N. CAROLINA DAIRY FOUNDATION v. Foremost-McKesson

92 Cal. App. 3d 98, 154 Cal. Rptr. 794
CourtCalifornia Court of Appeal
DecidedApril 19, 1979
Docket40485
StatusPublished
Cited by10 cases

This text of 92 Cal. App. 3d 98 (N. CAROLINA DAIRY FOUNDATION v. Foremost-McKesson) is published on Counsel Stack Legal Research, covering California Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
N. CAROLINA DAIRY FOUNDATION v. Foremost-McKesson, 92 Cal. App. 3d 98, 154 Cal. Rptr. 794 (Cal. Ct. App. 1979).

Opinion

92 Cal.App.3d 98 (1979)
154 Cal. Rptr. 794

NORTH CAROLINA DAIRY FOUNDATION, INC., et al., Plaintiffs and Respondents,
v.
FOREMOST-McKESSON, INC., et al., Defendants and Appellants.

Docket No. 40485.

Court of Appeals of California, First District, Division One.

April 19, 1979.

*102 COUNSEL

Flehr, Hohbach, Test, Albritton & Herbert, Milton W. Schlemmer and David J. Brezner for Defendants and Appellants.

Cooper, Taylor, Higbe & Sands, W. Austin Cooper, Barbara E. Schur, William H. Birnie and Warren N. Brakensiek as Amici Curiae on behalf of Defendants and Appellants.

Townsend & Townsend, Anthony B. Diepenbrock, Roger L. Cook and Marvin W. Murray for Plaintiffs and Respondents.

OPINION

RACANELLI, P.J.

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 *103 activities using such trademark or any colorable imitation. Defendants contend that the trial court's findings that the term is a protectable trademark through acquisition of a secondary meaning is not supported by law or the evidence. Our view of the record in light of established principles impels a contrary conclusion requiring affirmance of the challenged order.

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 an 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.[1] In granting relief, the trial court found the term "SA" to be plaintiffs' protectable trademark and had acquired a secondary meaning. On January 6, 1977, we granted Foremost's petition for supersedeas pending appeal; on March 3, 1977, the California Supreme Court granted hearing, denied supersedeas and retransferred the cause to this court for further proceedings.

*104 Issue

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 protectable 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.[2]

Scope of Review

(1) 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 *105 Growers v. Mosesian (1927) 84 Cal. App. 485, 497 [258 P. 630]; see generally 2 Witkin, Cal. Procedure (2d ed. 1970) Professional Remedies, § 80, pp. 1518-1519.) Guided by such principles, we examine the merits of the appeal.

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[3]); Webster's Third New Internat. Dict., p. 17) acquires a sour taste. In the early 1970s, Foundation research developed a new strain of LBA which when added to milk neither causes fermentation nor affects the natural or "sweet" taste of the milk. The composite term "SA" was coined and adopted as the product trademark at the commencement of promotional activities in early 1974. Efforts to register the new mark with the federal patent and trademark office and the California Secretary of State were rejected on the grounds the mark was merely a generic or descriptive term. Since the resulting milk product is not truly acidophilus milk,[4] federal and state regulatory agencies considered the words "SA" as simply a fanciful term, adopting the generic term "lowfat milk with lactobacillus acidophilus culture added" to officially describe the product. (See Cal. Admin. Code, tit.

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