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QUALITY WEAVING COMPANY v. ROBERT E. REGAN (11/22/76)

decided: November 22, 1976.

QUALITY WEAVING COMPANY
v.
ROBERT E. REGAN, INDIVIDUALLY AND DOING BUSINESS AS QUALITY LABEL COMPANY, APPELLANT



Appeal from the Final Order dated February 20, 1976, of the Court of Common Pleas, Civil Action, Equity, of Montgomery County, at No. 72-8143. No. 1277 October Term, 1976.

COUNSEL

Victor J. Roberts, Norristown, with him High, Swartz, Roberts & Seidel, Norristown, for appellant.

Zachary T. Wobensmith, II, Philadelphia, for appellee.

Watkins, P. J., and Jacobs, Hoffman, Cercone, Price, Van der Voort, and Spaeth, JJ. Price and Van der Voort, JJ., dissent.

Author: Jacobs

[ 245 Pa. Super. Page 67]

Plaintiff-appellee, Quality Weaving Company, filed an amended complaint in equity alleging infringement on its

[ 245 Pa. Super. Page 68]

    established trade name and seeking, inter alia, injunctive relief against appellant. A hearing on this complaint was held on May 16, 1975. On August 8, 1975 the chancellor issued a decree nisi, enjoining appellant from using the trade name Quality Label Company or the word "Quality" as or in a trade name in the label business in the Philadelphia and suburban Philadelphia area. Appellant's exceptions to certain findings of fact, to conclusions of law, and to the decree nisi were argued before the court en banc on February 17, 1976. On February 20, 1976 the court entered an order amending one of its findings of fact but otherwise dismissing appellant's exceptions. This appeal followed from the final decree thus entered. For the reasons hereinafter set forth, we conclude that the injunction must be dissolved.

The chancellor's findings of fact, insofar as they are relevant to this appeal, are summarized as follows: Appellee, Quality Weaving Company, is a manufacturer and distributor of labels, manufacturing woven and printed labels for a wide variety of items. In 1961 appellee undertook the formation of a separate corporation called Quality Industries, Inc., for the sole purpose of manufacturing and marketing woven bookmarks. Appellee solicits business by means of advertisements in trade journals and in the yellow pages of the Philadelphia and Manhattan telephone directories. Its woven label sales have ranged from $552,000 in 1962 and steadily increased to $1,274,000 in 1974. Appellee has been in the printed label business since 1967, with its sales of printed labels rising to a total of $305,000 in 1974. Since 1971 or 1972 certain of its labels have been printed on man-made fibers having properties like paper.

Appellant, Quality Label Company, engages in the manufacture of pressure sensitive labels printed on paper or foil. It registered the fictitious name Quality Label Company in 1972, unaware of the existence of Quality

[ 245 Pa. Super. Page 69]

Weaving Company. Appellant also advertises in the yellow pages of the telephone directory.

Appellee does not use the name Quality Label Company on any of its stationery, has not filed a fictitious name registration for the name Quality Label Company, and has not advertised as Quality Label Company. However, from 1966 to 1974 appellee received correspondence addressing it as Quality Label Company, or Quality, or other names containing the word "quality." In 1974, two checks mailed to appellee by a customer were misrouted to appellant's prior location before reaching appellee. Appellee has also been questioned as to whether appellant was selling for or was owned by, part of, or an office of appellee.

There was no evidence presented which would indicate that appellant adopted the name Quality Label Company with an intent to deceive the purchasing public. Rather, a realistic appraisal of the reasons existing for the choice of its name reveals simply that appellant wanted to use it to designate its label business. Nevertheless, the chancellor concluded that appellee's trade name had acquired a secondary meaning in the label industry as indicating appellee's business and that the name assumed by appellant was so similar as to "pose a substantial threat to public distinction between the parties' businesses." He further concluded that nothing short of the elimination of the word "quality" from appellant's corporate name would avoid the deception and confusion that he considered likely to occur. Accordingly, the chancellor enjoined further use of appellant's business name, as well as the use of any name containing the word "quality." ...


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