Quaker State O. R. Co. v. Steinberg , 325 Pa. 273 ( 1936 )

The majority opinion says: "The defendant can only be enjoined from the use of the name 'Quaker City' if it is deceptively similar [i. e., if it is similar to 'Quaker State']." I think the words "Quaker City" are deceptively similar to "Quaker State." I cannot agree with the statement that "there is nothing in the names 'Quaker State' and 'Quaker City' that should confuse the purchasing public." The impressive word in both of these phrases is "Quaker." The human mind so functions that its attention is concentrated on one word of any title or descriptive phrase. The average observer would either not note the difference between the phrases Quaker State and Quaker City or he would think that both oils were marketed by the same company and probably taken out of the subterranean caverns of Pennsylvania, which are generally known to yield oil of superior quality. Under the decree handed down by the majority, I see no reason why any person or company cannot now market without restraint an oil called "Quaker Town Oil" or "Quaker Borough Oil" or "Quaker Nation Oil."

Even when two proper nouns are linked together in a name, as, for example, "Waldorf-Astoria," one of the nouns soon becomes dominant and the public refers to the designated thing by its dominant name. People generally now refer to the "Waldorf-Astoria" as the "Waldorf." This one-word dominance is more pronounced when a proper noun is linked with a common noun as a designation. If some one produced and marketed cotton designated as "Missisippi Valley Cotton," it would soon become known as "Mississippi Cotton," and if, after it had secured a valuable reputation, another would market cotton and call it "Mississippi River Cotton," the latter name would be well calculated to deceive purchasers.¹

In Scranton Stove Works v. Clark et al., 255 Pa. 23,99 A. 170, this court, in an opinion by the late Chief Justice FRAZER, said: "To constitute an infringement of a trade-mark a literal copy is not necessary. The test is whether the label or mark is calculated to deceive the public and lead them to suppose they are purchasing an article manufactured by a person other than the one offering it for sale: Pratt's App.,117 Pa. 401 [11 A. 878]. The same principles apply to unfair trade competition. 'The general rule is that anything done by a rival in the same business by imitation or otherwise, designed or calculated to mislead the public in the belief that in buying the product, offered by him for sale, they were buying the product of another's manufacture, would be in fraud on that other's rights and would afford just ground for equitable interference': Juan F. Portuondo Cigar Mfg. Co. v. VicentePortuondo Cigar Mfg. Co., 222 Pa. 116, 132 [70 A. 968]. A fraudulent intent in such cases need not always be shown."

In American Clay Mfg. Co., a corporation of Penna., v.American Clay Mfg. Co., a corporation of N.J., 198 Pa. 189,47 A. 936, this court, in an opinion by Mr. Justice MITCHELL, said: "There are two classes of cases involving judicial interference with the use of names, first, where the intent is to get an unfair and fraudulent share of another's business, and, second, where the effect of defendant's action, irrespective of his intent, is to produce confusion in the public mind and consequent loss to the complainant. In both cases the courts of equity administer relief without regard to the existence of a technical trade-mark." Justice MITCHELL cites the case of North Cheshire Manchester Brewery Co. v.Manchester Brewery Co., Law Reps. App. Cases (1899), 83. In that case the House of Lords affirmed the decision of the Court of Appeal, enjoining the defendant from taking even as a second or subordinate part of its corporate title, the name of an older corporation. Justice MITCHELL said: "It was held that as a matter of fact the name of the appellant company was calculated to deceive, and that the appellant must, therefore, be restrained by injunction in the usual way. HALSBURY, Lord Chancellor, said, 'The real question is in a single sentence. Is this nameso nearly resembling the name of another firm as to be likelyto deceive?' " (Italics supplied.) Justice MITCHELL also cites the case of Holmes, Booth Haydens v. Holmes, Booth AtwoodMfg. Co., 37 Conn. 278. He says: "A company had been formed including in its corporate title the names of Holmes and Booth, two of its stockholders and directors. Some years later, Holmes, Booth and other stockholders formed a new corporation which assumed the name of Holmes, Booth Atwood Mfg. Co. On a bill by the first corporation the Supreme Court of Errors of Connecticut enjoined the use of Holmes and Booth's names in the title."

In the case of A. Hollander Son, Inc., v. Jos. Hollander,Inc., et al., 175 A. 628 (1934), the Court of Chancery of New Jersey, enjoined the defendant corporation and Joseph Hollander from using the name 'Hollander' either as one or as a component part of any trade name in the business of dressing and dyeing furs. In that case the court said: "It is not necessary that the complainant, in order to succeed, should prove actual fraud by the defendant, or that any single person was deceived. It is sufficient if, in the opinion of the judge, the symbol or device or get-up used by the defendant is one which so closely resembles the symbol, device or get-up used by the complainant as to be likely to deceive the public. . . . The idea that a man has a right to use his name as a part of the name of a corporation in which he is interested, without regard to the effect of such use in the way of accomplishing deception and fraud, precisely as a natural person can use his own name, has, I think, in this state, been exploded. . . . The corporate defendant will be restrained from using in its fur dressing and dyeing business its corporate name or any other name of which 'Hollander' is a component part, and this without any qualification. To permit the corporate defendant to use the name 'Hollander' in its business, even if limited to the trade, would expose the complainant to the risk of the very injury it complains of, viz., the deception or confusion of the buying public concerning the identity of the defendant's product." In McLean v. Fleming, 96 U.S. 245,24 L. Ed. 828, complainant who marketed "McLane's Liver Pill" procured an injunction against respondent who marketed his pills under the name, "Dr. McLean's Universal Pills." In that case the respondent pleaded laches and it was held by the Supreme Court that acquiescence of long standing was no bar to an injunction against respondent but did not entitle complainant to an account nor to a decree for gains or profits.

In Quaker City Chocolate Confectionary Co., Inc., v.Kernan, 278 Fed. Rep. 592, which was a trade-mark case, the Court of Appeals of the District of Columbia held that the plaintiff's objection to the defendant's use of the words "Quaker Maid" as a trade-mark for candy was well taken. The court said: "The goods on which the respective marks are used are the same and would undoubtedly be known to the trade as "Quaker Candy."

The Third Circuit Court of Appeals, 84 F.2d 387 (1936), enjoined Bernett Rosenfeld, who registered their drug store in Philadelphia as "Macy's Drug Store" under the Fictitious Names Act, from using the name "Macy." The court said that the use of the word "Macy's" "was intended to and had a tendency to mislead and deceive the public into the belief that the defendant's business was connected with that of the plaintiff. . . . There was a palpable attempt to make use of the plaintiff's reputation and good will acquired through many years of advertising and appropriate it to the benefit of the defendants and deceive the public."

The Circuit Court of Appeals (10th Circuit),56 Fed. Rep. 2d 973, (1932), enjoined the Standard Oil Co. of New Mexico, Inc., at the suit of the Standard Oil Co. of California, from using any corporate name which contains the words "Standard Oil Company" or words so similar thereto in sound or appearance as to lead to confusion or uncertainty. The court said: "With a practically unlimited field of distinctive names open to it for choice, defendant selected the name 'Standard Oil Company.' It could have had but one object, namely, to improperly obtain advantage of the goodwill associated with the name 'Standard Oil' and to take and commercially use as its own a commercial asset that belongs to another, to the detriment of that other and the public."

Even if "Quaker State" be considered a geographical name (which it is only in a seldom used colloquial sense), plaintiffs are no less entitled to protection in its use after they by advertising and marketing their product under that name have given it great commercial value than they would be if they had invented the name. The hesitancy which some courts in an earlier day manifested in protecting commercially used geographical names now seems to be disappearing. Many names originally geographical are now as well known commercially as they are geographically and their commercial use has frequently received judicial protection. In Elgin Nat. Watch Co. v.Illinois Watch Case Co., 179 U.S. 665, the Supreme Court of the United States, in an opinion by Chief Justice FULLER, held: "It is contended that the name 'Elgin' had acquired a secondary signification in connection with its use by appellant, and should not, for that reason, be considered or treated as merely a geographical name. It is undoubtedly true that where such a secondary signification has been acquired, its use in that sense will be protected by restraining the use of the word by others in such a way as to amount to a fraud on the public, and on those to whose employment of it the special meaning has become attached. In other words, the manufacturer of particular goods is entitled to the reputation they have acquired, and the public is entitled to the means of distinguishing between those, and other, goods; and protection is accorded against unfair dealing, whether there be a technical trademark or not."

I cannot agree with the statement in the majority opinion that the words "Quaker State Oil" did not acquire a secondary meaning until after 1919. The majority opinion concedes that plaintiff's "Quaker State Oil" had "been marketed and nationally advertised for five years [prior to 1919] under this name." That is surely enough to entitle plaintiff to protection against anyone using the same or a similar name after plaintiff had so nationally advertised its product. Any name, geographical or otherwise, as applied to a product, becomes an asset of the person who advertises and markets that product as soon as the public begin to associate that name with that product.

In American Waltham Watch Co. v. U.S. Watch Co.,173 Mass. 85, 53 N.E. 141, Mr. Justice HOLMES, speaking for the Supreme Judicial Court of Massachusetts, enjoined the defendant from using the name "Waltham Watch" and said: "The plaintiff was the first manufacturer of watches in Waltham, and had acquired a great reputation before the defendant began to do business. . . . The name of a person may become so associated with his goods that one of the same name coming into the business later will not be allowed to use even his own name without distinguishing his wares. Brinsmead v. Brinsmead, 13 Times Law R. 3. . . . And so, we doubt not, may a geographical name acquire a similar association with a similar effect, Whatever might have been the doubts some years ago, we think that now it is pretty well settled that the plaintiff, merely on the strength of havingbeen first in the field [italics supplied], may put later comers to the trouble of taking such reasonable precautions as are commercially practicable to prevent their lawful names and advertisements from deceitfully diverting the plaintiff's custom."

In an article entitled "Trade-Marks and Trade Names," 30 Columbia Law Review (1930), page 192, it is said: "A geographical term may be used to indicate the place of manufacture, e. g., that watches are manufactured at Waltham, Mass. It may come to signify a particular quality, e. g., Minneapolis flour, Rochester clothing. It may in time represent a special process, e. g., Budweiser beer. Finally, it may be used to designate the source or origin of a particular product, e. g., Elgin watches, Vienna bread. . . . The statement that geographical names cannot be valid trademarks is obviously too broad. . . . Why should not the person who added a new meaning to words previously signifying place, grade, or quality have the 'exclusive right' to use them in this acquired sense? . . . For present purposes, it is a matter of indifference whether geographical names are regarded as trademarks or trade names so long as they are as adequately protected against piracy as the Waltham mark [in American Waltham Watch Co. v. U.S. Watch Co., supra]. No mark, no matter how fanciful or unique, would receive greater protection. The Waltham case does not stand alone. In both the Glenfield Starch and Stone Ale cases, two famous English authorities, absolute injunctions were granted. In view of the broad relief given in these early cases, it is surprising that the notion should ever have developed that geographical names cannot be trade-marks."

In Columbia Grammar School v. Clawson, 200 N.Y. Supp. 768, the use of the name "Columbia" in connection with the words "Preparatory School" was enjoined at the instance of the plaintiff which had been using the name "Columbia Grammar School." The court said: "Defendant's claim that patriotic considerations should give the right to any one so choosing to use the word 'Columbia' without restriction seems to have been determined adversely to that contention in the case of People ex rel. Columbia Chemical Co. v. O'Brien,101 A.D. 296, 91 N.Y. Supp. 649."

In Hamilton-Brown Shoe Co. v. Wolf Bros. Co., 240 U.S. 251, the Supreme Court of the United States held that defendant was guilty of unfair competition in marketing its shoe under the trade-mark "American Lady" after the plaintiff had marketed its shoe under the trade-mark "American Girl." The court said: "We are convinced that it [the phrase "American Girl"] was subject to appropriation for that purpose [i. e., to designate shoes of plaintiff's manufacture]." In Fairbank Co. v. Luckel King Cake Soap Co., 102 Fed. 327, it was held that the use of the words "Gold Drop," where a prior company had used the words "Gold Dust" as applied to washing powder, was unfair competition and a trespass on plaintiff's good will. The court said that the plaintiff was "entitled to an injunction, irrespective of the question of any testimony as to actual fraud or willful intent."

There is no reason why an oil company cannot be as fully protected in the use of a geographical name as are hotel and railroad companies. Many of the latter bear geographical names, notably the Pennsylvania Railroad and the Baltimore Ohio Railroad.

Plaintiff by the expenditure of millions of dollars has affixed the name "Quaker State" in the public mind as being an oil marketed by it and presumably refined, at least in part, from Pennsylvania crude oil. The distinctive, "catchy" part of that name is the word "Quaker." By defendants calling their oil "Quaker City Oil," public deception is clearly invited. The defendant-partnership's own fictitious trade name is not "Quaker City" but "Pennsylvania Petroleum Products Company." They began to market their oil, which certainly is not produced from "Quaker City" oil wells, only after the plaintiff, which bears the name "Quaker State Oil Refining Company" had nationally advertised "Quaker State Oil" for four years and had acquired for such oil a large and constantly expanding market.

The majority opinion says: "The testimony discloses that another company located in Indiana adopted the name 'Quaker' for its oils two years before the plaintiff's earliest use of the designation, so that it could not be said that plaintiff had exclusively used the name." I think the answer to that is twofold: (1) the present plaintiff in a suit captionedQuaker Oil Co., Inc. [the Indiana Company] v. Quaker State OilRefining Co., 74 Fed. (2) 553, successfully opposed the registration of the word "Quaker" by the Indiana Company. In that case the court said: "It appears from the record that appellee's [Quaker State Oil Refining Company] trade-marks ["Quaker State Medium," "QSM," and "Quaker State"] have been in continuous use by appellee and its predecessor since July 31, 1914, . . . that appellee's lubricating oils and greases are generally referred to by the term 'Quaker'; that appellee had utilized practically every available means in advertising its trade-marks and its lubricating motor oils throughout the United States and Canada, . . .; that it has expended more than $2,000,000 in such advertising; and that it has sold its lubricating motor oils under its trade-marks throughout the United States and Canada." Registration of the word or mark "Quaker" by the Quaker Oil Company of Indiana was denied on the ground that it had not shown any use of the word "Quaker" prior to the use of that word by the Quaker State Oil Refining Co. The second answer is that it is immaterial to the issue in the instant case whether the Indiana Company had used the word "Quaker" to designate its oil before the plaintiff had so used that word. The present controversy is not between the present plaintiff and the Indiana Company. If it were and the Indiana Company could show that it had used the word "Quaker" to identify the oil it advertised and marketed in a certain territory, before the present plaintiff had advertised and marketed its oil in that same territory, it could justly demand the protection the plaintiff now asks for in this case against the defendant. It might well happen that two different corporations or individuals might begin to use in widely separated parts of the country the same trade name to designate the same kind of a product and at about the same time or otherwise. In such a case the right of each to its own territory would doubtless be judicially recognized. For example, in American Radio Stores, Inc., v. American Radio Television Stores Corp., 150 A. 180 (1930), the defendant was "enjoined from using as part of its corporate name the word "American" in the territory where the complainant does business and in territory competitively contiguous thereto which is reached by the complainant's trade and solicited by the complainant's advertisements." As Justice HOLMES said inAmerican Waltham Watch Co. v. U.S. Watch Co. (supra): "In cases of this sort, as in so many others, what ultimately is to be worked out is a point or line between conflicting claims, each of which has meritorious grounds, and would be extended further were it not for the other." Whatever may be the respective rights of the plaintiff and the Indiana Company, they have no bearing on the issue here, that issue being the right of the defendant to use the name "Quaker City" to designate its oil in territory admittedly commercially occupied by plaintiff's "Quaker State Oil" before the defendant or any other company using the name "Quaker" to designate an oil had entered that territory as a competitor.

The chancellor of the court below found — and these findings were not even excepted to — inter alia, as follows: "9. Plaintiff spent about; $650,000 for advertising in the year 1934; and plaintiff and its predecessors have expended $8,000,000 to $10,000,000 in advertising 'Quaker State' oils and in bringing its trade name, 'Quaker State,' to the knowledge of the public and have spent approximately $15,000,000 to $18,000,000 in establishing 70,000 dealers. The latter figure includes a portion of the advertising expense. 10. A valuable good will in the business of marketing motor oil under the trade name 'Quaker State' has been built up; the volume of business done by plaintiff in the sale of 'Quaker State' motor oil is large and in the year 1930 aggregated 18,000,000 gallons thereof."

I agree with the chancellor's 11th, 12th and 13th conclusions of law (as well as his other conclusions) reached as follows: "11. Under all the testimony the plaintiff is entitled as against the defendants to the sole use of the word 'Quaker' when applied to and used as a name for motor oil. 12. Plaintiff's interest in its good will, in the name of its merchandise, in its trade name and in the reputation of its business is property which a court of equity will protect from destruction or injury. 13. The money expended by plaintiff in advertising and sales promotion and the public demand for its product and the reputation of its oil for uniformity are good will and constitute property. The effect and tendency of the conduct of the defendant is to injure or destroy that property."²

I do not think the court below was justified in vacating the chancellor's decree nisi. I would therefore reverse the decree of the court below and decide this case as the chancellor decided it.

¹ It was said in 8 Michigan Law Review (1910), page 613, in an article on "The Unwary Purchaser": "The person to be considered, the courts say is not . . . the expert or the careful person, but the normal, every day purchaser, or, as some judges have designated him, . . . the inattentive purchaser, . . . or the unwary purchaser. . . . He is likely in making his purchase to act on the moment and is not bound to study or reflect. . . . He is not supposed to know that imitations exist. . . . Some courts have gone so far as to hold that he has a right to be careless and that the use of a mark or label will be enjoined where deception is a probable or even a possible consequence."

See also Coca-Cola Co. v. Chero-Cola Co., 273 Fed. 755, where the Court of Appeals of the District of Columbia, said: "The prospective purchaser . . . acts quickly. He is governed by a general glance. The law does not require more of him."

² In an article on "Pre-emption in Connection with Unfair Trade," in the Columbia Law Review, Vol. 19, page 29, Lord Justice GIFFORD is quoted as saying: "It is a fraud on a person who has established a trade and carries it on under a given name, that some other person should assume the same name, or the same name with a slight alteration [italics supplied] in such a way as to induce persons to deal with him in the belief that they are dealing with the person who has given a reputation to the same. See Lee v. Haley (1870), L. R. 5 Ch. 155, 160." The same article says (p. 45): "Nor does it matter that there are minor differences, and an imitation which is not exact. 'All that,' aptly said LEARNED HAND, J., 'is almost a convention, when you appropriate another man's mark; for there must be some color of good faith, some defense to put forward. Minor differences are supposed to help over hard places':Stamford Foundry Co. v. Thatcher Furnace Co., 200 Fed. 324. In such matters the court is under a very lively obligation to use its common sense. . . . The good will built up by the successful production of one article . . . is entitled to protection from anything that will hurt it, directly or by reaction."