Before AUGUSTUS N. HAND, CHASE, and CLARK, Circuit Judges.
AUGUSTUS N. HAND, Circuit Judge.
The Champion Spark Plug Company, a well known manufacturer of spark plugs for automobiles, brought this suit against the defendants charging infringement of its trade-mark "Champion," and also unfair competition. The charge is based upon the resale by the defendants of used spark plugs of plaintiff's original manufacture while still bearing the trade-mark "Champion" and also bearing plaintiff's type or style numbers indicating that the particular spark plug on which it was placed was specially adapted for automobiles of a certain make or for a use where it might have a heat range and other characteristics suited to the seasonal or other conditions under which the car was to be operated. The used spark plugs were obtained by the defendants from dealers in second-hand materials and after being sorted to eliminate plugs too badly worn or damaged for any further use were reconditioned. This reconditioning consisted of cleaning the plugs so as to remove burned and pitted portions of the center electrodes, readjusting the side electrodes and where they were worn away welding them to new metal in order to provide proper gap spacing.It also involved cleaning and painting them so that they would look more attractive for selling.
The plaintiff's witness Sibley testified to variations in the "critical measurements" of the plugs between those reconditioned by the defendants and those originally manufactured. He testified that the end of the porcelain insulators - known as the "petticoat" - had generally been worn away by sand blasting when the plug was reconditioned so that the insulation did not extend as far over the center electrode as it originally did and the plug was thereby a cooler plug because more of it was exposed to the air than when the insulator was extended by the petticoat. He also said that where the ground electrode had been welded the faces of the two electrodes were not parallel and that each of these changes adversely affected the heat range of the reconditioned plugs. To the layman, the physical changes seem minute. Nevertheless the trial judge found them so important that he held the retention of the word "Champion" on the reconditioned plugs as misleading and held the defendants had thereby infringed the plaintiff's trade-mark. But no experimental proof was offered by Sibley, nor by anyone else, that any changes in heat range resulting from the shortening of the inner electrode or abrasions of the insulation, or from the welding of the ground electrode, were sufficient to impair the commercial use of defendants' plugs or even to render them of different type numbers from those originally manufactured by the plaintiff. It is of course manifest that "Champion" plugs with shortened center electrodes, porcelain petticoats worn down, and ground electrodes somewhat altered by use are in operation on many cars and that the only difference between them and the plugs reconditioned by defendants lies in the fact that the former have not been cleaned and slightly repaired or readjusted.
The defendant's witness Kasarjian, chief engineer of the Aero Spark Plug Company, and former ignition expert of the United States Navy, testified that he had examined and tested defendants' reconditioned plugs and that the slight differences between them and the plugs as originally manufactured did not substantially affect the heat range or spark position of any plug and its functioning. Kasarjian was the only witness who made practical tests and measurements. His testimony, in the absence of any proof that defendants' plugs have not worked satisfactorily, convinces us that the finding of the trial judge, that the reconditioned plugs were so altered that they could not properly be sold with the trade-mark "Champion" on them, was without substantial basis. Although the defendants' plugs which were before the court did not exactly correspond with the drawings and specifications of their original manufacture, that is true of all plugs after a relatively small amount of driving. The defendants' plugs answer the purpose for which they are purchased; otherwise they would not be in demand and this suit to prevent their use with the trade-mark indicating their first origin would hardly have been brought. Worn Champion plugs only differ slightly from their original condition and are being driven constantly in cases where no second-hand dealer has intervened to recondition them. Even if the reconditioned plugs were somewhat impaired, as the court below found, without, however, any experimental test to show it, nevertheless they were fitted to perform a useful service and no one wishing to buy them would have any ground for complaint if he knew that he was purchasing "used" Champion spark plugs, originally of certain style numbers.
The court below found that the defendants had infringed the trade-mark "Champion" by selling reconditioned plugs having different functional features from those of the plaintiff. It for that reason enjoined the defendants from selling or offering for sale, or delivering to others for sale, any spark plugs of the plaintiff's original manufacture which had been repaired, reconditioned, or otherwise treated to improve their appearance unless and until (1) all trade-marks, trade-names, type marks, and style marks should be completely removed therefrom; (2) the metal shall should be completely covered with durable grey, brown, orange, or green paint or lacquer such as Duco; (3) the word "repaired" - capital letters - should be stamped into one face of the hex portion of the metal of a size as large as the face should permit and of a depth sufficient so that the indentations should retain enough white paint - when the white paint should have been wiped from the surface - distinctly to display each letter of the word "repaired" in white.
It was also found that the defendants had packed a large part of their reconditioned plugs in individual containers and cartons similar to plaintiff's on which the same words plaintiff uses - "guaranteed dependable" - were printed. In view of this the trial court decreed that the defendants affix to their cartons and containers the legend:
"Used spark (plugs) originally made by Champion Spark Plug Company, repaired and made fit for use up to 10,000 miles by Perfect Process Spark Plug Co., 1133 Bedford Ave., Brooklyn, N.Y."
The decree also provided that the name and address of the defendants was to be larger and more prominent than the legend itself, but that the name of the plaintiff might be slightly larger than the rest of the body of the legend.
In view of the findings as to misleading cartons and containers and as to style numbers of reconditioned plugs which because not differentiated from those on the plaintiff's new plugs might mislead, the defendants not only infringed the trade-mark "Champion" in selling their plugs without sufficient notice that they were reconditioned and not new, but also were guilty of unfair competition.
While no proof was offered that the defendants' plugs were actually "palmed off" as new and original Champion plugs or that any purchaser was induced to buy those plugs relying on a representation that they were as servicable as new ones, yet the kind of merchandising employed might enable dealers to "palm off" defendants' plugs as new ones and thus to mislead the public. The decisions in Federal Trade Commission v. Winstead Co., 258 U.S. 483, 494, 42 S. Ct. 384, 66 L. Ed. 729; Warner Co. v. Lilly Co., 265 U.S. 526, 530, 44 S. Ct. 615, 68 L. Ed. 1161; and H. G. Mumm Champagne Co. v. Eastern Wine Corp., 2 Cir., 142 F.2d 499, require a finding of unfair competition under such circumstances, irrespective of any proof of "palming off" by the defendants.
The defendants appeal from the decree on the ground that they have been guilty of no unlawful conduct and that the complaint against them should have been dismissed. The plaintiff appeals from such part of the decree as failed to find that the defendants had committed acts of unfair competition and denied an accounting.
The changes in the original spark plugs made by reconditioning them are slight to the eye and the evidence demonstrates that the defendants' articles work well, perform a useful service and that any changes in the heat range caused by wear or reconditioning are theoretical and in practice unimportant. Aside from the slight changes in the insulation and the electrodes the defendants' plugs are completely of the plaintiff's well known manufacture. The defendants have a right to sell them as such provided they make known to the public that they are second-hand and reconditioned and that the defendants - and not the plaintiff - have repaired the original plugs. They are also entitled to sell them with the trade-mark "Champion" and they style marks indicating the engines to which they are fitted.The mark "Champion" shows their origin. The type numbers cover thread size and the size of the cylinder hole into which the plug is fitted. These sizes have not been affected by reconditioning. While the type numbers also cover the heat range, that varies with wear and there is no proof that because of this the defendants' reconditioned plugs required another type of classification for practical purposes. Anyone buying a used plug would or should understand that it would not precisely correspond with the heat range of the original. Moreover, in any case, as Sibley's testimony indicates, the selection of precisely the right plug for a particular engine can only be accurately determined by the performance of the plug in use. Record, folios 698-99.
It is well settled by the authorities that the defendants have a right to sell an article manufactured by the plaintiff and to say that it has been so manufactured by retaining the latter's trade-mark and style numbers to indicate the origin of the goods. If the article the defendants have sold was second-hand and they repaired it they could still retain the marks on the goods if they gave the public clearly to understand that the goods were not simply those of the original manufacturer but had been repaired by themselves. They have only to tell the truth, and the whole truth, and to tell it plainly. It is, therefore, unimportant whether their reconditioned spark plugs were as good ...