Standard Oil Co. of New York v. Standard Oil Co. of Maine

• Decision Date: 10 March 1930
• Docket Number: No. 919.,919.
• Citation: 38 F.2d 677
• Parties: STANDARD OIL CO. OF NEW YORK v. STANDARD OIL CO. OF MAINE, Inc., et al.
• Court: U.S. District Court — District of Maine

38 F.2d 677 (1930)

STANDARD OIL CO. OF NEW YORK v. STANDARD OIL CO. OF MAINE, Inc., et al.

No. 919.

District Court, D. Maine, S. D.

March 10, 1930.

N. W. Thompson, of Portland, Me., and Stafford Smith, of New York City, for plaintiff.

Bradley, Linnell & Jones, of Portland, Me. (C. C. Jones, of Portland, Me., of counsel), for defendants.

PETERS, District Judge.

This is a bill in equity brought to prevent by injunction the use of the name "Standard Oil Company" or "Standard Oil" by the defendant in connection with the oil business. The plaintiff is a New York corporation. The defendant, the Standard Oil Company of Maine, Inc., is a Maine corporation. The individual defendants, citizens of Maine, are only nominal parties, and the word "defendant" will be hereafter used describing the Maine corporation. The defendant filed a demurrer and also an answer. The answer contains a formal denial that the jurisdictional amount of $3,000 is involved. The bill, however, has the requisite jurisdictional averment in this respect, and, as there was no formal plea to the jurisdiction, it was not incumbent upon the plaintiff to offer proof in support of it. Bitterman v. L. & N. R. Co., 207 U. S. 205, 224, 28 S. Ct. 91, 52 L. Ed. 171, 12 Ann. Cas. 693. Also it appears from the evidence not only that the immediate damage to the plaintiff, should the defendant proceed to put into execution its alleged designs, would be more than $3,000, but that the value of the rights which the plaintiff seeks to have protected is much more than that sum. Hunt v. New York Cotton Exchange, 205 U. S. 332, 27 S. Ct. 529, 51 L. Ed. 821.

The plaintiff has been engaged in the oil business in Maine for more than thirty-five years, having early complied with the laws of Maine relative to foreign corporations intending to do business in the state. It has built up a large and profitable business, having hundreds of employees, thousands of customers, and much property used in connection with its business. It sells products of petroleum in practically every town and city in the state. It has acquired a high reputation for the soundness of its goods, and, by its methods of doing business and from large sums spent in advertising, has built up around its name an exceedingly valuable good will. In 1922 it registered with the secretary of state the name "Standard," the name "Socony," and certain devices bearing those names, under the laws of Maine relating to the use of trade-marks and trade-names.

On September 26, 1929, the defendant corporation was organized under the laws of Maine for the purposes set out in its articles of association, the first two being as follows:

"(1) To deal in petroleum and its products, including gasoline.

"(2) To produce, purchase, transport, store and sell crude oil and its products, including gasoline, and to aid other companies and parties in the production, transportation, storage, manufacture and sale of the same."

Seven shares of stock were subscribed for, the balance of the capital, ninety-three shares, being placed in the treasury. A president, treasurer, clerk and three directors were elected. Up to this time no business has been engaged in by the defendant. This bill was filed November 30, 1929, and a preliminary injunction issued December 20, 1929.

It appears that persons having a place of business in New York City who were instrumental in forming the defendant corporation have formed similar corporations, with similar purposes, in some six other states, all with a nominal amount of capital and all bearing the name "Standard Oil Company," with suffixes indicating the state of incorporation.

The plaintiff now and for many years has done business in New York and New England exclusively. There are various other "regular" Standard Oil Companies, so called, representing the break-up of the original company, doing business in the other states, but no two of them in the same territory — at least using the Standard Oil name.

The plaintiff asks for relief on the ground that the word "Standard" is a trade-name under the law of Maine which no other person in the same business may use, and, especially, that the name "Standard Oil Company" has acquired a secondary meaning connected with and standing for the goods and business of this plaintiff to such an extent that it is entitled to protection against unfair competition in its fraudulent or improper use by another in the same line of activity.

I cannot doubt that the parts of the plaintiff's name referred to have acquired a secondary meaning such as to create rights that will be protected against unfair use and competition. It can hardly be argued that the use in New York or New England of the name "Standard Oil Company" or "Standard Oil" would not commonly be taken to refer to the Standard Oil Company of New York, the long-established and well-known company, and the only company of that name which many thousands of persons have come in contact with in that territory up to now. It would certainly result in the utmost confusion if another oil company should do business in that territory using the name "Standard Oil Company" as the defendant here has used it. That confusion would just as certainly result in damage to the plaintiff. The defendant, being a newcomer, has nothing to lose and everything to gain by the confusion, and when it appears, as it does here, that the name was adopted as a corporate name by a newly organized corporation, manifestly with the purpose of appropriating without consideration the most conspicuous and well-known name in the business the defendant was organized to engage in, the exact situation is presented which authorizes the intervention of a court of equity.

"The good will in business is a valuable asset, and in modern commercial life it is frequently built upon a trade-name. Any trade-mark or name not unlawful in itself nor against public policy, which has become of a pecuniary value or a business advantage, becomes a property right, and, as such, is entitled to the protection afforded by the courts.

"In his recent and admirable treatise, the Historical Foundations of the Law Relating to Trade-Marks, Frank I. Schechter, A. M., J. D. of the New York Bar, quoting from authorities, says: `A large part of what is most valuable in modern life seems to depend more or less directly upon "probable expectancies." It would...