Armstrong Cork Company and Armstrong World Industries, Inc., Plaintiffs- Cross-Appellees v. World Carpets, Inc., Cross-Appellants

Fifth Circuit

Armstrong Cork Company and Armstrong World Industries, Inc., Plaintiffs- Cross-Appellees v. World Carpets, Inc., Cross-Appellants

597 F.2d 496

CourtCourt of Appeals for the Fifth Circuit

DecidedAugust 10, 1979

Docket78-1919

StatusPublished

Cited by88 cases

This text of 597 F.2d 496 (Armstrong Cork Company and Armstrong World Industries, Inc., Plaintiffs- Cross-Appellees v. World Carpets, Inc., Cross-Appellants) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fifth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

Armstrong Cork Company and Armstrong World Industries, Inc., Plaintiffs- Cross-Appellees v. World Carpets, Inc., Cross-Appellants, 597 F.2d 496 (5th Cir. 1979).

Pincite

Opinion

JOHN R. BROWN, Chief Judge:

In this case, we fly by magic carpet through the exotic and esoteric realm of trademark law and the Lanham Act, 15 U.S.C.A. §§ 1051-1127. Armstrong Cork Company (Armstrong), plaintiff below, appeals from a District Court order enjoining Armstrong from using its proposed new corporate name, Armstrong World Industries, Inc. World Carpets, Inc. (World), defendant below, appeals from the District Court’s ruling that Armstrong had not violated the Georgia Fair Business Practices Act of 1975, Ga.Code Ann. §§ 106-1201 to 1217. The main issue on appeal is whether, the District Court was correct in ruling that Armstrong’s use of its proposed corporate name would infringe World’s rights in its registered trademarks WORLD and WORLD with a globe symbol. We conclude that the District Court’s finding of trademark infringement was incorrect. The District Court’s order of injunction is reversed and its ruling on the state law issue is affirmed.

I. In The Beginning The Carpetbaggers

Armstrong is a Pennsylvania corporation that manufactures home furnishing products, including hard surface flooring, ceiling material, furniture, and carpeting. Armstrong has ten foreign subsidiaries and affiliates located in eight foreign countries. Armstrong’s products are sold in over 100 countries. From 1950 to 1976, Armstrong spent approximately 180 million dollars in advertising.

Armstrong sells its products under various trademarks, such as Armstrong with a circled A and Evans & Black. Armstrong is also the owner of registered trademarks INDOOR WORLD and THE INDOOR WORLD, which refer to Armstrong’s interi- or decorating services and cotton piece goods.

Although Armstrong is best known for its hard surface flooring products, Armstrong is also a manufacturer of tufted carpets. In the early part of this century, Armstrong manufactured or sold carpet under various trade names, culminating with the Deltox label that was discontinued in the early 1960’s. In 1966, Armstrong acquired Brinton Carpets, a Canadian producer of woven and tufted carpeting. In 1967, Armstrong acquired Evans & Black of Texas and Georgia, a tufted carpet producer. Armstrong is now one of the largest producers of carpets. As required by federal law, the Armstrong corporate name appears on every label of carpet manufactured or warranted by Armstrong.

Since 1973, Armstrong has operated a wholly-owned subsidiary, Pacific World. Pacific World is the wholesale distributor of Armstrong carpets in California and the surrounding areas. Pacific World has approximately six to seven million dollars in annual sales.

For some time now, Armstrong has been considering a name change. Because cork has ceased to be a significant part of Armstrong’s product line, Armstrong’s executives concluded that the corporate name Armstrong Cork Company no longer provided an appropriate description of Armstrong’s business. Deciding to change to a corporate name that was “more reflective of what the Armstrong Cork Company is today,” Armstrong embarked upon what has been a rocky road to name change. Testimony of James Binns, Pres., Armstrong Cork Co.

Before deciding upon Armstrong World Industries, Inc., Armstrong considered other names, such as Armstrong International, Armstrong Industries, and Armstrong Indoor World Industries. Armstrong International and Armstrong Industries could not be cleared for use in certain states because of existing companies with identical names. Armstrong Indoor World Industries was not adopted because it was considered too restrictive.

*499 Armstrong eventually settled upon the name Armstrong World Industries, Inc. The proposed name was approved by Armstrong’s shareholders in 1977. Armstrong then formed a Delaware nameholder corporation, Armstrong World Industries, Inc., and received permission to do business in that name in all fifty states.

At this point, World pulled the rug from under Armstrong’s corporate feet, objecting to the proposed name change.

The Rug Beaters

World is a Georgia corporation manufacturing tufted textile carpets in a variety of styles and colors. Organized in 1954, World is a closely-held corporation with subsidiaries in seven metropolitan areas throughout the United States and with export sales in twenty-five countries, including Australia, England, Germany, and Japan. World’s annual sales exceed 100 million dollars. World has an established reputation in the carpet industry as a “trend setter.” Nationwide, World has spent approximately eighteen million dollars on newspaper, magazine, and television advertising.

World is the owner of federal registered trademarks WORLD and WORLD with a globe symbol. The federal trademark WORLD has become incontestable under Section 15 of the Lanham Act, 15 U.S.C.A. § 1065.

World and Armstrong are major competitors in the carpeting industry. Their manufacturing processes are similar. They have similar sales and distribution methods. For example, the companies frequently market their products through the same retail stores. Both companies typically furnish distributors and retailers with sample books, display racks, and other promotional materials. Armstrong and World both advertise in the same magazines, often on adjacent pages. The companies use the same toll-free telephone number for consumer inquiries.

II. How It Went: A Rug By Any Other Name

When efforts to resolve the name change dispute failed, Armstrong brought this declaratory judgment action, seeking a ruling that its proposed new corporate name did not infringe or unfairly compete with World’s rights in its registered trademarks, WORLD and WORLD with a globe symbol. 1 World counterclaimed for an injunction restraining Armstrong’s use of the new name and for damages and attorneys fees for violations of the Georgia Fair Business Practices Act of 1975, Ga.Code Ann. §§ 106 1201 to 1217. A jury was impaneled for a determination of World’s counterclaim for damages. The jury found that World was not entitled to exemplary or punitive damages. The jury also made advisory findings of fact that Armstrong’s use of the proposed name was likely to cause confusion, was not a good faith, fair, and descriptive use of the word World, and was an unfair trade practice. The District Court then made its own findings of fact and conclusions of law and enjoined Armstrong from using the proposed name.

The District Court held that World was entitled to injunctive relief because Armstrong carpet sold by Armstrong World Industries, Inc. would likely be confused with carpet sold by World and that therefore Armstrong’s use of its proposed corporate name would infringe World’s trademark rights. 2 The Court further held that Arm *500 strong could not claim protection under the “fair use” defense of Section 33(b)(4) of the Lanham Act. 3

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