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April 23, 1935


The opinion of the court was delivered by: INCH

INCH, District Judge.

The plaintiff brings this suit by bill of complaint duly filed August 18, 1934, in which it asks that the defendant be restrained from manufacturing or selling, or offering for sale, a certain baking powder and a chocolate flavored malt product, made by defendant, in certain containers, bearing certain labels, offered in evidence, which plaintiff claims has enabled defendant to unfairly compete with plaintiff, and which violate plaintiff's trade-marks, etc.

The defendant duly answered, by pleading filed October 15, 1934, which answer puts in issue the material allegations of said complaint. The answer contains a counterclaim based on an alleged conspiracy and entrapment by plaintiff resulting in alleged damage to defendant; it being claimed that the said conspiracy and entrapment was a part of plaintiff's efforts to unlawfully destroy the business of defendant.

 The plaintiff duly replied to this counterclaim by reply, filed October 30, 1934.

 This court has jurisdiction of both suit and counterclaim.

 A preliminary injunction was granted to plaintiff, which injunction was thereafter modified on appeal. This will be considered later in this opinion.

 The first thing to be found are the facts. Thereafter will be considered the effect of the order of said appellate court, as indicated in its decision. Finally, the law applicable to the facts found will be discussed.

 A great deal of testimony was taken, but the material facts appear to be, in substance, as follows:

 In 1878 Robert Benson Davis commenced the manufacture of baking powder. In his label he emphasized two things. One was the word "Davis" the other the letters "O.K." The earlier specimens of this label are found in Plaintiff's Exhibits 2, 3, and 4. The business started in New York City, but in or about 1893 the factory was moved to Hoboken, N.J., where it still is.

 In 1905 the plaintiff was incorporated under the laws of the state of New Jersey, and four years later plaintiff obtained its first trade-mark registration of Davis Baking Powder (Plaintiff's Exhibit 1).

 In 1919 plaintiff obtained its trade-mark for the word "Davis" with an apostrophe (Plaintiff's Exhibit 5). Finally in 1932 plaintiff obtained another trade-mark registration for "Davis Baking Powder" (Plaintiff's Exhibit 4).

 It is therefore a fact that, for over a half a century Davis Baking Powder has been on the market, and for the past quarter of a century, since obtaining its first United States trade-mark, this baking powder has been identified by the word "Davis."

 Between the years 1918 and 1934 the annual sales have averaged 21,000,000 cans. This market covers not only the United States but foreign countries. At one time these sales reached almost 35,000,000 cans in a single year.

 Substantially all the grocery stores, and certainly all the important stores of this character, not only handled Davis Baking Powder, but there is ample testimony that this product is commonly known and identified by the name "Davis."

 To be sure, the letters "O K," at first more prominent, and under the new and more attractive labels less prominent, have been retained, but it is clearly proven from the testimony that it is this word "Davis" that uniformly identifies plaintiff's product to the consumer and grocer.

 Naturally such a history in regard to a product, one which I think cannot be reasonably disputed, rests on two things: One the excellent method of manufacture; the other, wide advertising.

 One of these alone might not be sufficient, for it is a waste of money to advertise an inferior product. Certainly this would be so for such length of time as we find here. On the other hand, unless an excellent product is widely and wisely advertised, the extent of its market remains limited.

 The proof shows that plaintiff's method of manufacture comprises ingredients of highest quality, carefully tested by experts, and manufactured by expensive and adequate machinery, designed to insure its purity, and, from the time it consists of raw material until it reaches the consumer packed in its can, this product is not touched by human hands.

 It also appears that for the past few years air-tight cans have been added to prevent deterioration; it having been discovered, in the continued efforts of plaintiff to perfect its product, that the slip cover can, then in general use, tended to permit such deterioration.

 There is testimony that plaintiff supplies more than one-half of the total amount of the baking powder sold in the New York area.

 In addition to this business of manufacturing and selling baking powder, plaintiff also manufactures a preparation named "coco-malt." This coco-malt business was purchased by plaintiff in 1925, and in the past ten years plaintiff has sold approximately 34,000,000 cans of this chocolate malted drink.

 As to the second important thing, that of advertising of its baking powder and coco-malt, plaintiff has done a great deal. This consists of extensive advertising in newspapers, magazines, street car cards, and over the radio. The volumes of these advertisements offered in evidence by plaintiff covering a period from 1917 to date (Plaintiff's Exhibits 10, 11, 12, and 13) show the wide amount of this advertising.

 Much of the later advertising relates to both the baking powder and "coco-malt."

 This advertising also has been in newspapers of other languages ...

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