefore, the customers, in making purchases at defendant's store, were not actually misled into believing that they were buying plaintiff's goods or that they were shopping at one of its stores.
23. The defendant's business has not deprived the plaintiff of any customers, nor has it interfered with or harmed plaintiff's relations with them.
24. The defendant has been connected with the grocery business for twenty-five years.
25. The defendant knew of plaintiff's stores prior to his adoption of the name "Safeway Stores" in connection with his store.
26. The ostensible reason for defendant's adoption of the name "Safeway" was because his store was a safe place in which to shop for the people who lived in the housing project in that they did not need to cross any main highways to gain access thereto. However, his real purpose in adopting the name "Safeway Stores" was to create the impression that he had more than one store and at the same time to capitalize on the business and credit reputation of the plaintiff so that he could buy a large allotment of supplies from wholesalers during a period when food products were difficult to obtain in large quantities.
27. The plaintiff did not consent to or acquiesce in the defendant's use of the designation "Safeway Stores", and upon discovering that he was using that name, it promptly notified him in writing, on December 17, 1945, to cease using the name in connection with his business. The defendant has refused to do so.
28. Defendant's activities complained of by the plaintiff were confined to the territory of the Commonwealth of Pennsylvania.
Conclusions of Law.
1. This court has jurisdiction over the parties to and the subject matter of this action.
2. The name "Safeway" has not acquired a secondary meaning with respect to plaintiff's stores as far as the general consuming public of the Commonwealth of Pennsylvania, and more particularly of Hatboro and its vicinity, are concerned.
3. The defendant's use of the name "Safeway" in connection with his store constitutes unfair competition with respect to the plaintiff.
4. The plaintiff is entitled to a permanent injunction against the defendant, his agents, attorneys and...
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