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Cohn-Goldwater Mfg. Co. v. Corporation.


March 5, 1945


Author: Evans

Before EVANS, CLARK, and FRANK, Circuit Judges.

EVANS, Circuit Judge.

This is a trade-mark infringement suit wherein the District Court granted the defendant, on its counterclaim, the exclusive use of its trade name "Wilshire" on shirts, in 45 states, and granted plaintiff the right to use the same trade name, also on shirts, solely in the State of California. It held the plaintiff's registered trade-mark to be invalid because not in exclusive use for one year prior to its date of registration, on October 20, 1936. The trial court also found that the plaintiff, selling in California, and the defendant, selling in New York, independently of each other and ignorant of each other's adoption of the name, Wilshire, began the use of this name on its shirts. The plaintiff preceded the defendant in such use by a month or two, having begun in December, 1934, while defendant first used the name in January, 1935.

Plaintiff unfortunately had destroyed its records for the time prior to 1938 and was unable to prove the scope of its sales of Wilshire shirts for the years 1935 to 1938.*fn1 Defendant proved its use of the name in 1935 in 37 states, and in 1936, in 9 additional states.

The name Wilshire had been used prior to both plaintiff's and defendant's use, by a Newmark Co. which had ceased to exist. Plaintiff had oral consent from one connected with that company to use the mark. Defendant, after a search of the Trade Mark registrations and discovery of the registration of Wilshire by Newmark Co., learned that the Newmark Co. had gone out of existence.

Defendant's Wilshire shirts sell at from $10 to $12 per dozen wholesale and plaintiff's sell for $15 to $40 per dozen. Plaintiff's volume of sales greatly exceeds that of defendant's. In 1941 plaintiff sold over $680,000*fn2 of Wilshire shirts, whereas defendant sold $204,179 of such shirts in the the same year. Plaintiff spends*fn3 three times as much as defendant, on advertising.

Confusion between the two products began in 1938 in Texas and Nebraska as well as in California.

As between two well-nigh simultaneous users of a trade-name this apportionment of territory would seem not a little harsh - 45 states to 1. But the harshness, if any, is due to the fact that plaintiff was unable to factually substantiate its extended territorial claims with any contemporaneous, documentary, or even oral, proof. On the other hand, defendant's case was supported in detail by order blanks dated in 1935 and the following years, for substantial-sized orders, from many states. It showed sales in 46 states for 1935 and 1936.

Plaintiff showed the purchase of 5,000 labels (with name Wilshire) in December, 1934, and the representative of the label manufacturing company testified that they had been ordered continuously since. It was not shown, however, that any of these labels were used on shirts sold outside of California.

The president of the plaintiff company was able to identify many documents indicative of wide and substantial sales of plaintiff's Wilshire shirts, in the year 1938 and thereafter. He stated plaintiff had begun national advertising of Wilshire shirts in 1937 or 1938, but this was after defendant had occupied the field.

A careful reading of the record convinces us that the District Court's findings are supported by the evidence. Plaintiff certainly did not have exclusive use of the word Wilshire for a year prior to that term's registration in October, 1936, and it can claim no protection thereunder. It was unable to present evidence of establishment of its trade name in territories outside of California, whereas defendant made such showing. The trial court's apportionment of territory to the respective claimant of the same trademark is sustained by precedent. This practice was sanctioned in Hanover Star Milling Co. v. Metcalf, 240 U.S. 403, 36 S. Ct. 357, 60 L. Ed. 713, and United Drug Co. v. Theodore Rectanus Co., 248 U.S. 90, 39 S. Ct. 48, 51, 63 L. Ed. 141.*fn4 See also Derenberg, Trade Mark Protection, p. 455.

The decree of the District Court is affirmed.

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