Petition — Le Conté Cosmetics, Inc. v. J. B. Williams Co.

Supreme Court brief1976

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IN THE

Supreme Court of the Unit

October Term, 1975

N0..75=832 1

Le Conte Cosmetics. INc.. and ELTON C. TOoLANp.

Petitioners.

VS.

THE J. B. WILLIAMS ComMPANY. INC..

Respondent.

Petition for Writ of Certiorari to the United States

Court of Appeals tor the Ninth Circuit.

JOHN E. KELLY.

606 Wilshire Boulevard.

Santa Monica. Calif. 90401.

Counsel tor Petitioners.

PASTORIZA & KELLY.

Of Counsel.

Parker & son, Inc , Law Printers, Los Angeles. Phone 724-6622

SUBJECT INDEX

Page

ey SE nnseemeninmeeansenmadaniail 1

ESET RRR Ree OO Er Le 2

EERE SEER re BOSe eta EO TE I 2

of § ) EIRENE at a CREO 2

ey A ne eiteibsineniieiiinn 3

Reasons for Granting the Writ -.............2............. 7

The Supreme Court Has Never Spoken on the

Meaning of Likelihood of Confusion Within

the Scope of the Lanham Act Which Became

Law Almost 30 Years Ago—Notwithstanding

the Widespread Impact of the Phrase on the

Rights of Manufacturers and the General

Oe 7

The Supreme Court Should Reaffirm the Tests

Invoked Prior to the Lanham Act for Resolv-

ing Trademark Conflicts, Impliedly the Test of

Reasonable Likelihood of Confusion .......... 8

ill.

The Supreme Court Should Resolve the Conflict

Present Between the Circuits Over the Cor-

rect Test for Determining Likelihood of Con-

TNIETIE <iiemnnscnnncnncncsincouantiadisanisinindieaieiiaiapionneieuintiiainaiaies 11

IV.

There Is No Likelihood That a Reasonable

Purchaser Would Be Confused Between the

Products Marked Conti and Le Conté ............ 12

a 14

li.

INDEX TO APPENDICES

Page

Appendix A. Opinion of the Court fo Appeal ....

sbvienigil etal ipiiateediaainaiesdichetianitinibebiciiialietanieabiuisdigebdaieii App. p. 1

Appendix B. Opinion of the United States Court

of Appeals for the Ninth Circuit -................. 12

Appendix C. Petition for Rehearing .................... 20

Points for Reconsideration ....................2..........- 20

IIE susnsnenionnseisunlelmaadaneiiaaaddeimieeiieanes 22

This Circuit Does Not Follow the Liberal Test

of “Likelihood of Confusion Among Ignor-

ant, Inexperienced and Gullible Purchas-

ers” and the Parties Specifically Agreed to

Be Bound by a Far Different Test -............... 22

The Test in This Circuit Is Clearly Based on

“Reasonable Likelihood of Confusion” or

“Likelihood of Confusion Among Reason-

RTT ATER YAS SAN TNR A 26

All of the Critical Facts in This Controversy

Were Found by the District Court Who

Drew Inferences From the Trial Proceedings

and Are Entitled to Be Upheld Unless

Deemed “Clearly Erroneous” by the Appel-

III PINT sen dessins cen ceeseguleplehissiadeidiiinicacndal 29

a it 31

Appendix D. Opinion of the United States Court

of Appeals for the Ninth Circuit (Revised Sep-

ee SG: SPIED. susipeescibilcinniaipuiijaiaiuntiibbasinsinieaaianniiai 32

I Tit GRUIIEE :ssinciscstonidensstinsnsviciasaibesinneiediatinsinecantehiena 41

iii.

TABLE OF AUTHORITIES CITED

Cases Page

Beckwith v. Commr. of Patents, 252 U.S. 538

CED ecscetenisinsscisvenipinovthincesnianiannisamiiniiniamiotinien ia §3

Clairol Inc. v. Gillette Co., 389 F.2d 264 (2d Cir.

SRILA SR SASS RRS IN ae AE at se oe

Clairol Inc. v. Revlon, Inc., 144 USPQ 238 (N.Y.

As: Siaiils's, MEIITEIY - eccecassiiabasecsicenielnstictibiiincsaamspstieichitenivabaiiiniie

Coats v. Merrick Thread Co., 149 U.S. 562 (1893)

Dawn Donut Co. Inc. v. Day, 450 F.2d 332 (10th

RE aR EE ee oe eee

Fleischmann Distilling Corp. v. Maier Brewing Co.,

oe & Bi fe A |) eee

Jean Patou Inc. v. Jacqueline Cochran Inc., 201

Supp. 861 (D.C.S.D.N.Y. 1962) aff'd 312 F.2d

Be BR SER EERE. Ee eee

Kellogg Company v. National Biscuit Company, 305

BSR, SUE GEUIIIIIEET | ipciesuscindsalldeaisaisenidadiseiiainintinnenamenees

McLean v. Fleming, 96 U.S. 245 (1878) ............

Mishawaka Rubber & Woolen Mfg. Co. v. S. S.

Kresge Co., 316 U.S. 203 (1942) ......000000.2..

Redken Laboratories Inc. v. Clairol Inc., 501 F.2d

ES) ER ee aR

Saxony Products, Inc. v. Guerlain Inc., 513 F.2d

I ee

Smith v. Chanel Inc., 402 F.2d 562 (9th Cir. 1968)

ee ee eee ee eee eee eee errr eee eee ee eee eee ee eee

IE ci ciassseusheciesalamgunteesaiemiipeineaaiieiieinioon

West Point Mfg. Co. v. Detroit Stamping Co., 222

So & fe Gs a | Bee

iv.

Statutes Page

United States Code, Title 15, Sec. 1051

United States Code, Title 15, Sec. 1114(1) ....2, 8

United States Code, Title 28, Sec. 1254(1) .......... 2

~~ lel

IN THE

Supreme Court of the United States

October Term, 1975

Le Conte Cosmetics, INc., and ELTON C. TOLAND,

Petitioners,

vs.

Tue J. B. WILLIAMS COMPANY, INC.,

Respondent.

Petition for Writ of Certiorari to the United States

Court of Appeals for the Ninth Circuit.

Petitioners, Le Conté Cosmetics, Inc. and Elton C.

Toland (hereinafter usually collectively referred to as

“LE CONTE COSMETICS”) pray that writ of cer-

tiorari issue to review two related decisions of the

U.S. Court of Appeals for the Ninth Circuit dated

June 2, 1975 and September 18, 1975, reversing a

judgment dated May 17, 1973 of the U.S. District

Court for the Central District of California.

Opinions Below.

The District Court made its only opinion after trial

on May 17, 1973 reported at 178 USPQ 442 [copy

attached and called Appendix A]. A first opinion

of the Appellate Court dated June 2, 1975 is reported

at 178 USPQ 442 [copy attached and called Appendix

B|. A second or revised opinion of the Appellate

Court dated September 18, 1975 is not yet reported

[copy attached and called Appendix D}. An order

a an

of the Appellate Court denying Defendants-Appellees’

Petition for Rehearing is not reported [copy attached

and called Appendix E}.

Jurisdiction.

The judgment of the Appellate Court was entered

on June 2, 1975 {App. B], a timely petition for rehear-

ing was filed [| App. C]| and it was denied on September

18, 1975 [App. E]. A revised or second opinion

by the Appellate Court was filed September 18, 1975

[App. D}.

On November 28, 1975 the Defendants-Appellees

moved the Appellate Court to recall and stay its man-

date so this petition for a writ of certiorari could

be filed.

Jurisdiction of the Supreme Court to review the

two decisions or at least the last decision of the Appel-

late Court is invoked under 28 USC 1254(1).

Questions Presented.

1. Is the test for determining likelihood of con-

fusion under the Federal trademark and unfair compe-

tition laws based upon reasonable and prudent pur-

chasers—or—upon ignorant, inexperienced and gullible

purchasers?

2. Should a newcomer in a highly competitive indus-

try be required to take reasonable precautions to avoid

confusion—or-—to insure against the possibility of con-

fusion?

U.S. Statute Involved.

Title 15 Section 1114(1) of the U.S. Code provides

in pertinent part as follows:

Any person who shall, without the consent of the

registrant—

(a) use in commerce any reproduction, counterfeit,

copy or colorable imitation of a registered mark in

connection with the sale, offering for sale, distribution,

or advertising of any goods or services on or in connec-

tion with which such use is likely to cause confusion,

‘or to cause mistake, or to deceive; or

(b) reproduce, counterfeit, copy or colorably imitate

a registered mark and apply such reproduction, counter-

feit, copy or colorable imitation to labels, signs, prints,

packages, wrappers, receptacles or advertisements in-

tended to be used in commerce upon or in connection

with the sale, offering for sale, distribution, or adver-

tising of goods or services on or in connection with

such use is likely to cause confusion, or to cause

mistake, or to deceive; shall be liable in a civil action

by the registrant for the remedies hereinafter provided

(emphasis added ).

Statement of the Case.

J. B. Williams is a well known manufacturer of

pharmaceuticals and toiletries, some of which have

national recognition, e.g, GERITOL and AQUA-

VELVA.

One of its lines of toiletry products has been marketed

for over 50 years under the single word brand CONTI

which is protected by four U.S. trademark registra-

tions. CONTI products are specialty items featuring

castile properties and are formulated to be gentle and

mild. The advertising and labeling for CONTI are

designed to appeal to consumers with a special need

or desire for gentle and mild soap or shampoo.

Le Conté Cosmetics, Inc. is a manufacturer of cos-

metics and toiletries and since 1966 has marketed

these products on a nationwide basis under the two

words and brand name LE CONTE. The brand name

LE CONTE bears an emphasis mark over the second

“E” in order to create a French appearance and pro-

nunciation.

LE CONTE products are specialty items featuring

a hormone composition and the packaging and labeling

for LE CONTE products stress the specialty hormone

nature. The principal trademark employed by Le Conté

Cosmetics which appears on virtually all packaging

and advertising consists of the brand name LE CONTE

surrounded by a musical clef symbol.

Sales and promotional efforts by Le Conté Cosmetics,

a completely Black-owned and operated company, have

concentrated in areas of high Black population such

as the Watts region of Los Angeles and the Deep

South. LE CONTE customers are consequently pre-

dominantly Black.

CONTI products are all distinctively packaged in

the colors green and white and LE CONTE products

are all packaged in the distinctive colors of pink,

gold and white. CONTI, as it appears on packaging,

is visible from a great distance whereas the name

LE CONTE cannot be read on its packaging at very

close range.

The complaint by J. B. Williams stated two inter-

related claims for trademark infringement and unfair

competition. J.B. Williams’ answers to interrogatories

disclosed that it had no evidence of any instances

of actual confusion.

The parties filed reciprocal motions for summary

judgment and the District Court noted that there were

several disputed issues of material fact. The parties

agreed to withdraw their reciprocal motions for sum-

mary judgment and have an abbreviated trial based

upon some stipulated facts and the fact-findings of

the District Court to be determined at trial.

Importantly, at trial, the parties through their counsel

stipulated that the sole test to be applied was “reason-

able likelihood of confusion” between the trademarks

LE CONTE and CONTI and the District Court was

urged to try the controversy on that basis.

The issue of reasonable likelihood of confusion be-

tween the trademarks LE CONTE and CONTI was

resolved in favor of Le Conté Cosmetics and J. B.

Williams appealed.

In reversing the District Court’s judgment by its

first opinion of June 2, 1975 |App. B]| the Appellate

Court ruled that the District Court had incorrectly

applied the test to determine likelihood of confusion

because “The reasonableness of the likelihood is not

an issue on this appeal”. In addition the Appellate

Court indicated that “reasonable and prudent” cus-

tomers are not to be considered. Moreover, the name

CONTI was characterized by the Appellate Court as a

“strong” mark just because its origin was stipulated

to be unknown.

Although Le Conté Cosmetics’ petition for re-hearing

was denied, some of the points stressed were incor-

porated in the Appellate Court’s second opinion [ App.

D|. The Appellate Court still maintained that the test

was merely “likelihood of confusion” but as least took

into consideration a “reasonable customer of average

intelligence and experience” restricted to the points of

similarity, i.e., the “nexus of features shared by the

~ two marks”.

The net result of the Appellate Court’s two de-

cisions was to reverse the District Court's judgment

that there was no “reasonable likelihood of confusion”

between the trademarks CONTI and LE CONTE”.

The Appellate Court implied, however, that if a “pru-

dent, worldly person” was considered there would be

no likelihood of confusion [first opinion, App. B]

and that if a “worldly and sophisticated person” was

considered there would be no likelihood of confusion

{second opinion, App. D]. Thus, the Appellate Court

virtually agrees with the District Court that there is

no “reasonable likelihood of confusion” between CONTI

and LE CONTE but nonetheless has reversed the

District Court on this critical issue.

REASONS FOR GRANTING THE WRIT.

The Supreme Court Has Never Spoken on the Meaning

of Likelihood of Confusion Within the Scope of

the Lanham Act Which Became Law Almost

30 Years Ago—Notwithstanding the Widespread

Impact of the Phrase on the Rights of Manufac-

turers and the General Public.

Competitors as well as the general public need to

know the test under the Lanham Act for determining

the issue of likelihood of confusion.

Trademarks and especially brand names vitally af-

fect practically every citizen every day and in numer-

ous ways. They are the psychological symbols which

are exploited by their owners to draw customer atten-

tion. Mishawaka Rubber & Woolen Mfg. Co. v. S. S.

Kresge Co., 316 U.S. 203 (1942).

At the very heart of practically every controversy

involving trademark infringement and/or unfair com-

petition claims arising under federal law, is the pivotal

issue of likelihood of confusion. It is a nebulous phrase

of art subject to wide-ranging meanings.

Manufacturers, traders, businessmen etc. and espe-

cially new competitors need to know their limitations

in selecting and using trademarks. Must every new

trademark avoid confusion among the “ignorant, the

inexperienced and the gullible’? [App. B], a class

of customers far less than reasonable {[App. D] or

reasonable and prudent consumers | App. A]?

The already great need to know a workable defini-

tion of “likelihood of confusion” is being heightened

every day due to the increasing numbers of competi-

tors and the decreasing supply of brand names avail-

able to new competitors. Millions of names have been

monopolized through federal and state trademark regis-

trations. The scarcity of available names in the highly

competitive toiletries and cosmetics field is especially

acute. Clairol Inc. vy. Gillette Co., 389 F.2d 264 (2d

Cir. 1968); Jean Patou Inc. vy. Jacqueline Cochran

Inc., 201 Supp. 861 (D.C.S.D.N.Y. 1962) aff'd 312

F.2d 125 (2d Cir. 1963), Clairel Inc. v. Revlon,

Inc., 144 USPQ 238 (N.Y. Sup. Ct. 1964).

Since the enactment of the Lanham Act, 15 USC

1051 et seg., July 5, 1946 no opinion of the USS.

Supreme Court has provided any guidelines as to the

meaning and implementation of the phrase “likely to

cause confusion, or to cause mistake, or to deceive”

[15 USC 1114(1)]. The statute is not self-explanatory,

fails to give adequate notice and is so vague and

indefinite as to cause more misunderstanding than it

avoids.

With the 30th anniversary of the Lanham Act soon

approaching, it is surely time for the Supreme Court

to set forth definitive guidelines and this controversy

is particularly suitable for review by way of a writ

of certiorari.

Il.

The Supreme Court Should Reaffirm the Tests Invoked

Prior to the Lanham Act for Resolving Trademark

Conflicts, Impliedly the Test of Reasonable Likeli-

hood of Confusion.

Over the years prior to the Lanham Act the Supreme

Court has impliedly required that the issue of likelihood

of confusion should be resolved with reference to rea-

sonable purchasers as opposed to careless purchasers.

In the last such decision dealing directly with the

question i.e., Kellogg Company v. National Biscuit

Company, 305 U.S. 111 (1938) Justice Brandeis stated:

“The obligation resting upon Kellogg Company

is not to insure that every purchaser will know

it to be the maker but to use every reasonable

means to prevent confusion”. (Emphasis added).

Under these circumstances where an accused infringer

“.. . has taken every reasonable precaution to prevent

confusion or the practice of deception in the sale

of its product” (emphasis added) there is no trademark

infringement or unfair competition.

To resolve the central issue of likelihood of confusion

with respect to purchasers who are “. . . the ignorant,

the inexperienced and the gullible” {Appellate Court

first opinion, App. B| or less than reasonable [ Appellate

Court second opinion, App. D] would be to impose

onerous burdens on latecomers and require them in

essence to become insurers. Under such circumstances,

their property rights symbolized by various trade iden-

tities and their ability to identify themselves in crowded

marketplaces would be eroded.

In the Supreme Court’s often cited decision of

McLean vy. Fleming, 96 U.S. 245 (1878) the test

for resolving trademark infringement charges was de-

scribed as follows:

“All that courts of justice can do, in this regard,

is to say that no trader can adopt a trade-mark

so resembling that of another trader, as that ordi-

nary purchasers buying with ordinary caution,

are likely to be misled”.

. a court of equity will not interfere,

when ordinary attention by the purchaser of the

article would enable him at once to discriminate

the one from the other. Where the similarity

is sufficient to convey a false impression to the

public mind, and is of a character to mislead

and deceive the ordinary purchaser in the exercise

of ordinary care and caution in such matters,

it is sufficient to give the injured party a right

to redress, if he has been guilty of no laches”.

Surely the trademark laws cannot be so strict as

to require the prevention of confusion as to careless

people. This point has been made abundantly clear

by the Supreme Court in Coats v. Merrick Thread

Co., 149 U.S. 562 (1893) as follows:

“There is no doubt a general resemblance be-

tween the heads of all spools containing a black

and gold label might induce a careless purchaser

to accept one for the other. Defendants, however,

were not bound to any such degree of care as

would prevent this”.

The hypothetical person who symbolizes the pur-

chaser in deciding the likelihood of confusion issue

is analogous to the familiar hypothetical reasonable

man in tort law. Valuable personal and property rights

would surely be destroyed if the reasonable man in

torts were to become transformed and downgraded

to a careless man. Similarly if the hypothetical purchaser

in a trademark context is stripped of reasonableness,

as the Appellate Court has indicated, latecomers such

as Le Conté Cosmetics, Inc. would be deprived of

valuable property and personal rights.

III.

The Supreme Court Should Resolve the Conflict Present

Between the Circuits Over the Correct Test for

Determining Likelihood of Confusion.

There is a division of opinion among the Courts

of Appeal as to the test for determining likelihood

of confusion.

The position of the Appellate Court for the Ninth

Circuit as indicated by its two opinions under consider-

ation [App. B. and App. D] is far different than

the position followed by some of the other Courts

of Appeal, e.g., the Tenth Circuit and the Sixth Circuit.

Dawn Donut Co. Inc. v. Day, 450 F.2d 332 (10th

Cir. 1971); West Point Mfg. Co. v. Detroit Stamping

Co., 222 F.2d 581 (6th Cir. 1955).

In fact there is even division among the various

panels within the Ninth Circuit. Some panels within

the Ninth Circuit believe that the likelihood of confusion

issue must be decided with reference to ignorant, inex-

perienced, gullible and careless purchasers, e.g., Stork

Restaurant v. Sahati, 166 F.2d 348 (9th Cir. 1948);

Fleischmann Distilling Corp. v. Maier Brewing Co.,

314 F.2d 149 (9th Cir. 1963) whereas some of the

more recent panels of the Ninth Circuit have followed

the test of reasonable likelihood of confusion, e.g.,

Smith v. Chanel Inc., 402 F.2d 562 (9th Cir. 1968);

Redken Laboratories Inc. v. Clairol Inc., 501 F.2d

1403 (9th Cir. 1974); Saxony Products, Inc. v. Guer-

lain Inc., 513 F.2d 716 (1975).

With such widespread and even internal disagreement,

the Supreme Court ought to intervene and shed light

on this issue which is always so crucial to the outcome

of trademark infringement and unfair competition con-

troversies.

—_— =

IV.

There Is No Likelihood That a Reasonable Purchaser

Would Be Confused Between the Products Marked

Conti and Le Conte.

At trial the parties agreed to be bound by the

District Court’s decision as to “reasonable likelihood

of confusion”.

First the Appellate Court struck down the District

Court’s decision because “The reasonableness of the

likelihood is not an issue on this appeal” and the

purchasers were thought to be “. . . the ignorant,

the inexperienced, and the gullible” [App. B]. Later

the Appellate Court modified its language but not

the result by stating “. . . a reasonable customer

of average intelligence and experience would very likely

be confused as to the source, due to the nexus of

features shared by the two marks” (emphasis added)

| App. D}.

The distinctions in language between the Appellate

Court’s first and second opinions do not amount to

any real difference. The purchasers contemplated by

the first and second opinions were, respectively, ex-

pressly and impliedly unreasonable.

Only an unreasonable purchaser would react to just

“the nexus of features shared by the two marks”.

By this approach the Appellate Court is looking only

to the points of similarity while disregarding all points

of dissimilarity. Considering just some parts of a mark,

for example. instead of the entire mark is improper

as indicated by the Supreme Court in Beckwith v.

Commr. of Patents, 252 U.S. 538 (1919) as follows:

“The commercial impression of a_ trade-mark

is derived from it as a whole, not from its elements

autifias

separated and considered in detail. For this reason

it should be considered in its entirety (Johnson

v. Brandau, supra) and to strike out any consider-

able part of it, certainly any conspicuous part

of it, would be to greatly effect its value”.

Much to Le Conté Cosmetics’ distress, the Appellate

Court did in effect strike out major parts of the

total Le Conté mark. The District Court found that

“The name appears to have a French origin or deriva-

tion. The ‘accent aigu’ ‘e’ is distinctively French. It

would normally be pronounced by an American in

the French manner with the accent over the final

syllable” [App. A]. While there was an abundance

of evidence in the record to support the District Court’s

finding as to the obvious French pronunciation and

appearance of LE CONTE, (just like JEAN NATE

and FABERGE) the Appellate Court arbitrarily dis-

agreed stating that such was “clearly erroneous”.

All of the packaging for LE CONTE products shows

the name surrounded by a striking musical clef symbol

and in addition a double ring symbol. The District

Court specifically found, as anyone observing the pack-

ages must, that “The LE CONTE name on the packages

is invariably enclosed in a figure like a musical clef”.

Through its silence the Appellate Court arbitrarily

ignored that salient feature of Le Conté Cosmetics’

total composite trademark.

Other points of sharp dissimilarity disregarded by

the Appellate Court and which would have been taken

into consideration by any reasonable and prudent pur-

chaser are the following:

1. CONTI is a mild and gentle product directed

to all purchasers whereas LE CONTE is an active

hormone product directed particularly to the Black

population.

cules

2. The packaging of LE CONTE is dressed in

the flamboyant colors of pink, gold and white with

distinctive container shapes—whereas the packaging

for CONTI is green and white;

3. The name LE CONTE is printed in such small

script on the packaging and is so overwhelmed by

the other packaging design features that it can only

be read at very close range—whereas the name CONTI

in its various forms can be observed from a relatively

long distance;

Under the correct test of “reasonable likelihood of

confusion” which was both agreed to by the parties

and actually applied by the District Court [App. A]

a purchaser could quite easily distinguish the different

sources for CONTI and LE CONTE. This of course

is strongly implied by the lack of any actual confusion

in the marketplace during the long period of concurrent

sales of the respective products.

The District Court’s analysis and approach to the

issue of “likelihood of confusion’ with reference to

reasonable and prudent consumers was proper [| App.

A]. On the other hand, the Appellate Court’s related

approaches taken to resolve the issue [App. B and

App. D]| were seriously incorrect and ought to be

overruled by the Supreme Court.

Conclusion.

It is respectfully submitted that this petition for

a writ of certiorari should be granted.

Respectfully submitted,

JOHN E. KELLY,

Counsel for Petitioners.

PasTORIZA & KELLY,

Of Counsel.

APPENDIX A.

District Court, C. D. California.

The J. B. Williams Company, Inc. v. Le Conté

Cosmetics, Inc., et al. No. 72-1026-IH Decided May

17, 1973.

TRADEMARKS

1. Identity and similarity—Words—Not similar (§

67.4111)

As applied to toiletries, “Le Conté” does not so

resemble “Conti” that confusion is likely.

Action by The J. B. Williams Company, Inc., against

Le Conté Cosmetics, Inc., and Elton C. Toland for

trademark infringement and unfair competition. Judg-

ment for defendants.

Nilsson, Robbins & Wills and Charles E. Wills, both

of Los Angeles, Calif., and Mason, Fenwick & Law-

rence and Edward G. Fenwick, Jr., both of Washing-

ton, D. C., for plaintiff.

Pastoriza & Kelly and John E. Kelly, both of Santa

Monica, Calif., and Joseph H. Miller, Jr., Beverly

Hills, Calif., for defendants.

Hill, District Judge.

There were originally noticed for hearing on March

26, 1973, reciprocal motions of the parties for partial

summary judgment. Present on that date were: Charles

E. Wills, Esq., of Nilsson, Robbins & Wills, and Edward

G. Fenwick, Jr., Esq., of Mason, Fenwick & Lawrence,

for Plaintiff. and John E. Kelly, Esq., of Pastoriza

& Kelly, and Joseph H. Miller, Jr.. Esq., for Defendants.

On that date, by stipulation of counsel for both sides

— =

made in open Court, the following actions were taken

and ordered:

1. Each of the aforesaid motions for summary judg-

ment was withdrawn.

2. Plaintiff dismissed Lenore Toland as a Defendant

in the action.

3. Plaintiff dismissed all claims for any type of

relief against any Defendant other than a claim for

a permanent injunction.

4. Defendants dismissed all affirmative defenses and

all counterclaims or cross-complaints for affirmative

relief.

5. Counsel for both sides agreed that the case

should be tried commencing on Monday, March 26th,

and should be tried on the basis of the facts presented

to the Court in the affidavits and exhibits accompanying

their said motion for summary judgment and on the

basis of further facts which were hereupon stipulated

to. Pre-trial was waived.

6. The trial was confined to the sole issue of

whether there was a reasonable likelihood of confusion

as to the source and origin of Defendants’ products.

If so held, counsel agreed that the Plaintiff would

be entitled to a judgment providing for a permanent

injunction against Defendants. If held to the contrary,

judgment would be entered for Defendants against Plain-

tiff.

Trial having been had and the Court having con-

sidered the evidence introduced therein and having

heard argument, makes the following Findings of Fact,

Conclusions of Law and Orders:

——=

FINDINGS OF FACT

1. The Plaintiff, The J. B. Williams Company,

Inc., is a corporation organized and existing under

the laws of the State of New Jersey, with its principal

place of business at 757 Fifth Avenue, New York,

New York.

2. The Defendant, Le Conté Cosmetics, Inc., is

a corporation organized and existing under the laws

of the State of California, with its principal place

of business at Los Angeles, California, within the Cen-

tral Judicial District of California, and was incorporated

in October or November 1971.

3. The Defendant, Elton C. Toland, is a citizen

and resident of the State of California, and prior to

the incorporation of Le Conté Cosmetics, Inc., traded

under the style Le Conté Cosmetics, with his principal

place of business at Los Angeles, California.

4. The matter in controversy exceeds, exclusive

of interest and costs, the sum of Ten Thousand Dollars

($10,000).

5. The First Claim for Relief is for the infringe-

ment of trademarks registered under the Trademark

Laws of the United States, $$ 1051, et seq., of Title

15, United States Code. This Court has jurisdiction

thereof pursuant to $§ 1331 and 1338(a) of Title

28, United States Code.

6. Second Claim for Relief is for unfair competition.

This Court has jurisdiction thereof pursuant to § 1338

(b) of Title 28, United States Code.

7. Plaintiff is the owner of United States Trademark

Registration No. 200,914, dated July 14, 1952; United

States Trademark Registration No. 276,709, dated Oc-

_—

tober 28, 1930; United States Trademark Registration

No. 502,739, dated October 5, 1948; and United States

Trademark Registration "No. 507,046, dated February

22, 1949. As between the parties hereto, all of the afore-

mentioned registrations include the trademark “Conti”,

are valid and in full force and effect. On liquid shampoo

and concentrated professional shampoo, the trademark

“Conti” is shown in script form with the bottom portion

of the “C” extending under adjacent letters. The trade-

mark in script form with the bottom portion of the “C”

extending under adjacent letters does not appear on any

of the trademark registrations.

8. Since about January 1924, Plaintiff and its pred-

ecessors in business have continuously used the trade-

mark “Conti” in connection with the advertising and

sale of hand soap and shampoo.

9. Special Castile properties, or capacities for being

gentle and mild, are stressed in the labeling, packag-

ing and advertising used by Plaintiff in promoting

and selling its Conti products. Plaintiff's Conti products

are specialty items designed to appeal to and to be

used by consumers with a special need or desire for

gentle and mild soap or shampoo.

10. In many instances, Plaintiff has displayed the

statutory registration notice with its trademark “Conti”

as used on hand soap and shampoo, pursuant to §

L111 of Title 15, United States Code. Prior to institut-

ing the present action, Plaintiff notified the Defendants

of their alleged trademark infringement and alleged

unfair competition consisting of the use of the name

and mark “Le Conté”.

—_

11. “Conti” hand soap and “Conti” liquid shampoo

have been and are presently being sold to many segments

of the retail trade throughout the United States, includ-

ing the State of California, through such retail outlets

as grocery stores, discount stores, and large and small

drugstores. Some of these retail outlets are located

in predominantly Black-American neighborhoods..

12. “Conti” concentrated professional shampoo and

“Conti” concentrated shampoo soaplets have been and

are presently being sold through manufacturer’s rep-

resentatives throughout the United States, including

the State of California, to beauty and barber suppliers,

who resell to beauty and barber shops. Some of the

aforementioned suppliers and beauty and barber shops

are located in predominantly Black-American neighbor-

hoods.

13. From 1959 to daie, in excess of One Million

Dollars has been expended in the promotion and ad-

vertising of the trademark “Conti” in connection with

hand soap and shampoo products. This advertising

program has covered the entire United States. However,

Plaintiff's advertising expenditures have declined from

approximately $397,000 in 1959 to $19,000 in 1967

and 1968. The amount spent on advertising in 1969,

1970 and 1971 has been a negligible amount.

14. From 1959 through January 31, 1972, sales

of products under the trade name “Conti” have been

in excess of $8,948,000 and these sales are continuing

throughout the United States and in California. How-

ever, sales of “Conti” products have declined from

$1,164,000 in 1959 to $387,000 in 1971.

15. Since 1966, Defendant has produced and mar-

keted a line of hair care products under the trademark

of “Le Conté” including shampoo, hair conditioners,

a hair growing treatment and hair spray. The only

overlap between Plaintiff's and Defendants’ line of prod-

ucts is in the area of shampoo.

16. Defendants’ Le Conté hair care products feature

a hormone composition and are designed to appeal

primarily to persons of the Negro race. 97% of the

purchasers of Le Conté products are Black.

17. Le Conté Cosmetics Inc. is a Black-owned

and Black-operated company that generally concentrates

its sales and promotional efforts in areas of high Black

population, such as the Watts region of Los Angeles

and the Deep South.

18. Defendants’ Le Conté hair care products with

hormones are specialty items very different in terms

of composition, purpose, function and appeal as com-

pared to Plaintiff's specialty Conti items. The respective

Conti and Le Conté products are both generally classi-

fied as toiletries but are not interchangeable or sig-

nificantly similar.

19. Defendants’ principal trademark, which appears

on all packages and virtually all advertising and promo-

tional materials, is constituted by the words, Le Conté,

surrounded by a musical clef symbol.

20. The words, Le Conté, were derived in the

early part of the year 1966 by combining certain

common letters appearing in the full names of Lenore

Cooper Toland, Defendant Toland’s former wife, and

Elton Cohen Toland. Lenore C. Toland, a retired

music teacher from the Los Angeles City School System,

suggested the musical clef symbol. Defendants did not

know of Plaintiff's name, Conti, prior to this lawsuit.

21. Defendants began selling and promoting their

cosmetic and toiletry products under the name, Le

Conté, in the middle of the year 1966 through house

parties, at conventions, and in the local area. The

predecessor trade name, Le Conté Cosmetics, was incor-

porated and converted to Le Conté Cosmetics Inc.

in 1971. The Defendants first used their name, Le

Conté, as a trademark and trade name long after

the first use by Plaintiff of its name, Conti.

22. From the outset, Defendants have actively pro-

moted their Le Conté name and have actively advertised

their Le Conté name and hormone products in news-

papers, magazines, trade journals, radio and television.

23. Defendants’ advertised expenditures for Le

Conté products have been $7,000 in 1969, $17,000

in 1970, and $26,000 in 1971.

24. Defendants’ sales for Le Conté products were

approximately $1,000 in 1966, $7,000 in 1967, $13,-

000 in 1968, $46,000 in 1969, over $100,000 in

1970, and for the period of January 1971 through

September 1972 were $600,000.

25. Defendants’ sales of Le Conté products have

been steadily increasing and Plaintiff's sales of Conti

products have been steadily declining, now leveling

off. At the present time, Defendants’ sales of Le Conté

toiletries exceeds Plaintiff's sales of Conti toiletries.

26. No evidence of confusion among consumers

or tradespeople, known by or reported to Plaintiff

or Defendants, has been produced. No evidence of

lost business, lost customers, misdirected mail or pack-

ages sent to the wrong manufacturer, has been pro-

duced.

—_

27. Among reasonable and prudent customers, there

is no likelihood of confusion as to the true source

of Le Conté toiletries and the true source of Conti

toiletries. Reasonable customers would not be deceived

or misled into thinking that Le Conté is sponsored

by or produced by Plaintiff. Reasonable customers

would not be deceived or misled into thinking that

Conti is sponsored by or produced by Defendants.

(A) The names employed by Plaintiff and Defend-

ant are substantially different. Plaintiffs mame is a

single word, “Conti”, which would appear to be Italian

in origin or derivation. It has no clear meaning in

English. There is no evidence before the Court as

to how either name is normally pronounced or how

it is pronounced by the majority of customers, or

drugstore sales clerks, or even by the parties them-

selves. Plaintiff's name would normally be pronounced

by an American with the accent on the first syllable.

The “i” would be pronounced as the “y” is pronounced

in “ready”.

(B) Defendnts’ name consists of two words, “Le

Conté”. It also has no clear meaning in English. The

name appears to have a French origin or derivation.

The “accent aigu” over the final “e” is distinctively

French. It would normally be pronounced by an

American in the French manner with the accent on

the final syllable. The final “e” would be pronounced

like “ay” in “say”. The American public would be

conditioned to so pronounce it as a result of the

millions of dollars spent for television advertising by

other manufacturers of cosmetic and grooming products,

in which the “accent aigu” over the final “e” is similarly

pronounced, e.g. Fabergé and Jean Naté. The Court

takes judicial notice of such pronunciations and the

immense funds spent in advertising such products on

television.

the packages of the two parties or between the way

the two names are rendered on the packages and

in the parties’ advertising. Plaintiff's packages are all

distinctively green and white. The Conti name on the

packages and in advertising is unenclosed by any distin-

guishing figure. The Conti name is boldly rendered

so as to be visible from a great distance. Defendants’

packages are all pink and gold. The Le Conté name

on the packages is invariably enclosed in a figure

like a musical clef. The name on the package is always

rendered in pink. The Le Conté name is difficult

to read on all its packages and cannot be read from

a distance of more than two feet from the eye on

most of the packages, e.g. Exhibits A, B and J. The

only visual similarity between the two names (other

than the fact that they both contain the letters

“C-O-N-T”) is in the use of a large script “C”, the

bottom line of which extends underneath some or all

of the letters which follow. This type of script “C”

appears on all of Defendants’ packages and has from

the beginning of its use of the Le Conté name. Plain-

tiff has presented no evidence as to when its script

“C” was first adopted by it. Such a “C” does not

appear on any of Plaintiffs four trademark registra-

tions. It is as likely as not that Defendant commenced

the employment of the script “C” before Plaintiff did.

In any event, even when both names are rendered

with a script “C”. the two names as employed in

packaging and advertising have far more, and far more

significant, dissimilarities than similarities.

oniiiicn

(D) Defendants’ product line consists of hair treat-

ment, conditioners, “Growhair” treatment, conditioner

rinse and “conditioner shampoo”. The only overlap

is in shampoo. Plaintiff has four kinds of shampoo,

namely professional shampoo, shampoo concentrate,

shampoo with olive oil and shampoo soaplets. The

parties feature a very different thrust, appeal and motif

in their packaging and advertising. Defendants’ packages

and advertising feature hormone content. Plaintiff's

packaging and advertising feature Castile soap with olive

oi! content. Defendants’ advertising and the copy on its

containers are directed primarily at Black customers who

constitute 97% of its customers. Plaintiff's copy is

directed primarily at persons interested in a Castile-

based soap and shampoo featuring gentleness. This

appeal in Plaintiff's copy is made to persons of all

races and directed primarily to no particular race.

There is no evidence as to the racial distribution of

Plaintiff's customers.

28. Any finding of fact which is held to be a

conclusion of law shall be deemed to be a conclusion

of law.

CONCLUSIONS OF LAW

1. The Court has jurisdiction of the subject mat-

ter and jurisdiction over Plaintiff and Defendants. Juris-

diction arises under the Trademark Laws of the United

States, 15 U.S.C. $ 1051 et seq. and under 28 U.S.C.

$$ 1331 and 1338(a). Venue is based on 28 U.S.C.

$ 1391. Jurisdiction is also based on diversity of citizen-

ship between Plaintiff and the Defendants, the amount

in controversy exceeding $10,000, exclusive of interest

and costs, under 28 U.S.C. § 1332.

[1] 2. Among reasonable and prudent customers.

there is no likelihood of confusion as to the source

and/or origin of Le Conté products and the source

and/or origin of Conti products. Reasonable customers

would not be confused or deceived or misled into

thinking that Le Conté products, or any of them,

is sponsored by or produced by Plaintiff. Nor would

reasonable customers be confused or deceived or misled

into thinking that Conti products, or any of them,

is sponsored by or produced by Defendants.

As previously judicially recognized, the purchasers

of toiletries and cosmetics “are meticulous and do

not depend solely on pronunciation. They rely on the

reputation of the makers of the various brands.” Lucien

Lelong v. Lenel, 18i F.2d 3, 85 USPQ 117 (Sth

Cir. 1950). See also Jean Patou v. Jacqueline Cochran,

201 F.Supp. 861, 133 USPQ 242 (SD NY, 1962).

The Court notes that the respective marks in Lelong,

supra, were much more similar in appearance and

pronunciation than are Plaintiff's and Defendants’ marks

in Lelong, the marks in dispute were'-“Balaiza” and

“Bellezza”.

Moreover, even if the reasonable and prudent toi-

letry purchaser is no more careful or meticulous a

shopper than the shopper for ordinary, inexpensive

household goods, there is, and would be, no likelihood

of confusion.

Neither the trademark, name and device, taken

alone, nor the total physical image given by Defend-

ants’ product and name together—the total impression

of package. size, shape, color, design and name—is

likely to confuse the ordinary and prudent customer

as to the source or origin of the respective products.

3. Any conclusion of law that is held to be a

finding of fact is deemed to be a finding of fact.

4. Judgment will be entered in favor of the Defend-

ants and against the Plaintiff. Each side will bear

its own costs.

= =

APPENDIX B.

Opinion of the United States Court of Appeals,

for the Ninth Circuit.

United States Court of Appeals, for the Ninth Circuit.

The J. B. Williams Company, Inc., Plaintiff-Appel-

lant, vs. Le Conté Cosmetics, Inc., and Elton C. Toland

and Lenore Toland, Defendants-A ppellees. No. 73-2470.

OPINION

{June 2, 1975]

Appeal from the United States District Court for

the Central District of California

Before: ELY and GOODWIN, Circuit Judges and

RENFREW,* District Judge.

RENFREW, District Judge:

On May 10, 1972, plaintiff-appellant filed a com-

plaint in two counts against Le Conté Cosmetics, Elton

C. Toland, its principal owner and executive officer,

and Lenore Toland, his former wife, for infringement

of plaintiff's trademark (15 U.S.C. $1051 et seq.)

and unfair competition. Defendants filed an answer

and counterclaims on July 10, 1972, and _ plaintiff

replied to the counterclaims on July 27, 1972. On

September 1, 1972, plaintiff asked for leave to amend

its complaint to add a third claim for relief for false

representations (15 U.S.C. §$1125a). This motion was

denied. Defendants and plaintiff then both filed motions

for summary judgment with accompanying affidavits.

On March 26, 1973, the date set for the oral hearing

on these motions, Lenore Toland was dismissed from

-_——

*The Honorable Charles B. Renfrew, United States District

Judge, Northern District of California, sitting by designation.

= =

the action by plaintiff. Defendants dismissed all of

their counterclaims, and the court and parties then

agreed to try the case solely on the basis of the

affidavits already presented, and certain stipulated facts,

on the issue whether there was a “reasonable likeli-

hood of confusing the source and origin of defendants’

product with that of plaintiff's”. The court found that

there was no such likelihood and entered judgment

in favor of defendants. For the reasons stated herein,

we reverse.’

The J. B. Williams Co. has produced hand soaps

and shampoos under the trademark “Conti” since 1924.

Since 1966 Le Conté Cosmetics has marketed its line

of cosmetics and hair care products under the mark

“Le Conté”. The primary issue on this appeal is whether

the trial court correctly determined there was not a

likelihood of confusion of “Conti” with “Le Con.é”.

This Court stated in Fleischmann Distilling Corp. v.

Maier Brewing Co., 314 F.2d 149, 152 (9th Cir.

1963):

“Numerous cases in this and other circuits hold

that under the circumstances here present, the

question of the likelihood of confusion is one

for us to decide. * * *

“One reason * * * is that this determination

of likelihood of confusion partakes more of the

character of a conclusion of law than of a finding

of fact.”

‘Although the trial court based its judgment on whether

there was a “reasonable likelihood of confusion’ between the

trademarks, the Lanham Act (15 U.S.C. $1051 ef seg.) requires

merely that there be a likelihood of confusion between trade-

marks to find that there has been trademark infringement.

Fleischmann Distilling Corp. v. Maier Brewing Co., infra, 314

F.2d at 151. In reversing, we conclude that there was a

likelihood of confusion. The reasonableness °f the likelihood

is not an issue on this appeal.

—j|4—

See also Friend v. H. A. Friend and Co., 416 F.2d

526, 531 (9th Cir. 1969), wherein the court stated:

“* * * likelihood of confusion is a matter to be

determined by this court [citing Fleischmann|”.

Whether likelihood of confusion is more a question

of law or one of fact depends on the circumstances

of each particular case.’ If the facts are disputed,

the findings of the trier of fact must be upheld unless

they are clearly erroneous. To the extent that the

conclusion of the trial court is based solely upon dis-

puted findings of fact, the appellate court must follow

the conclusion of the trial court unless it finds the

underlying facts to be without support in the record.

Thus, this court has refused to decide de novo whether

likelihood of confusion has existed, on many occasions.

See HMH Publishing Co., Inc. v. Lambert, 482 F.2d

595, 598 (9th Cir. 1973); Carter-Wallace, Inc. v.

Procter & Gamble Co., 434 F.2d 794, 799 (9th Cir.

1970): Paul Sachs Originals Co. v. Sachs, 325 F.2d

212. 214 (9th Cir. 1963): Plough, Inc. v. Kreis Labora-

tories, 314 F.2d 635, 641 (9th Cir. 1963). However,

if the facts are not in dispute, the appellate court

is “in as good a position as the trial judge to determine

the probability of confusion”. Fleischmann Distilling

Corp. v. Maier Brewing Co., supra, 314 F.2d at 152,

quoting Miles Shoes, Inc. v. R. H. Macy & Co.,

Inc., 199 F.2d 602 (2d Cir. 1952).

In the present case, as in Fleischmann,’ no facts

presented to the trial court are in dispute. The matter

2See 3 Callmann §82.3(b).

“In Fleischmann Distilling Corp. v. Maier Brewing Co., 196

F.Supp. 401 (N.D.Cal.S.D. 1961), the trial court stated:

“There is no basic dispute as to the facts, most of

which have been admitted in the pleadings, by stipulation,

by discovery or by uncontradicted testimony.”

=—=

was submitted to the court based on cross-motions

for summary judgment, and the facts were stipulated.

No testimony was taken at trial. Since the same facts,

presented in the same manner, are available to us

as were available to the trial court, the decision of

the trial judge is a conclusion of law, readily reviewable

by this court.

This situation is distinguished from those cases, supra,

in which the trial court’s conclusion of whether or

not there is a likelihood of confusion is based upon

disputed issues of fact, resolved at trial. Each case

of trademark infringement must be analyzed based

on its own facts. The results reached in different cases

decided by this circuit only appear to be contradictory

when the particular facts of each case are not analyzed.

Thus, in Paul Sachs Originals Co. v. Sachs, supra,

it was disputed at trial whether the name “Sachs”

had become the dominant portion of appellant’s trade-

mark. The trial court found that it had not, and

a panel of this court, including two of the judges

who had decided Fleischmann, supra, the same year,

refused to disturb the trial court’s finding because

it was not clearly erroneous.

The standard followed in this Circuit in reviewing

the trial court’s decision regarding likelihood of confu-

sion was set out in Carter-Wallace, Inc. v. Procter &

Gamble Co., supra, 434 F.2d at 799, where the court

said:

“Where there is no dispute as to the facts

and the issue of confusing similarity is based

solely upon a comparison of the trademarks them-

selves, this court is in a position equally as good

as the trial court to decide the issues. [Citing

Friend v. H. A. Friend and Co., supra, and Fleisch-

—S

mann Distilling Corp. v. Maier Brewing Co.,

supra.| In the circumstances present here, however,

the facts are in dispute, and therefore the district

court's determination of lack of confusing similarity

as to the source of defendant's SURE deodorant

must stand unless clearly erroneous. Paul Sachs

Originals Co. v. Sachs, 325 F.2d 212, 214 (9th

Cir. 1963).”

See also HMH Publishing Co., Inc. v. Lambert, supra,

482 F.2d at 599, n. 6.

When, as in the present case, the trial court has

based its decision upon stipulated facts, rather than

facts resolved at trial, this court can, and should,

determine the issue of likelihood of confusion for itself.

In deciding whether there is a likelihood of confusion,

an important consideration is whether the trademark

seeking protection is “strong” or “weak”. A “strong”

mark is one which is used only in a “fictitious, arbitrary

and fanciful manner”, see National Lead Co. v. Wolfe,

223 F.2d 195, 199 (9th Cir. 1955), whereas a “weak”

mark is a mark that is a meaningful word in common

usage, see Sunbeam Lighting Co. v. Sunbeam Corp.,

183 F.2d 969, 972-973 (9th Cir. 1950),* or is merely

a suggestive or descriptive trademark, see Majestic

Mfg. Co. v. Majestic Electric Appliance Co., Inc.,

127 F.2d 862 (6th Cir. 1949). A “strong” mark

is entitled to a greater degree of protection than is

a “weak” one because of its unique usage, see Stork

‘However, this Court does not approve the “probable confu-

sion” standard mentioned in Sunbeam, supra, 183 F.2d at

974, insofar as it may differ from the “likelihood of confusion”

standard.

Restaurant v. Sahati, 166 F.2d 348, 355 (9th Cir.

1948). “Conti” must be considered a “strong” mark

because it was stipulated at trial that the origin of

the name is not known, and there was no evidence

produced that it is a word with a meaning of its

own.

In deciding whether there is a likelihood of confusion

between “Conti” and “Le Conté”, the marks must

be compared for similarity in respect to appearance,

sound and meaning. See National Lead Co. v. Wolfe,

supra, 223 F.2d at 201. Here, neither mark has any

clear meaning in English, but their appearances are

similar. There is no evidence that most Americans

would pronounce “Conti” and “Conté” differently, in

spite of the French spelling of the latter word. Adding

“Le” does not distinguish the sounds of the two marks

significantly. The trial court’s finding that Americans

would normally pronounce “Le Conté” in the French

manner with the accent on the final syllable because

of the heavy advertising of such brands as “Fabergé”

and “Jean Naté” it without support in the record.

If whether there exists a likelihood of confusion

was based on the likelihood that a prudent, worldly

person would be confused, then the differences between

these two marks might be sufficient. However, as was

stated in Stork Restaurant v. Sahati, supra, 166 F.2d

at 359:

“The law * * * protects not only the intelli-

gent, the experienced. and the astute. It safeguards

from deception also the ignorant, the inexperi-

enced, and the gullible.”

= =

It is the latter type of person who would very likely

be confused by the similarity of the trademarks. The

trial court’s conclusion of law that the persons to

be considered in determining the issue of likelihood

of confusion are “reasonable and prudent” customers

is a misstatement of the law in this Circuit and

is not the test to be used.

Appellees argue that the products of the two com-

panies are so different that, even if the names are

similar, there is no possibility of confusion. While

the major components of some of the products of

the two companies do differ, both companies. produce

hair care products whose uses are “related so that

they are likely to be connected in the mind of a

prospective purchaser”, Fleischmann Distilling Corp.

v. Maier Brewing Co., supra, 314 F.2d at 159, because

the products are similar and the markets for the two

lines of products overlap. The trial court said in its

finding of fact 11 that some of Conti’s products are

sold in predominantly Black-American neighborhoods

where, admittedly, most of Le Conté’s products are

sold. This fact, plus the similarity of the products,

is enough to conclude that there is a likelihood of

confusion of the marks.

We hold therefore that the court below was in

error in entering judgment for appellees, because a

likelihood of confusion has been shown.

A second issue raised on this appeal is whether

the trial judge correctly denied appellant leave to

amend its original complaint to include a claim for

false representations made by appellees. The original

complaint was filed on May 10, 1972. Less than

six weeks after appellant claims it became aware of

the basis for a third cause of action, it requested

leave to amend the complaint.

While the trial judge may exercise his discretion

in granting leave to amend pleadings, Foman v. Davis,

371 U.S. 178, 182 (1962), Rule 15(a) of the Federal

Rules of Civil Procedure provides that “leave [to

amend] shall be freely given when justice so requires”,

and “outright refusal to grant the leave without any

justifying reason appearing for the denial is not an

exercise of discretion; it is merely abuse of that dis-

cretion and inconsistent with the spirit of the Federa!

Rules.” 371 U.S. at 182. On remand, therefore, we

suggest that the trial court consider granting leave

to amend the complaint.

The judgment below is reversed and the cause is

remanded to the district court with directions to enter

judgment in accordance with this opinion and to deter-

mine the relief to which appellant is entitled.

=— =

APPENDIX C.

No. 73-2470

IN THE

United States Court of Appeals

FOR THE NINTH CIRCUIT

Tue J. B. WILLIAMS COMPANY, INC.,

Plaintiff-A ppellant,

VS.

Le Conte Cosmetics, INC., and ELTON C. TOoLanp,

Defendants-A ppellees (Petitioners).

Appeal From the United States District Court for the

Central District of California.

PETITION FOR REHEARING.

Points for Reconsideration.

In requesting the Appellate Court to reconsider

and/or grant a rehearing as to portions of its June

2, 1975 opinion under Rule 40 of the Rules of Appellate

Procedure—Le Conté Cosmetics’ invites particular at-

tention to the following points:

1. Through misapprehension of the law in this

Circuit an extremely liberal test merely requiring “like-

'For convenience, the Appellees-Defendants Le Conté Cos-

metics, Inc., and Elton C. Toland, shall usually be collectively

referred to as Le Conté Cosmetics; Appellant-Plaintiff, The

J. B. Williams Co., Inc., shall be referred to as J. B. Williams;

the 604-page record shall be cited as |R with page no.];

the Court Reporter's Transcript of the March 26-28, 1973

proceedings shall be cited as [Tr. with page no.]; and, the

=— =

lihood of confusion among ignorant, inexperienced and

gullible purchasers” was followed in reversing the Dis-

trict Court.

2. The correct test in this Circuit as followed

by the District Court is “reasonable likelihood of con-

fusion” or “likelihood of confusion among reasonable

purchasers”.

3. Even if a liberal test is to be the law in

this Circuit, the parties openly agreed before trial

to be judicially bound only by the “reasonable likelihood

of confusion” test—and the procedure of the District

Court should not have been disturbed.

4. Through misapprehension of the trial proceedings

the Appellate Court believed that all facts at trial

were undisputed and stipulated, whereas, much to the

contrary, all critical facts were disputed until resolved

by the District Court’s own fact findings arrived at

hy drawing inferences.

5. The Appellate Court's trial de novo of this

controversy was improper since all of the District

Court’s own fact findings developed by drawing infer-

ences at trial must remain undisturbed unless “clearly

erroneous’.

typewritten form of the Appellate Court's Opinion of June

2, 1975 shall be cited as (Opinion with page no. and line

nos.).

ARGUMENT.

This Circuit Does Not Follow the Liberal Test of

“Likelihood of Confusion Among Ignorant, Inex-

perienced and Gullible Purchasers” and the Parties

Specifically Agreed to Be Bound by a Far Different

Test.

The test set forth in Stork Restaurant v. Sahati,

166 F.2d 348 (9th Cir. 1948), adopted by the Appel-

late Court to compare the similarities and dissimilarities

between Conti and Le Conté (Opinion, p. 6, lines

1-14) is no longer the law in this Circuit. If the

test is allowed to stand, it will radically change the

trademark laws.

From our research the extremely liberal test of

Stork Restaurant {involving identical marks and designs,

restaurant services and intent to copy}, now 27 years

old, has been referred to with apparent approval by

this Circuit in only Fleischmann Distilling Corp. v.

Maier Brewing Co., 314 F.2d 149 (9th Cir. Feb.

12, 1963) [involving identical marks and alcoholic

beverages]. In fact the Stork Restaurant decision is

based on California law and does not even relate

to the Lanham Act which became effective after the

complaint was filed.

The liberal test echoed in Fleischmann was short-

lived, i.e., eight days, as indicated in Plough Inc.

v. Kreis Laboratories, 314 F.2d 635 (9th Cir. Feb. 20,

1963). Judge Pope, who wrote the Fleischmann opinion,

vigorously dissented in Plough about a week later,

attempting to draw attention to both the Srork Res-

taurant and Fleischmann decisions and the liberal test.

Neither related to cosmetics or toiletries such as Conti

and Le Conté.

eB Ah —

= =

Since it has not reappeared until the Appellate Court's

present opinion (Opinion, p. 6, lines 1-14) it may

be implied that the liberal test of “likelihood of con-

fusion among ignorant, inexperienced and gullible pur-

chasers” was plowed under by the Plough decision.

Of critical importance is the fact that the parties

unequivocally and without hesitation agreed to the

test of “reasonable likelihood of confusion as to source

and origin” as indicated in the District Court's judgment

(R 579]. At trial the following exchange occurred:

Mr. Wills [J. B. Williams’ counsel]: The words

of art, your Honor, are “likelihood of confusion”.

The Court: Is it “reasonable likelihood”? or

straight “likelihood”?

Mr. Wills: “Reasonable likelihood”.

The Court: That is what I thought. And you

agree with that? Mr. Kelly [Le Conté Cosmetics’

counsel]: Yes, indeed, your Honor.

Shortly thereafter related dialogue continued as fol-

lows:

The Court: Now, gentlemen, let me tell you

what it looks like to me. The only logical way,

it seems to me, that I can decide this issue

of reasonable likelihood of confusion is to, in

effect, have you stipulate with the Court that

that issue can be tried right now so I can make

findings of fact on that issue: . . .

Mr. Wills: So stipulated, your Honor.

Mr. Kelly: So stipulated, your Honor.

Even if the Appellate Court continues to believe

that the test is “likelihood of confusion among ignorant.

inexperienced and gullible purchasers” the parties agreed

only to be judicially bound by the “reasonable likelihood

of confusion” test. Unless any such test whether more

or less liberal is unconstitutional, unlawful or against

public policy, the parties and the District Court should

be permitted by the Appellate Court to have proceeded

in the prescribed manner.

The Appellate Court's reversal of the District Court's

judgment based on a substituted and very liberal test

is not just shocking to Le Conté Cosmetics—it has

denied Le Conté Cosmetics of its procedural and sub-

stantive due process.

While the U.S. Supreme Court has not spoken for

nearly a century on the test to be applied in trademark

conflict situations, it is of interest that the Supreme

Court’s celebrated decision of McLean v. Fleming,

96 U.S. 245 (1877) is referred to in Stork Restaurant

but for other reasons. The Supreme Court’s McLean

decision is of particular significance for its general

observations as to the test applicable in trademark

conflicts, as follows:

“All that courts of justice can do, in that re-

gard, is to say that no trader can adopt a trade-

mark, so resembling that of another trader, as

that ordinary purchasers, buying with ordinary

caution, are likely to be misled” {96 U.S. 245

at 251] (Emphasis added).

. a court of equity will not interfere, when

ordinary attention by the purchaser of the article

would enable him at once to discriminate the

one from the other. Where the similarity is suf-

ficient to convey a false impression to the public

mind, and is of a character to mislead and deceive

the ordinary purchaser in the exercise of ordinary

care and caution in such matters, it is sufficient

—

to give the injured party a right to redress, if

he has been guilty of no laches” [96 U.S. 245

at 255}.

Surely the ignorant, inexperienced and gullible pur-

chasers referred to in Stork Restaurant are not the

same as and are probably opposite to the ordinary

purchasers buying with ordinary care, attention and

caution referred to by the Supreme Court in McLean.

If the trademark law requires subsequent trademark

users to adopt safeguards to prevent the ignorant,

inexperienced and gullible from becoming misled, then

such trademark users woud be burdened with the strict

liability of insurers. The Supreme Court has indicated

that this is not required in Kellogg Co. v. National

Biscuit Co., 305 U.S. 111 (1938), as follows:

“The obligation resting upon Kellogg Co. is

not to insure that every purchaser will know it

to be the maker but to use every reasonable

means to prevent confusion” (Emphasis added).

The liberal test followed by the Appellate Court

in resolving this controversy is tantamount to equating

likelihood of confusion with “possibility of confusion”.

There is always a “possibility” that an ignorant, unin-

telligent, gullible or unthinking purchaser may become

confused between competing and even non-competing

products. But the trademark laws protect the trademark

users too, so the mere “possibility” is not sufficient

to establish legal confusion. Carter-Wallace Inc. v. Proc-

tor & Gamble Co., 434 F.2d 794, 799 (9th Cir.

1970) [involving cosmetics and toiletries}.

—nlliion

The Test in This Circuit Is Clearly Based on “Reason-

able Likelihood of Confusion” or “Likelihood of

Confusion Among Reasonable Purchasers”.

The test announced and relied upon by the Appel-

late Court (Opinion, p. 6, lines 1-14) in making

its Conti vis-a-vis Le Conté comparison, is, with

all due respect, a violent departure from the correct

test of this Circuit and the test universally followed

by all other circuits.

The correct test in deciding trademark conflicts is

either “reasonable likelihood of confusion” or “likeli-

hood of confusion among reasonable purchasers”. With

the notable exceptions of the Stork Restaurant and

Fleischmann decisions this Circuit indeed follows the

“reasonable likelihood of confusion” test as was ap-

plied by the District Court {|R 578] and which was

discussed in our Appellees’ Brief, pages 28 and 29.

Application of the liberal test by the Appellate Court

instead of the correct “reasonable likelihood of confu-

sion” test is of critical importance to Le Conté Cosmet-

ics, since it was the major factor in overturning the

District Court’s judgment. The Appellate Court com-

mented that if likelihood of confusion is based on

a “prudent, worldly person” then the “differences be-

tween these two marks might be sufficient” (Opinion,

p. 6, lines 2 and 3).

Of even greater overriding concern is the high inter-

est of all manufacturers and trademark owners to

know whether their trademark operations in this Circuit

are to be governed by the test of “likelihood of con-

fusion among ignorant, inexperienced and gullible pur-

chasers” or “likelihood of confusion among reasonable

and prudent purchasers’.

= Se +

~~ =

Purchasers of cosmetics and toiletries such as Le

Conté and Conti are especially careful in distinguish-

ing between competing products so the chances of

reasonable likelihood of confusion occurring are even

further decreased. See our Appellees’ Brief, pages 44-

46. This rule has been recently reaffirmed by this

Circuit with respect to hair care products in Redken

Laboratories Inc. v. Clairol, Inc., 501 F.2d 1403 (9th

Cir. 1974) where it was noted that such hair care

products are “directed toward individual and discrim-

inating taste”, that the consumers “who purchase these

products learn of necessity to distinguish between many

products designed for application to human hair” and

that the “average, prudent beautician or consumer would

not be likely to become confused” (Emphasis added).

The most recent published trademark decision of

this Circuit, Saxony Products, Inc. v. Guerlain, Inc.,

_.. F. 2d ...., 185 U.S.P.Q. 474 (9th Cir. Apr. 1975),

prior to the Appellate Court’s opinion, and which also

pertains to toiletries emphatically stresses the correct

test in terms of:

“Whether there is a ‘. . . reasonable likelihood

that consumers would be confused as to the

source...” [185 U.S.P.Q. 475 at 479}.

“Whether a *. . . reasonable customer could

mistake the source. . .” [185 U.S.P.Q. 475 at

480}.

The appellate Court in Saxony Products agreed with

the District Court's finding that “Among reasonable

consumers there is no likelihood of confusion as to

the true source” of the accused product {185 U.S.P.Q.

475 at 480}.

In other decisions of this Circuit relating to toiletries,

Smith v. Chanel Inc., 402 F.2d 562 (9th Cir. 1968),

the test under the Lanham Act was framed as to:

. reasonable likelihood that purchasers will

be confused as to the sole source, identity or

sponsorship of the advertiser's product” (Emphasis

added ).

From our research of the more recent decisions

of this Circuit and in particular those dealing intimately

with toiletries and cosmetics [which category includes

all of the products sold under the Conti and Le Conté

marks] there is no doubt but that the only and correct

test is “reasonable likelihood of confusion” or alterna-

tively “likelihood of confusion among reasonable pur-

chasers”.

Again this test was well understood by the District

Court and all the parties including J. B. Williams

whose counsel agreed that the issue for trial was “rea-

sonable likelihood of confusion” [Tr. 8, 9].

We respectfully submit that the Appellate Court's

observation that “The reasonableness of the likelihood

is not an issue on this appeal” (Opinion, p. 2, lines

32 and 33) demonstrates misapprehension of the cor-

rect test followed by this Circuit.

But for the misapprehension of the Appellate Court

who mistakenly employed the liberal test of “likelihood

of confusion among ignorant, unintelligent and gul-

lible purchasers” the District Court's judgment would

have been affirmed.

—29—

All of the Critical Facts in This Controversy Were

Found by the District Court Who Drew Inferences

From the Trial Proceedings and Are Entitled to

Be Upheld Unless Deemed “Clearly Erroneous”

by the Appellate Court.

The Appellate Court has misapprehended the Dis-

trict Court's trial proceedings as to how the fact findings

evolved. To explain why a de novo trial was proper,

the Appellate Court observed that “. . . no facts

presented at the trial court are in dispute. The matter

was submitted to the Court based on cross motions

for summary judgment and the facts were stipulated”.

This is seriously inaccurate. Only the most basic facts

were developed by stipulation.

All of the critical operative facts upon which the

District Court’s decision turned were found solely by

the District Court after considering the Elton C. Toland

deposition, numerous affidavits, advertising exemplars,

actual products, etc. Particular findings of fact which

were found solely by the District Court, either com-

pletely or in large measure, were 9, 13, 14, 16,

18, 23, 24, 25, 26, 27, 27A, 27B, 27C and 27D.

Indeed, a great many stipulated facts were rejected

and not adopted at all by the District Court (see

Appellant's Main Brief, Appendix, pp. 1-25), to the

disappointment of both parties.

This mistaken analysis of the facts and trial pro-

cedures by the Appellate Court is of vital concern

to Le Conté Cosmetics and has cost it a reversal

of the District Court's decision relative to its mark

— =

Le Conté which has now been used for over nine

years.

Those facts determined by the District Court were

entitled to be upheld unless deemed “clearly erroneous”

and not supported by the record. No specific fact

has been indicated by the Appellate Court to be “clearly

erroneous”. The Appellate Court has indicated that

since the District Court “. . . based its decision upon

stipulated facts .. . . determine

the issue of likelihood of confusion for itself” (Opinion,

p. 4, lines 29-32). This is just not so and the Appellate

Court’s trial de novo was improper because there

” oe

that it may

were many disputed facts.

The “expedited” trial did not make the District

Court’s own fact findings more vulnerable so that the

“clearly erroneous” requirement could be laid aside.

See Custom Paper Products Co. v. Atlantic Paper

Box Co., 469 F.2d 178, 179 (1st Cir. 1972)—relying

upon Lundgren v. Freeman, 307 F.2d 104, 113-114

(9th Cir. 1962).

In a related matter the Appellate Court has not

given any reason for disagreeing with the District

Court's taking of judicial notice set forth in Finding

of Fact 27B except that it “. . . is without support in

the record (Opinion, p. 5, line 30). The pronunciation

of nationally advertised French brand names for toi-

letries is well within the fund of general knowledge

and need not be “in the record”.

ee, eel

—_ =

Conclusion.

The Appellate Court is hereby asked to grant this

petition for a rehearing in order to correct its misap-

prehensions as to the “reasonable likelihood of con-

fusion” test and the type of fact findings by the District

Court.

PasTORIZA & KELLY,

JouN E. KELLY, Esgq.,

Attorneys for Appellees-Petitioners.

1, John E. Kelly, attorney for Appellees-Petitioners,

do hereby certify that the foregoing petition for a

rehearing of this cause is presented in good faith and

not for purpose of delay.

JOHN E. KELLY,

Attorney for Appellees-Petitioners.

=, =

APPENDIX D.

Opinion of the United States Court of Appeals for the

Ninth Circuit (Revised September 18, 1975).

United States Court of Appeals, for the Ninth Circuit.

The J. B. Williams Company, Inc., Plaintiff-Appel-

lant, vs. Le Conté Cosmetics, Inc., and Elton C. Tolan

and Lenore Toland, Defendants-A ppellees. No. 73-2470

OPINION

[June 2, 1975]

Appeal from the United States District Court for

the Central District of California.

Before: ELY and GOODWIN, Circuit Judges, and

RENFREW,* District Judge.

RENFREVW, District Judge:

On May 10, 1972, plaintiff-appellant filed a com-

plaint in two counts against Le Conté Cosmetics, Inc.,

Elton C. Toland, its principal owner and executive

officer, and Lenore Toland, his former wife, for infringe-

ment of plaintiffs trademark (15 U.S.C. $1051 et

seq.) and unfair competition. Defendants filed an an-

swer and counterclaims on July 10, 1972, and plain-

tiff replied to the counterclaims on July 27, 1972.

On September 1, 1972, plaintiff asked for leave to

amend its complaint to add a third claim for relief

for false representations (15 U.S.C. §$1125a). This mo-

tion was denied. Defendants and plaintiff then both

filed motions for summary judgment with accompany-

ing affidavits. On March 26, 1973, the date set for

the oral hearing on these motions, Lenore Toland

*The Honorable Charles B. Renfrew, United States District

Judge, Northern District of California, sitting by designation.

eee eEeEEO——EEEeeeee

was dismissed from the action by plaintiff. Defendants

dismissed all of their counterclaims, and the court

and parties then agreed to try the case solely on

the basis of the affidavits and exhibits already present-

ed, and certain stipulated facts, on the issue whether

there was a “reasonable likelihood of confusing the

source and origin of defndants’ product with that of

plaintiff's”. The court found that there was no such

likelihood and entered judgment in favor of defendants.

For the reasons stated herein, we reverse.

The J. B. Williams Co. has produced hand soaps

and shampoos under the trademark “Conti” since 1924.

Since 1966 Le Conté Cosmetics has marketed its line

of cosmetics and hair care products under the mark

“Le Conté”. The primary issue on this appeal is whether

the trial court correctly determined there was not a

likelihood of confusion of “Conti” with “Le Conté”.

This Court stated in Fleischmann Distilling Corp. v.

Maier Brewing Co., 314 F.2d 149, 152 (9th Cir.

1963):

“Numerous cases in this and other circuits hold

that under the circumstances here present, the

question of the likelihood of confusion is one

for us to decide. In Sleeper Lounge Company

v. Bell Manufacturing Co., 9 Cir., 253 F.2d 720,

723, this court quoted with approval the quotation

in Miles Shoes, Inc. v. R. H. Macy & Co., 2

Cir., 199 F.2d 602, that ‘we are in as good

a position as the trial judge to determine the

probability of confusion.’

1The Lanham Act (i5 U.S.C. $1051 et seq.) provides

that use without a registrant’s consent of “any reproduction,

counterfeit, copy, or colorable imitation of a registered mark

in connection with the sale, offering for sale, distribution, or

(This footnote is continued on next page)

onliien

“One reason for applying the rule of that case

and of the other cases in accord cited in the

margin [footnote deleted] is that this determination

of likelihood of confusion partakes more of the

character of a conclusion of law than of a finding

of fact.”

See also Friend v. H. A. Friend and Co., 416 F.2d

526, 531 (9th Cir. 1969), wherein the court stated:

“{L likelihood of confusion is a matter to be determined

by this court [citing Fleischmann|”.

Whether likelihood of confusion is more a question

of law or one of fact depends on the circumstances

of each particular case.* To the extent that the con-

clusion of the trial court is based solely upon disputed

findings of fact, the appellate court must follow the

conclusion of the trial court unless it finds the under-

lying facts to be clearly erroneous. Thus, this Court

has refused on many occasions to decide de novo

the facts underlying the trial court’s determination of

whether likelihood of confusion existed. See Carter-

Wallace, Inc. v. Procter & Gamble Co., 434 F.2d

794, 799 (9th Cir. 1970); Paul Sachs Originals Co.

v. Sachs, 325 F.2d 212, 214 (9th Cir. 1963); Plough,

Inc. v. Kreis Laboratories, 314 F.2d 635, 641 (9th

Cir. 1963). However, if the facts are not in dispute,

the appellate court is “in as good a position as the

trial judge to determine the probability of confusion”.

Fleischmann Distilling Corp. v. Maier Brewing Co..,

supra, 314 F.2d at 152, quoting Miles Shoes, Inc.

v. R. H. Macy & Co., 199 F.2d 602 (2d Cir. 1952).

advertising of any goods or services on or in connection with

which such use is likely to cause confusion” will entitle the

registrant to certain remedies. 15 U.S.C. §1114.

2See 3 R. Callman, The Law of Unfair Competition Trade-

marks and Monopolies, §82.3(b) (3d ed. 1969).

In the present case, as in Fleischmann,’ no facts

presented to the trial court are in dispute. The matter

was submitted to the court based on affidavits, exhibits,

and certain stipulated facts. No testimony was taken

at trial. Since no issue of material fact arises from

the affidavits, exhibits and stipulated facts, the deter-

mination by the trial judge, as to whether in light

of those undisputed facts there existed a “likelihood

of confusion” between Conti and Le Conté is a question

of law readily reviewable by this Court.*

This situation is distinguished from those cases, supra,

in which the trial court’s conclusion of whether or

not there is a likelihood of confusion is based upon

disputed issues of fact, resolved at trial. Each case

of trademark infringement must be analyzed based

on its own facts. The results reached in different cases

decided by this circuit only appear to be contradictory

when the particular facts of each case are not analyzed.

Thus, in Paul Sachs Originals Co. v. Sachs, supra,

it was disputed at trial whether the name “Sachs”

had become the dominant portion of appellant’s trade-

mark. The trial court found that it had not, and

a panel of this court, including two of the judges

who had decided Fleischmann, supra, the same year,

refused to disturb the trial court’s finding because

it was not clearly erroneous.

5In Fleischmann Distilling Corp. v. Maier Brewing Co., 196

F.Supp. 401 (N.D.Cal. 1961), the trial court stated:

“There is no basic dispute as to the facts, most of

which have been admitted in the pleadings, by stipulations,

by discovery or by uncontradicted testimony.”

‘It might be argued that the conflicting contentions of the

parties with respect to similarity in sound and appearance

of the two marks gives rise to a factual dispute. This argument

is no obstacle to the scope of our review since the trial

court's determination on those questions was clearly erroneous.

The standard followed in this Circuit in reviewing

the trial court’s decision regarding likelihood of con-

fusion was set out in HMH Publishing Co, Inc. v.

Lambert, 482 F.2d 595, 599, n. 6 (9th Cir. 1973):

“If the facts are not in dispute and the issue

of confusing similarity is based solely upon the

comparison of the marks in the context of ex-

trinsic facts, the appellate court may determine

the issue of confusing similarity.”

To this standard, we add a corollary test, namely,

where the conclusion of the trial court is based solely

upon disputed findings of fact, the appellate court

need not follow the conclusion of the trial court where

it finds the underlying facts to be clearly erroneous.

When, as in the present case, the trial court has

based its decision upon affidavits, exhibits and certain

stipulated facts, none of which raises an issue of material

fact, this court can, and should, determine the issue

of likelihood of confusion for itself.

In order to determine whether there is a likelihood

of confusion in a trademark infringement case, the

Court must consider numerous factors, including inter

alia the strength or weakness of the marks, similarity

in appearance, sound, and meaning, the class of goods

in question, the marketing channels, evidence of actual

confusion,” and evidence of the intention of defendant

in selecting and using the alleged infringing name.°

‘Although the trial court found no evidence of actual confu-

sion, this fact does not preclude this Court from concluding

that there is a “likelihood of confusion”, as actual confusion

is merely one factor to be considered by the Court when

it makes its determination.

“With respect to defendant’s intent the trial court found

that defendants did not know of plaintiff's name “Conti” prior

= =

See Carter-Wallace, Inc. v. Procter & Gamble Co.,

supra, 434 F.2d at 800: Paul Sachs Originals Co.

v. Sachs, supra, 325 F.2d at 214. After considering

these factors, the Court then must determine whether

there exists a likelihood of confusion.

Structuring the analysis in this fashion, it becomes

easier to determine whether the trial court findings

on the listed factors are ones of law or fact. Characteri-

zation is facilitated by an example. Consider the finding

in the instant case on similarity of appearance. There

was no dispute as to the actual appearance of the

marks. With the actuai appearance on evidentiary fact,

the next step was to decide whether to a reasonable

viewer the marks were similar in appearance. That

finding, if affirmative. would be aggregated with the

other factors and the aggregate assessed as a foundation

for the ultimate “likelihood of confusion” determination.

Individually each of these findings is preliminary to

and not per se determinative of the ultimate issue.

Viewing the foundational question as one of “con-

fusing similarity” is improper because it merges analysis

of one of the preliminary inquiries with the conceptually

distinct step of applying the statutory standard.’ The

marks may be similar in appearance (foundational

fact) yet not likely to cause confusion as to their

source, particularly when all the factors are considered.

Using this approach, similarity of appearance and the

remaining factors provide foundational facts and should

to this lawsuit and that the mark “Le Conte” was derived

by combining letters found in the names of defendant Toland

and his wife. The Court need not decide whether these findings

of the trial court are clearly erroneous, for even if the Court

assumes that they are correct, the other factors discussed below

require us to conclude that there is a “likelihood of confusion”.

™Confusing similarity” is another way of stating the “likeli-

hood of confusion”.

=_ =

be assessed on review under the clearly erroneous

rule.

The first step in the analysis is to determine whether

the mark seeking protection is “strong” or “weak”.

A “strong” mark is one which is used only in a

“fictitious, arbitrary and fanciful manner”, see National

Lead Co. v. Wolfe, 223 F.2d 195, 199 (9th Cir.

1955), whereas a “weak” mark is a mark that is

a meaningful word in common usage, see Sunbeam

Lighting Co. v. Sunbeam Corp., 183 F.2d 969, 972-

973 (9th Cir. 1950)," or is merely a suggestive

or descriptive trademark, see Majestic Mfg. Co. v.

Majestic Electric Appliance Co., Inc., 127 F.2d 862

(6th Cir. 1949). A “strong” mark is entitled to a

greater degree of protection than is a “weak” one

because of its unique usage, see Stork Restaurant

v. Sahati, 166 F.2d 348, 355 (9th Cir. 1948). “Conti”

must be considered a “strong” mark because it was

stipulated at trial that the origin of the name is not

known, and there was no evidence produced that it

is a word with a meaning of its own.

Second, the marks must be compared for similarity

in appearance, sound, and meaning. See National Lead

Co. v. Wolfe, supra, 223 F.2d at 201. Here, neither

mark has any clear meaning in English, but their

appearances are similar. We reject the contrary finding

of the trial court as clearly erroneous. Further, the

trial court found, on the basis of judicial notice, that

Americans would normally pronounce “Le Conté” in

the French manner with the accent on the final syllable

*However, this Court does not approve the “probable confu-

sion” standard mentioned in Sunbeam, supra, 183 F.2d at

974, insofar as it may differ from the “likelihood of confusion”

standard.

= =

because of the heavy advertising of such brands as

“Fabergé™ and “Jean Naté”. That finding is not a

proper subject for judicial notice.

Finally, the Court must consider the similarity in

use of the products of both companies and the channels

through which they are marketed. Appellees argue

that the products of the two companies are so different

that, even if the names are similar, there is no possibility

of confusion. While the major components of some

of the products of the two companies do differ, both

companies produce hair care products whose uses are

“related so that they are likely to be connected in

the mind of a prospective purchaser”, Fleischmann

Distilling Corp. v. Maier Brewing Co., supra, 314

F.2d at 159, because the products are similar and

the markets for the two lines of products overlap.

The trial court said in its Finding of Fact 11 that

some of Conti’s products are sold in predominantly

Black-American neighborhoods where, admittedly, most

of Le Conté’s products are sold. This fact joins findings

of similarity in the products and in the sound and

appearance of the two marks plus a designation of

the Conti mark as “strong”. It may be that a worldly

and sophisticated person would be able to discern

the differences between the marks. We conclude, how-

ever, that a reasonable customer of average intelligence

and experience would very likely be confused as to

the source, due to the nexus of features shared by

the two marks.

We hold therefore that the court below was in

error in entering judgment for appellees, because a

likelihood of confusion has been shown.

A second issue raised on this appeal is whether

the trial judge correctly denied appellant leave to amend

—_— =

its original complaint to include a claim for false

representations made by appellees. The original com-

plaint was filed on May 10, 1972. Less than six

weeks after appellant claims it became aware of the

basis for a third cause of action, it requested leave

to amend the complaint.

While the trial judge may exercise his discretion

in granting leave to amend pleadings, Foman v. Davis,

371 U.S. 178, 182 (1962), Rule 15(a) of the Federal

Rules of Civil Procedure provides that “leave [to

amend] shall be freely given when justice so requires”,

and “outright refusal to grant the leave without any

justifying reason appearing for the denial is not an

exercise of discretion; it is merely abuse of that discre-

tion and inconsistent with the spirit of the Federal

Rules.” 371 U.S. at 182. On remand, therefore, we

suggest that the trial court consider granting leave

to amend the complaint.

The judgment below is reversed, and the cause is

remanded to the district court with directions to enter

judgment in accordance with this opinion and to deter-

mine the relief to which appellant is entitled.

—_—

APPENDIX E.

Order.

United States Court of Appeals, for the Ninth Circuit.

The J. B. Williams Company, Inc., Plaintiff-Appel-

lant, vs. Le Conte Cosmetics, Inc., and Elton C. Tolan

and Lenore Toland, Defendants-Appellees. No. 73-2470

Appeal from the United States District Court for

the Central District of California.

Before: ELY and GOODWIN, Circuit Judges, and

RENFREW,* District Judge

The panel as constituted in the above case has

voted to deny appellees’ petition for rehearing.

The petition for rehearing is denied and the opinion

filed herein on June 2, 1975, is revised in the form

filed this same date.

*The Honorable Charles B. Renfrew, United States District

Judge, Northern District of California, sitting by designation.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.