The opinion of the court was delivered by: KAUFMAN
Petitioner, E. I. duPont de Nemours and Co. moved this court under Rule 12 of the Civil Rules of the Southern District of New York for an order adjudging respondents, Purofied Down Products Corp., its president, Louis Puro, and its vice-president, Joseph Puro, in contempt of a consent decree entered on November 4, 1957. Petitioner also moved under Rule 7(b)(1) of the Federal Rules of Civil Procedure, 28 U.S.C.A., for modification of the decree so as permanently to enjoin the respondent corporation from any further use of the name 'duPont' or any of petitioner's trademarks. In order to determine the factual issues underlying petitioner's allegations, by order dated January 26, 1959, and upon consent of both parties, I appointed William J. Manning, a member of the firm of Simpson, Thacher & Bartlett, Special Master to take evidence and to report has findings of fact as to whether respondents had violated the terms of the decree.
Evidence was taken before the Special Master on February 11 and 26 and April 1, 2 and 3, 1959.
On May 15, 1959, the Special Master filed his report and findings of fact, adjudging respondents in violation of certain provisions of the consent decree, but failing to find violations of other provisions. Both petitioner and respondents now cross-move under Rule 53(e)(2) of the Federal Rules of Civil Procedure for modification of the Special Master's report and for confirmation of the report as modified.
It should be emphasized at the outset that the factual findings of the Special Master come to me armored with a strong presumption of validity. Morris Plan Industrial Bank v. Henderson, 2 Cir., 1942, 131 F.2d 975; Helene Curtis Industries v. Sales Affiliates, Inc., D.C.S.D.N.Y.1954, 121 F.Supp. 490, 494-495, affirmed 2 Cir., 233 F.2d 148, certiorari denied 1956, 352 U.S. 879, 77 S. Ct. 101, 1 L. Ed. 2d 80. Under Rule 53(e)(2), I must accept these findings unless they are clearly erroneous.
In this proceeding petitioner must establish respondents' contemptuous conduct by clear and convincing evidence. Fox v. Capital Co., 3 Cir., 1938, 96 F.2d 684, 686.
'When it is doubtful whether a decree of injunction has been violated, a court is not justified in punishing for contempt * * * for the reason that no one can say with any degree of certainty that the authority of the court needs vindication or that the aggrieved party is entitled to remedial punishment.' City of Campbell, Mo. v. Arkansas-Missouri Power Co., 8 Cir., 1933, 65 F.2d 425, 427.
'Process of contempt is a severe remedy, and should not be resorted to where there is fair ground of doubt as to the wrongfulness of the defendant's conduct.' California Artificial Stone Paving Company v. Molitor, 1885, 113 U.S. 609, 618, 5 S. Ct. 618, 622, 28 L. Ed. 1106.
Before discussing in detail the violations alleged by petitioner, I will sketch briefly the background of the instant controversy.
Petitioner manufactures a polyester fiber sold under the trademark 'Dacron'. Among its other attributes Dacron is said to possess superior qualities as a fiberfill for pillows, comforters and other so-called sleep products. The corporate respondent manufactures and sells pillows and other sleep products, and has long been a purchaser of duPont's fiberfills, including Dacron.
On October 1, 1957, petitioner commenced the instant action against all three respondents, for infringement of duPont's Dacron trademark and for unfair competition. Petitioner alleged that respondents had infringed its trademark by distributing in interstate commerce pillows and other goods bearing the marks 'Daron' and 'Dacrilan', had made unauthorized use of and had simulated and copied petitioner's so-called 'red labels' and had falsely represented the amount of petitioner's fiber in the goods they manufactured. By consent of the parties on November 4, 1957 the action against the individual respondents was dismissed without prejudice and the action against the corporate respondent terminated by the entry of a final decree.
Paragraph 2 of the decree contains eight subparagraphs, five of which restrain respondents from certain conduct and three of which are mandatory. In its motion of November 14, 1958, petitioner alleged that respondents had violated all but one (subparagraph 2(g)) of those subparagraphs.
Proof of certain of the violations alleged by petitioner consisted solely in the introduction into evidence and examination by the Master of the allegedly violative article. Proof of other allegations depended upon the testimony of expert witnesses concerning tests performed on respondents' pillows and comforters. The hearings before the Special Master were devoted almost entirely to the introduction of evidence falling into the latter category. For convenience of discussion I will group together all of the alleged violations involving proof of laboratory tests and consider them after I have discussed all of the other alleged violations.
By subparagraph 2(a) respondents were 'enjoined and restrained from using in connection with the manufacture, sale, offering for sale, or advertisement of pillows or of any other goods the trademarks Daron or Dacrilan or any variations thereof including Daran and DACRon-acrILAN, or any other colorable imitation of (petitioner's) trademark 'Dacron".
The only evidence in support of the alleged violation of subparagraph 2(a) was one pillow bearing the Daron label (Petitioner's Exhibit 31) which had been purchased by petitioner from a retail store in Baltimore, Maryland, subsequent to the entry of the consent decree. The Special Master found that petitioner had failed to prove that this pillow had been sold to the retail store subsequent to the entry of the consent decree. The petitioner does not object to this finding.
I find that the Special Master's conclusion is supported by the record before him and I, therefore, adopt as a finding of the Court the Special Master's finding of fact No. 9.
Under subparagraph 2(h) respondents are 'required to offer, by written or oral communication to each customer, to repurchase or relabel all of (respondents') pillows or other goods previously sold and bearing the terms Daron, Daran, Dacrilan, DACRon-acrILAN, or variations thereof, and to furnish (petitioner), prior to January 1, 1958, with a statement, signed by the president of (respondent) corporation, advising (petitioner) that such offer has been made and the results thereof.'
The allegation that respondents had violated subparagraph 2(h) was also supported only by the introduction into evidence of Exhibit 31, the pillow bearing the Daron label purchased by petitioner from a retail store after the entry of the consent decree. The corporate respondent's president, Louis Puro, testified that he had instructed all of respondents' salesmen 'on their trips to their stores, wherever they see a Daron pillow, to have the store send it back for credit.' (Tr. p. 432.) He further testified that roughly a few hundred such pillows were returned for credit and that to the best of his knowledge, no Daron pillows remained unsold in any store. In addition, Petitioner's Exhibit 41, a letter from Mr. Louis Puro to Mr. William Weigel, attorney for petitioner, purportedly outlining the steps taken to insure compliance with subparagraph 2(h) of the consent decree was introduced into evidence.
On cross-examination, Puro testified that Exhibit 41 refreshed his recollection that the steps outlined in that letter were carried out by respondents (Tr. p. 446). The Special Master who observed and heard the witness apparently believed this testimony, for he found that respondents had not violated the provisions of subparagraph 2(h) of the consent decree. I find that the Special Master's conclusion in this regard is not clearly erroneous. Accordingly, the Special Master's findings of fact 10 and 11 are correct and are adopted as findings of the Court.
Subparagraphs 2(b) and 2(c).
I shall consider subparagraphs 2(b) and 2(c) together.
Subparagraph 2(b) provides that respondents are 'enjoined and restrained from representing by any method whatsoever in connection with the manufacture, sale, offering for sale, or advertisement of pillows, or of any other goods, that said pillows or other goods are manufactured, distributed or sponsored by (petitioner).'
Subparagraph 2(c) provides that respondents are 'enjoined and restrained from doing any other act or thing calculated or likely to cause confusion or mistake in the minds of the public or to deceive purchasers into the belief that (respondents') goods come from or are the goods of (petitioner) or that (respondents have) any connection with (petitioner).'
In support of its allegation that respondents had violated subparagraphs 2(b) and 2(c), petitioner introduced into evidence two polyethylene pillow containers (Petitioner's Exhibits 10 and 11), the use of which subsequent to the entry of the consent decree is conceded by respondents. The Special Master found that the overall impression created by the labels on both the polyethylene containers is that the pillows are either petitioner's product or that the manufacturer is in some way connected with petitioner. He found, therefore, that there was a likelihood of confusion in the minds of the public that the pillows sold in these containers were manufactured by petitioner. My own examination of the two containers leads me to the conclusion that this finding by the Special Master is clearly correct. On both containers the words 'duPont' occupies an extremely prominent position. On Exhibit 10, this word is accompanied by the claim 'made to rigid duPont specifications'. The overall impression of the label is that the pillow was either manufactured by duPont or by someone under duPont's control and direction. Likewise, on Exhibit 11 the words 'New * * * DuPont * * * Dacron puff pillow' are prominently displayed. Particular emphasis is given to the word 'DuPont'. The conclusion is inescapable that the effect of this label will be to create a misapprehension on the part of prospective purchasers that the pillow contained therein is a product of petitioner. On the basis of the foregoing I find that the Special Master correctly concluded that the use by respondents subsequent to November 4, 1957 of polyethylene containers similar to Petitioner's Exhibits 10 and 11 constitutes a violation of subparagraphs 2(b) and 2(c) of the consent decree of November 4, 1957. The Special Master's findings of fact 12 and 13 are, therefore, adopted as findings of fact of the Court.
Under subparagraph 2(d) respondents are 'required to indicate affirmatively and prominently on all labels and invoices and in all advertising, making reference to (petitioner's) trademark 'Dacron', which are used on or relate to (respondents') goods which contain 'Dacron' polyester fiber, mixed with other fibers or materials, the minimum percentage by weight of said 'Dacron' polyester fiber and the presence of such other fibers or materials, and the fact that any 'Dacron' polyester fiber used therein is re-used, reclaimed or reprocessed, if such be the case.'
Petitioner alleges that subparagraph 2(d) has been violated in two respects:
(1) By failing to indicate on the so-called sew-in label and on the polyethylene container the percentage by weight of the Dacron polyester fiber contained in petitioner's 'Puron' pillows which are filled with a blend of Dacron and Acrilan.
(2) By falsely labelling its pillows, in that the label failed to disclose the presence of foreign fibers in pillows supposedly containing 100% Dacron and failed to disclose the correct percentage of Dacron in pillows containing a mixture of Dacron and Acrilan. This second alleged violation of subparagraph 2(d) will be discussed under the heading 'Laboratory Tests'.
Respondent's 'Puron' pillows
which are represented to contain 10% Dacron and 90% Acrilan, bear two labels: (a) the 'law-label' which is required by law on all pillows and which discloses, inter alia, the quantities by weight of the fibers contained therein; (b) the so-called 'sew-in' label (Petitioner's Exhibit 8) which is a manufacturer's label and which names the fibers contained therein, but does not give the relative weights of the fibers. Puron pillows are sold by respondents in polyethylene bags (Petitioner's Exhibit 7) which also indicate the types of fibers contained in the pillows, but fail to disclose the percentages by weight of those fibers. It is petitioner's contention that the failure to disclose on the sew-in label and polyethylene container the percentage by weight of Dacron in respondents' Puron pillows constitutes a violation of the provisions of subparagraph 2(d) of the consent decree.
Respondents do not deny that the sew-in label and container fail to disclose the percentage by weight of Dacron, but urge that they had complied with the requirements of subparagraph 2(d) by including the weight percentages of Dacron on the law-label. It is respondents' position that nothing more than this was required by subparagraph 2(d).
The Special Master correctly found that subparagraph 2(d) in clear and unambiguous language expressly requires that the percentages be placed on all labels and invoices and in all advertising. This language clearly embraces the sew-in label as well as the polyethylene container. In failing to comply with the provisions of this subparagraph respondents were in wilful contempt.
The Special Master found as a fact, and respondents do not deny, that in 1958 respondents manufactured and distributed approximately 30,000 Puron pillows, packaged and labelled in the manner indicated. The Special Master's findings of fact 14, 15, 16 and ...