Drug Fair-Community Drug Co. v. Drug Fair, Inc.

309 A.2d 363, 453 Pa. 454, 180 U.S.P.Q. (BNA) 278, 1973 Pa. LEXIS 692
CourtSupreme Court of Pennsylvania
DecidedSeptember 19, 1973
DocketAppeal, No. 406
StatusPublished
Cited by7 cases

This text of 309 A.2d 363 (Drug Fair-Community Drug Co. v. Drug Fair, Inc.) is published on Counsel Stack Legal Research, covering Supreme Court of Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Drug Fair-Community Drug Co. v. Drug Fair, Inc., 309 A.2d 363, 453 Pa. 454, 180 U.S.P.Q. (BNA) 278, 1973 Pa. LEXIS 692 (Pa. 1973).

Opinion

Opinion by

Mr. Justice Nix,

The primary issue presented in this appeal is whether appellant, a foreign corporation with its principal place of business in Baltimore, Maryland, should be permitted to restrain appellee, Drug Fair, Inc. a Pennsylvania corporation with its principal place of business in Philadelphia, from doing business under its eorpo[456]*456rate name on the ground that appellee’s use of the name “Drug Fair” infringes appellant’s rights in said name.

Appellant filed a complaint in equity to enjoin appellee from using the name “Drag Fair”. A hearing was held on the complaint and the chancellor issued a decree nisi, denying appellant relief. Exceptions to the adjudication were argued before the court en banc which denied the same in an adjudication filed November 25, 1969. From the final decree thus entered, this appeal followed.

The facts as found by the chancellor and approved by the court en banc insofar as they are relevant to this appeal are as follows: Appellant operates a chain of ninety-four retail drug stores, selling a variety of goods in addition to pharmaceuticals throughout Virginia, Maryland, West Virginia and the District of Columbia. The name “Drag Fair” has been used by appellant in its business operations since the year 1951. Moreover, appellant has used the “Drag Fair” in advertising for approximately fifteen years in newspapers, trade magazines, radio, television and spends in excess of one million dollars ($1,000,000.00) per year on advertising. Further, the lower court found that appellant did not own or operate any stores in Pennsylvania1 and in fact, appellant’s only advertising in the Commonwealth was in the classified section of various news media for employment of pharmacists. It engaged in no consumer advertising of its products in Pennsylvania.

Appellee was incorporated in Pennsylvania, July 15, 1964, and registered under the Fictitious Corporate Name Act,2 on or about July 29, 1964. It operates two retail drug stores in Philadelphia as Drag Fair, Inc. and sells a variety of goods in addition to pharmaceuti[457]*457cals. The lower court found that at the time of incorporation, appellee’s principals were aware of other businesses trading under the name “Drug Fair” but were not aware of the nature or extent of that use and did not specifically know of appellant’s chain. The court further found that appellant, through its attorney, first notified appellees of its interest in the name “Drug Fair” approximately six weeks after appellee was incorporated but delayed bringing suit until five months after the opening of appellee’s first store, a delay which was prejudicial to the appellee.

The court below concluded that appellee’s use of the name “Drug Fair” was not intended to deceive or trade upon appellant’s reputation, that the name “Drug Fair” had not acquired any secondary meaning in Pennsylvania, and that its use by appellee did not constitute an unfair method of competition. Accordingly, it was ordered that appellee should not be enjoined from the use of the name “Drug Fair” in the operation of its business. We agree and therefore affirm.

Whether or not appellant is entitled to injunctive relief for alleged trade name infringement is dependent upon whether its trade name, “Drug Fair” had acquired a secondary meaning in Pennsylvania.

“The law in this class of cases is well established; its application to different facts and circumstances is sometimes difficult. Descriptive, geographical and generic words, as well as words of common or general usage belong to the public and are not capable of exclusive appropriation by anyone. This general principle is subject to the limitation or exception that if a trade name or trade-mark or other word or words have acquired, m the trade and in the minds of the purchasing public, a special or so-called secondary meaning, i.e., have come to mean that the article is the product of a certain manufacturer or of a particular individual or corporation, such trade name or trade-mark or word [458]*458or words will be protected against infringement: [citing cases].” Kool Vent Metal Awning Corp. v. Price, 368 Pa. 528, 532-33, 84 A. 2d 296, 298 (1951) (emphasis in original). See Miscellaneous, Inc. v. Klein’s Fashions, Inc., 452 Pa. 62, 305 A. 2d 22 (1973); Zimmerman, v. Holiday Inns of America, Inc., 438 Pa. 528, 266 A. 2d 87 (1970); Zimmerman v. B. & C. Motel Corp., 401 Pa. 278, 163 A. 2d 884 (1960); Quaker State Oil Refining Co. v. Steinberg, 325 Pa. 273, 189 A. 473 (1937).

A thorough examination of the instant record convinces us that the name “Drug Pair” had not acquired a secondary meaning in the minds of the purchasing public of Pennsylvania prior to its adoption by appellee. The uncontradicted evidence adduced at trial shows that at the time of appellee’s incorporation appellant made no sales in Pennsylvania, operated no stores in Pennsylvania and did no retail advertising in Pennsylvania. Clearly, Pennsylvania consumers had no reason to associate the name “Drug Pair” with appellant’s chain of retail stores.

We agree with appellant that under appropriate circumstances a national chain can enjoin a local merchant’s use of a trade name even though the national chain did not engage in business in the local area until after the local operator began business. We agree with the reasoning of the 4th Circuit in the case of Food Fair Stores, Inc. v. Lakeland Grocery Corp., 301 F. 2d 156 (4th Cir. 1962), cert. denied, 371 U.S. 817 (1962), that even though a local merchant had used the name “Pood Pair” in the local area before plaintiff corporation entered the local area, the local merchant’s use could be enjoined upon application by plaintiff corporation. Significantly, however, the court found that the name “Pood Pair” had acquired a secondary meaning in the minds of the purchasing public in the local area prior to the local merchant’s use of the name. Here, [459]*459there is no evidence to establish that the “Drug Fair” name had a secondary meaning in Pennsylvania. Merely because the name “Drug Fair” is associated with appellant’s stores in other areas of the country, the use of the name will not be enjoined in Pennsylvania where a secondary meaning has not been proven.

We are mindful that courts have placed less emphasis on the requirement of secondary meaning and have granted protection against trade name infringement upon a finding that the infringing party acted in bad faith with the intent to capitalize on plaintiff’s reputation and goodwill. For example, in Food Fair Stores, Inc. v. Lakeland Grocery, Corp., supra, the court found, in addition to a showing that the name “Food Fair” had a secondary meaning, that “the defendant deliberately and knowingly appropriated the plaintiff’s name for its own business and actually imitated the character and style of the signs by which the plaintiff’s business was made known to the public.” 301 F. 2d at 163. With respect to this practice of intentionally capitalizing on another’s goodwill, the court stated: “The existence or non-existence of good faith on the part of the second user of the trade name is a powerful factor in determining whether the name is entitled to protection in an area to which the business it identifies has not actually extended.

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309 A.2d 363, 453 Pa. 454, 180 U.S.P.Q. (BNA) 278, 1973 Pa. LEXIS 692, Counsel Stack Legal Research, https://law.counselstack.com/opinion/drug-fair-community-drug-co-v-drug-fair-inc-pa-1973.