The opinion of the court was delivered by: MARIS
This is a suit in equity filed by the Great Atlantic & Pacific Tea Company seeking an injunction restraining the defendant from using the letters "A & P" in its corporate name and in its business. From the evidence I make the following special
The plaintiff is a corporation of the State of New Jersey, which has been for many years engaged in the business of selling food products and household appliances. It has more than 14,000 retail stores, 2,018 of which are in the State of Pennsylvania, and 325 of them in the City of Philadelphia.
The plaintiff company has for many years been known colloquially to the public as the "A & P" Company and its retail stores as "A & P" stores. It employs on its store windows a circular insignia consisting of the letters "A & P" and the words "Established 1859" within the circle, the circle in turn being superimposed upon a bar within which are the words "Where economy rules." The plaintiff also has extensively used the letters "A & P" as a brand or trade-mark for various of its products.
The plaintiff has expended many millions of dollars for advertising its business, through the newspapers, by means of radio programs, and in other ways. Its sales in the Philadelphia district for the years 1932 to 1936, inclusive, amounted to $224,251,000. The value of its trade-name "A & P" is far more than the jurisdictional sum of $3,000.
The defendant was incorporated under the laws of Pennsylvania in March, 1936, and began business in April of that year. The letters "A & P" in its name are the initials of the surnames of Messrs. Aronberg and Podolsky, who were its incorporators and are the active managers of its business. At the time its name was selected, Aronberg and Podolsky had in mind the use of the trade-name "A & P" by the plaintiff and unquestionably fully understood its great value.
The defendant is engaged in the business of selling new and secondhand radios, washing machines, and electric refrigerators. It employs on its store windows a circular insignia with the words "A & P" within the circle and the word "Radio" within a bar or banner superimposed on the circle. It has also used the letters "A & P" in connection with the sale of its merchandise. Shortly after it started business, it used the following slogans in its store windows: "The name A & P assures you satisfaction." "A & P reputation deserves your patronage." The use of these two slogans was discontinued, however, after the plaintiff protested.
There was no credible evidence of actual confusion of the public mind by the use by the defendant of the letters "A & P."
This is a suit to restrain unfair competition. There is diversity of citizenship, and the court has jurisdiction since the matter in dispute is the plaintiff's trade-name and good will, the value of which is vastly in excess of $3,000.
The plaintiff seeks to restrain the defendant from using its trade-name "A & P" in connection with its business of selling radios, washing machines, and electric refrigerators. None of these articles is sold by the plaintiff.Consequently the first question presented is whether the owner of a nationally known and valuable trade-name may restrain its use by a third party in connection with a noncompeting business. It is quite clear that in such a case the defendant is not actually diverting custom and trade from the plaintiff. Such an injury, however, is not the only one which may result. As was said by Mr. Justice Shientag in Philadelphia Storage Battery Co. v. Mindlin, 163 Misc. 52, 296 N.Y.S. 176, 178: "The normal potential expansion of the plaintiff's business may be forestalled. * * * His reputation may be tarnished by the use of his mark upon an inferior product.* * * A false impression of a trade connection between the parties may be created, possibly subjecting the plaintiff to liability or to the embarrassments of litigation, or causing injury to his credit and financial standing."
The underlying principle involved in these cases was well put by Circuit Judge Learned Hand in Yale Electric Corporation v. Robertson (C.C.A.) 26 F.2d 972, 974, as follows: "However, it has of recent years been recognized that a merchant may have a sufficient economic interest in the use of his mark outside the field of his own exploitation to justify interposition by a court. His mark is his authentic seal; by it he vouches for the goods which bear it; it carries his name for good or ill. If another uses it, he borrows the owner's reputation, whose quality no longer lies within his own control. This is an injury, even though the borrower does ...