The opinion of the court was delivered by: LEVAL
Plaintiff brings this action under the trademark laws of the United States, seeking to enjoin defendant from franchising or licensing of the "Dunhill Tailors" name.
Plaintiff Alfred Dunhill of London, Inc. ("U.S. Dunhill"), a Delaware corporation with its principal place of business in New York, is a wholly owned subsidiary of plaintiff Alfred Dunhill Limited ("British Dunhill"). U.S. Dunhill is the exclusive user of the trade name and trademark "Dunhill" in the United States; British Dunhill is the owner of the trade name and trademark "Dunhill" elsewhere in the world.
U.S. Dunhill retails "Dunhill" products from eight stores in the United States
and to mail order customers throughout the United States. U.S. Dunhill also wholesales such products throughout the United States; British Dunhill and other related corporations retail and wholesale such products throughout the rest of the world.
The products sold by U.S. Dunhill include smoking articles, jewelry, small leather goods, luggage, toiletries, bar goods and accessories, writing instruments, desk accessories, clocks and menswear. "Menswear" includes shirts, sweaters, ties, robes, hats, outerwear, and slippers, all sold under the "Dunhill" name.
For the purposes of this litigation, U.S. Dunhill and British Dunhill will be referred to jointly as "plaintiff."
Defendant Dunhill Tailored Clothes, Inc., manufactures menswear, including clothing, accessories, ties, shirts, undershorts, socks, and footwear. It retails these items under its label at its New York store and sells its goods to mail order customers, through catalogs and advertisements in national publications. It wholesales goods to other retailers in the United States to be resold under defendant's trademark.
There is a long history of prior trademark litigation between these parties. In 1957, plaintiff brought an action to enjoin defendant from using the trademarks "Dunhill," "Dunhill Tailors," or "Dunhill Tailored Clothes, Inc." on any of its products. A seven-day trial was held before Judge Edward J. Dimock of this court, in which both parties presented considerable evidence on the merchandise each sold, the manner of sale, and the prior relationship between them. The evidence showed that defendant had sold its goods under the Dunhill name from its first store on Fifth Avenue in New York from 1923 until 1927, and had conducted a retail and small wholesale business from its second store on West 32nd Street in New York from 1927 to 1933. The defendant had advertised in national publications and on national radio broadcasts; its activities included the manufacture of suits for sale through the John Wanamaker Store in New York; the operation of leased departments
for the sale of custom-made clothes in Macy's department store in New York City and Bamberger's department store in Newark, N.J.; and defendant's goods were advertised and sold at the Hattie Carnegie Men's Shop in Palm Beach, Florida. All of these sales and activities were conducted under the "Dunhill" label. There was also testimony concerning a discussion between representatives of plaintiff and defendant regarding the establishment by defendant of a Dunhill Tailors department within plaintiff's store in Beverly Hills, Calif.
Judge Dimock found that defendant's use of the name and mark "Dunhill" was an infringement of plaintiff's mark and constituted unfair competition. On the other hand, Judge Dimock found that acts and conduct of representatives of plaintiff amounted to "an implied assurance by plaintiff to defendant that defendant might continue the sale (of certain products) under the name ... "Dunhill Tailors'." Judge Dimock's ruling permanently enjoined defendant from the use of the mark "Dunhill," but authorized the defendant to
"... use the words " "Dunhill Tailors' on or in connection with the advertising, offering for sale and sale, including use in its corporate title, of the following products for men, as such products are defined in the Findings of Fact filed herein, namely, clothing, jewelry, toiletries, haberdashery, flat leather goods, luggage and silent valets;
"Provided, however, that when defendant so makes any use of "Dunhill Tailors,' the words "Tailors' shall always be horizontally juxtaposed to "Dunhill' and shall always be in the same form, font, style, size and color and as prominent as "Dunhill,' and provided further that defendant shall not use "Dunhill Tailors' in lower case type."
The ruling expressed no limitation on the manner of defendant's distribution of its goods, or on the geographic area in which defendant might use the mark "Dunhill Tailors".
After the 1958 litigation, defendant obtained, after contested proceedings, two federal registrations for its "Dunhill Tailors" trademark. Each of these provides for use of the mark "Dunhill Tailors" on terms consistent with Judge Dimock's order. By agreement dated December 4, 1967, the parties settled a dispute concerning trademark rights. Neither the registrations nor the settlement agreement contains any limitation as to the manner or the geographic area in which defendant's goods may be sold.
In 1970, plaintiff again brought suit to prevent defendant from wholesaling men's clothing, toiletries, or other products. This litigation was concluded by a settlement agreement dated January 11, 1972, which set out a list of products that defendant was permitted to wholesale under the "Dunhill Tailors" trademark.