North Carolina Dairy Foundation, Inc. v. Foremost-McKesson, Inc.
North Carolina Dairy Foundation, Inc. v. Foremost-McKesson, Inc.
Opinion of the Court
Opinion
Defendants, Foremost-McKesson, Inc. and Weyerhaeuser Company, appeal from an order granting a preliminary injunction in favor of plaintiffs, North Carolina Dairy Foundation, Inc; (Foundation), G. P. Gundlach & Company, and Knudsen Corporation, enjoining defendants from infringing upon plaintiffs’ trademark “Sweet Acidophilus” (hereafter “SA”) or engaging in any domestic marketing
Procedural Background
Plaintiffs filed a complaint for trademark infringement and unfair competition and false and misleading advertising alleging in substance that: plaintiff Foundation, a nonprofit foreign corporation, developed and perfected a new strain of lactobacillus acidophilus (LBA), a fermenting bacteria used in milk products to aid digestion. The new culture and processing technique eliminates the sour-taste effect caused by the fermenting LBA additive producing a natural or “sweet” tasting milk containing the beneficial digestive properties. Plaintiff Foundation coined and adopted the term “SA” as a trademark for such milk products and granted exclusive promotion and licensing rights to plaintiff Gundlach. Plaintiff Knudsen, the exclusive California sublicensee, undertook qn extensive sales and promotional campaign in northern California to establish a market for its newly trademarked products. Within weeks, defendant Foremost, using milk cartons manufactured by defendant Weyerhaeuser, began distribution of its own Tuttle name-brand milk products prominently featuring a similar “SA” mark (see appendix) in a manner likely to create buyer confusion as to the product source. Defendants answered generally denying the charging allegations and alleging the mark possessed no inherent trademark significance and had not acquired a secondary meaning justifying trademark protection.
Plaintiffs’ motion for a preliminary injunction was heard and determined on the basis of numerous declarations and exhibits submitted by the parties and amici.
The single question presented is whether the term “SA” under the circumstances shown possesses protectable trademark significance appropriate for preliminary relief.
Defendants argue that the generic and descriptive words “sweet” and “acidophilus,” cannot be exclusively appropriated from the public domain and that a mark comprised of such words cannot attain trademark significance through an acquired secondary meaning. Moreover, it is argued, the evidence supporting plaintiffs’ trademark claim is insufficient and the resulting preliminary injunction constituted an abuse of discretion. Plaintiffs counterargue that the composite mark is protect-able as (1) an inherently distinctive term or (2) a descriptive term with an acquired secondary meaning. We conclude that the record adequately sustains the latter argument and that interim relief was properly granted.
Scope of Review
In reviewing the conflicting evidence supporting the issuance of the preliminary injunction, we must apply the test of substantial evidence and indulge all reasonable inferences in support of the findings implicit in the trial court’s determination. (People v. Columbia Research Corp. (1977) 71 Cal.App.3d 607, 610 [139 Cal.Rptr. 517]; City and County of San Francisco v. Evankovich (1977) 69 Cal.App.3d 41, 54 [137 Cal.Rptr. 883]; Metro-Goldwyn-Mayer, Inc. v. Lee (1963) 212 Cal.App.2d 23, 27-28 [27 Cal.Rptr. 833]; 6 Witkin, Cal. Procedure (2d. ed. 1971) Appeal, § 249, p. 4241.) In doing so, we look to determine whether in exercising its discretion the trial court properly balanced the respective interests and resulting inconvenience to the parties (Williams v. Los Angeles Ry. Co. (1907) 150 Cal. 592, 596 [89 P. 330]) with the objective of preventing manifest injustice pending trial on the merits. (See Metro-Goldwyn-Mayer, Inc. v. Lee, supra, 212 Cal.App.2d 23, 31-32.) If the evidence supports an implied finding that injunctive relief pendente lite is required in order to prevent probable irreparable injury, a reviewing court may not overturn the exercise of such discretion. (See Winfield v. Charles (1946) 77 Cal.App.2d 64, 70 [175 P.2d 69]; Sun-Maid Raisin
Evidence
The documentary evidence, viewed in a light favorable to plaintiffs (Metro-Goldwyn-Mayer, Inc. v. Lee, supra, 212 Cal.App.2d 23, 27-28) reveals the following:
For many years, a micro-organism known by its Latin name, LBA (a lactic acid fermenting agent), has been added to milk as an aid to digestion. When combined with the normal lactic acids, the resultant fermented milk, commonly called acidophilus milk (see Agr. Code, § 38521* *
I
Generic and Descriptive Terms
Under common law principles governing mercantile trademarks, only inherently distinctive marks (i.e., fanciful, arbitrary or suggestive) used to identify a particular product are protectable immediately upon use without necessity for proof of secondary meaning.
II
Doctrine of Secondary Meaning
An otherwise descriptive term or mark may achieve a protectable status whenever the quality of distinctiveness has—in fact—been acquired through a demonstrated secondary meaning. (Armstrong Co. v. Nu-Enamel Corp. (1938) 305 U.S. 315, 335-336 [83 L.Ed. 195, 207, 59 S.Ct. 191]; Coca-Cola Co. v. Koke Co. (1920) 254 U.S. 143 [65 L.Ed. 189, 41 S.Ct. 113]; Carter-Wallace, Inc. v. Procter & Gamble Company (9th Cir. 1970) 434 F.2d 794, 802; W. E. Bassett Company v. Revlon, Inc. (2d Cir. 1966) 354 F.2d 868, 871; Jackson v. Universal Internat. Pictures (1950) 36 Cal.2d 116 [222 P.2d 433]; Academy of Motion Picture, etc. v. Benson (1940) 15 Cal.2d 685 [104 P.2d 650]; Metro-Goldwyn-Mayer, Inc. v. Lee, supra, 212 Cal.App.2d 23; see generally 47 Cal.Jur.2d, Trademarks, § 27, pp. 746-747; 74 Am.Jur.2d, Trademarks and Tradenames, §§ 64-68,
The purpose of the equitable doctrine is to prevent unfair competition through misleading or deceptive use of a term exclusively identified with the claimant’s product and business (see Academy of Motion Picture, etc. v. Benson, supra, 15 Cal.2d 685, 689-690), affording judicial protection whenever “the name and the business [through continued association] become synonymous in the public mind; and submerges the primary meaning of the name ... in favor of its meaning as a word identifying that business.” (Visser v. Macres (1963) 214 Cal.App.2d 249, 253 [29 Cal.Rptr. 367].) The crucial element is the mental association in the buyer’s mind between the mark used in connection with the product and a single source of origin. (Carter-Wallace, Inc. v. Procter & Gamble Company, supra, 434 F.2d 794; Mac Sweeney Enterprises v. Tarantino (1965) 235 Cal.App.2d 549 [235 P.2d 266]; Visser v. Macres, supra, 214 Cal.App.2d 249; National Shoe Stores Co. v. National Shoes of N.Y. (1957) 213 Md. 328 [131 A.2d 909].) Such “source” identification does not, however, mean that the buyer must actually know the name of the source but only that the buyer directly associate the mark with but one, though, anonymous, source. (See California Apparel Creators v. Wieder of California (2d Cir. 1947) 162 F.2d 893, 897-898; Rest., Torts (1938) § 715, com. b.) In a pragmatic sense, the concept of secondary meaning and probability of buyer confusion are directly interrelated in that confusion is likely to arise only where the buyer has come to recognize the mark as associated solely with the claimant source. As succinctly stated by then Presiding Justice Burke, “ . . . secondary meaning is a shorthand phrase which describes the existence of conditions from which public confusion will flow if the defendant is permitted to pursue his deceptive scheme [citation]. If words have been used or employed ... in such a manner that the public has learned to associate them with the thing described, they acquire a
Contrary to Foremost’s assertion, the combination of two or more genetically descriptive words as a composite mark may result in a composite which is nondescriptive as a unitaiy term eligible for trademark protection. (Cf. Coca-Cola Co. v. Koke Co., supra, 254 U.S. 143; Firestone Tire & Rubber Co. v. Goodyear Tire & Rubber Co. (1975) 186 U.S.Pat.Q. 557 [affd. 189 U.S.Pat.Q. 348]; see 1 McCarthy, §§ 11:10, 12:12, pp. 364-365, 427.) The validity of a composite mark must be determined by viewing it in its entire and unfragmented context since “[t]he commercial impression of a trade-mark is derived from it as a whole, not from its [separated] elements . . . .” (Beckwith v. Commr. of Patents (1920) 252 U.S. 538, 545-546 [64 L.Ed. 705, 708, 40 S.Ct. 414].) So long as the primary significance of the descriptive term in the minds of the buying public is shown to be the product source rather than the product, then trademark protection will be extended under the doctrine. (Cf. Kellogg Company v. Nat. Biscuit Co., supra, 305 U.S. 111, 118 [83 L.Ed. 73, 78]; see Ball v. American Trial Lawyers Assn., supra, 14 Cal.App.3d 289, 302; Cowles Magazines & Broadcasting, Inc. v. Elysium, Inc. (1967) 255 Cal.App.2d 731, 735 [63 Cal.Rptr. 507]; Metro-Goldwyn-Mayer, Inc. v. Lee, supra, 212 Cal.App.2d 23, 30; Industrial Photo Service v. Kelly (1961) 198 Cal.App.2d 665, 668 [17 Cal.Rptr. 907]; Family Record Plan, Inc. v. Mitchell (1959) 172 Cal.App.2d 235, 242 [342 P.2d 10].)
Whether a descriptive term or mark has acquired a secondary meaning is ultimately a question of fact. (Educational Development Corp. v. Economy Co., supra, 562 F.2d 26, 29-30; Cowles Magazines & Broadcasting, Inc. v. Elysium, Inc., supra, 255 Cal.App.2d 731, 735; Visser v. Macres, supra, 214 Cal.App.2d 249, 254; Family Record Plan, Inc. v. Mitchell, supra, 172 Cal.App.2d 235, 243; Johnston v. 20th Century-Fox Film Corp. (1947) 82 Cal.App.2d 796, 813 [187 P.2d 474].) As summarized by one leading authority: “Facts which are relevant in proving the existence of a secondary meaning include the duration and continuity of the use of the name [citations]; the extent of advertising and
Moreover, the contemporaneous consumer reaction highlighted by the increased sales of Knudsen products, coupled with the graphic similarity
In view of such evidence, including the wide selection of competitive terms of phrases available to defendants,
Order granting preliminary injunction affirmed.
Elkington, J., and Newsom, J., concurred.
Carnation Company, one of the amici appearing herein, is a named party in a companion appeal, 1 Civil No. 44978.
Since it appears that the trial court’s determination of protectable trademark status was expressly based upon findings of secondary meaning, we limit our discussion to the merits of that claim and do not reach the separate issue whether the mark is alternately protectable as an inherently distinctive or fanciful term.
Section 38521 provides: “Acidophilus milk is market milk, skim milk that is derived from market milk, or a combination of market milk and skim milk that is derived from market milk, which has been pasteurized and afterward fermented by a pure culture of a strain, or strains, of Lactobacillus acidophilus.”
The term “SA” is a literal contradiction since the fermenting bacterial agent, acidophilus, is itself tasteless. The generic and descriptive term, as used in milk products, is familiar to relatively few buyers (mainly health food enthusiasts) and generally connotes a sour-tasting milk. Thus, plaintiffs’ mark describes a nonfermented, sweet-tasting product in literally contrasting terms.
These principles have been codified in the relevant trademark registration statutes. (See 15 U.S.C. § 1051 et seq.; Bus. & Prof. Code, § 14200 et seq.) Though formal registration constitutes presumptive evidence of ownership of the mark (see, e.g., Bus. &
Generally defined as: “relating to ... or descriptive of all members of a genus, species, class, or group.” (Webster’s Third New Internat. Diet., p. 945.)
We agree with Foremost’s contention that the relevant market area insofar as Knudsen’s trademark claim is concerned would be limited to California. (See generally 74 Am.Jur.2d, Trademarks and Tradenames, § 17, pp. 714-715.)
As plaintiffs perceptively suggest, a variety of descriptive terms were and are available to competitors: e.g., “acidophilus milk,” “fresh acidophilus milk,” “tasty acidophilus milk,” “unfermented acidophilus milk,” etc. Such use of the generic term as a common descriptive adjective is generally permissible. (See Firestone Tire & Rubber Co. v. Goodyear Tire & Rubber Co. (1976) 189 U.S.Pat.Q. 348, 350.)
Reference
- Full Case Name
- NORTH CAROLINA DAIRY FOUNDATION, INC., and v. FOREMOST-McKESSON, INC., and
- Cited By
- 14 cases
- Status
- Published