Sears, Roebuck and Co. v. Allstates Trailer Rental, Inc.

• Decision Date: 17 October 1960
• Docket Number: Civ. No. 11333.
• Citation: 188 F. Supp. 170
• Parties: SEARS, ROEBUCK AND CO., a New York corporation, v. ALLSTATES TRAILER RENTAL, INC., a Maryland corporation.
• Court: U.S. District Court — District of Maryland

188 F. Supp. 170

SEARS, ROEBUCK AND CO., a New York corporation, v. ALLSTATES TRAILER RENTAL, INC., a Maryland corporation.

Civ. No. 11333.

United States District Court D. Maryland.

October 17, 1960.

Robert F. Skutch, Jr., Weinberg & Green, Baltimore, Md., Frank H. Marks, Lederer, Livingston, Kahn & Adsit, Chicago, Ill., for plaintiff.

David Gerber, Burke, Gerber & Wilen, Baltimore, Md., and Albert J. Kramer and William T. Stephens, Washington, D. C., for defendant.

THOMSEN, Chief Judge.

Plaintiff, which sells auto trailers and other automotive parts and accessories under its registered trade-mark "Allstate" and operates automotive service stations using that name, seeks to restrain defendant from (1) renting auto trailers bearing the word "Allstates", (2) from using that word as the trade name of its trailer rental business and as part of its corporate title, and (3) from using the word "Nationwide" imposed over an outline map of the United States on its trailers and in its advertising.

Facts

The case has been submitted on a stipulation of facts, which includes a great variety of exhibits and the deposition of defendant's president.

Plaintiff is a New York corporation with its principal place of business in Chicago, Illinois. It has been engaged in retail trade since 1886 and is one of the largest retail distributors of consumers' merchandise in the United States. Plaintiff operates eleven mail-order plants, serving as merchandise distribution centers for all sections of the United States, including the State of Maryland and the City of Baltimore. For many years plaintiff has distributed semi-annually in this and other countries millions of copies of a large general catalogue. The 1959 Fall distribution exceeded 9,000,000 copies at a cost in excess of $15,000,000. More than 100,000 copies of the Spring catalogues have been distributed in Baltimore and more than 1,000,000 copies in Maryland during the period 1954-1960. All of the catalogues include automotive equipment sold under plaintiff's trademark "Allstate".

Since November 1926 plaintiff has continuously used and advertised the trademark "Allstate" in connection with certain goods which it sells. The "Allstate" trade-mark now covers a line of automotive parts and accessories.

Since 1925 plaintiff has operated retail stores throughout the United States, and now operates over 700 such stores, including several in and around the City of Baltimore, and elsewhere in Maryland. Plaintiff also operates about 650 automobile service stations in connection with its retail stores, including those in Baltimore. Those service stations sell plaintiff's "Allstate" merchandise and display the name "Allstate" in various ways, e. g.

"Allstate Tires Batteries Oil Lubrication & Accessories"

on the face of the station.

Plaintiff's Division 28 handles automotive parts and supplies other than tires and tubes. For the period 1945 to 1959, sales of Division 28 alone amounted to approximately $1.5 billion, with an advertising expense of over $46 million. The sales and advertising figures for tires are also very substantial. During the years 1950-1959 the cost of advertising "Allstate" products in Maryland has steadily increased from about $25,000 per year to about $50,000 per year; sales of such products have increased from less than $800,000 to more than $1,600,000. Plaintiff's "Allstate" line is advertised not only in plaintiff's catalogues, but also in local newspapers in Baltimore City and elsewhere. The word "Allstate" on the products and in the advertising is frequently displayed superimposed over an outline map of the United States.

In 1927 plaintiff registered its trademark "Allstate" for tires and tubes. In 1954 it registered on the Principal Register its trade-mark "Allstate" for a wide line of automotive and motor vehicle structural parts and accessories showing that the mark was first used for that category of merchandise on or about January 17, 1933. The list of products covered by the registration included utility trailers. Plaintiff has sold and advertised trailers under the trade-mark "Allstate" in Maryland and elsewhere since about January 1943. In the ten years since 1950 plaintiff has sold over 50,000 "Allstate" trailers.

Allstate Insurance Co., a subsidiary of plaintiff, has registered "Allstate" on the Principal Register as a service mark for underwriting of insurance risks.

Defendant is a Maryland corporation with its principal place of business at 6501 Pulaski Highway, in Baltimore. It was incorporated under its present name in January 1955 and since that time has engaged in the business of leasing automotive trailers to the public from its Pulaski Highway service station and through other service stations in Maryland. Since 1955 the trailers have borne defendant's trade name "Allstates". Defendant also uses the name "Allstates" on its stationery in printed leases and in telephone directory advertising. A predecessor partnership, known as Bennett's of Baltimore, was engaged in the business of leasing trailers, but it did not use the name "Allstates".

Defendant owns between 112 and 121 trailers. It now leases about 22 to 24 trailers to Nationwide Trailer Rental Systems, Inc., a system for exchanging trailers after one-way trips. These trailers are marked with the name "Nationwide" superimposed on an outline map of the United States. These trailers are generally used in interstate operations, while the trailers marked "Allstates" are generally used in and around Baltimore. Defendant's advertisements and telephone directory listings show that it is a member of the Nationwide Trailer Rental System.

No person, firm or corporation in the State of Maryland other than plaintiff is using the name "Allstate" or "Allstates" in connection with the sale of automotive parts and equipment, including auto trailers. No person, firm or corporation in the State of Maryland other than defendant is using the name "Allstate" or "Allstates" in connection with the leasing of auto trailers.

About the time of the opening of plaintiff's Mondawmin, Baltimore store in November 1956, Kershner, an assistant to the operating superintendent of that store, acting within the general scope of his authority, arranged for the leasing of a number of defendant's "Allstates" trailers for use at the Mondawmin store to facilitate the delivery of merchandise to plaintiff's customers during the pre-Christmas season, because sufficient regular facilities had not yet been developed for the delivery of such merchandise. After a period of several weeks, the trailers were returned to defendant's place of business and payment therefor in the amount of $142.50 was duly made by plaintiff's check. Subsequently, Kershner again arranged with defendant for the leasing of a number of trailers on similar terms and arrangements; payment for that leasing was made by plaintiff to defendant on or about June 17, 1957, in the amount of $61.27.

On or about July 23, 1957, defendant filed in the United States Patent Office an application to register the trade-mark "Allstates" for the leasing of vehicular trailers; that application was allowed for publication and was published for opposition in the Official Gazette of the Patent Office on November 4, 1958. Plaintiff has opposed such registration by an opposition proceeding in the Patent Office. That proceeding is now in suspension pending the outcome of this suit.

On or about November 28, 1958, counsel for plaintiff sent defendant a written demand that defendant cease using the trade style "Allstates".

The complaint in the instant action was filed on April 17, 1959. It seeks (A) an injunction against defendant's use of any trade name or style including the word "Allstates" in any form, or any other word confusingly similar to "Allstate"; (B) the destruction of all printed material, signs, and the like bearing the word "Allstates"; (C) the elimination of that word from defendant's corporate name; (D) an accounting of damages and profits; (E) a direction to the Commissioner of Patents to enter a final judgment in the opposition proceeding sustaining plaintiff's opposition and denying the registration applied for; and (F) for other and further relief. Plaintiff has now abandoned its claim for damages and profits.

In addition to the stipulated facts set out above, the deposition of Charles W. Benson, defendant's president, shows that when he organized the defendant corporation under its present name he was aware that plaintiff used the trademark "Allstate" in connection with the sale of many items, including trailers, and that plaintiff operated service stations in the Baltimore area and used the name "Allstate" on those stations. The deposition also included the following questions (by plaintiff's counsel) and answers:

"Q. Mr. Benson, has it ever occurred to you when a customer comes in to rent a trailer that they have asked you whether or not you are affiliated with Sears Roebuck and Company or whether you have any tie-up with Sears Roebuck and Company, or whether any of your trailers were Sears Roebuck trailers?

"A. In the past month I have had two people ask that.

"Q. Did it ever happen before that?

"A. I don't recall it happening before that."

Plaintiff contends that this evidence proves actual confusion. I am not satisfied that the two prospective customers who asked the question were not inspired by plaintiff, and I do not find this testimony persuasive to prove actual confusion. For reasons discussed below, however, I do find that there is a strong likelihood of confusion in the minds of the trailer-using public; that many people who are familiar with plaintiff's use of the word "Allstate" in connection with various automotive products and services would be likely to believe that a trailer rental concern using the name "Allstate" or "Allstates" is operated by or associated with plaintiff.

Discussion

Plaintiff asserts rights in this case...