A. Smith Bowman Distillery, Inc. v. Schenley Distillers, Inc.

• Decision Date: 31 July 1961
• Docket Number: Civ. A. No. 2199.
• Citation: 198 F. Supp. 822
• Parties: A. SMITH BOWMAN DISTILLERY, INC., Plaintiff, v. SCHENLEY DISTILLERS, INC., Defendant.
• Court: U.S. District Court — District of Delaware

198 F. Supp. 822

A. SMITH BOWMAN DISTILLERY, INC., Plaintiff, v. SCHENLEY DISTILLERS, INC., Defendant.

Civ. A. No. 2199.

United States District Court D. Delaware, at Wilmington.

July 31, 1961.

H. James Conaway, Jr., Morford, Young & Conaway, Wilmington, Del., and Henry B. Weaver, Jr., Quinn O'Connell, Hershel Shanks and Weaver & Glassie, Washington, D. C., for plaintiff.

Aaron Finger, and Richards, Layton & Finger, Wilmington, Del., and Milton B. Seasonwein, New York City, for defendant.

LEAHY, Senior District Judge.

Plaintiff, who owns the registered trademark "Virginia Gentleman," has used it since 1937 on its four-year-old, 90-proof bourbon whiskey. It brought this action alleging defendant's use on a similar product of the marks "Indiana Gentleman" and "American Gentleman" constituted infringement under 15 U.S. C.A. § 1114,¹ and unfair competition. Plaintiff seeks an injunction against the continued use of these marks² and cancellation of defendant's marks.³ Jurisdiction rests on the grant of 15 U.S.C.A. § 1121 without regard to diversity or jurisdictional amount.⁴ Because of the ad hoc nature of this type of case, precedents are of less than normal value and a careful review of the relevant facts in the instant case is necessary.⁵,^5a

The Bowman family began distilling bourbon on their Virginia farm in 1935, having selected the name "Virginia Gentleman" in an informal family council. This mark was registered in 1937⁶ and republished in 1957. Their bourbon has been in high demand almost from its commercial inception, and in 1943, because of war production requirements, plaintiff found it necessary to begin rationing the supply to its customers.⁷ After the war-time restrictions were removed, plaintiff still did not produce enough of its bourbon to satisfy the demand so the rationing system was continued and is still in effect, with many customers having their inventories completely depleted before their next shipment arrives. Although plaintiff's capacity was increased by 50% in 1959, the required four year aging process has not yet permitted any of this extra production to be marketed.⁸

The continuing high demand for plaintiff's product is somewhat surprising in view of its advertising practices; for while its annual expenditure in advertising is substantial,⁹ compared to the general industry practice it is almost an insignificant sum.¹⁰

In building up "Virginia Gentleman's" good will, plaintiff claims to have relied on the premise that "the quality of `Virginia Gentleman' is its own best advertisement"; word-of-mouth recommendation by satisfied customers; and the social prestige attached to a scarce, carefully produced, discreetly advertised product. The success of this policy is evidenced by the growing demand for the product and the rather frequent gratuitous mention of "Virginia Gentleman" in newspaper columns, national magazines, and contemporary novels.¹¹

Defendant, one of the largest national distillers, in 1958 bottled and sold two cases of a seven-year-old, 86-proof bourbon labeled "Indiana Gentleman" and two cases of an identical product labeled "American Gentleman." In 1959, these marks were registered without opposition.¹² No further shipments have been made under these marks and no advertising of either brand has been done. Defendant admits it was aware of the "Virginia Gentleman" mark during this period, but claims no discussion of similarity between the marks took place at the time its two marks were selected. Defendant's vice-president testified that the name "Indiana Gentleman" was "just hit upon" — the first word to give a connotation of the state where the bourbon was produced and the second "to tone the thing up" and "designate quality." "American Gentleman" also was "just hit on" as a companion name without the localized connotation of source.

Between November 1958 and April 1960, defendant also applied for registration of the marks "The Virginian," "Mr. Virginia," "Virginia Citizen," and "Virginia Settler." The latter two marks have not yet been admitted to publication; "Mr. Virginia" is now subject to an opposition filed by plaintiff;¹³ and "The Virginian" has been denied registration as confusingly similar to plaintiff's mark.¹⁴ Defendant's vice-president testified that these names were chosen as appropriate for use on the products of a Virginia distillery the company was then considering building.

Plaintiff requested that defendant discontinue the use of the marks "Indiana Gentleman" and "American Gentleman" and agree to their cancellation because of their similarity to plaintiff's mark. Defendant refused and this suit was brought.¹⁵

1. Under the statute, a finding of either actual product confusion or confusion as to the source of the product is sufficient to support a holding of infringement.¹⁶ Plaintiff claims both are proved in this suit. Even though only four cases of defendant's bourbon have been sold, this would seem to be enough to satisfy the statute, for Congress here intended to regulate all it constitutionally could.¹⁷ It is immaterial there is no proof of customer confusion actually having occurred in either manner, for the statute reaches the situation where only a potential or likelihood of confusion is shown.¹⁸ The lack of any ineluctable rule to test infringing similarity leaves a trial judge somewhat adrift since "the degree of similarity necessary to constitute infringement is incapable of exact definition * * * All that courts * * * can do is to say that no trader can adopt a trade-mark, so resembling that of another trader, as that ordinary purchasers, buying with ordinary caution, are likely to be misled."¹⁹ Another guideline suggested is that "we are in a field where the tendency of the law `has been in the direction of enforcing increasingly higher standards of fairness or commercial morality in the trade. The tendency still persists.'"²⁰ Also, where as in the instant case, the products to which the marks in question are applied are virtually identical, the degree of similarity in the marks necessary to support a finding of infringement is less than in the case of dissimilar, non-competing products.²¹

2. While it is not necessary for the plaintiff to establish the defendant's intent to infringe in order to prevail here,^21a one element to be considered by the court in deciding whether marks are confusingly similar is whether there is any "conscious imitation" by defendant of plaintiff's mark,²² whereby defendant "poaches upon the commercial magnetism" of plaintiff's symbol²³ or attempts to "bask in the reflected popularity" of plaintiff's established good will.²⁴ Defendant's denial here of any consideration of the similarity between its marks and plaintiff's is effectively contradicted by the course of action it adopted. Its behavior pattern shows that over a period of less than two years it attempted to register six marks, each with some substantial similarity to "Virginia Gentleman." During this time, plaintiff could not supply the growing demand for its product despite increased sales and production, while defendant's marks had no established good will. Despite defendant's ready explanation for the selection of these names, its course of conduct, considered as a whole, shows an attempt to come as close as possible to a mark with a high degree of established good will. A similar implication from a defendant's conduct was made in Q-Tips, Inc. v. Johnson & Johnson, Inc., 3 Cir., 206 F.2d 144, certiorari denied 346 U.S. 867, 74 S.Ct. 106, 98 L.Ed. 377, where a second-comer chose a name very similar to that of plaintiff's well-established product from a list of "dozens of names * * * many of which were arbitrary, fanciful and completely unlike anything suggested by the plaintiff's product."²⁵

3. Of course, the mere attempt to register a mark similar to an established mark is not enough alone to show the similarity is confusing. There must also be actual physical similarities between the names. Many multi-word marks with a single common word have been held confusingly similar when used on like products. For example, "Dixiana" and "Dixie Dew" were held confusingly similar to "Dixie Beau" and "Dixie Belle" when all were to be used on alcoholic beverages.²⁶ Similarly, "Q-Tips" was held infringed by "Cotton Tips";²⁷ "White Horse" and "Black Horse" by "Red Horse";²⁸ "Old Charter" by "Charter Oak";²⁹ and "Four Roses" by "Maryland Rose."³⁰

4. Besides the mere repetition of the common word "Gentleman," the marks in question also have a distinct similarity in that the varying word in each mark is a geographic modification of the common word. This dual relationship distinguishes this case from those cases without a double similarity like Nehi Corp. v. Mission Dry Corp., D.C.Del., 117 F. Supp. 116, affirmed per curiam 3 Cir., 213 F.2d 950, where this court held "Royal Crown" was not infringed by "Royal Punch." There, too, the marks were not being used on identical products.³¹

While there are obvious differences to the eye and ear between the marks in question when they are placed side-by-side, this is not the way they will confront the potential purchaser in the average case and this is not the context in which their similarity must be judged.³² In fact, it has been held that in the case of alcoholic beverages, the degree of similarity need not be as high as usual since the likelihood of confusion is greater because drinks are frequently purchased at bars and clubs without the purchaser seeing any bottles or labels.³³ In such a case, it seems particularly likely that a customer might become confused between several brands of the same product when he can recall the one he wants only as a "gentleman" from some place. The defendant argues against confusion in such a case because the names in question would call up different "word pictures" to purchasers, i. e., "Virginia Gentleman" implies "the magic of the fox hunt, the manor house * * * and other...