Appeal from the District Court of the United States for the Southern District of New York.
Before L. HAND, AUGUSTUS N. HAND, and CHASE, Circuit Judges.
AUGUSTUS N. HAND, Circuit Judge.
This is a suit to enjoin infringement of complainant's registered trade-mark "Spunlo" and to restrain unfair competition by the defendant because of the use of the mark "Sunglo" by the latter on competing goods. No accounting is prayed for. The District Court dismissed the bill on the ground that the word "Sunglo" had been used by others prior to registration or use of "Spun-lo" by the complainant, and the latter appeals. For reasons to be stated, we differ with the conclusion and think the complainant's prayer should be granted.
The goods to which the trade-marks "Spun-lo" and "Sunglo" have been applied by the complainant and the defendant respectively are women's undergarments of rayon silk. They are similar in appearance and texture and are in active competition. The complainant began to use "Spun-lo" to designate its fabrics on September 15, 1931, filed its application for the trade-mark on May 6, 1932, and obtained a certificate of registration on June 6, 1933. The mark was affixed by attaching to the fabrics hanger labels on which it was inscribed. In many instances these labels also bore in addition the individual marks of the customers.
Since complainant began to use "Spun-lo," it has spent about $500,000 in advertising it, and the mark finally became so well known that many department and retail stores have advertised it at their own expense. Over four million pounds of "Spun-lo" fabric had been sold by complainant up to the date of the trial. There can be no doubt that the name indicates to a wide public the origin of the fabric and that it is well known through a great part of the United States.
In February, 1934, about two years and five months after the complainant had adopted "Spun-lo" as its trade-mark, the defendant took the name "Sunglo" for its mark and used it on the same kind of rayon fabric in the same manner as complainant has done; namely, by employing hanger labels bearing the word "Sunglo." It has, however, done little or no advertising of the mark except what has been put out by the customers.
The name "Sunglo" so closely resembles "Spun-lo" phonetically that instances of confusion were proved at the trial in the case of a large department store in Kansas City, of another at Lafayette, Ind., likewise in New York and in Newark, N.J. The defendant was aware of the existence and use of complainant's trade-mark before adopting "Sunglo" for its own competing business. Under these circumstances the trial court properly found that "the defendant chose a word which came far too near the plaintiff's mark" and "attempted to imitate 'Spun-lo' with the hope of not running the risk of being held guilty of infringing it."
The only defense worthy of serious consideration is that of the prior registration of the word "Sunglo" by Brainerd & Armstrong Company and its prior use by that company for artificial silk thread, also the prior registration of "Sunglow Satin" by Smith-McCord-Townsend Dry Goods Company for mercerized sateen in linings and underwear. It was because of these defenses that the trial court held the trade-mark invalid and dismissed the bill to enjoin infringement and unfair competition. Upon the sufficiency of these defenses the whole case turns, for without them the complainant has established a valid trade-mark and infringement by defendant through the use of a confusing mark.
On July 25, 1922, the name "Sunglo" was registered by Brainerd & Armstrong for artificial silk thread in Class 43 covering "Thread and Yarn." They afterwards used "Sunglo" on embroidery thread, sweater thread, balls of embroidery thread, and rayon sewing thread. Brainerd & Armstrong changed their name to Corticelli Silk Company in 1926, and in 1932 merged with Belding-Hemingway Company, and after the merger took the name of Belding-Hemingway-Corticelli Company. The business of this corporation is in silk threads, silk fabric, and silk hosiery. It does not make or sell undergarments for women or fabric for such undergarments.
In 1922 Brainerd & Armstrong began to use the mark "Sunglo" on an artificial rope silk which was sold for an embroidery thread. In 1926 or 1927 Corticelli Silk Company put a rayon sewing thread on the market and sold it under the name "Sunglo," but discontinued the line after about two years because rayon thread had not then developed a proper elasticity. For a time prior to 1930 the mark "Sunglo" was used by the Corticelli Silk Company on rayon yarn to display the color line in which they put out the sweater yarn for hand knitting and crocheting of sweaters, caps, gloves, scarfs, and handkerchiefs. After the merger with Belding-Hemingway in 1932, an embroidery thread known as "Texto-Rope," which had been sold by the latter, was kept on the market and the use of "Texto-Rope" as a trade-mark was retained and the name "Sunglo" was discontinued. It has not been in actual use since except as used by the defendant to designate its garments. No "Sunglo" thread was carried in stock by the merged company.
Neither Brainerd & Armstrong, Corticelli Silk Company, nor Belding-Hemingway-Corticelli Company ever used the name "Sunglo" on fabric.
In spite of the fact that the Belding-Hemingway-Corticelli Company had discontinued the use of the mark "Sunglo" in 1932, Mr. Armstrong, its vice-president, testified that it was not their intention to abandon that mark. But on January 24, 1936, about a month after the present suit was begun, and in response to a request from the defendant that it be given an assurance by Belding-Hemingway-Corticelli Company that the name "Sunglo" on underwear would not affect the latter in any way, Mr. Armstrong wrote to the defendant that his company did not care to give up their mark "Sunglo," or in any way impair their right to its use. He added, however, that he did not believe its use on knitted rayon would adversely affect its value to them and that they were "making no objection" to defendant's registration.
On December 30, 1924, Smith-McCord-Townsend Dry Goods Company of Kansas City secured registration of the trademark "Sunglow Satin" which is stated in its application for registration to have been used since December, 1923, for mercerized sateen in linings and underwear in Patent Office Class 42 covering "Knitted, netted, and textile fabrics." The fabric referred to in this registration was cotton and not rayon, and it has not been shown to what extent it has ever been used or in what territory ...