YANKWICH, District Judge.
The Background of the Controversy.
The action, filed on April 24, 1944, was for trademark infringement and unfair competition. The plaintiff Brooks Brothers, is a corporation with its principal place of business in the City of New York. The defendant, Brooks Clothing of California, Ltd., is a corporation organized
In this action, the plaintiff charges the defendant with infringing its trademark and with being guilty of unfair competition in the use of a mark similar to its own and of simulating labels. It seeks to enjoin the defendants from using the word "Brooks" either as a part of its corporate name, or as a name designating its business, and for damages for both infringement and unfair competition.
The defendant was incorporated on the second day of July, 1930. For some ten years prior to the incorporation, its business was conducted by a partnership consisting of Harry Greenberg, John Greenberg, Emanuel Greenberg and Albert Greenberg, doing business as Brooks Clothing Company. It first registered its fictitious tradename in Los Angeles County on January 29, 1924. On February 7, 1924, the partnership caused the tradename and the use of the word "Brooks" to be registered with the Secretary of State of California under California Laws. On February 17, 1931, the defendant secured federal registration for its trademark "Brooks Clothing Co." After proceedings instituted by the plaintiff, the Patent Office, through its Examiner of Interferences, cancelled the certificate on March 3, 1944. No appeal was taken from the decision, which is now final. Upon the incorporation of the defendant, the partnership business, tradename and mark were transferred to the defendant corporation, which has used it since. At the present time, it conducts fifteen stores, four of which are in the City of Los Angeles and one each in the following California cities: Long Beach, Huntington Park, Glendale, Pasadena, Santa Monica, Pomona, Santa Ana, San Bernardino, San Diego, Santa Barbara and San Jose. It employs at these various places an average of 450 persons, with seasonal increases at various holiday times, and its sales, in the year 1944, amounted to $5,432,215.33. On its store fronts, in its advertising, both newspaper and radio, and in its circulars, the corporate name of the defendant is not used. Instead, the defendant uses the simple word "Brooks" without any prefix or suffix. On some of its labels, and in some of its telephone listings—notably in the New York City telephone directory—the words "of California" are used.
The defendant, in its answer to the complaint, states that it and "its predecessors have been engaged in the clothing business selling men's and ladies' clothing and apparel in the City of Los Angeles
Other facts, as disclosed by the pleadings of the parties and by the evidence offered in support of their divergent contentions, will be considered further on in the discussion.
Some Inherent Difficulties.
One of the seeming difficulties arising in this case stems from the fact that the Complaint is cast in one claim which combines trademark infringement with unfair competition. Some years ago, I called attention to the fact that, while, since the enactment of the Federal Rules of Civil Procedure, 28 U.S.C.A. following section 723c, the failure to state claims separately is no longer a ground for dismissal,
Some of the principles which apply to trademark cases do not apply to unfair competition. The law of damages, for instance, calls for proof of actual loss of sales in unfair competition, while in trademark infringement, presumption of loss is inferred from the proof of use of the mark and evidence of sales.
Whatever criticism writers may have directed at some of the concepts which have grown up in this realm of the law, as appears from some of the footnotes to two late Annotations on the subject,
"The judge is not to innovate at pleasure. He is not a knight errant, roaming at will in pursuit of his own ideal of beauty or of goodness. He is to draw his inspiration from consecrated principles. He is not to yield to spasmodic sentiment, to vague and unregulated benevolence. He is to exercise a discretion informed by tradition, methodized by analogy, disciplined by system, and subordinated to `the primordial necessity of order in the social life.'"
And, under the facts in this case, there is no room for cutting new paths for ourselves.
The Legal Norms Controlling.
Preliminarily, we advert to the fact that the business of the plaintiff has been developed by members of the Brooks family, who established it early in the last century, that without interruption, one or another descendant of the original Brooks was connected with the business and that, at the present time, two great grandsons are on the Board of Directors of the plaintiff.
A person has an inherent right to use his name in his business. And this right is recognized in the law of New York and of California, and by federal courts in cases involving trademarks and unfair competition.
So, at the outset, we are confronted with the situation that the defendant has no natural right to the use of "Brooks" in its corporate name or its business. No man of that name has ever been connected with it. It adopted the name as a convenience. Consequently, as to it, the plaintiff's rights are not even circumscribed as they would be, if dealing with a business using the family name of a natural person who is connected with it.
A trademark is merely a method used by a person to designate his goods. It cannot exist independent of a business. It depends on adoption and use, and not on originality or invention.
In making these rulings, the courts have also given practical application to the doctrine of secondary meaning, which seeks to protect "a person against harm to his business which the actor might cause by misleading prospective purchasers into identifying the actor's goods, services or business with those of the other. The ultimate issue in infringement cases is the likelihood that prospective purchasers will be misled."
The principle applies to unfair competition cases and to trademark cases, whether registered or unregistered.
In the application of these primary norms, certain secondary norms
One of the difficulties encountered in this branch of the law springs from the use of the word "competition." As a fact, what the law condemns is unfair practices. Such practices may exist where no competition occurs. As said in one case:
"This is nothing but a convenient name for the doctrine that no one should be allowed to sell his goods as those of another. This rule is usually invoked when there is an actual market competition between the analogous products of the plaintiff and the defendants, and so it has been natural enough to speak of it as the doctrine of unfair competition; but there is no fetish in the word `competition.' The invocation of equity rests more vitally upon the unfairness. If B represents that his goods are made by A, and if damage therefrom to A is to be seen, we are aware of no consideration which makes it controlling whether this damage to A will come from market competition with some article which A is then manufacturing or will come in some other way. The injury to A is present, and the fraud upon the consumer is present; nothing else is needed. This is the principle upon which the two English bicycle cases were decided. Walter v. Ashton, 1902, 2 Ch.Div. 282; Eastman Co. v. Kodak Co., 15 Rep.Pat. Cases 105. It was also at the bottom of our own decision in Peninsular [Chemical] Co. v. Levinson, 6 Cir., 247 F. 658, 159 C. C.A. 560, and of Akron[-Overland Tire] Co. v. Willys [-Overland] Co., 3 Cir., 273 F. 674; Imperial [Cotto Sales] Co. v. [N. K.] Fairbanks Co., 50 App.D.C. 250, 270 F. 686; Aunt Jemima [Mills] Co. v. Rigney [& Co.] 2 Cir., 247 F. 407, 159 C. C.A. 461, L.R.A.1918C, 1039. We have no doubt it is a sound principle, and should be applied in appropriate cases."
For this reason whatever may be the rule in other circuits, the rule declared by our Ninth Circuit Court of Appeals is that competition is not necessary.
The Law Applied to the Facts.
The discussion which precedes makes it evident that we are not confronted with an uncharted domain. On the contrary, the solution of the problems presented by this case lies within a well-defined legal pattern. So we now apply the criteria drawn from adjudicated cases to the facts herein.
It is clear that in the minds of California customers, California tailors and dealers in clothing, the word "Brooks" is identified with the business of the plaintiff. Advertising in magazines of national circulation over a long period of years and solicitation of customers by mail all over the United States, including California, from its early days, has made the tradename nationally known. During the same period, the word "Brooks" alone, without the "Brothers," came to be the identification mark of the plaintiff and its clothes. In fact, it is shown that in certain literary works of the middle of the century, characters were referred to as being "Brooks" tailored or clad in "Brooks" models. There is confirmation of this in the evidence of the defendant. It offered proof that in the clothing business, certain models have become known as "Brooks models," and that dealers have been besieged by customers to duplicate them. This shows the extent to which the name of the plaintiff has become identified with the clothing industry. Even when a word has become generic and its use dedicated to the public, as in the case of "Singer" for sewing machine and "Cellophane" for transparent paper, a competitor will be forbidden to apply it to its product or in advertisements, unless he clearly indicates that the product he is selling is not the product of the originator of the generic term.
Assuming, therefore, that the word "Brooks" could be applied to a model, and that the defendant might state, in its advertising, that it has such models available, this fact would not warrant unlimited use by the defendant of the word "Brooks" to characterize its business.
I have already adverted to the fact that the defendant makes no pretense that it does not use the first word of its corporate name exclusively to identify its business and its clothes. And the fact could not very well be denied, because an examination of its advertisements in the newspapers,
But, as the plaintiff, over a long period of years, has used "Brooks Brothers" as a tradename and mark, and has had, since 1915, a federal registration, and the plaintiff and the family which began the business a century and a quarter ago, having used the name "Brooks" in one form or another, which use was accompanied by extensive nation-wide advertising and solicitation of custom and fair dealings with customers in most of the states in the Union, the good will engendered by the word "Brooks" and by these practices belong to it. More, it has created a condition where, to use the language of the Restatement of Torts, "confusion of source" is inherent in the use of the word "Brooks" by anyone but the plaintiff.
The defendant is a new-comer in the field. And it does not have the right to use the name "Brooks." Its adoption of the name first as a fictitious name for a partnership, under the law of California, and later in its corporate name, could not affect the plaintiff's rights.
While, in this circuit, the interest in a trademark will be protected regardless of actual competition,
The conclusion is, therefore, inescapable that the plaintiff and the defendant are competing in selling clothes and that, in this field, the word "Brooks" has acquired a secondary meaning to the benefit of which the plaintiff alone is entitled, and in the protection of which, courts will aid.
This conclusion poses a question: Was the adoption of the name "Brooks" by the defendant a deliberate act aiming to appropriate illegally the name and good will of the plaintiff, as the Complaint charges?
There is no substantial evidence in the record that would warrant an affirmative answer to this question. On the contrary, the evidence shows that the choice was fortuitous. The name was suggested by a salesman for a clothing firm, who was selling goods to the defendant's predecessor. The salesman, now engaged in the clothing business in San Francisco, was a witness in the case and verified the story told by the oldest of the Greenberg Brothers. It seems that from a modest start, selling clothes under the name of "Money Back Harry," he was expanding his business. He acquired the merchandise of an insolvent clothing concern. In fear of xenophobia, which might discourage custom from one doing business under the name of "Greenberg," he sought a shorter name. The salesman told him that a friend of his had conducted a very successful business in Denver under the name of "Brooks". The Greenbergs thought of entering business under the name of "Bond's," in the
Harry Greenberg, who is the oldest of the brothers, and who was connected with the business longer than any of the others, testified, as did the others, that at the time of the adoption of the name, he did not know of the existence of Brooks Brothers. There is nothing improbable about this story, when we bear in mind that he was foreign-born, arriving in this country as a young boy, that he had never lived in New York and that he began a modest business in the comparatively small Los Angeles of the 1920's at a time when Brooks Brothers confined its business in California to mail solicitation and occasional visits of a salesman who called on a selected clientele. At any rate, it has not been contradicted. The plaintiff argues that if he did not know, he should have known. He seeks to have us apply the rule that in law a man is charged with the knowledge of those things which, on inquiry, he could have or should have discovered.
I do not believe the facts in the case would justify a finding of knowledge on the part of the defendant prior to 1930, when Harry Greenberg's visits to New York and his dealings with a clothing manufacturer, Kirschner, who knew of the plaintiff, and who later became associated with him, brought knowledge. The opening of the sales agency by the plaintiff in 1939 brought more direct notice.
This knowledge cannot be retrojected into the past so as to taint with deliberateness and fraud the innocent appropriation of the name "Brooks" in 1924. And had the defendant remained in the humble field in which it began, and had it used its full partnership or corporate name, its innocent adoption might, perhaps, call for denial of relief for unfair competition. It would not affect the trademark infringement, for it is independent of the motive of the appropriator.
"Indeed there is a kind of fraud, as courts of equity have long perceived, in
It is axiomatic that a court of equity must determine the issues before it as of the day of determination.
So far in the discussion, I have stressed the use of "Brooks" as the all-important factor in this case. The reason should be obvious from what I have said. Both in the law of trademark and of unfair competition, the basic right of the plaintiff derives from long use of the word "Brooks" in its original and secondary meaning.
However, certain other challenged practices call for comment.
The evidence is too slight to warrant a conclusion of imitation of labels. Such similarity of labels as may exist, is attributable to the patterns of label-makers. The evidence shows that the labels are made in New York, that the maker delivers them to the manufacturers, who place them on the articles of wearing apparel before shipping them to the defendant. The plaintiff has no design patent. In the printing of labels, just as in the printing of books, or in the printing of stationery, there are fashions which govern the use of a particular type. When one printer begins to use a certain type of lettering, others follow. At one time, Spencerian script was much in vogue for use on business cards. Later, with the advent of cheaper engraving, elaborate imitations of Old English letters made their appearance on cards and stationery. Hence such similarity as may appear in the labels has little bearing on the case. We should not forget that we are dealing with men's clothes and that labels on them are sewed on the inside, and do not have the visual appeal which a label on a bottle, box, can, package or like containers has, and are only incidental to the purchase.
Nor was there deliberate copying in defendant's advertising of a doublebreasted suit. A double-breasted suit is a double-breasted suit. Styles may change, but a double-breasted suit remains just about the same. Some may be more form-fitting than others, but, in the last analysis, a picture of one is a picture of them all. A comparison between the double-breasted suit exhibited in one of the plaintiff's catalogs with the suit advertised by the defendant, shows the usual three-button double-breasted suit, with the defendant's model more form fitting and revealing a straight line from the waist down, while the plaintiff's is looser in construction and features curved lines from the waist down, which give to it a draped effect. Nor is there any copying of language in the description of the suit. The plaintiff's catalog described a sack suit in this manner: "The first illustration shows a two-button sack suit (of the soft construction so completely) identified with Brooks Clothing". The defendant's accused advertisement described a double-breasted coat by this language: "Cut on easy, straight lines, the Brooks model embodies the (soft construction which is completely) opposed to any stiffness or over-tailored effect." Counsel for plaintiff point to the similarity of the
In other words, the dominant feature of fashion in clothes, as well as in other merchandise, dictates the terminology of advertising. And as language tends to run into a pattern, it is difficult, when speaking of similar things, to avoid the use of the same words, even in a language so rich as the English language. A phrase once seen by a writer of advertising copy, may linger in his mind to such extent that, unconsciously, he may use it in one of his own. Just as in one's writing, one may use phrases which have come from reading them in other's writings. Witness, the currency of phrases like "at long last" or "blood, sweat and tears" after their use by famous personages.
One fact remains unexplained except upon the theory that the defendant was actually attempting to create confusion in the minds of buyers. One of the last set of exhibits introduced at the trial was the "commercials" used on the radio programs. They were admitted without explanation and no disclaimer of their content was made by the defendant. In one of them, dated Sunday, March 18, 1945, the following was used by the announcer as his "first commercial":
"Just as the Brooks Stores have distinguished themselves with civilians, they have earned an enviable reputation among men in the armed services — because Brooks offer good, solid values. In the first World War, thousands of officers wore uniforms from Brooks — and today, Brooks Officer's Uniforms are seeing service on land and on sea — in the far corners of the world. The Brooks Uniform shops carry a complete stock of carefully-tailored, approved uniforms, as well as regulation furnishings, officers' insignia and devices. Brooks Stores realize the importance of your time and give special attention to alterations and delivery whenever necessary. The Brooks Uniform Shop in downtown Los Angeles is at 644 South Broadway. In Hollywood, at Hollywood Boulevard and Vine. Others are in Long Beach, San Jose, Santa Ana, Pasadena and San Diego."
As no one connected with the business of the defendant, and certainly not the present corporate defendant or its predecessor, the partnership, which used "Brooks" in its designation, ever engaged in the business of supplying the Armed Forces during the last war, the conclusion is inescapable that the object was to give the impression that the defendant was the same Brooks which had supplied uniforms to the Armed Forces during the First World War. That was palpably untrue. For the only Brooks which supplied such uniforms was the plaintiff. In fact, the catalogs in evidence, and other historical, descriptive material, show that the plaintiff took pride in the fact that its military uniforms were of great distinction and had been worn honorably by American soldiers in many wars.
Hence the conclusion that, while there was no actual general simulation of the labels or of the advertising material of the plaintiff, there was simulation in this instance. These facts and the simulation inherent in the use of the word "Brooks" entitle the plaintiff to relief.
A finding of knowledge cannot be based on surmise. The offices of the plaintiff are in New York. As it had no local office in California, none of its agents could see the defendant's activities. However, the plaintiff cannot deny knowledge from the date of the opening of its local office in 1939. On September 21, 1939, its agent, Anthony Corso, was designated as a statutory agent on whom process could be served. This gave him an authority beyond that of a mere sales representative. He admitted learning of the existence of a Brooks store in Los Angeles in 1940. It was not until 1943 that he forwarded to New York one of the defendant's advertisements.
In the Los Angeles telephone directory, beginning in 1939, the listing of the defendant's stores was in the same column only a few names above that of the plaintiff. In the classified section of the same directory, where the names are listed according to business, the plaintiff's name appears right under the defendant's. It is incredible that Mr. Corso, in the course of his business, did not see these listings. The stores themselves are located at places where anyone living in Los Angeles and driving, riding or walking on its streets, could not fail to pass them. The constant radio advertising and the appearance in local newspapers of full-page advertisements of the defendant cannot have escaped the attention of Mr. Corso. In fact, if we examine some of these advertisements, it is inconceivable that a person reading these newspapers (and it must be assumed that Mr. Corso has the common American habit of daily newspaper reading) could have turned their pages without seeing the name "Brooks" in bold face.
There is one other fact which, to my mind, indicates that not only Mr. Corso, but the plaintiff's officers as well had knowledge of the existence of Brooks in Los Angeles, at the time, at least, when it established its local agency. Mr. Corso testified that all the business arrangements for the rental of the property and for the installation of the telephone were conducted from New York. There is in evidence an application for telephone service for the plaintiff, made by Mr. Spencer Greason, Treasurer, dated August 7, 1939. It is addressed to the Southern California Telephone Company, and is signed "Brooks Brothers by S. G. Greason, Treasurer." While the application requests that the billing be made to Brooks Brothers, New York, it asks that the listing in the directory be worded, "Brooks Brothers of New York, Clothing." Why the addition of the words "of New York"? They are not a part of the plaintiff's corporate name. It is true that on some of its labels the top bears the words "Brooks Brothers" and the bottom the words "New York". But the preposition "of" does not appear anywhere in the advertising or on the labels. Its listings in the New York City Telephone Directory, dating back to 1935, do not use the words "of New York." The addition of these words to their name, the request for its listing, and its actual listing, beginning in 1939, to date, lead to the inference that the plaintiff, at that time, knew of the existence of the defendant corporation and of its use of the name "Brooks" and that it chose the form of listing as a means of differentiation from it. Such knowledge means duty to act. And its failure to act until 1944, when it began proceedings to cancel the trademark, and instituted this law suit, amounts to laches. This bars relief other than injunction against the future use of the name.
The plaintiff has offered no proof of actual loss or injury. He is, therefore, not entitled to damages for unfair competition. Nor does the decision of the Supreme Court in Mishawaka Rubber & Woolen Mfg. Co. v. S. S. Kresge & Co.
The Balancing of Interests.
What precedes is determinative of the main issues. However, brief comment should be made on an additional contention of the defendant. Its counsel press on us certain cases which they claim call for denial of all relief on the ground of public interest by resort to a balancing of interests. The doctrine of balancing of interests is more adequate as an explanation of what a court did in a particular case than as a guide to the court in doing it.
I believe that the chief cause of disagreement in this case arises from the fact that counsel for defendant have postulated a doctrine of non-competition which is based on the assumption that merchants in the same business who appeal to different social strata are not in competition with each other. This, as we have already pointed out, is an unreal cleavage of the business, especially in this Circuit, where the right to a trademark or tradename will be protected even in the
Now to the cases alluded to. Emerson Electric Mfg. Co. v. Emerson Radio & P. Corp., while nominally one for trademark infringement and unfair competition, was, as the court says, essentially "one of unfair competition."
"If one merchant has established a business under his name in wares of one sort, a second merchant may not use that name in selling other wares, if these are so like the first merchant's that the public will be apt to think that the first merchant is selling them."
S. C. Johnson & Son, Inc., v. Johnson
Dwinell-Wright Co. v. White House Milk Co.
"Where the name is personal or the mark is coined, it will be hard indeed for the newcomer to find any excuse for invading it, even though his user does no more than vaguely confuse the reputation of the first user with his own; he has no lawful interest in adopting such a mark."
I fail to see how the defendant can derive any comfort from language like this. "Brooks Brothers" involves the use of a personal name. The defendant has no right to use it. No person named Brooks has ever been connected with its business. So the rule applicable to innocuous trademarks, like those involved in two of these cases — "The White House," "Uncle Sam" — does not help. Nor do statements as to the narrower scope of relief in trademark infringement than in unfair competition. I have already pointed out
We conclude that the plaintiff is entitled to injunctive relief as herein indicated. The details appear in the Order filed simultaneously.
"Several years ago when Edward S. Rogers, one of the leading American writers and practitioners in the field, was lecturing on Unfair Competition, he asked a student: `What is your idea of this subject?' He got the answer: `Well, it seems to me that the courts try to stop people from playing dirty tricks.' Mr. Rogers comments, `One might spend weeks reading cases and find many definitions less satisfactory than this.'
"Mr. Rogers and his student were too optimistic. There are many dirty tricks in business which the courts do not stop —not at least in private litigation between competitors, for injunctions or damages." Zechariah Chafee: Unfair Competition, 1940, 53 Harvard Law Review, 1289.
"No inflexible rule can be laid down as to what conduct will constitute unfair competition. Each case is in a measure a law unto itself. Unfair competition is a question of fact * * * the universal test is whether the public is likely to be deceived." 63 Corpus Juris 414.
"Obviously, the question of what is unfair competition in business must be determined with particular reference to the character and circumstances of the business. The question here is not so much the rights of either party as against the public but their rights as between themselves." International News Service v. Associated Press, 248 U.S. 215, 236, 39 S.Ct. 68, 71, 63 L.Ed. 211, 2 A.L.R. 293.
And see: Lone Ranger, Inc., v. Cox, 4 Cir., 1942, 124 F.2d 650, 653.
It should be added that in California a person may, without judicial proceeding, change his name, and acquire property and do business under it. Ray v. American Photo Player Co., 1920, 46 Cal.App. 311, 189 P. 130; In re Useldinger, 1939, 35 Cal.App.2d 723, 96 P.2d 958. This is subject to the limitation that a person or partnership transacting business under a fictitious name or a partnership designation which does not show the names of the persons interested as partners in the business must file and publish the statutory certificate prescribed in such cases. California Civil Code, Secs. 2466-2468.
"It is now well settled in this country that a trade-mark protects the owner against not only its use upon the articles to which he has applied it, but upon such other goods as might naturally be supposed to come from him. Aunt Jemima Mills Co. v. Rigney [& Co.], 2 Cir., 247 F. 407, L.R.A.1918C, 1039; Akron-Overland [Tire] Co. v. Willys-Overland Co., 3 Cir., 273 F. 674; Vogue Co. v. Thompson-Hudson Co., 6 Cir., 300 F. 509; Wall v. Rolls-Royce, 3 Cir., 4 F.2d 333; Yale Electric Corp. v. Robertson, 2 Cir., 26 F.2d 972; Duro Co. v. Duro Co., 3 Cir., 27 F.2d 339." Hand, Judge, in Waterman Co. v. Gordon, 2 Cir., 1934, 72 F.2d 272, 273. (Emphasis added.) And see cases cited under Footnote 17.
"This court, however, has carefully considered the question in Del Monte Special Food Co. v. California Packing Corporation, 9 Cir., 34 F.2d 774, and has held that the two products need not be competitive. Many authorities are there cited, to which may be added the following: Standard Oil Co. of New Mexico v. Standard Oil Co. of California, 10 Cir., 56 F.2d 973; Wisconsin Electric Co. v. Dumore, 6 Cir., 35 F.2d 555 (certiorari granted 281 U.S. 710, 50 S.Ct. 333, 74 L.Ed. 1132, and certiorari dismissed 282 U.S. 813, 51 S.Ct. 214, 75 L.Ed. 728); American Products Co. v. American Products Co., supra [D.C., 42 F.2d 488]; Finchley, Inc., v. Finchly Co., supra [D.C., 40 F.2d 736]; Anheuser-Busch, Inc., v. Cohen, D.C., 37 F.2d 393; Armour & Co. v. Master Tire & Rubber Co., D.C., 34 F.2d 201; 63 C.J. 390, § 100." Phillips v. Governor & Co., 9 Cir., 1935, 79 F.2d 971, 974. (Emphasis added.)
To the cases cited by Judge Haney in the opinion, the following may be added, showing that the rule is not confined to this Circuit: Imperial Cotto Sales Co. v. N. K. Fairbanks Co., 1921, 50 App. D.C. 250, 270 F. 686; Akron-Overland Tire Co. v. Willys-Overland Co., 3 Cir., 1921, 273 F. 674; Yale Electric Corporation v. Robertson, 2 Cir., 1928, 26 F.2d 972; Western Auto Supply Co. v. Knox, 10 Cir., 1937, 93 F.2d 850, 853; Paramount Pictures v. Leader Press, 10 Cir., 1929, 106 F.2d 229, 231; Philco Corp. v. Phillips Mfg. Co., 7 Cir., 1943, 133 F.2d 853, 855, 148 A.L.R. 125; Adolph Kastor & Bros. v. Federal Trade Commission, 2 Cir., 1943, 138 F.2d 824, 826; Dwinell-Wright Co. v. National Fruit Product Co., 1 Cir., 1944, 140 F.2d 618, 622.
"Argument is advanced that the decrees should be upheld because the parties are not direct competitors. Neither defendant operates a store in Tulsa or Oklahoma City, and the defendant in the first case deals in part in second-hand merchandise while plaintiff vends only new merchandise. But both defendants conduct their business in closely connected towns in Oklahoma; they draw trade from territory not remote from the stores of plaintiff and from territory included in the mail order system of plaintiff; and the secondhand merchandise consists of accessories and parts for all makes of automobiles. The right to restrain a junior in the field is not confined to cases of actual market competition between identical products. It extends to a case in which one trader represents his products as those of another.A merchant has a sufficient economic interest in his trade-name to restrain another from exploiting it in the sale of his merchandise, even though the two are not engaged in the manufacture or distribution of the identical or like products." Western Auto Supply Co. v. Knox, 10 Cir., 1937, 93 F.2d 850, 852, 853. (Emphasis added.)
"For the law imputes knowledge when opportunity and interest, combined with reasonable care, would necessarily impart it. Not to improve such opportunity, under the stimulus of self-interest, with reasonable diligence, constitutes laches which in equity disables the party who seeks to revive a right which he has allowed to lie unclaimed from enforcing it, to the detriment of those who have, in consequence, been led to act as though it were abandoned." Wollensak v. Reiher, 1885, 115 U.S. 96, 99, 5 S.Ct. 1137, 1139, 29 L.Ed. 350.
The assumption of counsel for the defendant that this case, in some manner, establishes a new landmark in this branch of the law is without foundation. The language used related to the particular facts. For the same court, through the same distinguished judge, Learned Hand, has recognized the doctrine of "confusion of source" and granted relief against it, even outside of a particular field of exploitation. In Yale Electric Corporation v. Robertson, 2 Cir., 1928, 26 F.2d 972, 973, Judge Hand said:
"The law of unfair trade comes down very nearly to this — as judges have repeated again and again — that one merchant shall not divert customers from another by representing what he sells as emanating from the second. This has been, and perhaps even more now is, the whole Law and the Prophets on the subject, though it assumes many guises. Therefore it was at first a debatable point whether a merchant's good will, indicated by his mark, could extend beyond such goods as he sold. How could he lose bargains which he had no means to fill? What harm did it do a chewing gum maker to have an ironmonger use his trade-mark? The law often ignores the nicer sensibilities.
"However, it has of recent years been recognized that a merchant may have a sufficient economic interest in the use of his mark outside the field of his own exploitation to justify interposition by a court. His mark is his authentic seal; by it he vouches for the goods which bear it; it carries his name for good or ill. If another uses it, he borrows the owner's reputation, whose quality no longer lies within his own control. This is an injury, even though the borrower does not tarnish it, or divert any sales by its use; for a reputation, like a face, is the symbol of its possessor and creator, and another can use it only as a mask. And so it has come to be recognized that, unless the borrower's use is so foreign to the owner's as to insure against any identification of the two, it is unlawful. Aunt Jemima Mills Co. v. Rigney [& Co.], 2 Cir., 247 F. 407, L. R.A.1918C, 1039; Akron-Overland [Tire Co.] v. Willys-Overland [Co.], 3 Cir., 273 F. 674; Vogue [Co.] v. Thompson-Hudson Co., 6 Cir., 300 F. 509; Wall v. Rolls-Royce, 3 Cir., 4 F.2d 333. Although it is quite true that the point is still open in the Supreme Court. Beech-Nut [Packing] Co. v. [P.] Lorillard [Co.], 273 U.S. 629, 47 S.Ct. 481, 71 L.Ed. 810. Again, if originally descriptive, a mark may have been so generally used that it denotes no particular maker, unless narrowly applied. Pabst Brewing Co. v. Decatur Brewing Co., 7 Cir., 284 F. 110. Here we are dealing with a proper name, which, though it has been used quite generally, is shown to denote the defendant when applied to flash-lights. The disparity in quality between such wares and anything the plaintiff makes no longer counts, if that be true." (Emphasis added.)
Judge Hand reasserted the doctrine in Adolph Kastor & Bros. v. Federal Trade Commission, 2 Cir., 1943, 138 F.2d 824, 825, decided subsequent to Emerson Electrical Mfg. Co. v. Emerson Radio & P. Co., supra, in these words:
"The only protective private interest in words of common-speech is after they have come to connote, in addition to their colloquial meaning, provenience from some single source of the goods to which they are applied. The Kastor Company does not assert that the word, `Scout,' on a pocket knife means anything of the sort; and no such assertion could be sustained, for there is not a shred of evidence in the record to sustain it. Therefore, the decision turns upon whether the suggestion — to put it no more strongly — from the name, `Scout,' upon a boy's pocket knife that the Boy Scouts of America sponsor it as proper for Boy Scouts, is enough to support the order. We hold that it is; that the Boy Scouts have a cognizable interest in preventing such possible confusion. It is not even necessary that the label shall lead `boy scouts' to buy Kastor knives supposing that they are `Official Knives'; boys who are not `Scouts' may be led to buy them because in their minds they vaguely have the imprimatur of the Boy Scouts of America. That interest the law will protect against an opposing interest no greater than that of all persons in the use of common speech. We have again and again decided, in cases where a merchant's mark has been used upon goods which he does not in fact sell, but may be thought to be selling, that he may stop the use. No one need expose his reputation to the trade practices of another, even though he can show no pecuniary loss." (Emphasis added.)