Westward Coach Manufacturing Co. v. Ford Motor Co., 16043

• Decision Date: 07 February 1968
• Docket Number: No. 16043,16071.,16043
• Citation: 388 F.2d 627
• Parties: WESTWARD COACH MANUFACTURING COMPANY, Inc., and Ray Grainger, Trustee in Bankruptcy of Westward Coach Manufacturing Company, Inc., Plaintiffs-Appellants, v. FORD MOTOR COMPANY, Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

388 F.2d 627 (1968)

WESTWARD COACH MANUFACTURING COMPANY, Inc., and Ray Grainger, Trustee in Bankruptcy of Westward Coach Manufacturing Company, Inc., Plaintiffs-Appellants, v. FORD MOTOR COMPANY, Defendant-Appellee.

Nos. 16043, 16071.

United States Court of Appeals Seventh Circuit.

January 9, 1968.

Rehearing Denied February 7, 1968.

COPYRIGHT MATERIAL OMITTED

Lloyd L. Zickert, Chicago, Ill., Robert A. Spray, Indianapolis, Ind., Donald L. Welsh, Chicago, Ill., for plaintiffs-appellants.

Harry T. Ice, James E. Hawes, Jr., Indianapolis, Ind., John R. Spielman, Dearborn, Mich., for defendant-appellee.

Before HASTINGS, Chief Judge, and KILEY and CUMMINGS, Circuit Judges.

HASTINGS, Chief Judge.

This is an action for trademark infringement and unfair competition brought by plaintiffs-appellants Westward Coach Manufacturing Company, Inc. and Ray Grainger, trustee in bankruptcy, against defendant-appellee Ford Motor Company on April 28, 1965, in the United States District Court for the Southern District of Indiana.

The three-count complaint charges Ford with infringement of Westward's common law trademark in the word MUSTANG with the representation of a charging horse; infringement of Westward's Indiana statutory trademark in the same word and representation; and unfair competition. The complaint seeks $3,000,000 in damages, punitive damages and an injunction perpetually restraining Ford from using the mark MUSTANG and/or the representation of a charging horse in Indiana and throughout the world.

Upon the motion of Ford, and after a substantial record, including depositions, answers to interrogatories, affidavits, admissions of fact, and exhibits, was compiled, the district court entered summary judgment for Ford on July 29, 1966, pursuant to Rule 56(c), F.R.Civ.P., 28 U.S.C.A. Westward and Grainger appeal from that judgment.

Appellants E. Edward Enochs, Bernice Enochs and Buelah Vaught, all shareholders of Westward prior to its reorganization in bankruptcy (pursuant to Chapter XI of the Bankruptcy Act, 11 U.S.C.A.) and assignees of interests in this lawsuit, appeal from the judgment and from the district court's order of December 7, 1966, denying their motion to intervene and striking their amended complaint.

Westward was incorporated in Indiana on September 21, 1962, as a successor to the unincorporated Westward Coach Manufacturing Company. The unincorporated Westward was founded by the appellant E. Edward Enochs in 1960 and began manufacturing pick-up campers (campers suitable for mounting on pick-up trucks) in September of that year. After incorporation Westward also began manufacturing travel trailers, designed for towing by a truck or automobile, and a few chassis-mounted campers for trucks.

The trailer industry is a large one. In 1965, a partial listing of manufacturers in the industry occupied seventy pages of a trade journal. The industry's sales of campers and trailers in the period of 1960-65 exceeded 875,000 units, of which Westward accounted for 1,234 sales.

Westward's products are sold principally through unfranchised dealers, some (approximately fifteen percent at the time this action was brought) of whom were also franchised dealers for new automobiles and trucks.

Westward marketed its trailers and campers under the names "Colt," "Palomino," "Pinto," "Stud," "Stallion," and MUSTANG. The MUSTANG name was first used in September, 1960, on campers and was subsequently used on travel trailers. Westward reserved the name for its highest quality products. Of the 1,234 campers and trailers sold by Westward in the period of 1960-65, 865 bore the MUSTANG name.

In January, 1962, Westward received an Indiana trademark registration on the MUSTANG name and representation of a charging horse. The application stated that the mark would be used on "utility coaches, vehicle-carried accommodations for campers or travelers, vans, and the like."

Westward applied for federal registration of the mark on October 22, 1962. It overcame an opposition filed by White Motor Company and was issued a federal trademark on September 5, 1967. That trademark is for use on "utility van bodies mountable on pick-up trucks and small trucks for providing trailer-type housing and storage accommodations for travellers and sportsmen, coach bodies known as campers for providing such accommodation and mountable on an associated vehicle or carrying unit such as a truck or boat unit such as a pontoon frame, and trailers * * *." Westward's action is not founded on the federal trademark, and we may ignore it in this case.

Ford Motor Company is a leader in the automotive industry, manufacturing and marketing automobiles throughout the United States and in foreign countries. Consistent with industry practice, Ford markets its products through a nationwide system of independent franchise dealers.

In 1962, Ford built an experimental sports car which it exhibited at vehicle shows. The car, which was not initially produced for sale, was named MUSTANG and bore the representation of a running horse. Westward wrote Ford in December, 1962, notifying Ford that Westward had been using the MUSTANG name and horse representation since 1960, and requesting that Ford discontinue its use of the mark. In response, Ford expressed its opinion that Westward had no exclusive right to the MUSTANG trademark and that there was no likelihood of confusion of Ford's products with Westward's products.

Ford began producing its MUSTANG sports car for sale in April, 1964. In addition to the MUSTANG name and the representation of a running horse, the car bore the name Ford. The introduction of the car was accompanied by a $6,000,000 advertising and promotion campaign, and an additional $10,000,000 was expended for advertising before October, 1965. In its advertising, Ford prominently displayed the Ford name, identifying the MUSTANG sports car as a Ford product and a member of "Ford's family of fine cars." In the first eighteen months of production, Ford sold 645,416 MUSTANG automobiles.

Ford has manufactured and marketed a Ford Econoline truck outfitted with living accommodations and referred to in Ford's advertising as a "camper." It has also advertised certain of its pick-up trucks as "Camper Specials." It has published an advertising booklet entitled "Ford Recreational Vehicles" and other publications promoting its products as recreational vehicles. It has engaged in joint promotions with trailer manufacturers. Ford does not manufacture or sell campers or travel trailers. However, some Ford dealers sell them in addition to Ford products.

Appellants allege that Westward has continuously and extensively used the name MUSTANG and representation of a charging horse in connection with its campers and trailers, and that through its extensive nationwide advertising and marketing effort the MUSTANG trademark had come to identify and distinguish its products. They allege that Westward's products and Ford's products are closely related and that Ford's use of the MUSTANG name and representation of a horse infringes Westward's trademark by creating a likelihood of confusion concerning the source of the products and by preventing Westward's expansion into the manufacture of self-propelled recreational vehicles. The allegations as to unfair competition are substantially the same.

At a pre-trial conference on January 6, 1966, it was disclosed that Westward had filed a reorganization proceeding in the United States District Court for the Northern District of Indiana, pursuant to Chapter XI of the Bankruptcy Act, 11 U.S.C.A., and on February 8, 1966, appellant Grainger, the trustee in bankruptcy of Westward, was added as a plaintiff by order of the district court. The district court having jurisdiction of Westward's reorganization petition approved a plan assigning to the appellants E. Edward Enochs, Bernice Enochs, and Buelah Vaught an interest of approximately fifty percent in Westward's pending action against Ford, giving E. Edward Enochs the sole power to control the action, and charging him with the expenses of prosecuting the action. Five percent of the action was assigned to Westward, and the remainder to Westward's creditors, represented by the trustee, appellant Grainger.

The district court's order granting summary judgment to Ford was accompanied by an extensive memorandum opinion, which is reported at 258 F.Supp. 67 (1966). The court found no genuine dispute concerning the following facts. That the word MUSTANG is not a distinctive word, nor one originated by Westward or Ford, but is a noun of common usage denoting the wild or semi-wild horses introduced into North America by the Spanish conquistadores. That prior to Westward's or Ford's use of the name MUSTANG, it was used in connection with a variety of products and had been federally registered as a trademark alone and in combination with the representation of a horse at least thirty-four times for a variety of products, including trailers. That there are at least 266 federal trademark registrations of a representation of a horse which are still in use. That Westward had used the trademark claimed by it continuously since September, 1960. That Westward's sales under the MUSTANG name totaled 579 units through 1964. That Westward's advertising and promotional expenditures, which were devoted principally to its MUSTANG campers and trailers, totaled $2,899.33 in 1960, $11,256.91 in 1961, $14,244.45 in 1962, $22,407.10 in 1963, and $42,953.70 in 1964. That Westward had no plans to build a motor vehicle, but did have plans to assemble trailer units on motorized chassis purchased from automobile manufacturers. And, that Ford's advertising and its warranty practices clearly communicated to the public beyond any doubt that Ford was the manufacturer, seller and warrantor of the MUSTANG automobile.

The court found as an undisputed fact that there is a common market of users and dealers for the automotive and...