Hyde Park Clothes, Inc. v. Hyde Park Fashions, Inc.

SWAN, Chief Judge.

This is an appeal by the plaintiff from a judgment dismissing its complaint on the merits, after a trial, in a suit charging infringement of a registered trade-mark and unfair competition. Federal jurisdiction was based on the Trade Mark Act of 1946, IS U.S.C.A. §§ 1114, 1121, with pendent jurisdiction under 28 U.S.C.A. § 1338(b) as to the claim of unfair competition, and also on diversity of citizenship, 28 U.S. C.A. § 1332. Plaintiff’s trade-mark, registered January 2, 1923 as No. 163,111 under the Act of February 20, 1905, showed the words “Hyde Park” in combination with a golfing scene. The trial court found no infringement of this trade-mark, and this finding is not challenged by the appellant.¹ The court also found that the plaintiff had a good common-law trade-mark in the words “Hyde Park”, for men’s clothes manufactured by it and that this mark was not infringed by the defendant either by the use of its corporate name, “Hyde Park Fashions, Inc.,” or by using the words “Hyde Park” in its advertising and on the labels it attaches to the garments it manufactures and sells. The trial court further held that the defendant in the manufacture and sale of its ladies’ suits and coats does not compete unfairly with plaintiff in its manufacture and sale of men’s suits and coats. Only this conclusion as to the non-existence of unfair competition is attacked by the appeal.

The trial court made detailed findings of fact and wrote an opinion (unreported). The appellant does not object to the court’s findings on factual questions; it disputes only the legal conclusions drawn therefrom. The parties are not in direct competition. Plaintiff and its predecessors in the business háve been engaged in the manufacture and sale of men’s clothing, particularly suits, and since 1922 have used the words “Hyde Park” on their labels. Plaintiff has never manufactured or sold women’s garments. Defendant was imcorporatéd in 1945 and deals exclusively in women’s clothing, classified in the garment trade as “Junior Miss Sizes and hjodels.” When defendant adopted its corporate name it had no knowledge of the existence of plaintiff. It chose a name which its predecessor had used in his business and which the New York Secretary of State informed it was available.² Both plaintiff and defendant sell their garments nationally in practically all the states. They deal with retailers who sell to the public. As applied to both plaintiff and defendant the trade-mark “Hyde Park” does not have a geographical connotation but has a secondary connotation connoting style or quality. Persons engaged in the manufacture and retailing of men’s suits and coats associate the words “Hyde Park” in the men’s clothing field with the plaintiff; those engaged in the manufacture and retailing of women’s suits and coats associate the words in the women’s clothing field with the defendant. The defendant has not attempted to palm off its product as the product of the plaintiff. It has not diverted any of the plaintiff’s customers; nor has the plaintiff sustained any loss or damage as the result of any similarity in the corporate names of plaintiff and defendant. Such similarity has caused no “confusion” in the trade and the purchasing public has not been misled into believing that plaintiff is the source or origin of defendant’s merchandise. The plaintiff’s garments are priced somewhat higher than defendant’s, but this difference in pr.ice does not adversely, affect plaintiff’s reputation or good will. The defendant has spent more, in proportion to gross sales, in advertising than has the plaintiff; atid its product is highly considered among department and specialty store buyers, because of its quality and its patented style of skirt. In its advertising and merchandising defendant refers to its suits as “Drum Skirt” suits.

The appellant urges that the first question for determination is whether federal law or state law is controlling in a cause of action for unfair competition in which federal jurisdiction rests solely on diversity, although jurisdiction was also claimed as pendent to an action on a federally registered trade-mark which the court found valid but not infringed. It is said that the question is “so controversial” that it should be decided “even though in appellant’s view the result of the case should not turn on the decision,” because it is entitled to prevail regardless of whether federal or state authorities are applied.³ Judge Clark is of opinion that because of the Lanharn Act federal law controls, but a majority of the court thinks that a decision as to which law should be applied is unnecessary, since in our opinion the application of either federal or state law requires affirmance.

If it he assumed that federal law is to be applied, there is no need to add anything to Judge Leibell’s opinion. He analyzed the principal cases in this circuit involving competition in related fields.⁴ As these cases point out, the interests of the owner of a trade-mark who seeks to extend it to cover goods on which he has never used it are two: (1) the possibility that trade practices of the defendant may stain the reputation of the plaintiff in the minds of his customers; and (2) the possibility that some time in the future the plaintiff may wish to extend his business into the market which the defendant has already begun to exploit. These interests must be weighed against the interests of the defendant to preserve whatever good will he has acquired by selling his goods under the name and marks he has adopted.⁵ Judge Leibell then demonstrated by a discussion of the facts that the plaintiff had not shown any basis for injunctive relief.⁶ We agree. Our recent decision in Admiral Corporation v. Penco, Inc., 2 Cir., 203 F.2d 517, involves a different situation for there the court found intentional palming off and actual confusion.

Nor do the New York cases, if state law rather than federal be applicable, lead to a different conclusion when no intentional palming off exists and no actual or likely confusion has been found.⁷ According to tKe appellant “the latest pronouncement of the New York courts on this subject” is Time, Inc., v. Life Color Laboratory, Inc., 198 Misc. 1038, 101 N.Y.S.2d 586, 587. There the trial judge found that there had been no palming off, no confusion, no inferiority in the defendant’s work which might discredit the plaintiff if confusion existed, and no damage to the plaintiff. Yet he felt constrained to grant an injunction, saying “Upon such facts, it would appear that an injunction ought not issue, but the law of 'unfair competition’ is to the contrary.”⁸ But in relying on this decision the appellant was evidently unaware that the judgment had been reversed by the Appellate Division and its decision affirmed by the Court of Appeals.⁹ This disposition of the case by the appellate courts confirms our view that on this subject the state law is not at odds with our own cases and that under either state or federal authorities affirmance of the judgment on appeal is required.

Judgment affirmed.

1 . The appellant’s brief, states: “Appellant is not here urging the cause of action on the registered mark and is entirely content that it be ignored. If it is ignored, then this court has nothing before it except an action in which the jurisdiction is predicated solely on diversity.”

2 . The plaintiff did not qualify itself to do business in New York State until 1950.

3 . In support of applying federal law, the appellant cites Grocers Baking Co. v. Sigler, 6 Cir., 132 F.2d 498; and Jewel Tea Co., Inc., v. Kraus, 7 Cir., 187 F.2d 278.

4 . S. C. Johnson & Son v. Johnson, 2 Cir., 118 F.2d 427; S. C. Johnson & Son v. Johnson, 2 Cir., 175 F.2d 176, certiorari denied 338 U.S. 860, 70 S.Ct. 103, 94 L.Ed. 527; Federal Telephone & Radio Corporation v. Federal Television Corp., 2 Cir., 180 F.2d 250.

5 . Our recent decisions in Miles Shoes, Inc., v. R. H. Macy & Co., 2 Cir., 199 F.2d 602, certiorari denied 315 U.S. 909, 73 S.Ct. 650, and Pastificio Spiga Societa Per Azioni v. De Martini Macaroni Co., 2 Cir., 200 F.2d 325 are not concerned with goods in related fields; they cannot be regarded as in any respect inconsistent with the doctrine expounded in the Johnson and Federal cases.

6 . The concluding paragraph reads as follows :

“I have concluded that defendant does not infringe plaintiff’s trade-mark and does not unfairly compete with plaintiff. No harm has come to plaintiff by way of ‘confusion’; nor any damage to plaintiff’s reputation by defendant’s use of the words ‘Hyde Park’ in its corporate name or on its women’s suits. And there is no likelihood of any damage to plaintiff. Defendant has taken nothing from plaintiff; the fact is defendant has paid its own way in acquiring a good will of its own in the women’s field. Plaintiff has stated that it does not ask damages. It proved none. Nor has it shown any threat of damage which could be the basis for asking for injunctive relief. The complaint will accordingly be dismissed on the merits.”

7 . See, for example, Eastern Construction Co. v. Eastern Engineering Corp., 246 N.Y. 459, 402, 159 N.E. 397, 398,

“Justification, if any, for the injunction, must rest upon a finding that the corporate name which the defendant has adopted, with the sanction of the state, is so similar to the name under which the plaintiff conducts its business that the public may be confused, and that some persons may do business with the defendant in the belief that they are dealing with the plaintiff. * * * ”

Neva-Wet Corp. v. Never Wet P. Corp., 277 N.Y. 163, 169, 13 N.E.2d 755, 758; “ * * * But the equity power of the court should not be exercised to interfere with freedom of conduct of trade and general business competition, but only to restrain fraud and imposture.”

8 . Judge Nathan’s opinion indicates, 101 N.Y.S.2d at pages 586-587, that he followed what he considered to be the doctrine of Triangle Publications v. Rohrlich, 2 Cir., 167 F.2d 969.

9 . Time, Inc., v. Life Color Laboratory, Inc., 279 App.Div. 51, 107 N.Y.S.2d 957, affirmed 303 N.Y. 965, 106 N.E.2d 56.