TAYLOR WINE COMPANY, INC., Appellee, v. BULLY HILL VINEYARDS, INC., Appellant
Docket No. 77-7441, No. 296 - September Term, 1977
UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT
569 F.2d 731; 1978 U.S. App. LEXIS 13213; 196 U.S.P.Q. (BNA) 593
October 3, 1977, Argued
January 3, 1978, Decided
RIOR HISTORY:
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Appeal from preliminary injunction issued by the United States District Court for the Western District of New York (Burke, D.J.) enjoining defendant from use and infringement of plaintiff's "Taylor" trademark. The Court of Appeals held that the defendant was properly enjoined from trademark use of the word "Taylor" and from making claims implying some connection with the plaintiff company, but that the injunction should be modified to permit the signature of defendant's owner, Walter S. Taylor, to appear on labels and advertisements when accompanied by a disclaimer of affiliation with the plaintiff company.
DISPOSITION:
Affirmed in part, reversed in part, and remanded.
The order is affirmed in part, modified in part, and remanded for further proceedings in accordance with this opinion.
COUNSEL:
James M. Hartman, Rochester, New York (Harris, Beach, Wilcox, Rubin & Levey, Rochester, New York, of counsel), for Defendant-Appellant.
John Stuart Smith, Rochester, New York (Frank H. Penski and Nixon, Hargrave, Devans & Doyle, Rochester, New York, of counsel), for Plaintiff-Appellee.
JUDGES:
Hays, Gurfein and Meskill, Circuit Judges.
OPINIONBY:
GURFEIN
OPINION:
[*732] GURFEIN, Circuit Judge:
Bully [**2] Hill Vineyards, Inc. appeals from a preliminary injunction order issued by the U.S. District Court of the Western District of New York, Burke, J., on August 10, 1977, enjoining it from using and infringing the trademarks owned by the plaintiff, the Taylor Wine Company, Inc., and from engaging in acts of unfair competition. There was no trial below. The injunction was granted on findings of fact and conclusions of law based upon the affidavits submitted. n1
n1 The grant or denial of a preliminary injunction is customarily within the discretion of the district court, and the decision will not be disturbed on review unless there has been an abuse of that discretion. See State of New York v. Nuclear Regulatory Commission, 550 F.2d 745, 750-51 (2d Cir. 1977); Triebwasser & Katz v. A.T. & T. Co., 535 F.2d 1356, 1358 (2d Cir. 1976); 7 Moore's Federal Practice Para. 65.04[2], at 65-47 to 65-49, Para. 65.21 at 85 (Supp. 1976-77). This, of course, does not mean that we must inevitably affirm the district court's decision. See Omega Importing Corp. v. Petri-Kine Camera Co., 451 F.2d 1190, 1197 (2d Cir. 1971) (Friendly, J.) (... Congress would scarcely have made orders granting or refusing temporary injunctions an exception to the general requirement of finality as a condition to appealability ... if it intended appellate courts to be mere rubber-stamps save for the rare cases when a district judge has misunderstood the law or transcended the bounds of reason). Carroll v. American Federation of Musicians, 295 F.2d 484, 488-89 (2d Cir. 1961) (Friendly, J.). In trademark cases, a preliminary injunction will lie where there is a likelihood of confusion by shoppers, Hills Bros. Coffee, Inc. v. Hills, Supermarkets, Inc., 428 F.2d 379 (2d Cir. 1970).
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[*733] The broad order enjoined Bully Hill from using the word "Taylor" or any colorable imitation thereof in connection with any labeling, packaging materials, advertising, or promotional materials for any of its products, from infringing plaintiff's trademarks, and from continuing to engage in acts of unfair competition. A panel of this court denied a stay and the matter is here on Bully Hill's appeal. 28 U.S.C. § 1292(a).
The plaintiff, Taylor Wine Company, Inc., has marketed wine from the Finger Lakes region of New York under the Taylor name since 1880, and since 1927 has registered thirteen Taylor trademarks in the U.S. Patent Office, and used them in commerce. It has spent almost ten million dollars in advertising its wine products under the Taylor name in the last ten years. The District Court found that the Taylor trademarks have come to be accepted by the consuming public as identifying the distinctive product of the Taylor Wine Company.
Walter S. Taylor owns the defendant company, Bully Hill Vineyards, Inc. He is the grandson of Walter Taylor who, in 1878, started a winery on Bully Hill. The defendant company was established in 1970, selling its products under [**4] the brand name of Bully Hill. At some time before May, 1977, the defendant began to market a new line of wines under a brand name "Walter S. Taylor."
"Walter S. Taylor" appears in large print on the front, back or both of labels of defendant's wines. The word "Original" is displayed in large print or otherwise given prominence. At various places, the name "Walter S. Taylor" is used with the statement "Owner of the Estate" or "Owner of the Taylor Family Estate." Bully Hill has also stated on labels and in its advertising that it was founded in 1878. In fact, the grandfather of the present Taylor with some partners, formed a partnership whose assets were later conveyed in the lifetime of Walter S. Taylor's father to the plaintiff company. Whatever trademark use of the name "Taylor" inhered in the partnership was transferred with the wine business to the plaintiff corporation. Bully Hill, the vineyard, itself did not stay in the Taylor family but was sold to strangers. Walter S. Taylor bought it in 1958. Thus, neither the use of "Taylor" as a trademark nor the vineyards at Bully Hill devolved upon Walter S. Taylor, the grandson, by descent.
Appellant contends that its use of "Taylor" [**5] as a trademark does not infringe the appellee's trademarks because the appellant's wines are better and are not in actual competition with appellee's wines. It also urges us to say that the injunction is too broad, in any case, and that it would be enough if we made Bully Hill add some distinguishing words if it chooses to use Walter S. Taylor's own surname as a trademark.
This is not a case where a first comer seeks to save himself a place in a new market he has not yet entered by denying to a man the use of his own name in exploiting that market. Cf. S. C. Johnson & Son, Inc. v. Johnson, 116 F.2d 427 (2d Cir. 1940). The wines of defendant and plaintiff compete in the same general market. It is a truism that every product has its own separate threshold for confusion of origin. Wine is a product whose quality is accepted by many simply on faith in the maker. They can perhaps identify the vintner better than the wine.
It is doubtless true that some wartime soldiers did bring back from Europe an inchoate taste for wine and for some of its nuances, and that other Americans have [*734] acquired a similar taste. Yet, the average American who drinks wine on occasion can hardly [**6] pass for a connoisseur of wines. He remains an easy mark for an infringer. Whether appellant's or appellee's wines are better is not the issue. Trespass upon the secondary meaning of the Taylor brand name, developed at great cost over the years, cannot be forgiven on the ground that subtlety of taste will avoid the confusion inherent in the overlapping labels and representations of origin.
We do not doubt that Walter S. Taylor, a former employee of the plaintiff, knew well the customer appeal of the Taylor name, nor that he chose to capitalize on the name as if his grandfather had left it to him as an inheritance. The only serious question we must meet is whether the injunction is too broad.
The conflict between a first comer who has given a secondary meaning (as well as trademark registration) to a family name, and a later comer who wishes to use his own true family name as a trademark in the same industry has been one of the more interesting issues in the law of trademark infringement. The problem is made more difficult when the second comer has his own background of experience in the particular industry, and is not simply a newcomer. See John T. Lloyd Laboratories, Inc. v. Lloyd [**7] Brothers Pharmacists, Inc., 131 F.2d 703 (6th Cir. 1942).
In the nineteenth and earlier twentieth centuries, both the state and federal courts tended to be highly solicitous of an individual's personal right to use his name in trade. Brown Chemical Co. v. Meyer, 139 U.S. 540, 35 L. Ed. 247, 11 S. Ct. 625 (1891); Howe Scale Co. v. Wyckoff, Seamans & Benedict, 198 U.S. 118, 49 L. Ed. 972, 25 S. Ct. 609 (1905); Meneely v. Meneely, 62 N.Y. 427 (1875). See McCarthy, Trademarks in Unfair Competition, § 13.3 pp. 459-560 (1973 ed.).
With the passage of the Federal Trade-Mark Act of 1905, 33 Stat. 742, and an increasing commercial reliance on marketing techniques to create name recognition and goodwill, the courts adopted a more flexible approach to the conflicting property interests involved in surname trademark infringement cases. By 1908, the Supreme Court was willing to enjoin the use of a surname unless accompanied by a disclaimer. Herring-Hall-Marvin Safe Co. v. Hall's Safe Co., 208 U.S. 554, 559-60, 28 S. Ct. 350, 52 L. Ed. 616 (1908). Shortly thereafter, in Thaddeus Davids Co. v. Davids, 233 U.S. 461, 58 L. Ed. 1046, 34 S. Ct. 648 (1914) and L. E. [**8] Waterman Co. v. Modern Pen Co., 235 U.S. 88, 59 L. Ed. 142, 35 S. Ct. 91 (1914), the Supreme Court established what has since become a guiding principle in trademark surname cases. Once an individual's name has acquired a secondary meaning in the marketplace, a later competitor who seeks to use the same or similar name must take "reasonable precautions to prevent the mistake." L. E. Waterman Co., supra, at 94.
It is, however, difficult to distill general principles as to what are "reasonable precautions" from the Supreme Court's decisions in Thaddeus Davids and Waterman. In Davids, supra, the Court affirmed without modification a lower court decree enjoining entirely the use of the words "Davids" or "Davids Mfg. Co." in connection with the manufacturing and sale of inks. 233 U.S. at 472. In Waterman, supra, on the other hand, the Supreme Court affirmed without modification a lower court's injunction which simply prescribed the use of a full first name instead of an initial, and required a notice of disclaimer. n2
n2 Courts have framed relief differently even when the threat of confusion has been much the same. In Hat Corporation of America v. D. L. Davis Corp., 4 F. Supp. 613 (D. Conn. 1933), the court granted an absolute injunction restraining the use of the name "Dobbs" on hats. Yet in John B. Stetson v. Stephen L. Stetson, 85 F.2d 586 (2d Cir.), cert. denied, 299 U.S. 605, 81 L. Ed. 446, 57 S. Ct. 232 (1936), the district court determined, and the court of appeals affirmed that a "Notice of Disclaimer" would suffice to dissipate public confusion.
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