Petition — Gardner Bender, Inc. v. Ideal Industries, Inc.

Supreme Court brief1980

Ask Donna

What actually matters in this document.

Text

ee =

; |

= Be ee = Di ial Bi all Rial a ee =a oe Bhi

APR 24 1980

| MICHAEL RODAK, JR., CLERN

IN THE

Supreme Court of the United States

OCTOBER TERM, 1979

No. 79-1680

IDEAL INDUSTRIES, INC.,

Respondent,

vs.

GARDNER BENDER, INC.,

Petitioner.

PETITION FOR WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

George H. Solveson

735 North Water Street

Milwaukee, WI 53202

Attorney for Petitioner

Glenn O. Starke

Gary A. Essmann

ANDRUS, SCEALES, STARKE & SAWALL

Richard A. Kranitz

Of Counsel

—————SS

-i-

TABLE OF CONTENTS

PAGE

NE Oy Se or ee Oe eee ss 1

TU OIE kA e wubb sc bbb se veceat'e 2

i ee aa al cea ec kee pecs cba eee eben 2

EEE ESE ee 2

i Ce i Ei A bs dubs nw We 6s coescens 2

Reasons for Granting the Writ ...............0eeee cece 7

1. The decision below conflicts with principles

established iit this Court and uniformly followed

by the Courts of Appeal by abolishing the long

standing principle that in order for a series of

number-letter designations to achieve trademark

status, they must first be shown to have been

primarily adopted for use as trademarks ........ 8

2. The law relating to the grant of preliminary

injunctive relief articulated by the decision

below is sufficiently important and erroneous to

merit correction by this Court ................5- 17

A. The decision below conflicts with principles

established in this Court and uniformly

foliowed by the Courts of Appeal by

abolishing the heavy burden of proof placed

upon a movant claiming common law

SI EE Ss cece ssacccccsesccccsseces 17

B. The preliminary injunction should not have

been granted where “unique issues in the

law of trademarks” are involved ............ 19

C. The Court below totally misapplied the law

with respect to irreparable harm, balance of

hardships and status quo by granting the

preliminary injunction .............eeeeeeee 20

Ne he Rr beeen ea eb erates stadboesebepeves 24

Appendices:

A. Opinion in Ideal v. Gardner (7th Cir. 1979)

612 F. 2d. 1018, 204 U.S.P.Q. 177 ...........

B. Opinion in Ideal v. Gardner (E.D. Wis. 1979)

ES ai hoon 65s d0 6 OC eva c see

-ii-

TABLE OF AUTHORITIES

Cases: PAGE

Allan Wood Steel Co. v. Watson, 150 F.Supp. 861

a PONE AE CL OR SUR OEE LEE Ob eb ee i ewetewesces’s 19

Allison v. Froehlke, 470 F.2d. 1123 (5th Cir. 1972)........ 23

American Heritage Insurance Co. v. Heritage Co.,

RR ge Te GS es” Tie | SA 19

Amoskeag Mfg. Co. v. Trainer, 101 U.S. 51,

a EO Oe ae ere 9

Armco Steel Co. v. Watson, 188 F.Supp. 554

AB oe REP EY OP EES Pee eel PTE TEERE TELE 14

Blaich v. National Football League, 212 F.Supp.

a Pa en | ee 23

Campbell Soup Co. v. Armour & Co., 3 Cir.

8 eS Ss Pe ae ee a ee ee coe 12

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

FO lad Mae PED ROUEN. COVE 5c SES Si eee eee. 18

Chase Brass & Copper Co. v. Chase Metalcraft Corp.,

19 F.Sepe. 966 GiiN.Y. 194B) ee ccc cee ee 21

Clairdale Enterprises, Inc. v. C I Realty

Investors, 423 F.Supp. 261 (S.D.N.Y. 1976) ............ 23

Clairol Incorporated v. Gillette Company,

ee SR Se aera 15

Coats v. Merrick Thread Co., 149 U.S. 562,

Sa eG. My OF Eee AT QUOD See eee dee cece 9

Columbia Mill Co. V. Alcorn, 150 U.S. 460,

eG a Sey ar Gree. TIKE CIG9S) ok ee ec 8

Deering Harvester Co. v. Whitman & Barnes Mfg.

NR Be GP a A a re 14

Dennison Manufacturing Co. v. Scharf Tag, Label & Box

S0., 180-F i GED GOR. TOUR i ei ee eee Tt,

Dymo Industries, Inc. v. Tapeprinter, Inc.,

oe Oe ee ee ea ers ee 17

Diamond Match Co., v. Safe Harbor Match Co.,

ee th Bae UAE IE, UUPED C25 iS vee cw wcccccbeccces cs 19

Ex parte Estabrook Pen Co., 109 U.S.P.Q. 368,

NG I EE orsign Deve ciks SeSe seks ate valees Genes 13

-iii-

Farm Service, Inc. v. U.S. Steel Corp.,

149 U.S.P.Q. 861 Gdahe S.CR. TORR. cs ic. sai vencees 19

Fisher v. Holiday Inn of Rhinelander, Inc.,

181 U.S.P.Q. 796 (Wis: Cis. Ch. 1978). <2 lscad eucl Ri 21

Fram Corporation v. Boyd, 230 F.2d 931

(Ste Cie. UDG) . on canisswibins + < dnecistue 0 nee ee 12

Gillette Co. v. Ed Pinaud, Inc.,

178 F. Supp. 618 (6.D.N. Y.: 1968) si. cs vin ds FS. Aaa ao 20

Helene Curtis Industries v. Church & Dwight Co.

560 F2d 1325 (7th Cir. 1977) ........ Jon kaeene see 21

In Re Rockwell-Standard Co., 169 U.S.P.Q. 445

(TEAB, UST). ievcdvcientcccedcukenen saa ae 18

In re Standard Kollsman Industries, Inc.,

156 U.S.P.Q. 346 (TTAB 1967) ..:. <5 .i5yee eee 15

James Heddon’s Sons v. Millsite Steel & Wire

Words, Inc., 6th Cir. 128 F.2d. 6 .. ..c<scsBwes teases 12

Kraft Phenix Cheese Corporation v. Levin,

29 F.Supp. 813 (E.C. Penn 1909)..:;) 4.03 4.5 Gite ee 19

K-S-H Plastics, Inc. v. Carolite, Inc.,

408 F.2d 54 (Sth Cir. 1969) eaeg. 55 5é.Gh ee eae 11

Kellogg Co. v. National Biscuit Co., 305 U.S. 111,

59 S.Ct. 109, $3 L.Ed. F3.(093@) «ds . sa-suess does eee 19

La Chemise Lacoste v. General Mills, Inc.,

487 F.2d. 312,314 (2d Cir. 1973) ici. . ic be eee 12

Life Savers Corp. v. Curtiss Candy Co.,

7th Cie., 162 F.2d. 4 . .. 0s eh a es wie 19

McCormick & Company v. Summers, 354 F.2d. 668

(CCPA 1966) . .... «0. <siidid 4 dalaloe «ele ee 23

Merrill Lynch, P.F. & Smith, Inc. v. E.F. Hutton,

Inc., 403 F.Supp. 336 (E.D.Mich. 1975) ................ 23

Mount Sinai Med Center of Greater Miami, Inc. v.

Mathews, 425 F.Supp. 4 (S.D. Fl. 1976) ............... 23

Munters Corp. v. Burgess Industries, Inc.,

535 F.2d. 210 (2nd Cis. 1976) wicnc’. .4k5 apes eee ee 20

Peter Pan Foundations v. Beau-Bra Foundations,

125 F.Supp. 637 (S.D.N.Y. 1999)... «x00. deeds eed 21

Programmed Tax Systems, Inc. v. Raytheon,

419 F.Supp 1251 (S.D.N.Y. 1976) ...... stews aenueaeee 19

-iv-

Ralston Purina Company v. Thomas J. Lipton,

ime., 261 F.Supp. 129 GiD.N.Y¥. 1972)... .......02.008 19

Roselux Chemical Co. v. Parsons Ammonia Co.,

Re ii occ cicb aces ccvacccess 19

Selchow & Righter Co. v. Book-of-the Month Club,

ie., toe W.ce Ao. Go, oa0 (.U.N.Y. 1976)..........6.. 21

State of Texas v. Seatrain, International,

OE 23

Time Mechanisms, Inc. v. Qonaar Corp., |

GEe Dimes Bee, FEL Cache BITE) cece cece scccccsess 17

W.A. Mack, Inc. v. General Motors Corporation,

eS 23

W.E. Bassett Co. v. Revlon, Inc., 435 F.2d.

ewan c ceases cups 17, 18

Willheim v. Investors Diversified Services, Inc.,

eee sccscencsspece 20

William H. Keller, Inc. v. Chicago Pneumatic

Tool Co., 298 F. 52 (7th Cir. 1923), cert.

denied, 265 U.S. 593, 44 S.Ct. 637,

EE I Sn 9

Yale Electric Corp. v. Robertson, 26 F.2d. 972

ee eae aoe Le nt baeee as ga eece ee 21

Statutes:

Title 15, United States Code, Section 1057b............ 18

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

Other Authorities:

1 J.T. McCarthy, Trademarks and Unfair Compettion,

iid CLLR as dale Gab ke bse ue op nensesp ones 15

IN THE

Supreme Court of the United States

OCTOBER TERM, 1979

No.

IDEAL INDUSTRIES, INC.,

Respondent,

vs.

GARDNER BENDER, INC.,

Petitioner.

PETITION FOR WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

Petitioner Gardner Bender, Inc. (‘Gardner’) respectfully

prays that a writ of certiorari be issued to review the judg-

ment of the United States Court of Appeals for the Seventh

Circuit entered in the above proceeding.

OPINIONS BELOW

The Opinion by the Court of Appeals is reported at 612

F.2d. 1018, 204 U.S.P.Q. 177. It is printed in Appendix A

hereto.

_ The Opinion of the District Court which was reviewed is

reported at 204 U.S.P.Q. 38. It is printed in Appendix B

hereto.

JURISDICTION

The Judgment of the Court of Appeals was dated and en-

tered November 19, 1979 and rehearing was denied on

January 28, 1980. Jurisdiction of this Court is invoked

under 28 U.S.C. §1254(1).

QUESTIONS PRESENTED

1. Whether the Court below erroneously granted a pre-

liminary injunction through the abolishment of the primary

adoption test to improperly permit exclusive trademark

rights in a series of industry accepted size indicators for

electrical connectors, namely 71B, 72B, 73B, 74B, 76B, and

78B.

2. Whether the Court below erroneously granted a pre-

liminary injunction based on so-called “unique issues in

the law of trademarks”, through the abolishment of the

heavy burden of proof on movant, and by erroneously as-

sessing irreparable damage, the balance of hardships, and

the status quo.

CONSTITUTIONAL PROVISION

The Fifth Amendment to the Constitution of the United

States provides, insofar as it is pertinent here, that ‘‘No

person shall . . . be deprived of . . . property, without due

process of law.”

STATEMENT OF THE CASE

Many years ago, Ideal adopted and used a numeral letter

series, namely 71B, 72B, 73B, 74B, 76B and 78B, solely to

designate the different sizes and models of a series of

otherwise substantially identical electrical connectors com-

monly used by electricians, manufacturers, etc. Ideal stated

to the Court below:

“... the 71B series ... was not initially adopted

and used as a trademark. . .”’

The 71B series was not adopted as a trademark, but

rather was used by Ideal and the trade as merely a designa-

tion of size. Ideal stated to the Court below:

“. .. these designations were used by Ideal and the

trade as merely a designation of size or model.”

Ideal did not apply the 71B series to the ends of its con-

nectors for use as trademarks, but rather as type designa-

tions intended primarily to identify a particular design for

the connector as required by the regulations of Underwrit-

ers Laboratories, Inc. The U.L. Reg. No. 78 and 78A pro-

vides:

“The marking on a connector shall include the man-

ufacaturer’s name or trademark and ... the type...

designation.”

+44

“The type designation is intended primarily to iden-

tify a particular design. . .”” (emphasis added)

Ideal did not apply the 71B etc. designations to its car-

tons or labels for use as trademarks, but rather used the

term “model” adjacent thereto to designate only the size of

its connectors. Ideal’s President testified:

“Q. What does the term “Model” mean? Is that a size

or grade designation, or what meaning does it have? A. I

don’t know. It refers to 74B. Q. And that’s a size desig-

nation? A. Yes.”

Ideal has not used the 71B etc. designations in its

catalogs as trademarks, but rather only as size and model

designations. Ideal stated to the Trademark Office:

“In that catalog the designations ‘’71B”’, etc. are used

as size or model designations. In fact, use in a catalog

does not qualify as a technical trademark use.”

By the time Gardner entered the marketplace with its

new line of connectors, the industry had commonly ac-

cepted the 71B etc. designations as standard size indicators

for a line of substantially identical electrical connectors

which only differed in size.

Ideal’s principal competitors, namely Hi Scale and Holub,

have widely used the 71B series as size designations for a

substantial period of time. The labels of both Holub and Hi

Scale prominantly display the 71B etc. series to designate

the size of their connectors.

The various distributors, including the distributors

which are customers of Ideal, all stated that the 71B. etc.

terms designate or indicate the size of electrical connectors.

No one claimed that the 71B etc. designations were

trademarks, until Ideal initiated the present suit and filed a

series of applications before the Trademark Office in or

about April and May of 1976.

Prior to the stay of the Trademark Office proceedings

subject to the resolution of this case, the Trademark Office

initially rejected such applications on the ground that the ~

71B etc. terms were not trademarks, but were rather model

designations.

After reviewing substantially the same customer tes-

timony as considered by the District Court below, the

Trademark Office again rejected Ideal’s applications on the

ground that the 71B etc. terms were not trademarks but

rather were model and size designations commonly used

throughout the trade. The U.S. Trademark Office stated:

“The affidavits submitted by applicant have been

carefully considered, but the mark ‘’74B” is still be-

lieved to be a size or model designation rather than a

trademark for applicant’s goods.

It would appear the “74B” is being used as a model or

size designation not only by applicant but by several other

manufacturers of electrical connectors as well. Enclosed are

photocopies of packaging and advertising materials —

applicant’s as well as competitors’ — that show use of “74B”

as a model designation.

“The refusal to register on the ground that the matter

presented for registration is a mere size or model designa-

tion and not a trademark is continued.”

The customer testimony submitted by Ideal failed to con-

tain any assertion that the 71B etc. terms were looked upon

as trademarks or that their “primary” meaning or signifi-

cance was source or origin rather than the product, i.e. its

size. One customer, Olin B. Blocker, who was cited by the

Court below as typical of other testimony, stated:

“Q. What does the series of designations signify to

you? A. The size of the wire nut.”

In fact, no where in Ideal’s briefs or statements before

the Court has Ideal ever contended that the primary signifi-

cance of the 71B etc. terms is source or origin rather than

the product, i.e. its size.

The evidence, taken individually and in combination,

overwhelmingly supports the ultimate fact that the 71B etc.

designations are recognized throughout the industry as

common industry-wide accepted size designations for elec-

trical connectors.

Ideai first learned of Gardner’s intent to enter the market

in October of 1975 but did not make any objection to

Gardner until it filed suit in May of 1976.

Further, Ideal failed to file its brief and exhibits in sup-

port of its motion for Preliminary Injunction until January

21, 1977, more than one year after Ideal first learned of

Gardner’s intention to use the 71B etc. series with respect

to its electrical connectors, and more than nine months

after Ideal had filed the suit. Gardner had substantially

completed its expensive molds without any objection from

Ideal and had entered into a wide scale production which

resulted in substantial inventories to satisfy the needs of

Gardner’s customers.

On June 10, 1977, the District Court held a hearing and

reviewed most of the evidence in this case and thereafter

refused Ideal’s summary judgment motion with respect to

Gardner’s second counterclaim.

Thereafter, Ideal made no formal motion to advance its

preliminary injunction motion for hearing. Approximately

thirty-nine months after Gardner had entered the market

with the 71B etc. designations, the Distrct Court entered an

order to require Gardner to permanently deface and modify

its expensive four hundred molds, to render valueless a

substantial inventory evaluated at approximately one-half

of Gardner’s net worth, to require that all connectors be re-

called from Gardner's distributors, to irreparably damage

Gardner’s relations with its dealers, to create substantial

replacement costs, and to prevent Gardner from informing

its customers of the customary sizes of its electrical connec-

tors.

Gardner has never used the 71B etc. series as trademarks,

but only to designate the type and size of connectors. With

respect to its connectors, Gardner only uses the 71B etc.

terms to satisfy the UL regulation that a type designation

be used to primarly identify a particular connector design

[UL Reg. §78 (a)].

While the regulations of Underwriters Laboratories also

require that a trademark be placed upon the ends of the

connectors, Gardner has employed its distinctive trademark

“GB” on its connectors while Ideal has used its registered

trademark ‘Ideal’ on its connectors. In either case, neither

Gardner nor Ideal has used the 71B series upon their con-

nectors as trademarks.

Gardner also placed the 71B etc. designations upon its

cartons and labels within the ordering information area

along with other descriptive information including the

number of connectors in the carton, the corresponding

catalog number, etc. to inform the customer of the connec-

.> ae 4 Zi =| ® | & =

tor style and size. In all cases, Gardner’s labels bear Gard-

ner’s “GB” trademark prominently, in addition to Gard-

ner’s distinctive logo.

Further, Gardner did not employ the 71B designations in

its catalog as trademarks, but rather to designate the style

and size of the connectors to inform the customer of the

characteristics of the product.

On November 19, 1979, the United States Court of Ap-

peals for the Seventh Circuit affirmed with modification the

District Court’s preliminary injunction order by holding

that the District Court could properly “infer” that the 71B

series had acquired secondary meaning to justify trademark

protection, notwithstanding Ideal’s failure to meet the

primary adoption test.

REASONS FOR GRANTING THE WRIT

The reasons why this writ should be granted are:

that otherwise, the abolishment of the long standing

primary adoption test by the Court below will have a de-

leterious impact and effect upon the commercial practices of

all industries in the United States with respect to the con-

tinuance and formation of industry wide numbering sys-

tems commonly relied upon by consumers to compare

prices between otherwise similar products; and

that otherwise Gardner, without fair opportunity for trial

on the merits, will be deprived of valuable property by the

misapplication of substantive law in a fundamental area in

contravention of the legal principles laid down by this

Court.

1. The decision below conflicts with principles estab-

lished in this Court and uniformly followed by the Courts

of Appeal by abolishing the long standing principle that in

order for a series of number-letter designations to achieve

trademark status, they must first be shown to have been

primarily adopted for use as trademarks.

Heretofore, this Court and the various Circuits uniformly

hele. that in order for a party to claim exclusive trademark

rights in a series of numerals or numeral-letter designations

for a series of substantially identical products, it must first

demonstrate that such series of designations have been

primarily adopted for use as trademarks, rather than to

designate some feature or characteristic of the product it-

self. If a party meets the primary adoption test and the

numbering series is found to specifically describe a charac-

teristic or ingredient of the article, then such party must

meet the second test, namely of showing that such terms

have acquired secondary meaning.

In this case, the Court below abolished the long standing

primary adoption rule and held that the District Court

could “infer” that the 71B series numbers had acquired

secondary meaning.

The decision below will have grave consequences upon

the commercial activities of almost all companies which .

have primarily adopted extensive numbering and lettering

systems to designate their products to distinguish between

different sizes, styles, grades, quality, etc. Ideal did not

adopt and use the 71B series as trademarks, but rather the

designations were solely adopted and used by Ideal and the

trade to designate the size and model of the connectors.

This Court has spoken quite clearly concerning the pri-

mary adoption rule which the Seventh Circuit has now

abolished. In Columbia Mill Co. v. Alcorn, 150 U.S. 460, 14

S.Ct. 151, 37 L.Ed. 1144 (1893), this Court stated at page

463:

‘. . .if the device, mark, or symbol was adopted or

placed upon the article for the purpose of identifying

its class, grade, style, or quality, or for any purpose

other than a reference to or indication of its owner-

ship, it cannot be sustained as a valid trademark.”

tale

eri

In Coats v. Merrick Thread Co., 149 U.S. 562, 13 S.Ct. 966,

37 L.Ed. 847 (1893), this Court stated (at 37 L.Ed. 852):

4é

. it is clear that no such monopoly could be

claimed of mere numerals, used descriptively, and

therefore not capable of exclusive appropriation be-

cause they represent the number of the thread, and are

therefore, of value as information to the public, Amos-

keag Mfg. Co. v. Trainer, 101 U.S. 51 (25:993). Clearly,

the plaintiffs cannot, as patentees, claim a monopoly of

these numerals beyond the life of the patent and it is

equally clear, that, where used for the purpose of im-

parting information they are not susceptible of exclu-

sive appropriation as a trademark, but are the common

property of all mankind.” (emphasis added)

In Amoskeag Mfg. Co. v. Trainer, 101 U.S. 51, 25 L.Ed. 993

(1879), this Court stated at page 54:

“. . . letters or figures which, by the custom of trad-

ers, or the declaration of the manufacturer of the goods

to which they are attached are only used to denote

quality, are incapable of exclusive appropriation; but

are open to use by anyone, like the adjectives of the

language.”

Even the Seventh Circuit prior to this case followed the

primary adption rule set forth by this Court. Thus, in Wil-

liam H. Keller, Inc. v. Chicago Pneumatic Tool Co., 298 F. 52

(7th Cir. 1923), cert. denied, 265 U.S. 593, 44 S.Ct. 637, 68

L.Ed. 1196 (1924), the Seventh Circuit stated at page 59:

“There can be no question but what [sic] a number

may become a good trademark, if its primary adoption

be solely to indicate origin. On the other hand, if the

figures indicate a grade or a quality only, they may not

be the basis for a valid trade-mark.”

In Keller, supra., the Seventh Circuit held that although

the figures ‘50’, “60”, “80” and “90” were federally regis-

tered as trademarks, their primary adoption was not solely

to indicate origin and therefore they were not trademarks.

In this case it is undisputed that the 71B series designa-

tions were adopted and used by Ideal and the trade over

the years to solely indicate the model and size of electrical

connectors and were not considered to be trademarks by

either Ideal or the trade. The Seventh Circuit stated:

“The 71B series numbers are not’‘arbitrary” marks in

the trademark sense. Although the numbers were cho-

sen arbitrarily in the sense that they do not refer di-

rectly to a characteristic of the connectors, the progres-

sion of numbers was adopted, and is currently used,

to describe the relative sizes of the connectors.”

+ee

“The 71B series numbers had no descriptive mean-

ing prior to their use by Ideal. However, over time

they came to have a descriptive meaning which appa-

rently is recognized and used throughout the market.”

+e%

“Ideal’s distributors said it indicates size, and Ideal’s

competitors only use it to indicate size. Even the af-

fidavits submitted by Gardner declared that the desig-

nations indicated the size of the connectors.”

Even Ideal’s own legal counsel admitted that when he

first became involved in this case, his initial reaction was

that numbers and letters could not be trademarks. Specifi-

cally, Ideal’s counsel stated:

“‘My first reaction when I took a look at this is num-

bers and letters couldn’t be trademarks. an instinctive

layman's reaction, I guess.”” Hearing Transcript, pages

28-29.

Thus when Ideal’s own legal counsel initially had a

layman’s reaction that numbers and letters such as the 71B

€

series designations could not be trademarks, how could it

be expected that a non-legal layman, such as Gardner,

should have any other reaction.

Various other circuits have also followed the primary

adoption rule set forth by this Court.

The Ninth Circuit applied the primary adoption rule in

K-S-H Plastics, Inc. v. Carolite, Inc., 408 F.2d 54 (9th Cir.

1969), where it held that the alpha-numeric symbols K-4,

K-5, K-11 and K-12 were not used to primarily designate

origin but were rather used as pattern desig~ ations and

therefore generic. The Court stated at page 59

“. . .the trial court’s finding that the symbols had

become generic terms designating pattern and not

producer is fully supported by the evidence. A number

of fixture manufacturers testified that K-numbers had

become a shorthand industry expression for a given

panel configuration. Some fixture manufacturers actu-

ally quoted K-numbers as a part of their catalog al-

phanumeric designation for certain types of light fix-

tures.”” (emphasis added)

The Sixth Circuit in Dennison Manufacturing Co., v. Scharf

Tag, Label & Box Co., 135 F. 625 (6th Cir. 1905), applied the

primary adoption rule and held that a series of arbitrarily

selected numerals, namely 2001, 2002, 2003, 2004, 2005, 2006

and 2007, as applied to seven sizes or shapes of labels and

tags for designating the color and size of the labels, were

not trademarks. The Sixth Circuit recognized that the series

of arbitrarily selected numeral designations, as in the pres-

ent case, were used in distinguishing or designating the

style, color and size of each label by a separate numeral.

_ The Court stated at page 630:

“But in this case all of these difficulties are mag-

nified because the complainant has not adopted one

sign, symbol, or numeral as an unchanging indicia of

origin, but a multitude of arbitrary numbers, one such

number being applied to each article made by it which

is distinguishable from like articles of its manufacture

by reason of size, shape, color of border, or the pur-

pose for which it was designed. . . Extend this system

of distinguishing each style, color, and size of label by

a separate numeral, and how is it possible that such a

scheme can serve the office of designating the Denni-

son Company as the common source of origin? But

that is precisely what the complainant insists it has

done, and for such a multitude of numerals it is seek-

ing protection as valid trademarks.”

In refusing to recognize the series of arbitrarily selected

numerals as trademarks, the Sixth Circuit stated at page

633:

“The usual office of a number, whether one of a

series or one arbitrarily selected, is to indicate grade,

quality, quantity, or some other characteristic. These

numbers having been adopted and used for the ordi-

nary purpose of a numeral could point to origin only

in a secondary way, and used in this sense they are

not good trademarks.” (emphasis added)

The Fifth Circuit in Fram Corporation v Boyd, 230 F.2d 931

(Sth Cir. 1956), applied the primary adoption rule and held

that the designations C-4, C-21, C-100, C-130 and C-i34

were used to identify five different sizes of oil filter re-

placement cartridges and thus were not subject to a

trademark monopoly. The court stated at page 934:

“Finally, and as to the claim of infringement of

common-law trademark, we think it is plain that colors

or a combination of colors of themselves are not sub-

ject to trademark monopoly, Life Savers Corp. v. Curtiss

Candy Co., 7th Cir., 182 F.2d. 4, Campbell Soup Co. v.

Armour & Co., 3rd Cir. 175 F.2d. 795, and James Heddon’s

Sons v. Millsite Steel & Wire Words, Inc., 6th Cir. 128

F.2d. 6. Neither are numerals or symbols whenused to des-

ignate size or capacity. Dennison Mfg. Co. v. Scharf Tag,

Label & Box Co., 6th Cir. 135 F. 625’.

The Patent Office in Ex parte Estabrook Pen Co., 109

U.S.P.Q. 368, (Comr. Pats. 1956), applied the primary

adoption rule and held that a series of style numbers such

as 2668, 2555, 1551, 9559, 9668, 2556, 1550 and numerous

others were not trademarks. Estabrook used the trademark

“Estabrook” on its penpoints, it adopted different combina-

tions of numerals to differentiate each of its styles of points

from the others, it advertised the numbers as style num-

bers, the ordering and invoicing of Estabrook’s penpoints

was by the style number, and the users of Estabrook’s pens

knew that when they bought an “Estabrook” point number

as a replacement they would get the same style as the pre-

vious style number. Twelve affidavits from longtime deal-

ers in “Estabrook” pens stated that they had never known

of any other company using “2668” on a pen, that “2668”

was recognized in the trade as a pen point made only by

Estabrook, and that when resale customers asked for a

“2668” pen point, they understood that they were getting a

point made exclusively by Estabrook. It was noted that at

no time had the number “2668” been featured in any man-

ner different from the other style numbers. It was held that

the style numer 2668” did not perform the function of a

trademark. The Commissioner stated at page 370:

“Applicant uses “2668” as a style number and ad-

vertises it as a style number; and in light of all the

evidence submitted, it must be concluded that it is

recognized and used by purchasers — both dealers

and the public — as a style identification of one of

applicant’s ‘‘Estabrook’’ pen points. The number

“2668” does not, on the record here, appear to be used

as or perform the function of a trademark.” (emphasis

added)

Because Estabrook failed to meet the primary adoption

test, the Patent Office was not required to consider the evi-

dence of secondary meaning submitted by Estabrook.

The Sixth Circuit in Deering Harvester Co. v. Whitman &

Barnes Mfg. Co., 91 F. 376 (6th Cir. 1898), recognized that a

series of numeral/letter designations, i.e. ““F-13’, “‘B-410”,

etc., which were originally adopted and used for no other

purpose than to conveniently designate the size, shape and

capacity of an article and distinguish it from other parts,

sizes, shapes and adaptability with no intention or expecta-

tion to thereby indicate its origin of manufacture could not

become trademarks. The Sixth Circuit correctly recognized

that the inherent function of such a series of designations

in their customary use is primarily to designate a feature of

the connectors and any indication of origin is purely acci-

dental. The Sixth Circuit stated at page 380:

“Any office which these marks perform as designa-

tions of origin is purely accidental. The fact that no

two distinct parts in the same machine bear the same

numerals is altogether persuasive of the fact that their

purpose is not that of indicating the producer. Without

explanation, such a multitude of different marks would

convey no meaning. When explained, as they always

have been and always must be, the explanation is that

they are intended to designate size, shape, and place

in the machine, and are to be used to distinguish one

piece or part from another having a different function.

This purpose does not tend, in any but the most re-

mote way to indicate the producer or maker.”

The authority cited by the Court below does not support

the abolishment of the primary adoption rule. Quite to the

contrary, such authority supports petitioner’s view that the

primary adoption test should be applied in all cases.

In Armco Steel Co. v. Watson, 188 F.Supp. 554 (D.D.C.

1960), the Court noted in an oral decision that the

numeral-letter designations were adopted by the claimant

with the intention “to designate the particular brands” as

trademarks. The claimant also had licensed others under

such trademarks. Because such terms were merely descrip-

tive of the product or characteristics thereof, the claimant

also had to satisfy the second test, namely of proving sec-

ondary meaning.

In re Standard Kollsman Industries, Inc., 156 U.S.P.Q. 346

(TTAB 1967) did not involve the issue of whether the

letter-numeral designations were valid trademarks, but

rather decided the issue of infringement by another desig-

nation. Obviously, the Trademark Office had previously

found that the primary adoption test had been met with re-

spect to the designations.

The Second Circuit’s decision in Clairol Incorporated v.

Gillette Company, 389 F.2d 264 (2d Cir. 1968) does not stand

for the proposition cited by the Seventh Circuit. Quite to

the contrary, the Second Circuit*held that the term “Inno-

cent Beige” was not a trademark and denied the grant of a

preliminary injunction. The Second Circuit stated at pages

270-271:

“Clairol seems to contend that any grade or style

mark which is intended to also serve as a trademark

will receive protection. We do not think that the opin-

ion in Kiekhaefer lays down any such proposition.”

“We are cited to no cases in which a color or shade

designation has been held (at any level) as a valid

trademark.”

Even the McCarthy treatise cited by the Court below in-

dicates that letters and numerals which are adopted as de-

signations of a particular style or grade are not valid

trademarks. 1 J.T. McCarthy, Trademarks and Unfair Compe-

tition, § 11.15, pp. 371-372 states:

“It has been held from an early date that words, let-

ters, numbers and symbols which are used as designa-

tions of a particular style or grade of product are not

valid trademarks in that they do noi serve the function

of identifying and distinguishing the goods (not

grades) of this seller from those of others. The term

“grade” designation has been held to be synonymous

with “model designation,” “type designation,” “style

designation,” “flavor designation,” “color and shade

designation,” and any other designation which may be

used by a manufacturer or seller to differentiate one

product in his line of goods from the other therein,

rather than to identify such goods and distinguish

them from like goods of other sellers.”’

In conclusion, the authority relied upon by the Court

below does not support its proposition that the primary

adoption rule should be abolished with respect to whether

numerals or numeral-letter designations such as the 71B

series in question should be deemed to be common law

trademarks.

The Court below totally ignored the strong public interest

against permitting a monopoly of numerals or numeral-

letter designations which, as in this case, have been com-

monly used throughout the industry to indicate common

sizes for a series of connectors.

The decision below will mean that every catalog number

or size designation used by thousand of companies to des-

ignate the characteristics of thousands of their products

will now be claimed as exclusive trademarks.

In following the logical progression of the decision be-

low, a manufacturer having one thousand different sizes of

an otherwise identically constructed product will claim one

thousand different numeral-letter trademarks for the single

product which only differs in size. As trademarks, such

numerals or letters may not be used by any other manufac-

turer in such industry. The result will be that new man-

ufacturers will be hard pressed to find simple numeral-

letter systems to indicate the type, style, size or other

characteristics of such product.

The decision below will have a significant impact by

dismantling presently existing industry-wide size indicat-

ing systems. The decision will have the chilling effect of

discouraging the adoption and use of common numbering

systems within industries so that consumers will not be

able to readily compare prices with respect to otherwise

identically constructed goods.

The granting of the preliminary injunction below does

not serve the public interest, and is contrary to the princi-

ples established by this Court.

2. The law relating to the grant of preliminary injunctive

relief articulated by the decision below is sufficiently im-

portant and erroneous to merit correction by this Court.

A. The decision below conflicts with principles estab-

lished in this Court and uniformly followed by the Courts

of Appeal by abolishing the heavy burden of proof placed

upon a movant claiming common law rights.

There are no presumptions which attach under the com-

mon law to the 71B etc. designations, and Ideal bears a

heavy burden in proving validity, Dymo Industries, Inc. v.

Tapeprinter, Inc., 326 F.2d. 141 (9th Cir. 1964); Time

Mechanisms, Inc. v. Qonaar Corp., 422 F.Supp. 905, 911

(D.N.J. 1976).

The court below, however, did not place any burden of

proof upon Ideal and held that:

“the district court could properly infer that the 71B

series numbers had acquired secondary meaning. See

W.E. Bassett Co. v. Revlon, Inc., 435 F.2d. 656, 661 (2d.

Cir. 1970)”. (emphasis added)

The case of W.E. Bassett Co., supra., however, did not

involve common law rights, but rather dealt with a feder-

ally registered mark having statutorily recognized presump-

tions of validity (15 U.SC. § 1057b). The Second Circuit

stated at page 661:

“Hence, there is ample evidence to support Judge

Frankel’s inference that Bassett’s “Trim” mark had at-

tained secondary meaning, especially in view of the

patent office’s registration of that mark.” (emphasis

added)

The Court below recognized the extensive industry wide

usage of the 71B series as standard connector size designa-

tions by both competitors and customers.

With such extensive third party usage, the Court below

erroneously inferred secondary meaning.

In Carter-Wallace, Inc. v. Procter & Gamble Co., 167

U.S.P.Q. 713 (9th Cir. 1970), the Ninth Circuit stated at

page 719:

“Plaintiff attempts to dismiss these third-party uses

as minimal or immaterial, but they indicate the obvi-

ous: that the term ‘sure’ is an oft-used one with no

special characteristics or distinctiveness of its own. In

the present context, such third party usage is relevant

to disprove the existence of trademark rights in the

plaintiff.” (emphasis added)

In Re Rockwell-Standard Co., 169 U.S.P.Q. 445 (TTAB

1971), the Trademark Office stated at p. 445:

“In this regard, the record in this case clearly estab-

lishes that at the very time the issue of registrability

was under consideration, others in the auotomotive

trade were using “fail-safe’’ in a purely descriptive

sense to properly describe their goods and this would

negate any secondary meaning in the term “fail-safe”

as an indicator of origin.”” (emphasis added)

Also see Alan Wood Steel Co. v. Watson, 150 F.Supp. 861

(D.D.C. 1957); Roselux Chemical Co. v. Parsons Ammonia

Co., 299 F.2d. 855 (CCPA 1962); McCormick & Company v.

Summers, 354 F.2d. 668 (CCPA 1966); American Heritage In-

surance Co. v. Heritage Co., 182 U.S.P.Q. 77 (Sth Cir. 1974).

With such third party usage, the Court below erred in

granting the preliminary injunction on the grounds of in-

ferred secondary meaning, Diamond Match Co., v. Safe Har-

bor Match Co., 109 F. 154 (E.D. Penn. 1901); Kraft Phenix

Cheese Corporation v. Levin, 29 F.Supp. 813 (E.C. Penn

1939); Farm Service, Inc. v. U.S. Steel Corp., 149 U.S.P.Q.

861 (Idaho S.Ct. 1966)

Proof of secondary meaning entails rigorous evidentiary

requirements, Kellogg Co. v. National Biscuit Co., 305 U.S.

111, 59 S.Ct. 109, 83 L.Ed. 73 (1938), and particularly when

asserted on a motion for preliminary injunction, Ralston

Purina Company v. Thomas ] Lipton, Inc., 341 F.Su

. , “s . 129

(S.D.N.Y. 1972). as

The decision below, by inferring secondary meaning,

improperly abolished the heavy burden of proof always

placed upon a movant for preliminary injunction alleging

common law rights.

B. The preliminary injunction should not have been

granted where “unique issues in the law of trademarks”

are involved.

The Court below prefaced its opinion by stating:

“This case brings up for decision unique issues in

the law of trademarks, especially the question whether

numbers may become common law trademarks.”

In order to arrive at its decision, the Seventh Circuit had

to abolish the long standing primary adoption trademark

rule which uniformly held that in order for numerals and/or

letters to be capable of functioning as trademarks, they

must be primarily adopted for use as trademarks rather

than to indicate the characteristics of the product, i.e. style,

size, type, etc.

The Court below should not have issued a preliminary

injunction when, admittedly, the plaintiff was advancing

“unique issues in the law of trademarks”, La Chemis Lacoste

v. General Mills, Inc., 487 F.2d. 312, 314 (2d Cir. 1973).

C. The Court below totally misapplied the law with re-

spect to irreparable harm, balance of hardships and status

quo by granting the preliminary injunction.

The grant of a preliminary injunction is an extraordinary

remedy and should only be resorted to in extreme cases

where there are little or no issues of law or fact, Willheim v.

Investors Diversified Services, Inc., 303 F.2d. 276 (2d Cir.

1972), The Court below found overwhelming irreparable

damage to the defendant Gardner with virtually no damage

to the plaintiff Ideal.

The Seventh Circuit has abolished, for all practical pur-

poses, the long standing, well-known rule that delay by a

plaintiff in seeking preliminary injunctive relief constitutes

significant evidence of the lack of irreparable damage to

such plaintiff.

The Court below mistakenly applied the law of laches to

such situation. The delay constituting grounds for laches is

considerably longer and should be distinguished from the

delay which constitutes evidence of the lack of irreparable

harm sufficient for denying preliminary injunctive relief,

Gillette Co. v. Ed. Pinaud, Inc., 178 F.Supp. 618 (S.D.N.Y.

1959); Peter Pan Foundations v. Beau-Bra Foundations, 125

F.Supp. 637 (S.D.N.Y. 1955). Such distinction was wholly

ignored by the Court below.

In the present case, Ideal waited almost thirteen months

before filing its brief in support of the preliminary injunc-

tion after it first learned of Gardner’s intention to enter the

market with the 71B series designations. Courts in other

Circuits have uniformly denied preliminary injunctive relief

where such delay occurs, Programmed Tax Systems, Inc. v.

Raytheon, 419 F.Supp. 1251 (S.D.N.Y. 1976) (A delay of four

(4) months from the time plaintiff first learned of the al-

leged infringement and ten (10) weeks after commencement

of the action); Chase Brass & Copper Co. v. Chase Metalcraft

Corp., 19 F.Supp. 966 (S.D.N.Y. 1948) (a delay of sixteen

(16) months from the time plaintiff became aware of defen-

dant’s use); Fisher v. Holiday Inn of Rhinelander, Inc., 181

U.S.P.Q. 794 (Wis. Cir. Ct. 1974) (eight (8) months).

In the present case, Gardner was required to continue in

its manufacture of connectors bearing the 71B series desig-

nations because of the extreme expense of permanently de-

facing its four hundred molds. The delay attributable to

Ideal resulted in the necessary buildup of substantial inven-

tory required to service the customers of Gardner.

The Seventh Circuit erroneously followed the long dis-

carded Second Circuit rule whereby the Courts of yes-

teryear implied or inferred irreparable harm under a prima

facie showing of infringement. While such doctrine may

have doubtful applicability to federally registered marks

under statutorily defined presumptions of ownership and

validity as involved in Helene Curtis Industries v. Church &

Dwight Co., 560 F.2d. 1325 (7th Cir. 1977), it has long been

rejected with respect to common law terms. In Selchow &

Righter Co. v. Book-of-the Month Club, Inc., 192 U.S.P.Q.

530, 533 (S.D.N.Y. 1976), the Court stated:

“relying on Yale Electric Corp. v. Robertson, 26 F.2d

972 (2d Cir. 1928), plaintiffs assert that in a trademark

case a prima facie showing of infringement is suffi-

cient to support the issuance of injunctive relief.”

“a review of the more recent cases in this Circuit re-

veals that the Second Circuit has not adhered to the

view expressed in that case. Rather, the decisions in this

Circuit in trademark cases have consistently stated that in

addition to a probability of success on the merits a party

moving for a preliminary injunction must demonstrate pos-

sible irreparable injury.”

The Seventh Circuit thus rejected the standard of requir-

ing proof of irreparable damage and reverted to the long re-

jected theory of implying irreparable harm where the terms

are identical.

On the other hand, the Court below recognized the sub-

stantial damage that would be inflicted upon Gardner by

the imposition of the preliminary injunction. Such damage

includes the shutdown of Gardner's manufacturing opera-

tions for a substantial period of time, the loss of current in-

ventory of connectors constituting approximately one half

of Gardner's net worth, the recall of connectors from deal-

ers, the infliction of irreparable damage upon Gardner’s re-

lations with its dealers, and the creation of substantial re-

placement costs.

Notwithstanding all of the above, the Court below recog-

nized that Gardner had prominantly utilized its trademark

and logo to clearly represent to the customers the source or

origin of such connectors. The Court below stated in perti-

nent part:

‘Gardner carton labels ... bear Gardner’s “GB”

trademark prominantly, in addition to Gardner's dis-

tinctive logo.”

In total, the Court below recognized the extreme hard-

ships and irreparable damage that would occur to Gardner

whereas the Court improperly inferred irreparable damage

to Ideal. The resurrection of the long out-moded and ex-

Pressly discarded Second Circuit theory of implying ir-

reparable injury constitutes clear reversible error.

The Seventh Circuit has abandoned the previously well-

established principle that a preliminary injunction should

not be granted when such disproportionate hardship is

caused to the defendant, Munters Corp. v. Burgess Industries,

Inc., 535 F.2d. 210 (2nd Cir. 1976); Allison v. Froehlke, 470

F.2d. 1123 (5th Cir. 1972); Clairdale Enterprises, Inc. v. C I

Realty Investors, 423 F.Supp. 261 (S.D.N.Y. 1976); Merrill

Lynch, P.F. & Smith, Inc. v. E.F. Hutton, Inc., 403 F.Supp.

336 (E.D.Mich. 1975); Blaich v. National Football League, 212

F.Supp. 319 (S.D.N.Y. 1962); Mount Sinai Med Center of -

Greater Miami, Inc. v. Mathews, 425 F.Supp. 4 (S.D. FI.

1976); State of Texas v. Seatrain, International, S.A., 518 F.

2d. 175 (5th Cir. 1975).

The Court below totally failed to balance the hardships in

this case. Further, the preliminary injunction ordered by

the Court below destroys the status quo by forcing Gardner

to permanently disfigure its 400 molds and, in effect, grants

to Ideal the full relief which it seeks at trial. In effect, the

Seventh Circuit has reversed its previous decision, W.A.

Mack, Inc. v. General Motors Corporation, 260 F.2d. 886 (7th

Cir. 1958), where the Seventh Circuit stated:

“A preliminary injunction does not issue which

gives to the plaintiff the actual advantage which would

be obtained in a final decree.”’

CONCLUSION

For the reasons stated, the petition for a writ of certiorari

should be granted.

Respectfully submitted,

George H. Solveson

735 North Water Street

Milwaukee, Wisconsin

Glenn O. Starke

Gary A. Essmann

ANDRUS, SCEALES, STARKE & SAWALL

Richard A. Kranitz

Of Counsel 3

Appendices

Appendix A

Jn the

United States Court of Appeals

Hor the Sebenth Circuit

No. 79-1060

IDEAL INDUSTRIES, INC.,

Plaintiff-Appellee,

vs.

GARDNER BENDER, INC.,

Defendant-Appellant.

Appeal from the United Sates District Court for the

Eastern District of Wisconsin

No. 76-C-317 — John W. Reynolds, Judge

ARGUED APRIL 24, 1979 - DECIDED NOVEMBER 19, 1979

Before FAIRCHILD, Chief Circuit Judge, MOORE, Senior Cir-

cuit Judge,* and WOOD, Circuit Judge.

MOORE, Circuit Judge: This case brings up for decision

_ unique issues in the law of trademarks, especially the ques-

tion whether numbers may become common law

* The Honorable Leonard P. Moore, Senior Circuit Judge of the United

States Court of Appeals for the Second Circuit, is sitting by designation.

2a Appendix A No. 79-1060

trademarks. Defendant Gardner Bender, Inc. (‘’Gardner’’)

appeals from an order dated January 10, 1979 of the United

States District Court for the Eastern District of Wisconsin,

Honorable John W. Reynolds, Chief Judge, which granted

plaintiff Ideal Industries, Inc’s (“Ideal”) motion for a pre-

liminary injunction. Gardner was enjoined from selling any

electrical connectors bearing the numbers claimed by Ideal

to be its trademarks and using the numbers on the labels of

cartons or on sales literature. Gardner also was ordered to

recall cartons and connectors in the hands of distributors

once modified cartons and connectors become available.

The district court stayed enforcement of its order on

January 15, 1979; this court continued the stay pending

resolution of Gardner's appeal.

Ideal is a Delaware corporation with its principal place of

business in Sycamore, Illinois. Gardner is a Wisconsin cor-

poration which has its principal place of business in Glen-

dale, Wisconsin. Both parties are in the business of making

and selling various electrical products. The district court's

subject matter jurisdiction rested on the diversity of citi-

zenship of the parties. 28 U.S.C. § 1332 (1976).

Understanding of the present controversy requires a brief

review of the past. Early in the 1930’s Ideal began to market

the product now at issue: barrel-shaped, screw-on electrical

connectors. These connectors have a hard outer shell made

of an electrically-insulating material which is molded

around a coiled spring. They connect two or more wires

securely when they are screwed onto the bared ends of the

grouped wires. Such connectors are usually sold in a range

of sizes. Ideal has sold, and continues to sell, a range of six

sizes under the trademark ‘Wire Nut’.

3a Appendix A No. 79-1060

Beginning in 1936, Ideal adopted an arbitrary series of

numbers to designate the different sizes. The number “71”

was applied to the smallest, followed by numbers 72, 73, 74

and 76. There are no records which show whether these

numbers corresponded to some characteristic of the connec-

tors other than relative size. In 1946, Ideal began to make

these connectors with a Bakelite rather than phenolic shell

and added a capital “B” to each of the numbers to indicate

the new material. The connectors were identified as 71B,

72B, 73B, 74B, and 76B (hereinafter referred to as the “71B

series’). A sixth, larger size was added in 1966 and was

designated “78B’. Although Ideal has long used a different

material than Bakelite, the 71B series numbers have con-

tinued to appear on the connectors, on carton labels, in ad-

vertising, and in catalogs since 1946.

In 1965 or 1966, Ideal redesigned the cartons, and their

labels, in which the connectors were sold. Besides modern-

izing the look of the label, Ideal increased the size of the

71B series designations so that they became the largest

symbol on the labels. Ideal claims that this change was

made because the company realized that the 71B series

numbers had come to stand for the source of the connec-

tor.' The labels continued to carry the registered

'We reproduce here the labels of Ideal and Gardner for one size of con-

nector.

es Ker _ FAST. EASY, SIMPLE - >

. = [ills “2 colorcoded="

rece! Ball te 1S

“CATALOG NGL

oG =uwreqe@ +

076:

4a Appendix A No. 79-1060

trademarks “Ideal”, “Wire Nut’ and a registered crow’s-

foot design logo representing Ideal. Underneath the 71B

series designation appeared the word “model” in parenth-

eses. In 1969 the connectors and carton labels were color-

coded to indicate size differences but this change had no

effect on the label design or the relative prominence of the

71B series designations.

The 71B series numbers appear on the tops of the connec-

tors themselves to satisfy the requirements of Underwriters

Laboratories, Inc. (“UL”) and the Canadian Standards As-

sociation (“CSA”) that electrical connectors be marked with

a type or catalog-number designation. The imprints of UL

and CSA also appear on the top of Ideal’s approved connec-

tors, along with the trademark “Ideal” and numbers which

indicate the range of wire sizes which the connector can ac-

commodate. All these markings satisfy the CSA and UL re-

quirements.

Ideal is the dominant firm in the market for barrel-

shaped, fixed-spring electrical connectors. Its chief com-

petitors are Hi-Scale Products Corp., Inc. (“Hi-Scale’”’), ITT

Holub Industries (“Holub”), Eagle Electric Mfg. Co.

(“Eagle”), and Gardner. Holub sells its connectors under its

trademark “Hi” and the size designation series “No. Hi-3”,

“No. Hi-4” and ‘‘No. Hi-6”’. Beginning around 1972

Holub’s carton labels displayed a 7iB series number along

with the word “size” in a blue circle to indicate the size

comparability between Ideal’s and Holub’s products.

Holub’s own number series was still the most prominent

label designation and contined to appear on the connectors

themselves.

Prior to 1975, Hi-Scale’s labels bore Hi-Scale’s own series

numbers, such as ‘’HS-18’ or “HS-7” as well as the ap-

propriate 71B series number in smaller print adjacent to the

word “‘size’’. The connectors displayed Hi-Scale’s own

5a Appendix A No. 79-1060

series designations. In 1976, after Gardner entered the mar-

ket, the 71B series number began to appear on Hi-Scale

labels in approximately the same size print as the Hi-Scale

series numbers. The 71B series numbers were still accom-

panied by the adjacent words “Approx. Size’”’.

This case arises from the entry of Gardner into the elec-

trical connector market in 1976. Instead of creating its own

series numbers, Gardner adopted the 71B series as the sole

type designation for its connectors. In addition, the catalog

numbers for each size are similar. While Ideal uses the

catalog number “30-073” to represent its 73B connector,

Gardner uses “10-073” to represent its own 73B connector.

Since Gardner also adopted Ideal’s color coding scheme for

the connectors, the only way to tell a Gardner connector

from one made by Ideal is the presence of a “GB” in place

of “IDEAL” on the top of the connectors. All else on the

connector is the same. The Gardner carton labels are the

same color as Ideal’s although they bear Gardner’s “GB”

trademark prominently, in addition to Gardner's distinctive

logo. The word ‘style’ appears next to the 71B series

number on the carton labels.

Ideal commenced this action in May 1976, charging that

Gardner was engaged in unfair competition and common

law trademark infringement. The complaint sought pre-

liminary and permanent injunctive relief and damages.

Ideal filed its brief and exhibits in support of its motion for

a preliminary injuncttion in January, 1977. Not until

November 30, 1978, did the district court hold a hearing on

the motion. Ideal relied only on its claim that Gardner was

infringing its alleged common law trademark rights in the

71B series; the unfair competition claim was not pressed as

support for the for the preliminary injunction. The motion

was considered on the affidavits, deposition transcripts and

exhibits submitted by the parties as well as the pleadings

No. 79-1060

and the arguments made at the hearing. The district court

expressly absolved Ideal of fault for the long delay between

the filing of the motion and the hearing. The district court

rendered its decision and order in favor of Ideal on January

10, 1979; Gardner appeals. We affirm with modifications

and remand for further proceedings.

6a Appendix A

II.

The scope of review at this stage is quite restricted. An

order granting a preliminary injunction in a trademark case

“will not be set aside by a Court of Appeals unless it is

contrary to the principles of equity or the result of impro-

vident exercise of judicial discretion’. Doeskin Products, Inc.

v. United Paper Co., 195 F.2d 356 (7th Cir. 1952). This court

recently reaffirmed its view that “abuse of discretion” is

the proper standard. Helene Curtis Industries v. Church &

Dwight Co., 560 F.2d 1325 (7th Cir. 1977), cert. denied, 434

U.S. 1070 (1978). Furthermore, the district court’s findings

of fact will not be upset unless they are “clearly errone-

ous”, as provided by Fed.R.Civ.P 52(a). Fleetwood Co. v

Hazel Bishop, Inc., 352 F.2d 841 (7th Cir. 1965). Therefore,

the following discussion of the legal principles governing

the alleged trademarks is merely to aid in explaining the

court’s view that the district court did not abuse its discre-

tion in evaluating the likelihood of Ideal’s succeeding on

the merits.

The basic issue is whether it is likely that Ideal’s 71B

series numbers are common law trademarks. Gardner’s

chief argument on this appeal is that numbers which origi-

nally were adopted to indicate different sizes of a product

rather than its origin cannot be trademarks. Gardner relies

heavily on this court’s statements in William H. Keller, Inc.

v. Chicago Pneumatic Tool Co., 298 F. 52 (7th Cir. 1923), cert.

denied, 265 U.S. 593 (1924):

SHER RRERRRRRRERE

No. 79-1060

“There can be no question but what [sic ]anumber

may become a good trade-mark, if its primary adoption

be solely to indicate origin. On the other hand, if the

figures indicate a grade or a quality only, they may not

be the basis for a valid trade-mark.” 298 F. at 59.

The numbers at issue in the case indicated the length of

a piston stroke in a riveting hammer. The quoted statement

was a restatement of the Supreme Court's holding in Coats

v. Merrick Thread Co., 149 U.S. 562 (1893), that numbers in-

dicating the size of thread cannot be trademarks. Other

courts have made similar general statements. See, e.g., Fram

Corp, v. Boyd, 230 F.2d 931 (5th Cir. 1956); Dennison Mfg.

Co. v. Scharf Tag, Label & Box Co., 135 F. 625 (6th Cir.

1905), cert. denied, 201 U.S. 648 (1906). Apparently these

courts did not have before them the question whether the

numbers indicating style or grade had achieved a secon-

dary meaning as symbols of the source of the goods.

7a Appendix A

The general rule with respect to descriptive terms was

stated by this court as follows:

“A merely descriptive term specifically describes a

characteristic or ingredient of an article. It can, by ac-

quiring a secondary meaning, i.e., becoming ‘distinc-

tive of the applicant’s goods’ (15 U.S.C. § 1150(f), be-

come a valid trademark.”’ Miller Brewing Co. v. G.

Heileman Brewing Co., 561 F.2d 75, 79 (7th Cir. 1977),

cert. denied, 434 U.S. 1025 (1978).

Substantial authority supports the idea that terms which

were originally descriptive of style or grade ought to be

treated the same way as any merely descriptive term.

Clairol, Inc. v. Gillette Co., 389 F.2d 264 (2d Cir. 1968); 1 J.T.

_ McCarthy, Trademarks and Unfair Competition, § 11:15, pp.

371-375 (1973). Thus numbers which describe the size of a

product, an aspect of the product’s grade, ought to be cap-

8a Appendix A No. 79-1060

able of becoming trademarks if the proponent of the mark

can prove secondary meaning. In Armco Steel Co. v. Wat-

son, 188 F.Supp. 554 (D.D.C. 1960), the court ordered the

Commissioner of Patents to register the numbers 17-4PH

and 17-7PH as trademarks designating brands of stainless

steel products. The Patent Office had originally denied re-

gistration of the marks because the letters “PH” stood for

“precipitation hardening”, a process used in making the

steel, and the numbers described the proportions of metals

comprising the stainless steel alloy. The court found that

the marks had developed a secondary meaning through

long use and advertising, and had thus become trademarks,

as well as descriptive terms. In another case, the Trademark

Trial and Appeal Board denied registration to a mark which

would have infringed the previously registered marks

“SK-97", “SK-128", “SK-98”", “SK-58” as applied to audio

speakers. Although the case did not involve secondary

meaning, the Board declared that letter marks are entitled

to the same scope of protection as other registered marks.

In re Standard Kollsman Industries, Inc., 156 U.S.P.Q. 346

(TTAB 1967). The fact that the 71B series designations are

numbers descriptive of size does not prevent them from

becoming trademarks if they have acquired secondary

meaning.

Gardner further argues that the 71B series designations

have become generic or common descriptive terms, which

by their nature cannot become trademarks. Miller Brewing

Co. v. G. Heileman Brewing Co., supra, 561 F.2d at 79-80. In

light of Gardner’s numerous assertions that the 71B series

numbers describe the size of a connector, this argument is

difficult to understand. “A generic or common descriptive

term is one which is commonly used as the name or de-

scription of a kind of goods.” Miller Brewing Co. v. G. Heile-

man Brewing Co., supra, 561 F.2d at 79 (emphasis added). If

9a Appendix A No. 79-1060

there is any candidate for a generic or common descriptive

term among Ideal’s marks, its is the registered trademark

“Wire Nut”, which designates the kind of electrical connec-

tor characterized by a barrel shape and a fixed, coil spring,

yet this term has not, as far as we know, passed into com-

mon usage. The term “wire connector’ is a generic or

common descriptive term which probably could not be-

come the exclusive property of any one producer; other-

wise, it would be impossible to tell the buyer what the

product is.? Since these characteristics do not apply to the

71B series numbers, they do not fit into the category of

generic or common descriptive terms.

The 71B series numbers are not “arbitrary’’ marks in the

trademark sense. Although the numbers were chosen arbi-

trarily in the sense that they do not refer directly to a

characteristic of the connectors, the progression of numbers

was adopted, and is currently used, to describe the relative

sizes of the connectors. Hence, they are merely descriptive,

not arbitrary, terms.

Ideal concedes that proof of secondary meaning is neces-

sary and argues that there is enough proof in the record to

support the district court’s finding that the 71B series num-

bers do have secondary meaning.

When evaluating alleged proof of secondary meaning, a

court should be chiefly concerned with the attitudes of pur-

chasers towards the mark. Union Carbide Corp. v. Ever-ready

Inc., 531 F.2d 366, 380 (7th Cir.), cert. denied, 429 U.S. 830

(1976). Ideal submitted seven affidavits and eight deposi-

tions of its customers from widely separated areas of the

'? For an excellent presentation on the difference between a merely de-

scriptive term and a common descviptive term, see the example of the

“Deep Bowl Spoon” in Abercrombie & Fitch Co. v. Hunting World, Inc.,

537 F.2d 4, 10 n.11 (2d Cir. 1976), quoting Fletcher, Actual Confusion as to

Incontestability of Descriptive Marks, 64 Trademark Rep. 252, 260 (1974).

10a Appendix A No. 79-1060

country. Twelve of these were from independent wholesal-

ers of electrical equipment, firms which buy connectors

from several manufacturers. Three statements came from

electrical contractors, the normal end-users of electrical

connectors. The district court found that all the persons

who gave affidavits or responded to deposition requests

stated that they were familiar with the electrical industry,

that they regarded Ideal as the source when they saw the

71B series numbers used in relation to electrical connectors,

and that they believed that Ideal would be identified as the

source of such connectors throughout the industry.? The

only challenges to these proofs were thirteen affidavits of

“individual manufacturer’s representatives”, and two

depositions of officers of Ideal’s competitors. The gist of

these statements was that the 71B series was used com-

monly throughout the industry to indicate the size of a

connector, regardless of its source.

The district court quite properly discounted the value of

the Gardner affidavits because the affiants were Gardner's

sales representatives and thus had an interest in belittling

the trademark value of the 71B series numbers. The same is

true of the depositions by the officers of ideal’s com-

petitors. Furthermore, the exhibits submitted by Ideal rep-

resented the opinions of purchasers of the product in con-

trast with Gardner’s exhibits. The Union Carbide case stres-

sed the importance of purchasers’ attitudes. When these

statements are added to the fact that Ideal has marketed its

connectors with the 71B series designations for over 30

* Olin Blocker, an electrical distributor from Atlanta Georgia, described

in a deposition his perception of the 71B series as follows:

“Well, I don’t recall anybody using these numbers other than Ideal,

and it has been, I guess, one of the leaders in the field, and if any-

body would say 73B wire nuts, I think that the trade generally thinks

of Ideal wire nuts.”

lla Appendix A No. 79-1060

years and that during that period Ideal has been the

dominant firm (over 80% of the market in 1976) in the

market, we conclude that the district court could properly

infer that the 71B series numbers had acquired secondary

meaning. See W.E. Bassett Co. v. Revion, Inc., 435 F.2d 656,

661 (2d Cir. 1970) (properly supported inference of secon-

dary meaning for a merely descriptive term is enough to

justify trademark protection).

Of course, at trial Ideal must substantiate the inference

that the 71B series designations have come to have a sec-

ondary meaning according to the standard stated by Judge

Denison in G. & C. Merriam Co. v. Saalfield, 198 F. 369, 373

(6th Cir. 1912), cert. denied, 243 U.S. 651 (1917):

“So it was said that the word had come to have a sec-

ondary meaning, although this phrase ‘secondary mean-

ing’ seems not happily chosen, because, in the limited

field [the particular trade and branch of the purchasing

public ], this new meaning is primary rather than sec-

ondary; that is to say, it is, in that field, the natural

meaning.”

See also Restatement of Torts § 716, Comment b (1938);

Kellogg Co. v. National Biscuit Co., 305 U.S. 111 (1938). We

decide now only that the district court had before it enough

evidence to conclude that Ideal was likely to succeed on the

merits.

The last issue which relates to the likelihood of Ideal’s

succeeding on the merits is the question whether Gardner's

use of the 71B series numbers will create a likelihood of

confusion as to the source of the goods. Gardner’s argu-

ment that no proof of actual confusion was submitted is

. unavailing. No evidence of actual confusion is required in

order to prove a likelihood of confusion. Helene Curtis In-

dustries v. Church & Dwight Co., supra, 560 F.2d at 1330;

12a Appendix A No. 79-1060

W.E. Bassett Co. v. Revlon, Inc., supra, 435 F.2d at 662. Sev-

eral factors are important in determining the likelihood of

confusion: the similarity of the marks, the similarity of the

products, the area and manner of concurrent use, the de-

gree of care likely to be exercised by consumers, the

Strength of the complainant’s mark, actual confusion, and

intent on the part of the infringer to palm off his products

as those of another. Helene Curtis Industries v. Church &

Dwight Co., supra, 560 F.2d at 1330; Union Carbide Corp. v.

Ever-Ready, Inc., supra, 531 F.2d at 381-382.

Looking at the facts here, we see that the marks are the

same, the products are the same, the manner of use of the

marks is the same, and the geographical markets overlap or

are identical. As if this were not enough, there is evidence

that customers are not very careful in ordering the connec-

tors. Two witnesses stated in depositions that sometimes a

customer would ask for connectors by the 71B series

number alone, without mentioning a producer. Gardner

disingenuously argues that these customers are merely in-

dicating indifference as to the source of the goods. The con-

trary inference is more likely when one remembers that

Ideal has been the dominant supplier of connectors using

the 71B series numbers for over thirty years. The likelihood

of confusion is almost obvious, and is not reduced by

Gardner’s decision to copy Ideal’s color coding scheme in

addition to using the 71B series numbers. This issue is sub-

ject to further proof at trial but, for present purposes, the

likelihood of confusion is strong enough to justify a pre-

liminary injunction.

Ill.

In order to obtain a preliminary injunction, a plaintiff

must show, in addition to a likelihood of success on the

merits, that it will be irreparably injured unless steps are

13a Appendix A No. 79-1060

taken to preserve the status quo. Helene Curtis Industries v.

Church & Dwight Co., supra, 560 F.2d at 1330. The trial

judge must also weigh the relative hardships to the parties.

Id. The district court found that Ideal was in danger of los-

ing business and losing its current identification as the

source of the 71B series connectors and that if Ideal should

prevail on the merits the burdens of eradicating impermis-

sible uses of its trademarks would be substantially in-

creased were a preliminary injunction not granted. Ap-

parently Gardner failed to produce evidence of the hard-

ships it would suffer if limited, preliminary injunctive re-

lief were granted. The issue is whether the district court

abused its discretion in granting the requested preliminary

relief. Helene Curtis Industries v. Church & Dwight Co.,

supra.

Gardner argues that Ideal’s long delays in commencing

and prosecuting this action have vitiated Ideal’s claim that

it will be irreparably injured unless a preliminary injunc-

tion is granted. Ideal filed its complaint seven month after

learning of Gardner’s intention to enter the market. Eight

months later, after accumulating seven affidavits and eight

depositions from independent distributors, Ideal filed the

brief and supporting papers on its motion for a preliminary

injunction. Twenty-two months after this second filing the

district court held the hearing on the motion. In its deci-

sion and crder the district court stated that the twenty-two

month delay after the motion papers were filed was “‘not

fairly attributable to the plaintiff”. Apparently the delay re-

sulted from the condition of the district court’s calendar.

Gardner is correct in arguing that the plaintiff's delay in

moving for a preliminary injunction has been considered

_ by some courts in assessing the probability of irreparable

injury. W.E. Bassett Co. v. Revlon, Inc., supra, 354 F.2d at

874 n.4; Programmed Tax Systems, Inc. v. Raytheon, 419

F.Supp. 1251, 1255 (S.D.N.Y. 1976). However, delay is only

one among several factors to be considered; these cases do not

14a Appendix A No. 79-1060

support a general rule that irreparable injury cannot exist if

the plaintiff delays in filing its motion for a preliminary in-

junction. On the contrary, this court has stated that mere

passage of time cannot constitute laches. Helene Curtis In-

dustries v. Church & Dwight Co., supra, 560 F.2d at 1334. In

evaluating the defense of laches, the Helene Curtis court

looked to whether the defendant had been lulled into a

false sense of security or had acted in reliance on the plain-

tiff’s delay. The delay attributable to Ideal in this case

neither lulled Gardner nor caused it to act in reliance on

the delay. Hence, the district court was within its discre-

tion when it refused to apply the laches defense in its

analysis of Ideal’s claim of irreparable injury.

The existence of irreparable injury is positively supported

by the fact that the alleged trademark and the infringing

use are identical, that the products are the same, and that

the markets are the same. These factors by themselves are

indicative of irreparable injury. One commentator has

noted:

“Also essential to trademark law is the presumption

that use of a trademark or trade name identical with

that of a competitor, on similar goods and in a similar

business, causes deception and confusion of the pub-

lic.” Nims, The Law of Unfair Competition in Trademarks

1078 (4th ed. 1947).

And, as this court has already said, “the damage to the

goodwill and prominence of the [plaintiff’s] trademark

through public confusion of it with the [defendant’s]

trademark is, in itself, an irreparable injury”. Helene Curtis

Industries v. Church & Dwight Co., supra, 560 F.2d at 1332.

See also Omega Importing Corp. v. Petri-Kline Camera Co.,

451 F.2d 1190, 1195 (2d Cir. 1971). This readiness to find ir-

reparable injury arises, in part, from the realization “that

the most corrosive and irreparable harm attributable to

trademark infringement is the inability of the victim to con-

15a Appendix A No. 79-1060

trol the nature and quality of the defendant's goods”’ 4

Callman, Unfair Competition, Trademarks and Monopolies §

88.3(b) at 205 (3d ed. 1970). Monetary damages are likely to

be inadequate compensation for such harm.

The district court has an obligation to weigh the relative

hardship to the parties in relation to its decision to grant or

deny a preliminary injunction, even when irreparable in-

jury has been shown. Gardner’s brief presents an array of

costs which it will have to bear if the preliminary injunc-

tion is imposed. Elimination of the 71B series numbers

from Gardner’s connector molds would shut down its man-

ufacturing operations for at least one month, if Ideal’s con-

tentions are accepted, or up to seven months, if Gardner's

claims are correct. Gardner’s current inventory of connec-

tors, worth approximately $180,000, would be a total loss.

This amount is one-half of Gardner’s net worth. Ideal’s

claim that such a high inventory level is the product of

mismanagement may be correct; nevertheless, the inven-

tory is a fact which must be considered. Finally, the re-

quirement that all connectors be recalled from the posses-

sion of Gardner’s dis‘ributors would irreparably damage

Gardner's relations with its dealers and would create sub-

stantial replacement costs.

The district court did not fully discuss the relative hard-

ships of the parties but seems to have been handicapped

by Gardner’s failure to present all the facts prior to the is-

suance of the injuncion. In light of the facts presented to

us, we affirm the issuance of an injunction but remand for

modification of the order for reasons stated below. The

hardships which Gardner will suffer do not warrant denial

of all preliminary relief to Ideal. One entering a field al-

ready occupied by another has a duty to select a trademark

that will avoid confusion. Watkins Products, Inc. v. Sunway

Fruit Products, Inc., 311 F.2d 496, 499 (7th Cir. 1962), cert.

l6a Appendix A No. 79-1060

denied, 373 U.S. 904 (1963). See also Helene Curtis Industries

v. Church & Dwight Co., supra, 560 F.2d at 1333-4. Gardner

surely knew that both Hi-Scale and Holub only used the

71B series as size designations and that they used their

own series numbers on the connectors and the cartons to

indicate the source of the products. In spite of this know-

ledge, Gardner chose a course which it must have realized

would create buyer confusion. Gardner could easily have

invented its own series numbers for use on the connectors

and thus fulfilled its duty to avoid confusion. Having

adopted its course, Gardner cannot now complain that hav-

ing to mend its ways will be too expensive.

Nonetheless, the facts necessitate a different balance in

the hardships suffered by the parties. Prior to and during

the long delay before a hearing was held on the prelimi-

nary injunction motion, Gardner continued to produce the

offending connectors to a point where its current inventory

contitutes almost half of its net worth. A remedy like the

injunction at issue, which renders this inventory a total

loss, seems overly harsh. Gardner claims that there is a risk

that it will become insolvent. Ideal would be reasonably

protected if the district court fashioned a modification to its

order, allowing Gardner to make normal sales from its in-

ventory during the time necessary for Gardner to alter its

machinery. Ideal claims the changes can be made in one

month; Gardner says they will take seven. This is a ques-

tion for the district court. The district court should exercise

its discretion to ensure that Gardner’s sales from inventory

will be made in good faith and will not subvert our intent

by flooding the market with connectors which may confuse

buyers. This modification is necessary to maintain Gard-

ner’s cash flow and prevent financial disaster to Gardner

from loss of its total inventory.

17a Appendix A No. 79-1060

IV.

Although the record contains sufficient evidence to sup-

port a preliminary injunction with the modification

suggested above to protect Ideal’s alleged trademarks, addi-

tional evidence apparently not considered by the district

court calls for a further modification of the injunction or-

der. Gardner has raised the defense that its use of the 71B

series designations is a “fair use” of the numbers in their

descriptive sense only. In situations where a mark has both

a trademark function and a descriptive funcion, the “fair

use” defense allows a junior user of a mark to use the mark

in good faith in its descriptive sense, as opposed to its

trademark sense. J. T. McCarthy, Trademarks and Unfair

Competition, § 11:17 at 377 (1923). The analytical focus of

the defense, which exists under both the Lanham Act, 15

U.S.C. § 1115(b)(4) (1976), and the common law, is on how

the term is being used. Venetianaire Corp. of Amrica v. A. &

P. Import Co., 429 F.2d 1079 (2d Cir. 1970). The typical case

involves a term having a descriptive meaning in popular

usage which is adopted by some firm to denominate cer-

tain of its products. Even though the term has become a

trademark as to those products, it may still be used in its

original descriptive sense if the use is in good faith. See

Abercrombie & Fitch Co. v. Hunting World, Inc., 537 F.2d 4,

12-13 (2d Cir. 1976) (use of word “safari’’ with respect to

clothing).

This case is a slight variant of the typical case. The 71B

series numbers had no descriptive meaning prior to their

use by Ideal. However, over time they came to have a de-

scriptive meaning which apparently is recognized and used

throughout the market. The district court found that it is

probable that the 71B series numbers have come to have, in

addition, a secondary meaning distinguishing Ideal’s prod-

ucts from those of its competitors. These two aspects of

18a Appendix A No. 79-1060

the mark can be recognized. Ideal may prevent use of the

terms by others in their trademark sense as symbols of the

goods of a single producer such that buyers are likely to be

confused, but may not claim an exclusive right to use of the

marks in their generally accepted descriptive role. See J.T.

McCarthy, Trademarks and Unfair Competition, § 11:17 at 379

(1973); Restatement of Torts, § 727, Comment a (1938).

Gardner argues that it only uses the 71B series numbers

in a descriptive sense, as indicative of size or style. It

claims that its packaging and advertising clearly show use

of the terms “size” and/or “style” in conjunction with the

71B. series designations. An examination of the reproduc-

tion of Gardner’s packaging and advertising contained in

the briefs and appendices reveals that the word “style” ap-

pears on the carton labels and in the advertising; nowhere

does Gardner show that it is using the 71B series to de-

scribe ‘size’. Yet Ideal said that the series in part desig-

nates size, Ideal’s distributors said it indicates size, and

Ideal’s competitors only use it to indicate size. Even the af-

fidavits submitted by Gardner declared that the designa-

tions indicated the size of the connectors. No one but

Gardner thinks the series numbers are descriptive of

“style’”’ or type.

On the evidence in the record, we conclude that to the

extent the 71B series numbers are descriptive, they are de-

scriptive only of size, not of a “style’’ or “type”. When

Ideal uses the numbers with the word “model” on Ideal’s

carton labels, the numbers are being used in their

trademark sense. However, in light of the “fair use” doc-

trine, the district court’s order goes too far in prohibiting

Gardner from using the 71B series numbers in any way on

its cartons. For the purposes of establishing fair prelimi-

nary protection for Ideal’s alleged trademarks, Gardner

should be allowed fairly to use the numbers on Gardner

19a Appendix A No. 79-1060

labels, adjacent to the word “size”, to inform buyers of the

size of the connectors. A final determination of the scope of

the “fair use’ defense must await the trial.

Ideal appears to have implicitly accepted this limited use

of the numbers in the course of defending the nature of

Holub’s use of the 71B series numbers in contrast to Gard-

ner’s use. It seems that as long as Holub uses its own series

numbers on the connectors and in a dominant manner on

the carton labels, Ideal has no strong objection to Holub’s

discreet use of the numbers on the carton as indicators of

the size of the connectors. Ideal, of course, condemns Hi-

Scale’s expanded use of the 71B series numbers, which

began on the heels of Gardner’s appropriation of the series

numbers. In any event, Holub began using the 71B series

numbers as size designations on its carton in 1972 and

Ideal was aware of that use. Not until five years later, after

Ideal commenced this suit, did Ideal object to such use of

its alleged trademarks. In all fairness, Gardner should not

be preliminarily enjoined from engaging in a use which

Ideal allowed to Holub for five years. This conclusion is

particularly appropriate where the prior use by Holub ap-

pears to be within the scope of the “fair use” defense.

The district court properly enjoined Gardner’s use of the

numbers on the tops of the connectors to indicate its type,

as required by UL and CSA standards. Gardner’s decision

to adopt Ideal’s color coding scheme as well as Ideal’s series

numbers increases the likelihood of customer confusion.

Gardner will have to create its own series designations for

use on the connectors in compliance with the UL and CSA

requirements until such time as this case comes to final

judgment after trial.

In summary, the preliminary injunction should be mod-

ified to allow Gardner to sell connectors from its inventory

until it can produce connectors without the infringing

20a Appendix A No. 79-1060

numbers on top and to use the 71B series numbers on car-

tons fairly to describe the size of the connectors. We re-

mand the case to the district court for it to exercise its dis-

cretion ir modifying its order consistent with this opinion

and for trial.

A true Copy:

Teste:

Clerk of the United States Court of

Appeals for the Seventh Circuit

USCA 4512-Midwest Law Printing Co., Inc., Chicago—11-19-79—300

Appendix B

In the

United States District Court

Lastern District of Wisconsin

IDEAL INDUSTRIES, INC.,

Plaintiff

DECISION AND ORDER

vs. Civil Action

No. 76-C-317

GARDNER BENDER, INC.,

Defendant

This is an action for unfair competition arising out of the

alleged infringement by the defendant Gardner Bender,

Inc., of plaintiff's claimed trademark designations 71B, 72B,

73B, 74B, 76B, and 78B upon its electrical connectors. The

court has jurisdiction in diversity.

On November 30, 1978, oral argument was held on the

motion of the plaintiff Ideal Industries, Inc., for a prelimi-

nary injunction. Plaintiff seeks an order restraining Gard-

ner Bender from selling any containers or cartons or from

2b Appendix B 76-C-317

distributing any literature using such designations on its

connectors, and requiring Gardner Bender to recall any

such connectors, cartons, or literature which it or its dis-

tributors presently have available for sale.1 For the reasons

hereinafter stated, plaintiff's motion will be granted.

The evidence in the record reveals that Ideal has used the

number designations at issue since 1936 as arbitrary size

designations. It added the B in 1946 to reflect the “Bakelite”

composition of the connectors and has continued to date to

use the B in conjunction with the letter series although the

connectors are no longer made of Bakelite. (Affidavit of

William J. Scott, filed May 19, 1976.) There appears to be

no dispute that Ideal was the first company to use the al-

phanumeric series 71B-74B, 76B, and 78B, and that the ear-

liest use of the series by another company occurred in the

middle or late 1960's.

Numerals or letters used as size or grade designations

only are not entitled to trademark protection. William H.

Keller, Inc. v. Chicago Pneumatic Tool Company, 135 Fed. 52

(7th Cir. 1905); Dennison Mfg. Co. v. Scharf Tag, Label & Box

Co., 135 Fed. 625 (6th Cir. 1905); Fram Corporation v. Boyd,

230 F.2d 931 (5th Cir: 1956). They can, however, have

trademark status if they have or have acquired a secondary

meaning as to source, even though they may originally

_ |! The original motion and brief in support thereof requested far more

extensive relief. Plaintiff at the oral argument and in a subsequent letter

to the court dated December 4, 1978, stated that it is modifying its de-

mand to encompass only the use by the defendant of the letter B in con-

junction with the number series 71-74, 76, and 78, and also that “Ideal

requests that only those connectors currently in boxes in the hands of

distributors need be recalled and replaced with new connectors.” (Letter

from Mr. McSweeney dated December 4, 1978, at page 2.)

3b Appendix B 76-C-317

have been used only to indicate size.? See, eg., William H.

Keller, Inc., supra, at 59; Standard Brands, Inc. v. Smidler, 151

F.2d 34 (2d Cir. 1945); Armco Steel Corporation v. Watson,

188 F.Supp. 554 (D.C. D.C. 1960); K-S-H Plastics, Inc. v

Carolite, Inc., 408 F.2d 54 (9th Cir. 1969).

In determining whether a symbol has trademark status,

one of the primary evidentiary sources is the attitude of

purchasers toward the symbol. Union Carbide Corporation v.

Ever Ready Incorporated, 531 F.2d 366, 380 (7th Cir. 1976),

cert. denied 429 U.S. 830 (1976). The evidence of indepen-

dent customers is particularly valuable because of the diffi-

culty of obtaining such evidence. Gehl v. Hebe Co., 276 Fed.

271 (7th Cir. 1921); Photoplay Pub. Co. v. LaVerne Pub. Co.,

Inc., 269 Fed. 730 (3d Cir. 1921). In contrast, the testimony

of nonindependent company distributors or representatives

is of little value. Application of Duvernoy & Sons, Inc., 212

F.2d 202 (C.C.P.A. 1954); G.D. Searle & Co. v. Chas. Pfizer

& Co., Inc., 231 F.2d 316 (7th Cir. 1956); Norm Thompson

Outfitters, Inc. v. General Motors Corporation, 448 F.2d 1293

(9th Cir. 1971).

The record in this case contains seven affidavits and

eight depositions of the following persons who claim to be

independent customers of Ideal: affidavits filed January 21,

1977, of Morton J. Finkel, Robert E. Oswell, Michael R.

Celiceo, Philip Stahlman, Donald J. Folger, Joseph A. Pfab,

and Burlyn G. Haber (‘Ideal Exhibit Book IV’’); deposition

transcripts filed January 21, 1977, of Olin B. Blocker, Victor

? Defendant argued at the oral argument held on November 30, 1978,

that the alphanumeric series at issue is merely a “generic or common de-

scriptive term” for electrical connectors and therefore under no cir-

cumstances can become a trademark. Miller Brewing Company v. G.

Heileman Brewing Company, Inc., 561 F.2d 75, 79 (7th Cir. 1977). At this

time, the series appears rather to be an “arbitrary” term, Miller, supra, at

79, see also affidavit of William J. Scott filed May 19, 1976, and therefore

would be capable of having trademark status even without a secondary

meaning as that term is used in trademark law.

4b Appendix B 76-C-317

P. Kester, William H. Kent, Richard D. Guyer, Gersil N.

Kay, Donald R. Lumsden, Eugene K. Halley, and James M.

Fowler (“Ideal Exhibit Book V”). All of said persons state

that they are familiar with the electrical industry, that they

pesonally regard Ideal as the source when they see the al-

phanumeric series 71B-74B, 76B, and 78B used in relation to

electrical connectors, and that they believe that industry-

wide Ideal would be identified as the source of such con-

nectors. Defendant suggests that this evidence should be

discredited because it was obtained from “a few of IDEAL’s

favorite electrical distributors and contractors.” (Defen-

dant’s answering brief, filed August 1, 1977, at page 28.)

There is no competent evidence in the record, however, to

show that the witnesses are other than what they claim to

be, i.e., independent customers.

In contrast, defendant's witnesses, all of whom state that

they regard the 71B-74B, 76B, and 78B series as indicating

the sizes of electrical connectors generally and not as indi-

cating that Ideal is the source of the connectors, identify

themselves as “‘individual manufacturer’s represen-

tatives[s].’’ See affidavits filed August 1, 1977, of Gene

Aberoutte, Philip J. Hersh, Jack Grattan, John S. McGee,

Arthur Model, Bernard Rosenblum, Fred W. Stokes, Vernon

Walsh, Wiley D. Jones, Gerald N. DePerro, George Finn,

Tom C. David, and Carl Bonfert. Defendant also refers to

them as its sales representatives. (Defendant's answering

brief, filed August 1, 1977, at page 38.) Defendant has also

submitted affidavits, filed June 2, 1977, from Paul A. Hauck

and Gordon P. Polley who are officers of competitors of

plaintiff. In view of plaintiff's claim that said competitors

are also infringing its trademark series 71B-74B, 76B, and

. 78B on their connectors (see Ideal’s Exhibit Book VIII, filed

August 29, 1977, Tabs A and F), the Court considers that

the two affidavits, which state that the series does not indi-

cate origin, are entitled to little weight.

5b Appendix B 76-C-317

In sum, based on the evidence presently before it, the

Court is persuaded that the weight of that evidence sup-

ports Ideal’s claim of trademark status for its alphanumeric

series 71B-74B, 76B, and 78B, for use in connection with

electrical connectors.

Defendant argues that even if the series has trademark

status, plaintiff has unduly delayed in seeking injunctive

relief and therefore cannot claim irreparable injury. A party

is entitled to sufficient time for discovery to permit it to

gather the evidence which it needs to support a claim for

injunctive relief prior to filing a motion for said relief, see

Re: McNeil Laboratories Incorporated v. American Home Pro-

ducts Corporation, 416 F.Supp. 804 (D.C. D.N.J. 1976); Nes-

ter Johnson Mfg. Co. v. Alfred Johnson Skate Co., 144 N.E.

787 (Ill. S.Ct. 1924), and the Court is satisfied that Ideal was

not delinquent in pursuing its discovery. (See plaintiff's

reply brief, filed August 29, 1977, at pages 28-29.) Delays

which occurred subsequent to January 21, 1977, when Ideal

filed its brief in support of its motion for injunctive relief,

are not fairly attributable to the plaintiff.

The Court is also satisfied that plaintiff will suffer ir-

reparable injury if a preliminary injuncion is not granted. It

therefore need not decide whether or not, as plaintiff ar-

gues, such a showing is not in any event required. See,

e.g., Wawak & Co., Inc. v. Kaiser, 129 F2d 66 (7th Cir. 1942).

There is unrebutted testimony in the record that customers

frequently order connectors by number-letter combination

(71B, 72B, etc.) without specifying the manufacturer of the

connectors. (See, e.g., affidavits filed January 21, 1977, of

Morton J. Finkel, Michael R. Celiceo, Donald J. Folger,

Joseph A. Pfab, and Burlyn G. Haber.) There is also evi-

dence tending to show beginning use of the 71B-74B, 76B,

and 78B series by manufacturers other than Gardner Bender

6b Appendix B 76-C-317

at or about and subsequent to the time that Gardrer Ben-

der commenced using the series on its connectors. In the

Court’s opinion, the fair implication of both such types of

evidence is that the plaintiff is presently in danger of losing

business and of losing in the future its presently held iden-

tification as the source of the 71B-74B, 76B, and 78B connec-

tors, and, further, that should plaintiff ultimately prevail on

the merits of the suit, its burden of eradicating impermis-

sible uses of its trademarks will be substantially increased

if the present use by the defendant, which is the major

present infringer, is not enjoined.

Defendant has submitted two affidavits from William E.

Gardner, filed May 9, 1977 and August 1, 1977, detailing

the injuries which defendant will suffer if an injunction is

granted. Those affidavits do not, however, address the

issue of the injury, if any, which defendant will suffer if

the limited type of relief which plaintiff now seeks is

granted, nor is there any other evidence in the record

which addresses that point. In consequence, the Court

finds no irreparable injury to defendant from its granting of

the injunction.

The foregoing shall, pursuant to Rule 52(a) of the Federal

Rules of Civil Procedure, constitute the Court's findings of

fact and conclusions of law.

IT IS THEREFORE ORDERED that the motion of the

plaintiff Ideal Industries, Inc., for a preliminary injuncion

is granted, and the defendant Gardner Bender, Inc., its

agents, successors, and assigns and all persons acting in

privity or concert with them, or any of them, are hereby

enjoined and restrained, effective immediately and until

_ further order of this court, except for purposes of compara-

tive advertising, from:

7b Appendix B 76-C-317

1. Selling any connectors containing the designation 71B,

72B, 73B, 74B, 76B, or 78B thereon;

2. Selling any cartons on which the designation 71B, 72B,

73B, 74B, 76B, or 78B appear;

3. Selling any cartons on which catalog numbers contain-

ing the number 71, 72, 73, 74, 76, or 78 appear; and

4. Distributing any literature, including without limiting

the foregoing, brochures and/or price lists containing the

designation 71B, 72B, 73B, 74B, 76B, or 78B for Gardner

Bender connectors, or catalog numbers containing the de-

signations 71, 72, 73, 74, 76, or 78 for Gardner Bender con-

nectors.

IT IS FURTHER ORDERED that as soon as new brochures

and price lists are available, they will be distributed to

Gardner Bender’s customers, and those customers shall be

requested to destroy copies of prior brochures and price

lists.

IT Is FURTHER ORDERED that as soon as Gardner Ben-

der, Inc., has its cartons and connectors modified as or-

dered above, it will call back the cartons and connectors

currently in the hands of distributors and replace them

with the revised cartons and connectors.

IT Is FURTHER ORDERED that Ideal Industries, Inc.,

shall file a surety bond in due form in the amount of

$25,000 within three working days of the filing date of this

decision and order.

Dated at Milwaukee, Wisconsin, this l0th day of January,

1979.

John W. Reynolds, Chief Judge

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.