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

> Briefs, arguments, decisions, and more.

URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385003_1425%3A1

## Record

- **Collection:** Supreme Court brief
- **Document type:** Petition
- **Published:** January 1, 1976
- **Citation:** 424 U.S. 913

## Text

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

I.

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

II

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

er
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

a

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.

ae

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.

I.

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-

a

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”.

ad

. 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

ee

— =

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

a

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

a

takes judicial notice of such pronunciations and the
immense funds spent in advertising such products on
television.

(C) There is no noticeable visual similarity between
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 —

Ve

= =

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).

o

. 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).

ae

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.

=a

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.

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385003_1425%3A1. Public record. Not legal advice.