Best & Co. v. Miller

SWAN, Circuit Judge.

Best & Co., a New York corporation and owner of the trade-mark “Liliputian Bazaar” registered in 1915 under' the TradeMark Act of 1905, 33 Stat. 724, 15 U.S.C.A. § 81 et seq., brought suit against Sadie S. Miller, doing business in Stamford, Connecticut, under the name and style of “Miller’s Lilliputian Shoppe.” Charging both trade-mark infringement and unfair competition, the plaintiff sought an injunction against use by the defendant of the words “Lilliputian Shoppe,” an accounting, and treble damages. The defendant answered denying the charges and counterclaiming for cancellation of the plaintiff’s registration on the ground that its tradermark was merely descriptive. Both parties were citizens of New York. Federal jurisdiction of the claim of trade-mark infringement was sustained under 15 U.S.C.A. § 96, with pendent jurisdiction as to the claim of unfair competition. Hurn v. Oursler, 289 U.S. 238, 53 S.Ct. 586, 77 L.Ed. 1148; Armstrong Paint & Varnish Works v. Nu-Enamel Corporation, 305 U.S. 315, 59 S.Ct. 191, 83 L.Ed. 195. The trial resulted in dismissal of the complaint, from which the plaintiff has appealed, and dismissal of the counterclaim, from which the defendant has appealed.

The facts found by the district judge are set out at length in his opinion, 67 F.Supp. 809. A summary of them follows: Since 1879 the plaintiff and its predecessors have been continuously engaged in the City of New York in selling at retail apparel for infants and children not over six years of age. Up to 1910 its store front carried the name “Liliputian Bazaar” and the goods there sold were so advertised and labeled. In that year the store was moved to Fifth Avenue and 35th Street, and the business was expanded to include apparel and accessories for older children and adult men and women. Thereafter the sale of goods for infants and children under seven was conducted as a department of the plaintiff’s business. Except where it was impracticable to do so, the merchandise sold in this department has always beén labeled “Liliputian Bazaar.” During the entire period that the business has been in existence the “Liliputian'Bazaar” has been extensively advertised, and has come to signify in the minds of the buying public Best & Co. In February 1930 the plaintiff opened a branch store in Mamaroneck, New York, which is 13 miles from Stamford, Connecticut. In that year the plaintiff had 1495 charge customers in the Stamford area. In August 1942 it opened a branch store in Stamford on the same street as the defendant’s store and almost directly opposite it. •

■ The defendant’s store was opened on December 31, 1930, by her husband Jacob Miller, to whose ¡interest she succeeded Upon his death .in 1940. The store has always borne the name “Miller’s Lilliputian Shoppe” and occupied the same premises. From the start the business has been restricted .to the retail sale of wearing apparel for infants and children wearing garments no larger than size 16, and the merchandise sold has carried labels bearing the name 'of the ’ store and its location, “Stamford, Conn.” All of the advertising has been of a purely local nature and has described the store as “Miller’s Lilliputian Shoppe,” except on three occasions when an advertisement in a Stamford newspaper omitted the word “Shoppe.” In September 1944, shortly before the present suit was started, two shoppers employed by the plaintiff made cash purchases at the defendant’s store and requested the defendant to mail the purchased articles to designated addresses in New York, which was done. On November 9, 1945, the defendant had 26 charge customers residing, outside of Connecticut, to whom advertising material was sent and from whom orders were filled by mail.

The existence of “Miller’s Lilliputian Shoppe” at Stamford came to the attention of the plaintiff in 1933 and a demand was made upon Jacob Miller that he discontinue the use of the words “Lilliputian Shoppe.” This demand was renewed in 1934 and again in October 1944. Negotiations followed, and upon their collapse the present suit was commenced on November 8, 1944.

Since registration of a trade-mark confers only procedural advantages .and does not enlarge the registrant’s substantive rights,¹ the trial judge held it unnecessary to pass upon the validity of the plaintiff’s trade-mark and turned at once to a consideration of the claim of unfair competition. He found that the record was barren of a single instance of a purchaser buying the defendant’s merchandise in the belief that it was the plaintiff’s and that the plaintiff’s president could not recall any one having confused the two; he found also that there was no likelihood that the public would be deceived by the defendant’s use of the trade name “Miller’s Lilliputian Shoppe”; consequently despite the finding that “Liliputian Bazaar” had acquired a secondary meaning signifying Best & Co., he held that the defendant was • not engaging in unfair competition.

Much of the argument on the appeal has concerned itself with the validity of the plaintiff’s trade-mark, the defendant contending that “Liliputian Bazaar” is equivalent to “Children’s Department” or “Children’s Store” and merely descriptive of the business in which both parties are engaged, while the plaintiff argues that the word “Liliputian” as applied to the sale of goods is fanciful and suggestive rather than purely descriptive.² We agree with the district court that it is unnecessary to decide whether the trade-mark is a proper subject of registration under the federal Trade-Mark Act of 1905, § 5, 15 U.S.C.A. § 85. Assuming it is, the plaintiff is entitled to no relief unless there has been infringement. What degree of resemblance is necessary to constitute an infringement is incapable of exact definition; courts can say no more than that “no trader can adopt a trade-mark so resembling that of another trader as that ordinary purchasers, buying with ordinary caution, are likely to be misled.” McLean v. Fleming, 96 U.S. 245, 251, 24 L.Ed. 828. Hence the test of trademark infringement differs little, if any, from the test of unfair competition.³

By her counterclaim the defendant asks for cancellation of the plaintiff’s registration on the ground that the mark is merely descriptive. Under the Trade-Mark Act of 1905, § 22, 15 U.S.C.A. § 102, the defendant has no standing to obtain such relief since she has no interfering registered trade-mark. Drittel v. Friedman, 2 Cir., 154 F.2d 653, 654. If the court were to apply the Trade-Mark Act of 1946, effective July 5, 1947, to the appeal, section 47(b), 15 U.S.C.A. § 1051 note, although neither party has suggested that we should do so, it may be that section 37, 15 U.S.C.A. § 1119, gives her standing to demand the cancellation; but even on that assumption we could not decide the counterclaim in her favor on this record. Section 46(b), 15 U.S.C.A. § 1051 note, saves “marks, registered under the ‘ten-year proviso’ of section 5 of the Act of February 20, 1905, as amended.” Under this proviso, 15 U.S.C.A. § 85, it seems likely that the plaintiff’s mark, which has been in continuous use since 1879, was properly registered, even if it were considered merely descriptive. Thaddeus Davids Co. v. Davids, 233 U.S. 461, 34 S.Ct. 648, 58 L.Ed. 1046. This issue apparently was not litigated at the trial and has not been argued here. If the 1946 Act were held applicable, a remand to the district court would be necessary; but in the opinion of the court the provisions of the 1946 Act are not “applicable to the subject matter” of the defend-, ant’s appeal from dismissal of her counterclaim.

The essence of the wrong of unfair competition lies in the sale of the goods of one manufacturer or vendor for those of another or under such conditions as may lead the purchaser to think they are the goods of the other.⁴ If the defendant selects a trade-mark or trade name similar to the plaintiff’s with intent to palm off his wares as those of the plaintiff, proof of his intent may be strong evidence of, and in proper' circumstances establish, the likelihood of confusion. In the case at bar there is no finding that the defendant’s trade name was chosen with any such intent; nor is there any evidence to justify such a finding. On the other hand, a defendant’s good faith in believing that he has so marked his goods as to distinguish them from the plaintiff’s, will not protect him if the court finds that confusion has resulted, or is likely to'result. The trial judge correctly ruled that unfair competition is a question of fact, and the test is “whether the public is likely to be deceived.” ⁵ Applying this test he found no unfair competition. Such a finding is not conclusive on an appellate court, if it takes a different view as to the likelihood of deception'.⁶ A majority of the court agrees with the trial court’s finding of no unfair competition. It is true that “Miller’s Lilliputian Shoppe” makes use of the dominant word in the plaintiff’s mark and substitutes á synonym for “Bazaar,” but it also contains the surname “Miller’s,” and no one word of the three is emphasized more than another. While not conclusive, it is not without significance in determining the likelihood of deception of the public by the use of the defendant’s trade name, that no actual confusion has ever resulted during the many years since the business was started at the end of 1930.⁷ Furthermore, the sec-, ondary meaning which “Liliputian Bazaar” has acquired signifies Best & Co. so that goods bearing that label are identified as coming from its store rather than from an anonymous source or from a dealer whose name the customer may have forgotten. Cases such as Barton v. Rex-Oil Co., 3 Cir., 29 F.2d 474, where the secondary meaning denotes a product, are therefore distinguishable. With the competing stores located on opposite sides of the same street, only about 100 feet apart, and each bearing the owner’s name, the likelihood that customers will be deceived into buying the defendant’s wares in the belief they are the plaintiff’s seems to us nil.

The plaintiff contends that Menendez v. Holt, 128 U.S. 514, 9 S.Ct. 143, 32 L.Ed. 526, compels a contrary conclusion. There the trade-mark “La Favorita,” followed by the name Holt & Co., used as a brand name of flour was held infringed by the defendant’s use of the same brand followéd by the name S. O. Ryder, on its flour, the court saying that the substitution of the name Ryder for Holt “is an aggravation and not a justification, for it is openly trading in the name of another upon the reputation acquired by the device of the true proprietor.” But it should be observed that there the trade-mark, identified a product and that the court found an intent to infringe. Moreover, we do not understand the case to mean that under no circumstances will the use of the defendant’s name be sufficient to prevent deception of the public. For reasons already stated we think there is no likelihood of deception in the case at bar and accordingly affirm the judgment.

1 Armstrong Co. v. Nu-Enamel Corporation, 305 U.S. 315, 324, 59 S.Ct. 191, 83 L.Ed. 195; Emerson Electric Mfg. Co. v. Emerson Radio & Phonograph Co., 2 Cir., 105 F.2d 908, 910, certiorari denied 308 U.S. 616, 60 S.Ct. 262, 84 L. Ed. 515; George W. Luft Co. v. Zande Cosmetic Co., 2 Cir., 142 F.2d 536, 541, cert. denied 323 U.S. 756, 65 S.Ct. 90, 89 L.Ed. 606.

2 In Ball v. Broadway Bazaar, 194 N. Y. 429, 436, 87 N.E. 674, 676, which was a suit brought by a predecessor of the present plaintiff, the court said: “The word ‘Lilliputian’ is derived from Swift’s Travels of Lemuel Gulliver to the imaginary Kingdom of Lilliput, the inhabitants of which were described as pygmies about six inches in height. Although of purely fanciful origin, the word ‘Lilliputian’ has become a part of the English language, and is used to denote persons, and possibly things, of diminutive or minute size. The word ‘Bazaar’ is also part of our common speech. * * * It is obvious that neither of these words alone can be the subject of a trade-name in which any one can acquire an exclusive proprietary right. They are purely descriptive parts of our language, and may be used by all. But their use together, or in combination with some other word, such as ‘Best,’ for instance, marks the difference between what is permissible and what may be forbidden.”

3 Armstrong Co. v. Nu-Enamel, 305 U. S. 315, 325, 59 S.Ct. 191, 83 L.Ed. 195; American Steel Foundries v. Robertson, 269 U.S. 372, 380, 46 S.Ct. 160, 70 L.Ed. 317; Nims, Law of Unfair Competition and Trade Marks (4th Ed.1947) 10, 1017.

4 Fawcett Publications, Inc. v. Popular Mechanics Co., 3 Cir., 80 F.2d 194, 198.

5 General Finance Loan Co. v. General Loan Co., 8 Cir., 163 F.2d 709, 712; Eastern Wine Corporation v. Winslow-Warren, Ltd., 2 Cir., 137 F.2d 955, 960; certiorari denied 320 U.S. 758, 64 S.Ct. 65, 88 L.Ed. 452.

6 LaTouraine Coffee Co., Inc. v. Lorraine Coffee Co., Inc., 2 Cir., 157 F.2d 115, 117; certiorari denied 329 U.S. 771, 67 S.Ct. 189.

7 Lucien Lelong, Inc. v. Lander Co., Inc., 2 Cir., 164 F.2d 395, 397.