Saunders System Atlanta Co. v. Drive It Yourself Co.

123 S.E. 132, 158 Ga. 1, 1924 Ga. LEXIS 69

• Court: Supreme Court of Georgia
• Decided: March 13, 1924
• Docket: Nos. 4009, 4010
• Status: Published

Opinion

Hines, J.

(After stating the foregoing facts.)

A corporation has the exclusive right to the use of its own name. The corporate name is a necessary element of the corporate existence. A court of equity will enjoin another from using or imitating such name, upon the same principles under which persons are protected in the use of trade-marks. Rome Machinery &c. Co. v. Davis, 135 Ga. 17 (68 S. E. 800). A person or corporation may acquire a trade-name. Such trade-name is as much descriptive of the manufacturer or dealer as his own name. Infringement of the real or trade-name of an individual or corporation will be enjoined by a court of equity when a proper case is made. An infringement upon the real name or trade-name of an individual or corporation is such a colorable imitation of the name that the general public, in the exercise of ordinary care, might think that it is the name of the individual or corporation first appropriating the same. The use of such name or the infringement thereof is a fraud against the person entitled to use the same, when the infringer intends to create the impression in the minds of the public that he and the person or corporation first appropriating the name are the same. If the person or corporation first appropriating and using the name has a clear right to the use thereof, its subsequent use by another person or corporation, knowing of this right, is presumed by the law to be fraudulent. It has even been held that the innocent or accidental use of a trade-name capable of exclusive appropriation will be enjoined. Previous use of such name in another section by another will not defeat such right in the territory in which such person or corporation appropriates and uses such name. Yellow Cab Co. v. Sachs (Cal.), 28 A. L. R. 105 (216 Pac. 33); Whitley Grocery Co. v. McCaw Mfg. Co., 105 Ga. 839 (32 S. E. 113); Creswill v. Grand Lodge, 133 Ga. 837 (67 S. E. 188, 134 Am. St. R. 231, 18 Ann. Cas. 453). So the court below properly enjoined the defendant from using either the corporate or trade-name of the plaintiff, if either were capable of exclusive appropriation by the plaintiff.

But the defendant, Saunders System Atlanta Company Inc., contends that the name, “Drive It Yourself,” is merely descriptive of the kind and character of the business which the plaintiff is conducting, and for this reason cannot be exclusively appropriated by it. Undoubtedly the general rule is that a dealer cannot exclusively appropriate as a trade-name words which, according to their primary meaning, may with equal truth and right be employed by others for the same purpose. Larrabee v. Lewis, 67 Ga. 561 (44 Am. R. 735); Goodyear’s India Rubber &c. Co. v. Goodyear Rubber Co., 128 U. S. 598 (9 Sup. Ct. 166, 32 L. ed. 535); Standard Paint Co. v. Trinidad Asphalt Mfg. Co., 220 U. S. 446 (31 Sup. Ct. 456, 55 L. ed. 536); Nims on Unfair Competition and Trade-marks (2d ed.), 391; 38 Cyc. 708 B. Generally geographical names are not subject to exclusive appropriation as trade-names. Rome Machinery &c. Co. v. Davis, supra.

Whether the name, “Drive It Yourself,” is composed of mere descriptive words,, and for this reason is incapable of exclusive appropriation, we need not decide in the present ease. While generic names, geographical names, and names composed of words which are merely descriptive are incapable of exclusive appropriation, words or names which have a primary meaning of their own, such as words descriptive of the goods, service, or place where they are made, or the name of the maker, may nevertheless, by long use in connection with the business of the particular trade, come to be understood by the public as designating the goods, service, or business of a particular trader. This is what is known as the doctrine of secondary meaning; and is the origin of the law of unfair competition, as distinguished from technical trademarks or trade-names. In Reddaway v. Banham, 65 L. J. Q. B. 381, Lord Herschell said: “The name of a person, or words forming part of the common stock of language, may become so far associated with the goods of a particular maker that it is capable of proof that the use of them by themselves without explanation or qualification by another manufacturer would deceive a purchaser into the belief that he was getting the goods of A when he was really getting the goods of B. In a case of this description the mere proof by the plaintiff that the defendant was using a name, word, or device which he had adopted to distinguish his goods would not entitle him to any relief. He can only obtain it by proving further that the defendant was using it under such circumstances or in such manner as to put off his goods as the goods of the plaintiff. If he could succeed in proving this, I think he would, on well-established principles, be entitled to an injunction.” On this subject see Wotherspoon v. Currie, L. R. 5 H. L. 508; International Silver Co. v. Wm. H. Rogers Corp., 66 N. J. Eq. 119 (57 Atl. 1037, 2 Ann. Cas. 407); Sartor v. Schaden, 125 Iowa, 696 (101 N. W. 511); 38 Cyc. 769 (2). It-is not essential to the maintenance of a suit to enjoin unfair competition that the plaintiff should show that he has the exclusive right to a corporate or trade-name; but an allegation and proof of an interest in the good will of the business is sufficient, as it is the property in the good will of the business which is protected in all cases of unfair competition. 38 Cyc. 766 B, and cases cited in note 90.

The defendant next contends that the degree of resemblance between the names or devices used by it and the plaintiff is not sufficient to warrant the grant of an injunction. The plaintiff’s full corporate name is Drive It Yourself Company of Georgia. The full corporate name of the defendant is Saunders System Atlanta Company, Inc., and it uses the trade-name, “Saunders Drive It Yourself System.” Is the resemblance between these two names sufficient to warrant equitable interference? The degree of resemblance between names which is sufficient to warrant equitable interference is not capable of exact definition. Atlas Assurance Co. v. Atlas Insurance Co., 138 Iowa, 228 (112 N. W. 232, 114 N. W. 609, 15 L. R. A. (N. S.) 625, 128 Am. St. R. 189); Newport Sandbank Co. v. Monarch Sand Mining Co., 144 Ky. 7 (137 S. W. 784, 34 L. R. A. (N. S.) 1040). It may be stated generally that the similarity must be such as is likely to mislead purchasers of ordinary caution and prudence, or, in other words, the ordinary buyer, into the belief that the goods, services, or wares are those of a business rival. French Republic v. Saratoga Vichy Spring Co., 191 U. S. 427 (24 Sup. Ct. 145, 48 L. ed. 247); Standard Paint Co. v. Trinidad Asphalt Mfg. Co., supra; Dover Stamping Co. v. Fellows, 163 Mass. 191 (40 N. E. 105, 28 L. R. A. 448, 47 Am. St. R. 448).

Unfair competition is generally a question of fact. Oreswill v. Grand Lodge Knights of Pythias, supra. No inflexible rule can be laid down as to what conduct will constitute such competition. “The imitation need only be slight, if it attaches to what is most salient.” Johnson v. Bauer, 82 Fed. 662 (27 C. C. A. 374); Saxlehner v. Eisner &c. Co., 179 U. S. 19 (21 Sup. Ct. 7, 45 L. ed. 60). The question in all cases is: Is the defendant, as a matter of fact, by his conduct passing off his goods as plaintiff’s goods, or his business as plaintiff’s business? The universal test is whether the public is likely to be deceived. 38 Cyc. 779 (5).

We are of the opinion that the judge was authorized to find, under the evidence, that the plaintiff made a case of unfair competition. If it had only appeared that the defendant was using the name of “Saunders Drive It Yourself System,” the resemblance between that name and the corporate and trade-names of the plaintiff would not make as strong a case for the plaintiff as that proved. The plaintiff was chartered by an order of Fulton superior court in 1920 as the Drive It Yourself Company of Georgia. It immediately established its place of business at 161 Ivy Street in the City of Atlanta. The trial judge was authorized to find that it adopted the trade-name of “Drive It Yourself.” These words were placed in conspicuous places upon the front of its place of business. The court was authorized to find that the plaintiff had advertised and conducted its business under this name. In July', 1923, shortly before the institution of this suit, the defendant established its business at 12 West Peachtree Street in the City of Atlanta. The defendant displayed over its place of business the words, “Drive It Yourself,” in the most prominent place. It also put up a sign, consisting of an oval, with the word, “ Saunders,” written in the top of the oval, the words, “Drive It Yourself,” in the middle, and the word, “ System,” at the bottom in white letters on a blue background. The trial judge was' also authorized to find that the defendant was holding itself out, by signs and advertisements, as the Drive It Yourself Company. We cannot say, as a matter of law, that the trial judge was not authorized to find that the degree of similarity between the plaintiff’s corporate and trade-names and that used by the defendant was not sufficient to mislead the public and to authorize the grant of an injunction. There was certainly some evidence which authorized the chancellor to find as he did in this matter.

The defendant’s counsel urges that a court of equity will not interfere where confusion, if any, results only from similarity of the names used, and not from the manner of their use. It is asserted that courts of equity will only grant relief where there is fraudulent use of similar names or marks with the intention to deceive, and that no relief will be granted for the use of similar names when they are honestly used. If the plaintiff had the right to the exclusive use of the trade-name which it adopted, or to the exclusive use of its corporate name, the simulation of such name would be enjoined by a court of equity, as we have shown above. It has been asserted that, in the absence of the exclusive right to a trade-name, a court of equity will not enjoin another from using such name upon mere proof of the use of plaintiff’s trade-name by the'defendant, if nothing more appears. There is,authority to the effect that fraudulent intent is necessary to constitute unfair competition by the use of names 'in such a manner as to convey to the public the impression that the goods of one manufacturer or trader are those of another. It has been held that, the circumstances must be such as to show wrongful intent in fact, or to justify that inference from the facts alleged and proved. Lawrence Mfg. Co. v. Tennessee Mfg. Co., 138 U. S. 537 (11 Sup. Ct. 396, 34 L. ed. 997); Elgin Watch Co. v. Illinois Watch Case Co., 179 U. S. 665 (21 Sup. Ct. 270, 45 L. ed. 365); Hopkins on Trademarks (3d ed.), 294. But the better view is that an actual fraudulent intent need not be shown, if the necessary and probable tendency of defendant’s conduct is to deceive the public and to pass off his goods or business as that of the plaintiff, especially where only preventive relief against the continuance of the wrong is sought or granted. 38 Cyc. 783 (6); 26 R. C. L. 84, § 60. There is nothing to the contrary in Carter v. Carter Elec. Co., 156 Ga. 297 (119 S. E. 737), in which the use of one’s own name was involved.

The trial judge enjoined the defendants “from using the words, ‘Drive It Yourself,’ and the oval trade-mark design at present employed by them on their letter-heads, bill-heads, advertisements, stationery, and signs on their place of business, or as a part of its name;” but further provided in his judgment that it should “not be construed as preventing the defendants . from in any other wise using the phrase, e Drive It Yourself,’ as indicative of the character of their business, whether said phrase be incorporated in advertisements, signs, stationery, forms, or in any other manner whatsoever except in the oval trade-mark design above referred to.” The plaintiff, in its cross-bill of exceptions, excepts to the latter part of this judgment, on the ground that the defendants should have been enjoined from using its trade-name in any manner whatsoever. We think this position of plaintiff is well taken. If the defendants were wrongfully using the trade-name of the plaintiff they should be enjoined from its use in toto, and not only partially. They certainly should not be permitted to place its trade-name over the front of their building, whether in or out of the oval referred to. The defendants should have been enjoined from using the trade-name of the plaintiff in all ways.

Judgment reversed on the cross-hill of exceptionsj main hill of exceptions dismissed.

All the' Justices concur.