Petition for Writ of Certiorari — Humble Oil & Refining Co. v. American Oil Co.
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“MAR Zo (969
IN THE : JOY F, DAVIS, CLERK
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ee _ Supreme Court. of the ited States
| ' OcTOBER TERM, 1968
a °
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: ‘No. ‘1200
HUMBLE OIL & REFINING COMPANY, a corpora-
tion, ESSO, INCORPORATED, a corporation, and
STANDARD OI. se iuinael a New Jersey corpo-
ration,
Petitioners,
Vv.
AMERICAN OIL COMPANY, a corporation, and
STANDARD OIL COMPANY, an Indiana corpora-
tion,
Respondents.
PETITION FOR A WRIT OF CERTIORARI TO THE
UNITED. STATES COURT OF APPEALS
- FOR THE EIGHTH CIRCUIT -
SULLIVAN & CROMWELL ArtHurR H. DEAN
; Davin W. PEcK
ForpycE, MAYNE, HaRTMAN, Rov H. Steves os
RENARD & STRIBLING 48 Wall Street
DILLARD W. BAKER New York, N. Y. 10005
WALTER R. MayNE
506 Olive Street
St. Louis, Missouri 63101
Counsel for Petitioners
Of Counsel.
March ‘25, 1969 ‘
Oe ee ea
TABLE OF CONTENTS
- Humble Oil & Refining Co. v. Standard Oil Co. (Ken-
tucky), 229 F. Supp. 586 (S. D. Miss. 1964), rev'd,
363 F. 2d 945 (5th Cir. 1966), cert. denied, 385
rr MS en 6,8,19
PAGE
Citation to Opinions Below ................ ee ee
JOT eke cet es yescsiecsaves Pyevery rrr 2
Questions Presented | eae PeS PrOeLe Tere err Ores ey aes |
Statutory Provision Involved ............... ree 3
Ce a eer trrre Pree eRe Er ee ens Pee 3
Reasons for Granting the Writ ....... ie par enae awed a
CER Na eee nator wae ee ed Seale
_ Appenpix A: Opinién of Court of Appeals ..... oe
AppeNnpDIx B: Judgment of Court of Appeals-...... Bl
‘APPENDIX C: Opinion of District Court .......... Cl
Appenpix D: 1938 Opinion of Court of Appeals ... D1
APPENDIX E: 1937 Findings of Fact and Conclusions
of Law and ‘Decree of District Court ............ El
AUTHORITIES CITED
Cases: he
' Conal Co. ¥-Clork, 80'U.. S- (3. Wal} 311 20
Columbia Artists Management Inc.'v. United S tates,
¢ Se ere Sahil a waine Wo cahew oes 17
Esso, Inc. v..Standard Oil Co. (Indiana), 98 F. 2d 1
ES Re | eer or eres 3, 4
Hanover Star Milling Co. v. M etcalf, 240 U.S. 403 ..
— S
ii
= | Ry | PAGE
John Simmons Co. v. Grier Bros. Co., 258 U.S. 824. 6
Kellogg Co. v. National Biscuit Co., 305 U.S.111... 21
Perma Life Mufflers, Inc. v. International Parts Corp.,
ey i Eas ca heh ova eek Gases Wa aeeeneKs 24
Precision Instrument Mfg. Co. v. Automotive Main-
. tenance Mach. Co., 324 U.S. 806 «............. 24
_ Serta Associates, Inc. v. United States, . U.S.
(Feb. 25, 1969) bee ked ea ceke ws ee 17,18
Standard Oil Co (Indiana) v. Standard Ol Co. (New
Jersey), 27 Trade Mark Rep. 544 (E. D. Mo. 1937),
aff'd sub. nom. Esso, Inc. v. Standard Oil Co. (In- — *
diana), 98 F. 2d. ( Sth Cir. | Sere ens Hee 4,5
Standard Oil Co. (IndianaJ v. Standard Oil-Co. ( New
Jersey), 239 F. Supp. 97 (E. D. Mo. 1965) ...... “fe
Standard Oil Co. (Ohio) v. Standard Oil Co. (Indi- *
ana), 252 F. 2d 65 (10th Cir. 1958) ............ 6
Standard Oil Co. v. United States, 221 U.S. 1 ....2, 4,7,
11, 12, 15, 16
Timken. Roller Bearing Co. v. United States, 341 -U. S.
ie Leth hidee ches obi k CRON ES ART RaO ve enh af, ae
United States v. Bayer Co., 135 F. Supp..65 (S. D.
We hae Ss Fie We he cisine CaS ee ees 18
United. Drug Co. v. Theodore eteine Co., 248 U.S. .
SS. '5, 20
United States v. C ontainer ¢. orporation, 21 L. Ed. 2d .
el eeeacchennese Se hives cen bar warns wnes 18 ©
United States v. General Electric Co., 82 F. Supp. 753.
CE EE ee ucts eateries: ae
United States v. National Lead Co., 332 U.S. 3... .1%6
United States v. Sealy;THc> 388 U. | ae . 16, 18
United States v. Swift & Co., 286 U.S. 106 ....2, 7, 10-15,
: United States v. United Shoe Machinery Corp., ¢
SE” RR Paap rls acs eave ona oy gale ND ee 14,15
White Motor Co. v: United States, wWeU.S.25e.... ©.
e
» Bo ccereattant ete _ [=
ili i,
| Ps | Suess PAGE
_ Text: |
2 Pomeroy, Equity Jurisprudence § 399 Pisicnkes hac gh:
STATUTES: | a0 |
Be is he vk seks Fee eer ee eer ee 3
15 U.S.C. §§ 1115(b) (7) ...... eerye ee Va eee, Te
JG OO, Wa 5S es ee 2:
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{
— IN THE»
Supreme Court of the United States
| OcTOBER TERM, 1968
* _— .
*»
HuMBLE OIL & REFINING COMPANY, a cor-
poration, Esso, INCORPORATED, a corpora-
. tion, and STANDARD OIL COMPANY, a
_ New Jersey corporation,
. Petitioners, :
No.
v.
AMERICAN OIL COMPANY}xa corporation,
and STANDARD O1L Company, an Indiana
corporation, ,
if * Respondents. }
PETITION FOR A WRIT OF CERTIORARI TO THE -
UNITED STATES COURT OF APPEALS |
FOR THE EIGHTH CIRCUIT t
‘Petitioners pray that a writ of certiorari issue to review
the judgment of the United States Court of Appeals for the
Eighth Circuit, entered in the above-entitled case on Janu-
ary 9, 1969.
Citation to Opinions Below
The opinion of the District Court (R. 66-82), denying
petitioners’ petition for modification of an injunctive decree
entered in 1937, is printed in Appendix C hereto (infra,
pp. C1-18) and is reported at 259 F. Supp. 559. The opin-
ion of the Court of Appeals, affirming the judgment of the
District Court, is printed in Appendix A hereto (infra, pp.
_ Al-37) and is reported at 405 F.2d 803.
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2
Jurisdiction
The judgment of the Court of Appeals, printed in Ap-
pendix B hereto (infra, p. Bl), was entered on January 9,
1969. The jurisdiction of this Court i$ invoked under 28
U.S. C. § 1254 (1).
Questions "Peomened
? 1. Did the Court-of Appeals misconstrue and misapply
this Court’s decision in United States v: Swift & Co.,’
286 U. S. 106, in holding that the language of that deci-
sion “limits” the power of a court of equity. to modify an
injunctive decree that has demonstrably restrained com-
petition in the marketing of petroleum products in several
areas of the country, when the petitioners are asking that
the restraints flowing from such decree be removed in order —
to achieve “workable competition in the market” (cf. United
States v. United Shoe Machinery Corp., 391 U. S. 244,
252). | re.
2.. Did .the Court of Appeals, in confirming a “terri-
torial allotment” to Standard Oil Company (Indiana) of
the exclusive right to use the name Standar@ Oil and any
names and marks derived therefrom in a 15-state area, and
barring petitioners from competing therein with their. well
known trademark ESSO, fail to give required regard and
effect to the antitrust laws and this Court’s decision in
Standard Oil Co. v. United States, 221 U. S. 1. ee
3. Did the Court of ‘Appeals err in confirming and
continuing a right of exclusive use of a trademark that
has lost its exclusive identity with the products and good will
of any one company and derivés its value from the general
reputation and common good will of several companies.
Aan gah SOE
3
4. Can the doctrine of “unclean hands,” invoked by -
the District Court but not by the Court of Appeals, be
invoked in private litigation involving important issues of
antitrust law to bar consideration of the merits of the action
or to bar relief which would eliminate the effects of an
anti-competitive arrangement.
Statutory Provision Involved
Section 1 of the Sherman Act,-15 U. S. C. § 1, pro-.
vides, in pertinent part, as follows: .
“Every contract, combination in the form of
trust or otherwise, or conspiracy, in restraint of
trade or commerce among the several States, or with
foreign nations, is declared to be illegal. . . -
Statement
This case arises from petitioners’ efforts to modify a
1937 decree of injunction (printed in Appendix FE hereto,
infra, pp. E16-17), issued by the United States District
Court for. the Eastern District of Missouri and af-
firmed by the Eighth Circuit, which prohibits Standard Oil
- Company (New Jersey) (“Jersey”) and its affiliates from
marketing petroleum products under their ESSO-: trade-
mark in fourteen midwestern states’ where the détree
granted Standard Oil Company (Indiana) (“Indiana”)
and its affiliates the exclusive right to use the name Standard
Oil and any trademark derived therefrom. Esso, Inc. v.
- 1Michigan, Indiana, Wisconsin, Illinois, Minnesota, Iowa, Mis-
souri, North Dakota, South Dakota, Kansas, Oklahoma, Montana,
Wyoming and Colorado. These states plus Nebraska, where Indiana |
- commenced marketing in 1939 by acquisition of Standard Oil Com-
pany of Nebraska (A4, Al2), are sometimes referred to herein as the
“15-state area” or the “midwest.”
we
Bucccn. boiperertiaasid
4
Standard Oil Co. (Indiana), 98 F. 2d 1 (8th Cir. 1938).?
The Court there held that, despite the dissolution of the
Standard Oil Trust, directed by this Court’s 1911 decision
in Standard Oil Co. v. United States, 221 U. S. 1, Indiana
retained the exclusive right to the Standard Oil name and
cognitive marks in the states that constituted Indiana’s “al-
lotted territory” under the Trust.
In its 191d opinion, this Court held that the Trust’ ~
system, under which Jersey, Indiana and its other members
were confined in their marketing to assigned districts from
which all other members were excluded, had “operated to
destroy the ‘potentiality. of competition’” (221 U. S. at
73-74), and the Court ordered the dissolution of the Trust
in the clear expectation that thereafter the former. members
of the Trust would be freed to compete with each other fully
and effectively.
The decree entered was not only one of dissolution of
the combine, but also of injunction against the companies
entering into agreements in the future tending to bring
about violations of the Act (221 U. S. at 79). Each com-
pany continued thereafter to operate in its historic territory
under the Standard Oil name, but obviously without right-
to foreclose full competition therein by any other Standard
Oif company or to enter into any spiaceaenenents that would
limit such conetition.
In 1935, Esso, Inc., at that time a wholly-owned subsidi-
ary of Jersey, entered Indiana’s historic territory by opening
‘three gasoline service stations in St. Louis, Missouri. These
stations were identified by the red, white and blue ESSO
oval, and both stations and products were clearly marked:
2The 1938 decision of the Court of Appeals is printed in Appen-
dix D hereto (infra, pp. D1-14). The 1937 Findings of Fact and Con-
clusions of Law of the District Court, printed in Appendix E hereto
(infra, pp. E1-17), are reported at 27 Trade Mark Rep. 544 (E. D.
Mo. 1937).
afin oD SAT BA OO
5
to indicate that ESSO was not connected with Indiana
D4-5; E8-9). Indiana sued to enjoin the use of ESSO,
and in 1937 the United States District Court for the
Eastern District of Missouri entered a decree enjoining
Esso, Inc. from using ESSO or any trademarks such as
- “Standard Oil Company,” “Standard Oil,” “Standard,”
“SOCO” or “SO,” or symbols colorably similar thereto,
in the fourteen states where Indiana was then marketing
“under the Standard Oil name. Standard Oil Co. (Indiana)
v. Standard Oil Co. (New’ Jersey), 27 Trade Mark Rep.
544 (E. D. Mo. 1937) (E1-17). The decision of the
District Court and the injunction pursuant thereto were
affirmed by the Eighth Circuit in 1938. Esso, Inc. Vv.
Standard Oil Co. (Indiana), 98 F. 2d 1 (8th Cir. 1938)
(D1-14). ‘
The 1937 decision of the District Court and the 1938
decision of the Eighth Circuit were bottomed on the essen-
tial finding, required by this Court’s landmark decisions
in United Drug Co. v. Theodore Rectanus Co., 248 U. 5S.
90, and Hanover Star Milling Co. v. Metcalf, 240 U. S.
403, that “the only Standard Oil reputation known to
the public” in the midwest at that time was the reputa-
tion of Indiana, and therefore Indiana was entitled to pro-
tection in its territory agminst. the use of Standard Oil
or any trademark or tradename derived therefrom, such as.
ESSO, by another Standard Oil Company because such use
would cause such other compasay’s goods and products to be
sold in such territory as those of Indiana (D13).
On appeal in 1938, appellant Esso, Inc. pointed out to
the Court of Appeals that the absolute prohibition against
use in the midwest by any former member of the Trust
other than Indiana of any trademark derived in any way
from the name Standard Oil would inhibit effectivé com-
petition among the former members.of the Trust and would
thus operate to frustrate the purpose of the 1911 dissolution
pti ed bee!
-
decree which was to encourage competition among the
former rhembers of the Trust (Supp. R: 517-20). «The
Court of Appeals rejected this argument (D14), and, in
the succeeding years, the mandate of the decree was relied
on and extended by other judicial decisions to tervitorialize
the use of the Standard Oil name and any cognitives thereof
according to the territorial allotment made among the
Standard Oil companies under the Trust,? and the com-
panies accepted the decisions as binding law e.compassing
most of the United States.‘
The instant action, commenced on July 9, 1963, pur-
suant to Rule 60(b) of the Federal Rules of Civil Proce-
dure, requested modification of the 1937 decree ‘to permit
Humble, Jersg@prlomestic marketing affiliate, to use ‘its
ESSO trademark in the marketing of its petroleuin prod-
ucts in the 15-state area in which Indiana had been awarded
_ the exclusive right to use the Standard Oil name and marks.
Petitioners’ request for modification was based on the
facts (1) that the good will and reputation embodied in
the Standard Oil name is no longer, if it ever was, exclu-
sively attributable in the 15-state area’ to Indiana and its
affiliates, but today, for a nation on wheels, accustomed
to nationat—advertising ,and to whom state lines mean
_ nothing, is actually the common reputation and good will of
all the Standard Oil companies; (2) that in today’s market-
ing the use of a single.nationally known trademark for a_.
8Standard Oil Co. (Ohio) v. Standard Oil Co. (Indiana), 252
F. 2d 65 (10th Cir. 1958) ; Humble Oil & Refining Co. v. Standard
Oil Co. (Kentucky), 229. F. Supp. 586 (S. D. Miss. 1964), rev'd,
363 F. 2d 945 (Sth Cir. 1966), cert. denied, 385 U. S. 1007. The
latter action, in which Humble was enjoined from using ESSO in
five southeastern states, is still pending in the district court, and
that action would necessarily be governed by this Court’s decision
in this proceeding (John Simmons Co. v. Grier Bros. Co., 258
U. S. 82).
4R. C-306-08; R. C-667-74; p. A15, infra.
7
nationally distributed product is vital to effective competi- ,
tion; (3) that the»public in all parts of the country is now
familiar with the Standard Oil cégnitives used by the sev-
eral Standard Oil companies and ¢an distinguish among
them, so that confusion is minimal—hence the 1937 decree
has operated, and will continue to operate, without justifica-
tion in trademark law, to restrain and inhibit effective com-
petition among the various Standard Oil companies and to
perpetuate unjustified and unfair territorial monopolies in
the use of the Standard Oil name and reputation, in con-
travention of the public policy in favor of full and effective |
competition and fhis Court’s decision in Standard Oil Co.
v. United States, supra.
The District Court, on September 29, 1966, filed its
findings of fact and conclusions of law ang decree dismiss-
ing the complaint and continuing in full force and effect the
1937 decree (C1-18). It did not make any finding as of
todgy tracking the essential finding on which the 1937 de-
cree rested, that the only Standard Oil reputation known to
the public in the midwest was the reputation of Indiana be-
cause that public’s only experience with a Standard Oil .
company was with Indiana, but held that petitioners had
not met the burden of proof required for modifying a de-
cree imposed by the language of this Court’s opinion in
United States v. Swift & Co.,; 286.U. S. 106, and that, even
had they done so, relief would be denied on the ground of
“unclean-hands” alone (C5).
The Court of Appeals, in affirming, recognized that
“change has come about since 1937”; that the motoring
public, “a generation on wheels,” mobile and travelling.
from one Standard Oil territory to another not only over long
distances but also in short commuter traffic, “thinks nation-
ally;” that there have been “great advances in radio and
television” and “advertisements are not to be limited by
geographical configurations,” so that by 1960 “it had be-
DB stttianasrsccsnsnnss nts
€ome obvious that it was desirable to attain, if possible, uni-
form identification of stations and products” in nationwide
marketing ;° that gasoline credit cards, in wide use through-
out the country, usable at stations of any Standard Oil com-
pany, “distinguish” among the several Standard Oil com- _
- panies and their individual identifying trademarks, so that .
the companies are satisfied to advertise by these cards each
other’s marks as those of “non-affiliated” companies.
The Court of Appeals further recognized (A28) as had
the Court of Appeals for the Fifth Circuit (363 F. 2d at
946, 951) that—unlike the conditions existing in 1937, when
the Court found (D12-13) that “There was no good will
owned in common [by the several Standard Oil Companies],
but a separate good will appertaining to the separate busi-
ness‘as carried on by the various companies in their allotted
territory’”—now “the Standard Oil image is a general one”
(A28), the good will in the Standard Oil name is attribu-
table to all the Standard Oil companies and must be “shared” -
‘among them (363 F. 2d at 946, 951). Therefore, the _Court
of Appeals did not find, any. more.than had, the District
Court, that there any longer existed the condition that was
the predicate of the 1937 decree, namely, that the mid-
western public’s only experience with a Standard Oil com-
pany was with Indiana dad that the only Standard Oil repu-
tation known to that public was the reputation of Indiana
(D12- 13).
The Court of Appeals also recognized the anti-compéti-
tive effect of the territorial allocation of the use of the-
_5In the most practital and pointed recognition of the desirability
of nationwide identification of stations and products, Indiana has
extended nationally the use of its red, white and blue torch and oval |
sign, substituting the word “American” for the worde‘Standard” out- .
side the midwest (A13), and has diminished and curtailed its use of
SO and SOCO to “small letters” on road maps and pumps (A26-27), »
a token use just short of abandonment for the purpose of attempting
to forestall = by ESSO and SOHIO in the 15 states.
, Seniesa ng ARK ARE ecing <a Let inarer a agiing ett 34
Standard Oil name and all derivations therefrom, as graph-
ically demonstrated by the figures it noted under the head-
ing in its opinion entitled ““The importance of nationwide
marks and names.” In 1964, Standard of Ohio (“Sohio” )
made 31% of the.retail gasoline sales under its SOHIO
label in Ohio, but less than .2% of thé sales in the adjacent
three states where it uses the name BORON. Jn the 15-state
area Indiana has 18% of the gasoline market. Humble has
less than 1.7% and neither Standard of California (includ-~
ing Standard of Kentucky) nor Sohio has as much as..5%.
In contrast, in New England and New. York, where there
has been no objection and injunction against more than one
Standard Oil company using marks of Standard Oil deri- °
vation, Mobil Oil Corp. (formerly Socony) continues to lead
the market with approximately 16%, and ‘Humble, which .
has used ESSO in these states without restriction, is a close
competitor with: about 12% of the market (A27).
Thus the Court of Appeals, with due recognition of the —
fact that use of nationwide marks on a national basis
“enables a company to compete more effectively” (A27),
stated that “were the slate clean, one might argue with some
force that full and unlimited competition among all the
Standards . . . would be good for the public and would be’in
the national tradition” (A36). But the slate was “not
clean and unencumbered,” the Court held, and it recited as
the encumbrances the “1911 decision,” “the dissolution of the »
old Trust” and “the territorial allotment. flowing from that
dissolution,” and the 1937 decree and like decrees of other
courts following the Eighth Circuit decision (A36-37).
Indeed, the Court seemed to view the 1911 decision of
this Court and the dissolution of the Standard Oil Trust as
contemplating and countenancing the territorial allotment of
the use of the Standard Oil name along the same geograph-
ical lines as had obtained under the Trust, for the Court at
10
the beginning of its opinion spoke of the “practical result”
of the 1911 dissolution decree as being that “each of the
several Standard Oil companies, which had been part of the
Trust, thereafter operated separately and independently ©
and with exclusive use of the Standard name in that area
of the nation which had been allotted to it originally”
(A4); and spoke at the end of this “territorial allotment”
as “flowing from that dissolution” (A36-37).
The Court, therefore, virtually brushed aside ‘the im-
pact of the anti-trust laws” and the public interest in com-
petition and viewed the case narrowly as private trademark
litigation. It rejected the premise of plaintiffs’ argument—
that modification was dictated when the original injunction, -
based on a different set of facts, could not properly have
been entered on the state of facts that now exists—and
held, to the contrary, that Indiana was entitled to continu-
ance of the absolute trademark protection accorded by the.
1937 decree although the essential predicate“of that decree
no longer existed ard despite the Court’s conclusion that
competition might best be ‘served by . eliminating the
restraint. ~ ?
The Court held that the test of ” ie propriety of
modification of the 1937 decree was the full strictness of .
the “limits of i inquiry” language of this Court’s opinion in
United States v. Swift & Co., supra. Deeming the “control-
ling issue” to be “whether the use of ESSO in the 15-state
area would occasion confusion i in the buying public” (A21-
22)—an issue which would not even be reached unless
Indiana had solidly grounded rights by “territorial allot-
ment”’ in the exclusive use of the Staridard oil name and
cognitives in the midwest—the Court found. that there
would still be “more than a mere shadow” of confusion,
due to the existence of several Standard Oil companies, and
held that Swift barred modification of the decree because
the danger of confusion that the decree had been designed
ea
sy
11
to avoid had not “become attenuated to a shadow” and
plaintiffs had not proved they were “suffering hardship so
extreme” as to be the “victims of oppression” (A31-32).
Reasons for Granting the Writ
This case, involving the vitals. a the marketing of
petroleum products in the United States, presents important
questions of broad practical and ltgal significance con-
cerning the proper relationship between trademark rights
and the antitrust laws and the proper construction and’
application of this Court’s decisions in Standard Oil Co. v.
United States, 221 U. S. 1, and United States v. Swift &
Co., 286 U. $: 106.
The decision below, compounding three fundamental ¢ er-
rors—in its holdings (1) that the language of Swift limited .
the power of the Court to inquire into and remove the re- .
straint on competition imposed by the 1937 decree, (2)
that the “territorial allotment” involved was an unexcep-
tionable arrangement “flowing from the dissolution” of |
the Standard Oil Trust, (3) that an exclusive trademark |
right should be continued although the essentiakpredicate -
of such 2 right no longer exists—perpetuates a restraint on
competition among Standard Oil companies by sanctifying:
and enforcing a “territorial allotment” under which‘ each
Standard Oil company is accorded, in the territory allotted »
to it under the Standard Oil Trust, the exclusive right of
use of the Standard Oil name and any name or mark{de-
rived from or cognitive of Standard Oil. y
The consequence is that the several Standard Oil com-
panies, each with its principal trade name or mark in some
respect identified with Standard Oil, may not use such
name or mark in national marketing or in a vast majority -
of the states in which another Standard Oil company had
a monopoly of Standard Oil marketing under the Trust.
12
: As national marketing under national marks is essential —
to eftective competition among: oil companies, the preven- ~
_ tion of use in national marketing of the principal marks of
' the Standard Oil companies, and territorialization of the .
Tight of each company to use the Standard Oil name and any
/ Marks derived therefrom, is a restraint on competition of
' the widest effect:
e : I.
The Court of Appeals was confronted with two ques-
tions of. the largest public importance: (1) whether the
1937 decree had operated to restrain competition if the
marketing of petroleum products in a fifteen state area of
the middle west in contravention of antitrust principles and
this Court’s opinion in Standard O1l Co. v. United States
supra, (2) whether, in the case of a trademark of national
cognition used by several owners with equal rights in the
trademark, one owner is entitled to the exclusive use of
the trademark and the contined injunctive protection of
such use in a fifteen state’ area, when the trademark has
ceased to be identified in that area exclusively with the
products of such user. Instead of determining the issues— -
indeed, despite the indication in the Court’s opinion that
if it were to decide the issues on the merits it would modify
the decree in the interest of attaining effective competition
in the petroleum industry—the Court held that it was in-
hibited from reaching the merits because of the limitation
on its power to modify a decree laid down by the “lim
of inquiry” language in this Court’s,opinion in Swift.
The record is a demonstration of the anti-competitive
effects of the 1937 decree in territorializing the right of ex-
clusive use.of the Standard Ojl name and the Standard Oil
reputation and good will attributable nationally to all the
Standard Oil companies. Due regard for the public policy
N
1
Atmbarnn >
Ae, eee Cn pete ee 9 gs ee ee SO re
13
embodied in the antitrust laws and required obeisance to
this Court’s 1911 decision, outlawing and dissolving the
Standard Oil Trust, dictated modification of the 1937 de-
cree to eliminate the restraint on competition that decree
imposed by its “territorial allotment” to. Indiana of the
exclusive right to use the Standard.Oil name aid any cogni-
tive thereof—excluding the nationally-known brands ‘of
other Standard Oil Companies from competition—in the
15-state area which was Indiana’s allotted territory under
the operation of the Standard Oil Trust. «
The Court of Appeals deemed itsélf powerless, however,.
to modify the decree in accordance with antitrust and trade-
mark principles because of “the. requirements of Swift,”
perceived in the language of this Court’s opinion in that
case. ;
The Court of Appeals thus misconceived the rule of
Swift and misapplied it in this case. The Court overlooked
the altogether different factual and legal fundamentals be-
tween the two cases, with a result reached in this case that
is the obverse of that dictated by the underlying principle
of this Court’s decision in Swift. -
Swift was an antitrust casé ending in a decree against
continuing. anti-competitive practices. The defendants
‘moved for modification to soften the remedial provisions
of the decree. This Court, addressing itself to the under-
lying facts that had led to the decree—that “defendants -had
‘abused their powers so grossly and persistently as to lead
to the belief that even when they were. acting separately,
their conduct should be subjected to extraordinary re-
straints,” and considering the public interests the decree
was designed to protect—concluded that the riské in loosen-
ing the restraints upon the defendants. had not become ‘so
attenuated as to justify modification of the decree in’their —
favor. ;
4
4
= *. me —— ao. ene eeese y ie a ee ea et RR ciel atity in eal di ne Ce sain Sete a Ae Se “@ ace
14
sles
In contrast, in the present case, it is the decree itself
that is anti-competitive in effect, and the relief that is
requested is the removal of a restraint on competition.
This Court has duly noted that the “language” in
Swift must be read in the light of its “context,” and that
its “thrust” is “‘misconceived” if applied obverselz to refuse
modification of a decree that should be modified in the
interest of promoting competition. United States v. United °
Shoe Machiuery Corp. 391 U. S. 244. |
Ironically, the Court of Appeals here quoted (A20)
from this Court’s opinion in United Shoe Machinery with |
a significant ellipsis revealing that the Court misread both -
the Swift and United Shoe Machinery decisions... The’
quotation, with bracketing of the vital missing part, is
subjoined :
“Swift teaches that a decree may be changed: upon
an appropriate showing, and it holds: that it may
not be changed in the interests of the defendants
if the purposes of the litigation as incorporated in
the decree . . .'[(the elimination of monopoly and
restrictive practices ) ] have not been fully achieved.”
As a consequence, the Court erroneously rejected, as
“not consistent with the language and with what we regard .
as the requirements of Swift” (‘A21), the altogether cor-
rect proposition petitioners stated to the Court:
“, . that’a party is entitled to modification when
the original injunction, based on a different set of —
facts,.could not properly have been entered on the
state of facts that now exists. When such a change
has taken place, the change of fact is the equivalent
of a change of law” (Brief for Appellants at 85).
the Rebiies te mets Ride t he jitedw
want bad 0c: Manse ore ae Wb Ne cat ol nth
me
a
‘S ; * .
“The essential isstie before the Court is ‘whether,
on the facts shown to exist today; which were dem-
onstrated in an exceptionally full record, and pur-
suant to the policy of the trademark and antitrust
laws, the Court would issue the injunction that it
issued in 1937. . .” (Id. at 149).
And the Court thus departed from fundamentals both
of trademark law and antitrust law, continuing the protec-
tion of a trademark no longer entitled to protection and per-
petuating a restraint on competition not required by Swift
but condemned by both Swift and United Shoe M achinery,
and opposed to the command of dissolution and injunction
issued by this Court in Standard Oil Co. v. United S tates: |
II.
The Court of Appeals thought itself stayed from making
the modification of the 1937 decree that would serve the pub-
lic interest in more effective competition, not only by the
language of Swift, but also by its view, patently erroneous,
_ that this Court’s 1911 decision, outlawing the Standard Oil
Trust and directing its dissolution, assumed the continuance
of the “territorial alloment’ held to be illegal, to the extent
that the exclusive right to.the use of the Standard Oil name
and cognitive marks ‘would follow the territorial pattern
of assigned*operations under the Trust. 7 ees
“Were the slate clean,” the ‘Court acknowledged, there
would be force ‘in. the argument that .full and unlimited
competition among all Standard Oil companies “would be
_ good for the public and would be in the national tradition”
(A36). But. the Court felt constrained against render-
ing the decision that the public good and national tradition
would dictate because the slate was “not clean and unen-
cumbered.” The encumbrances, as the Court saw it, in-
16
cluded the “1911 decision” and “the dissolution of the old
Trust” and the “territorial allotment” that was the “prac-
tical result” “flowing from the dissolution” (A36-37).
It is submitted that this holding is wholly without war-
rant, and that it is anomalous to suggest that a decision _
that outlawed the Standard Oil Trust because the terri-
torial allotment of operations thereunder destroyed the
potentialitywof competition—a decision designed to stir com-
petition among the companies—contemplated that the same
system would continue in the allocation of territory in which
each Standard Oil Company would have the exclusive right
to use the Standard Oil name and any cognitives thereof. .«
The Court thus sanctified a restraint on competition
among Standard Oil companies akin to the restraint that
existed under the Standard Oil Trust. Under the operation
of the Trust, each Standard Oil company had an assigned
territory in which it had the exclusive right to operate as
a Standard Oil\Company (221 U. S. at 77). Since the
dissolution of the Trust the several Standard Oil companies
have not been totally conhned in their operations by the
same territorial allocations, but the 1937 decree and its
counterparts in other jurisdictions have served to restrain
andginhibit competition along the same lines as the outlawed
Trust by maintaining the same- territorial.allotments in
which each company has been given the exclusive right of
the use of the-Standard Oil name and any mark cognitive
- of Standard Oil.
, It cannot be doubted that any arrangement among the
companies to this effect would have run afoul of the injunc-
tive provisions.of the 1911 decree and the public policy
expressed in the antitrust laws. White Motor Co. v. United
States, 372 U. S. 253; Timken Roller Bearing Co. v. United
States, 341°U. S. 593; United States v. NationalLead Co.,
332 U. S. 319. A plea that the allocation of territory fol-
lowed trademark rights would have been to no avail. United
. ; ge
17
- States v. Sealy, Inc., 388 U. S. 350; Timken Roller Bearing |
Co. v. United States, supra; Serta Associates, Inc. v. United
States, U.S. (February 25, 1969). The allocation
made is no less repugnant-to antitrust principles because.
it is the product of mistaken judicial decision. Columbia
Artists Management Inc. v. United States, 381 U. S. 348.
It did not flow from the 1911 decree, it rose against it.
The Court 0: Appeals’ refusal to make required modi-
fication of the 1937 decree was not due to any lack of
appreciation of the restraint it imposed, for the opinion
sufficiently noted the anti-competitive effect of the decree
that nothing beyond the recitals of the opinion itself is
necessary to show the restraint.
It is “obvious,” the Court noted, that for “a generation
on wheels” that “thinks nationally” it is “desirable to attain,
if possible, uniform identification of stations and products”. .
_ To deny to Jersey and other Standard Oil companies the
use Of their distinctive identifying marks in all states in
which other Standagal Oil companies were assigned the use
of the Standard Oil name by the Trust is to deprive them not
only of the national value of their trademarks but of the
essential of efféctive nationwide competition. att
The figures Ziven in the Court’s opinion (A27),
for example, of Sohio having 31% of the market in Ohio
where it uses SOHIO and only .2% of the’ market in
adjacent states where it uses BORON, and of Humble
having less than 1.7% of the market (Standard of Cali-
fornia and Sohio having less than .5%) in the 15 states
In&iana calls-“its territory” and enjoys 18% of the market,
are proof conclusive of the nature and extent of the re-
straint on competition that the 1937 decree and following
decisions have perpetrated and perpetuated.
z |
It is not necessary ‘to say more to establish that the
Court was in error in regarding the historic as hallowed
18-
and in exalting trademark considerations over antitrust
considerations, assuming, as was not the case (infra, pp.
19-22), that there was some warrant in trademark law
for the Court’s trademark rationale.®
The Court acted contrary to fupdamentals in subordi-
nating, virtually ignoring, the far reaching antitrust aspects
of the case which should have been given paramount con-
sideration. Certainly, with any change of significance in
the circumstances that led to the 1937 decree, assuming that
it was warranted under the circumstances then existing, .
the Court should have modified the decree as samen con-
siderations dictated.
The fact that the Standard Oil companies are not pre-
cluded from competing with-each other under other trade-
marks does not affect the illegality of the territorial arrange-
ment that substantially restrains competition. The antitrust
laws do not depend for invocation upon the elimination of
all competition among competitors or potential competitors.
Rather, they look to the effectiveness of a particular re-
straint in limiting the effectiveness of competition. United
States v. Container Corporation, 21 L. Ed. 2d 526 (1969. ;
United States v. General Electric Co., 82 F. Supp. 753
(D. N. J. 1949). The effectiveness of the restraint here
is beyond cavil.
8In 1937, when the injunction was issued, no court had yet
squarely faced the issue as to whether an agreement regulating the
use and exploitation of common trademarks- might constitute a
violation of the antitrust laws. Since. that time, however, Congress
es declared that a trade mark may not be “used to violate the. anti-
st laws of the United States,” 15 U. S. C. §1115(b) (7), and this
Court has specifically held that trademarks may not be used as a
device for effecting a -division of territories among competitors.
Timken Roller Bearing Co. v. United States, 341 U. S. 593, 598-99;
United States v. Sealy, Inc., 388 U. S. 350; Serta Associates, Inc.
v. United States, U.S. (February 25, 1969). See also
United States v. Bayer Co., 135 F. Supp. 65 (S.D.N.Y. 1955) ;
United States v. General Electric, 82 Fe Supp. 753 ee N. J. 1949).
Il.
The Court of Appeals was in error even if it were cor-
rect in its underlying assumptiog that trademark principles
should govern and antitrust principles should be disregarded.
_ The 1937 decree necessarily rested on a finding (D12)
that at that time “the only Standard Oil reputation known to
the public” in the midwestern states was the reputation of
Indiana—or as Indiana then argued, the midwestern public
“had never had any experience with any Standard Oil
_ products except those of the plaintiff. [Indiana]”—and
“There was no good will owned in common [by the several
Standard Oil companies], but a separate good will apper-
taining td the separate business as carried on by the various
companies in their allotted territory” (D12-13). 3
The facts today are entirely different. No one would
any longer. suggest that the only experience the midwest
public has had with Standard Oil products is with Indiana.
Rather, as the Court of Appeals observed, “the Standard
Oil image is a general one” (A28), or as the Court of Ap-
peals for the Fifth Circuit noted (363 F. 2d at 946, 951),
the goodwill in the Standard Oil name is attributable to all
the Standard Oil companies and must be “shared” among
eae } ne é
The required sharing is, of course, possible by territorial —
allocation of the right of user, but that is not a form of
sharing permissible under the antitrust laws and this Court’s: °
1911 decision. The only sharing compatible with: the anti-
trust laws and the 1911 decree is a competitive sharing, with
each company entitled to use its established marks anywhere,
not barred because those marks have a natural identifica- .
tion with the common Standard Oil name.’ -
On trademark principles, regardless ‘of antitrust prin-
ciples, Indiana could claim exclusive trademark Tights in
the Standard Oil name and cognitives in the midwest only —
20
if, to the midwestern public, that name and all its cogni-
tives means only Indiana. United Drug Co.-v. Theodore
Rectanus Co., 248 U.S. 90, 97; Canal Co. v. Clark, 80 U. S.
(13 Wall.) 311. Neither*the District Court nor the Court
of Appeals made any such finding as of today. Rather the
Court of Appeals held that the lack-of basis for such a find-
ing was “unimportant” because “Indiana is the only com-
pany which properly has used: the name in the Midwest”
(A33). In sum, the continuance of the Indiana territorial
monopoly in the Standard Oil name and cognitives rests
on no more than the fact that Indiana has enjoyed such a:
monopoly in the past.
On: settled trademark principles, Indiana has lost any
exclusive trademark rights in the Standard Oil name be- |
cause nowhere does Standard Oil mean exclusively. Indiana.
United Drug Co. v. Theodore Rectanus Go., supra at 97:
. The predicate of the 1937 decree—the then existing terri-
torial isolation of separate Standard Oil reputations, one in-
dividual reputation for each territory, and no common good
will to be shared—clearty no longer exists and there is “ho
pretense that it does. The District Court and Court of Ap-
peals were clearly wrong, therefore, in holding that trade-
mark law entitles Indiana to any. exclusive territorial use
of the Standard name and:cognitives against other Stand-
ard Oil companies which have an equal right to use their
established marks in national competition. | ie
The Coutt of Appeals thus approached the case from
an erroneous premise, in de‘ining the “controlling issue”
as “whether the use of ESSO in the 15-state area would
-‘oceasion confusion in the buying public,” and in holding,
_ with the language of Swift as its guide, that the standard
of decision was whether the percentage of confusion coulg
be dismissed as “attenuated to a shadow.” ;
A question of confusion would not even arise, much ~
less be determinative, unless Indiana had solidly grounded
‘ 2 21
trademark rights in the Standard name sed all —
in the midwest against all-other~Standard Oil companies.
_ Indiana has no such valid claim and possible confusion is
_ therefore immaterial as a trademark matter.- It is: some-
thing to be dealt with by required identification of the par-
ticular source of any product, not by the territorialization
among Standard Oil companies of the exclusive right to
use the Standard name and any tyarks derived therefrom.
Kellogg Co. v. National Biscuit Co., 305 U. S. 111, 119.
The proposition on which petitioners stood was correct, |
_ that “a. party ‘is entitled to modification when the original
_ injunction, based on a different set of facts, could not prop-
erly have been entéred on the state of facts that now exists.”
The essential predicate of the 1937 decree, and fdr the con-
tinuance of it, does not now exist. It was, therefore, funda-
_° mental error for the Court of Appeals to reject petitioners’
premise, stating that it was “not consjStent with the lan-
guage” of Swift.
Again the Court misread Swift, fo in Swift there was
no question that the United States was still entitled to the
injunction issued—the public interest that the injunction
was designed to protect was unquestionably still entitled
to protection—and the only question was whether the
remedy of the injunction could be modified without risk to
the interest to be protected; whether the “dangers” to be
guarded against had “become attenuated to a shadow.” The
rationale of decision and language éf Swift have no ap-
plication to a case where the interest protected by the in-
junction is no longer entitled to protection. The Court of.
Appeals was clearly wrong in jumping over the basic trade-
mark question of whether Indiana, on the existing facts,
has any trademark right to the exclusive use of the Stand-
ard Oil name and cognitives in the fifteen states of the mid-
west, and in defining the issue as whether possible confusion
had become “attenuated to a shadow.”
°
22
The Court was likewise in error in deeming from Swift
that it was necessary for petitioners to show that they were
“suffering hardship so extreme” as to be the “victims of
oppression” in order to raise the question of whether
Indiana any longer had the exclusive right to the Standard
Oil trademark that the 1937 decree awards. Since the pred-
‘icate-of that right no longer exists, .the denial to petitioners
of their right to use ESSO is an illegal deprivation of seri-
ous proportions. Further characterization of the wrong is
neither necessary nor relevant, although indeed it is oppres-
sive and a denial of the equal protection of law.
There is not involved here in any way any attempt at
imitation or palming off, nor is there any basis for concern _
about such confusion as may arise only from the fact that -
‘there are several Standard Oil companies, all of equattegiti-
macy, but using different and — identifiable -and dis;
tinguishing marks, such as BE Ge Esso) Gong . Indeed,
the varying marks are so Heel) 3 that the Standard
Oil companies join in the mutual issuance and honoring of
credit cards that advertise each others’ marks as “non-
affiliated” (A24). one
Jersey does not even use its name, as it might properly
do, inthe domestic marketing of petroleum products. It is the
name of its marketing subsidiary HUMBLE that is on the
stations selling ESSO products. There is no lack of truth,
honesty or fair dealing in the situation and there is no
longer justification, if there ever was, in the “territorial
allotment” made by the 1937 decree. On the contrary, this -
territorialization, so at odds with the requirements of
national marketing, is a.restraint on competition. offensive
alike to trademark law ang antitfust law,
a
r
23
IV.
The incidents upon which the District Court’s finding
of unclean hands was based included: (i) Humble’s action
in bringing suit in the United States District Court for the
Western District of Oklahorna to enjoin the unauthorized
use of ESSO by a.local marketer (see Standard Oil Co.
(Indiana) v. Standard Oil Co. (New Jersey), 239 F. Supp.
97 (E.D.Mo. 1965)) ; (ii) a proposal for litigation, acc8rd- —
ing to the Court’s finding, made in 1960 by Jersey’s
lawyers in a meeting with lawyers for Standard Oil of
Ohio, which the District Court found was: intended to de-
ceive the courts, although the Ohio lawyers; whom the Dis-
trict Court found to have told the truth, denied it was in
any way intended to deceive the cOurts; ard (iii ) the testi-
mony of Jersey’s and Humble’s awyers denying that they
had made any such proposal (C12-15).
The District Court’s finding of “unclean hands” was
entirely unwarranted in law or in fact. 3
It is altogether indefensible to suggest, even if Humble
‘may not use ESSO in marketing in the 15-state area, that -
Humble cannot -sue a flagrant infringer of\ the ESSO
trademark without first seeking the permission/of Standard
of Indiana or the United States District Court for the —
Eastern District of Missouri.
The finding that the alleged proposal of litigation’ was
intended to deceive the courts is without any support in the
evidence and contradicted by all the witnesses upon whose
testimony the District Court purported to rely in making
the finding (R. A-104-05; R. A-127-28). |
Patently, as the Conirt of Appeals implicitly recognized
by its decision of the action on the merits, the doctrine -
unclean hands had no place in this litigation, The doctrine ©
- is confined to conduct that is connected to the matter in
\
.
p ee
a >
a
ns Bites a: biti ek ae
24 ’
| litigation and affects the relationship of the parties. Preci-
sion Instrument Mfg. Co. v. Automotive’ Maintenance
Mach. Co., 324 U. S. 806, 814-15; 2 Pomeroy, Equity
Jurisprudence § 399. The alleged proposal of litigation
with Sohio was never acted upon and had no relation to
or. effect upon the litigation between Jersey and Indiana.
Finally, the doctrine of unclean hands could not be
embraced here as a determinant of the case in issue. This
Court has rejected the application of the in part delicto
doctrine, which is a form of unclean hands, in actions involv-
' ing the antitrust laws, Perma Life Mufflers, Inc: v. Interna-
tional Parts Corp., 392 U. S..134, 138-39. Therefore,asa *
matter of law, the doctrine of unclean hands cannot be held
in this case to preclude a decision on the merits or appro-
priate relief. é
CONCLUSION -
This case presents important and substantial questions
ae concerning the proper relationship between antitrust and
| trademark principles and the power and duty of the federal
| courts to modify injunctions. Certiorari should be granted.’
4
Respectfully submitted,
| | ARTHUR H. DEAN
| . Davip W. PEcK |
| Roy H. STEYER
48 Wall Street,
New York, N. Y. 10005.
- SULLIVAN & CROMWELL WALTER R. MAYNE
Forpyce, Mayne, Hartman, 996 "Ollive Street,
RENARD & STRIBLING St. Louis, Missouri 63101,
DILLarp W. BAKER Counsel for Petitioners,
Of Counsel. eek ee | | f
Mich 25, 1969, ees : |
Al
APPENDIX A
Opinion of the Court of Appeals Filed January 9, 1969
UNITED STATES COURT OF APPEALS
For THE EIGHTH CIRCUIT
No. 18,596
Humble Oil & Refining Company, a
Corporation, Esso, Incorporated, a
Corporation, and.Standard Oil Com- Appeal from the .
pany, a Néw Jersey Corporation, “Daleed States
Appellants, | pistrict Court
= for the East-
ern District of
American Oil Company, a Corporation, -
and Standard. Oil Company, an In- —
diana Corporation,
Appellees.
[January 9, 1969.]
Before BLackmun, G1Bson and Lay, Circuit Judges.
BLACKMUN, Circuit Judge.
This appeal provides yet another chapter in the story of
Standard Oil and of the many Standard Oil controversies
which have added color to the body of our law of trade-
marks, trade names, and restraint of trade.’ -
For a preliminary phase of the present litigation see Humble Oil
& Refining Co. v. American Oil Co., 224 F. Supp. 909 (E.D. Mo.
1963). ; :
——
A2
Appendix A
. ” The plaintiffs appeal from a judgment of the district
court dismissing their complaint (filed July 9, 1963) by -
which they seek, under Rule 60(b), Fed. R. Civ. P., to.
modify and amend that court’s injunction issued July 8,
1937, and affirmed by this court in Esso, Inc. v. Standard
Oil Co., 98 F.2d 1 (8 Cir. 1938).
The plaintiffs are three: .
Standard Oil Company, a New Jersey corporation,
hereinafter called jersey Standard or Jersey. The
— was not an original party-plaintiff but
was made such, on motion of the deféndants, by dis-
trict court order pursuant to Rule 19(a), Fed. R.
Civ. P. Jersey’s wholly-owned subsidiary, Humble
Oil & Refining Company, a Delaware corporation
“and successor to Standard Oil Compfhy of New
Jersey, a Delaware corporation. Since Humble
became Jersey’s wholly-owned subsidiary in 1960,
it has been its parent’s nationwide marketing affiliate
in the United States. Jersey itself does not carry on
any marketing operations.
Humble’s wholly-owned subsidiary, Esso, Incorpo-
rated, a Delaware corporation.
_ The defendants are two:
Standard Oil Company, an Indiana corporation, here-
inafter called Indiana Standard or Indiana.
‘Indiana’s wholly-owned subsidiary, American Oil
Company, a Maryland corporation. Since January 1,
1961, American has conducted all of Indiana’s mar-
keting operations in the United States.
What the plaintiffs seek, as the amended complaint
asserts, is “to permit Humble to use its trademark ESSO
A3 *
‘ Appendix A
and marks containing ‘Esso’ in the marketing by Humble
of its petroleum products in fifteen midwestern states in
which American now markets.” Judge Meredith, after a
full trial, denied the relief requested (a) on the merits
and (b) -by application of the doctrine of unélean hands.
Accordingly, he dismissed the complaint and “continued
in full force and effect” the 1937 decree. The district
court’s findings, conclusions, and supporting memorandum —
are reported as Humble Oil & Refining Co. v. American
Oil Co.; 259 F.Supp. 559 (E.D. Mo. 1966).
Background litigation. 1. In 1909 the United States
Circuit Court for the Eastern District of Missouri, with
Judges Walter H. Sanborn, Van Devanter (soon thereafter
Mr. Justice Van Devanter), Hook, and Adams (being all
the circuit judges in the Eighth Circuit’s then geographical
area) constituting the court, issued its opinion holding
that Standard Oil Company of New Jersey (which owned
controlling interests in a number of other Standard. Oil
companies, including Indiana, and other corporations),
seven individuals and 37 additional corporate defendants,
including Indiana, were “in restraint of trade and com-
merce in petroleum and its products among the several
states”, in violation of the Sherman Act. By its decree
the court enjoined the continuance of that violation.
United States v. Standard Oil Co., 173 F. 177, 197-200
(C.C.E.D. Mo. 1909). eer
2. On appeal, the Supreme Court of the United States,
in an opinior® by Mr. Chief Justice White, affirmed the
circuit court’s decree “except as to. . . minor matters.”
Standard Oil Co. v. United States, 221 U.S. 1, 82 (1911).
-In so doing the Court recognized that the circuit court’s
decree “commanded the dissolution of the combination,
PER eee eT eee
PO ne ee
A4
Appendix A
_ and therefore in effect, directed the transfer by the New '
Jersey corporation back to the stockholdérs of. the various
subsidiary corporations . . . of the stock which had been
turned over to the New Jersey company...” 221 U.S. i
at 78. The first Mr. Justice Harlan separately concurred
in part but dissented as to the “minor matters.” 221 U.S.
at 82-106. |
3. Accordingly, the circuit court modified its decree on
July 29, 1911; the holding company distributed the stocks;
and the dissolution oMthe Standard Oil Trust was effected.
See United States v. Standard Oil Co., 47 F.2d 288, 289
(E.D. Mo. 1931). The practical result of this was that
each of the several Standard Oil companies, which had
been part of the Trust, thereafter operated separately and
independently and with exclusive use of the Standard
name in that area of the nation which had been allotted to
it originally. 221 U. S. at 77. See Fry v. Layne-Western
Co., 282 F.2d 97, 106 (8 Cir. 1960). Indiana’s area at the
tive consisted of 11 states, namely, Michigan, Indiana,
Wisconsin, Illinois, Minnesota, Iowa, Missouri, North
re South Dakota, Kansas, and Oklahoma.
4. This division and subsequent natural growth under-
standably led to competition and this in turn to vigorously |
contested lawsuits over the right to use the Standard Oil
name and its various derivatives and abbreviated forms.
Some of these were controversies between Standard Oil ©
companies of the original group; most, however, were
between an established -Standard Oil company and an
outsider who sought to employ the name. The rulings
in these cases consistently have been to the effect that
the name Standard Oil has a secondary meaning in the
AS
Appendix A
trade and that, in the hands of ‘the original user, it is
entitled to protection against unfair use and unfair com-
petition in the area where that user operates. Judge
Meredith described it well when he said,
[T]he particular Standard Oil Company which first
and continuously used the name “Standard” and
derivatives thereof in a particular trade area had the
exclusive right to-use that name and all derivatives.
therefrom to the exclusion of the other Standard Oil
Companies and to the exclusion of all strangers who
attempted to use the name. 259 F.Supp. at 560.
The reported.cases include Standard Oil Co. [Indiana] v.
Michie, 34 F.2d 802 (E.D. Mo. 1929) ; Standard Oil Co. of
New York v. Standard Oil Co. of Maine, 38 F.2d 677 (D.
Maine 1930), modified and aff’d, 45 F.2d 309 (1 Cir. 1930) ;
Standard Oil Co. of New Mexico v. Standard Oil Co. of
California, 56 F.2d 973 (10 Cir. 1932) ; Standard Oil Co. of
_ Colorado v. Standard Oil Co. [Indiana], 72 F.2d 524 (10
Cir. 1934); cert. denied, 293 U.S. 620; Esso Standard Oil
Co. v. Bazerman, 99 F.Supp. 983 (E.D. N.Y, 1951) ; Stand-
ard Oil Co. [Indiana] v. Standard Oil Co. of North Dakota,
123 F.Supp. 227 (D. N. D. 1954); Standard Oil Co. [ In-
diana] v. Standard Oil Co. [Ohio], 141 F.Supp. 876 (D.
Wyo. 1956), aff’d 252 F.2d 65 (10 Cir. 1958), 76 A.L.R.2d
600; Esso Standard Oil Co. v. Standard Oil Co. of North
Carolina, .112-U.S.P.Q. 265 (M.D. N.C. 1956) ; and Esso
Standard Oil Co. v. Standard Oil Co. of New. England,
170 F.Supp. 71 (D. N.H. 1958). A decision initially to the .
contrary, evidently the only one, involving special facts,
is Humble Oil & Refining Co. v. Standard Oil Co. (Ken-
tucky), 229 F.Supp. 586 (S.D. Miss. 1964) ; but this was
reversed, 363 F.2d 945 (5 Cir. 1966), cert. denied, 385 U.S.
oe wan sae
A6
Appendix A
1007, and the final disposition of that a? is in line
with the other cited cases.”
It should perhaps be noted, for what it may be worth,
that a Jersey affiliate, Esso Standard Oil Company, was a
party in a number of the outsider cases and that it took
the position in those cases, some of them within a decade
of the institution of the present lawsuit, that the exclusive
right to the Standard Oil name or derivatives in the terri-
tory in question belonged to it. It has taken a like position
in registration and other proceedings.
5. It was the United States District Court. for the
Eastern District of Missouri and this court, however,
which entertained the earliest litigation between constituent
companies of the old Trust. That case was the one which
resulted in the 1937 decree and its affirmance here. In 1935
Esso, Incorporated, opened three gasoline service stations
in Saint Louis, Missouri, within the territory historically
inhabited: by Indiana. Indiana sued (Civil Action No.
11407 in the Eastern District) to enjoin Esso, Incorporated,
from using “ESSO”,, alone or in combination, in Indtana’s
multistate area. The late Judge Moore ruled in favor of
Indiana and on July 8, 1937, entered a decree, the injunctive
?There are also certain unreported decisions consistent with the -
cited cases. Among these are Esso Standard: Oil Co. v. Standard Ou
Co. of Virginia, (decree entered November 29, 1955, by the United
States District Court for the Western District of Virginia) ; Esso
Standard Oil.Co. v. Stone Oil Co. (decree entered October 2, 1959,
by the United States District Court for the Western District of Penn-
Sylvania) ; Standard Oil Co. [Indian ; v. Standard Oil Co. of Vene-
zuela (decree entered April 5, 1951, by the United States - District
Court for the District of Nebraska) ; Standard Oil Co. [Indiana] v.
Green (decree entered June 6, 1957, by the United States District
Court for the Northern District of Illinois) ; and Standard Oil Co.
{Indiana] v. Mercer (decree entered July 6, 1942, by the United
States: District Court for the District of Montana).
A7
A ppendix A
portion of which is set forth in the margin.* The court’s
supportive findings, described as “elaborate and in consider-
able detail”, are summarized in the affirming -opinion of
this court. Esso, Inc. v. Standard Oil Co., supra, 98 F.2d
at 3-4. We place in the margin pertinent portions of those ~
findings and conclusions‘ arid pertinent portions of Judge
*Defendant, Esso, Incorporated, its agents, servants, representa-
tives, employees, attorneys, confederates, and all others acting for,
with, through or under it and each of them, be and hereby are per-
petually enjoined and restrained: ,
(a) From using in the states 6f Missouri, Colorado, Illinois,
Indiana, Iowa, Kansas, Michigan, Minnesota, Montana, North -
Dakota, Oklahoma, South Dakota, Wisconsin or Wyoming in
connection with petroleum and its products or in the petroleum
industry or in connection with the sale of any articles similat to
those heretofore marketed by plaititiff, in any name, corporate or
otherwise, or as a brand for merchandise or in any manner:
1. The term “Esso”, either alone or in combination with
other names, terms, letters, marks, symbols‘or syllables.
2. Any of plaintiff’s trademarks or trade names, i.e.,
“Standard Oil Company”, “Standard Oil”, “Standard”,
“SOCO”, or “SO” or any names, terms, marks or symbols
colorably similar thereto in sound, appearance, significance or
meaning, or any combination thereof with other names, terms,
letters, marks, symbols or syllables. 5 ;
(b) From selling, offering or advertising for sale any product
not plaintiff’s product of a similar nature to the pggducts heretofore
marketed by the plaintiff in the above named states tinder any name
or mark or by any method indicating that such product is the
product of Standard Oil Company ;
(c) From committing any other act or acts calculated to cause
confusion or to infringe, injure or damage the rights of the plain-
tiff in and to its trademarks, name and good will, and from other-
wise competing unfairly with the plaintiff by any means or in
any manner.
*Among the 1937 findings of fact are:
°° 7%. Plaintiff and its products have long been known in the
localities where it operates by the nicknames “S O C ov, oC,
“S O Company”, “Standard”, and “Standard Oil.”
8. In the states in which plaintiff operates there are various _.
persons who are aware of the fact that there are several concerns
° ead
OLE AN I I
SIN IMO ae a
A8&
en Appendix A
in the petroleum industry known by names which include the
words Standard Oil, but in these states the terms ‘“‘Standard”,
“Standard Oil”, “S O” and “S O C O” and variants thereof are
used by the public to identify the plaintift and the plaintiff’s
products,.
9. Defendant’s parent company, Standard Oil Company (New
Jersey), at various times has asserted and admitted that “Stan-
dard” and “Standard Oil” as used by each of the Standard Oil
Companies in the respective localities where each operates (in-
cluding the plaintiff here) indicate in each such locality the com4
pany operating in that-locality and none of the others. :
11. “S O” and “S O C O” are abbreviations of and equiv-
alents of “Standard Oil’, and are recognized as such by the public.
12. Stdndard Oil. Company of New Jersey and Standard Oil -
Campany (New Jersey), which defendant in its brief refers to as
its associates, have recognized and acknowledged plaintiff’s exclu-
sive rights in “Standard Oil Company”, “Standard”, and “Stan-
dard Oil” in said states.
14. Continuously, since the dissolution - decree in 1911, the
various Standard Oil companies, including plaintiff, have used one
or more of the trademarks “Standard”, “Standard Oil”, “Stand-
ard Oil Company”, “S O C O”, “S O”, or abbreviations of such
marks or variations of them, exclusively i in the territory where eaeh
has operated. inder the name Standard Oil Company and each of
said companies has acquired,common law rights in marks used by
it in the states in which it has used its said trademarks which
rights are exclusive of the other companies and each has recog-
nized the rights of each of the others to use said marks exclusively
in its own locality. Each company has competed with. the others
without limitation of locality under many different names and
trademarks, which do not include “Standard” or similar words. .
15. The Standard Oil Company of New Jersey, or the
Standard Oil Company (New Jersey), or both, in the past in
applying to yarious courts for protection for their trademark rights
in the words “Standard” or analogous marks have repeatedly
represented to said courts as a basis for desired relief that the
rights of each of the Standard Oil Companies in the states in which
it conducts its business are exclusive’ of each of the other Standard
Oil Companies and that such rights in’ each company are based
on exclusive use of such trademarks in the ternitory in which it has
conducted its business under such trademarks.
26. Plaintiff’s use of “Standard”, ‘Standard Oil”, “S O” and
“S O C O”, both prior to and after defendant's use of “Esso” has
been a continuance of its long use of those marks and was in
exercise of its then existing rights.
AQ es
‘s
Appendix A
4
2.
e
27. The public regaré#the letters “S O” when used iri connec-
tion with petroleum products sold by plaintiff as being the initials
of “Standard Oil Company’? and “Standard Oil” and understand
them to mean that such products are made by or sold by plaintiff
or by a subsidiary olainfiff or by a concern connected with
plaintiff, or by a concern selling plaintiff’s goods.
28. “Esso” is the spelled out form of “S O”.
29. “Esso” is identical in sound and significance to “S O”.
30. “Esso” is the equivalent of “SO”. ~
31. “Esso” is confusingly’similar to “S O” and “S O CO”.
32. “Esso” is the equivalent of “Standard Oil” to many con-
umers of petroleum products.
33. Deferidant’s parent company, Standard Oil Company of
New Jersey, in seeking relief and protection from courts of equity
has asserted,and represented to such courts that “Esso” is iden-
tically the same as the letters “S O” and also that “S O” is the
. same as “S OC O”.
34.. The intent of the Standard Oil Company of New Jersey
in its use of Esso as a brand and as part of the corporate name of
defendant “Esso, Incorporated”, is to sell its goods as “Standard
Oil” and “S O” goods in states in which these ‘brands are not its
trademarks and trade‘names, but are the trademarks and trade
names of its competitors; and by so doing to enable it to deceive
the public to its advantage and profit . . . :
35. Members of the public seeing the word “Esso” displayed
at defendant’s stations believe that the products sold there are the
products of the plaintiff or of a subsidiary of plaintiff, or of a
company connected with plaintiff or selling plaintiff's products . . .
40. The term “Esso” does not describe and is not understood
as meaning any perticular grade or quality of product. It has no
meaning except a the equivalent of the letters ““S O”.
42.° Defendant’’ use of the colors red, white and blue in the
_ combination in which it uses them on its stations and on its cans in
which it sells its products is sufficiently different from plaintiff's -
combination and arrangement of such colors, that if used without
_ the word “Esso”, or any word of which “Esso” is a part, or any
other word or symbol similar to or suggesting the marks or names
“S 0”, “S O C O”, “Standard”, “Standard Oil”, “Standard Oil
' Company”, or any one or more of them, the public is not likely tq,
be deceived into believing that the products sold at the stations
and in cans bearing defendant’s combination of such colors, are
plaintiff’s products.
Among the 1937 Conclusions of Law are:
1. The terms “Standard”, “Standard Oil’, “Standard Oil
Company”, “S O”, and “S O C O”, are plaintiff’s [Indiana’s]
— ~ °
4
wn
A10 ce
®
pre's A
Gardner’s opinion® “describing the siqwunde advencied by
Esso, Incorporatec, and containing this court’s response
thereto. 98 F.2d at 5-7. 4.
trademarks and trade names. Plaintif{\is entitled to their exclusive
use in the states in which it conducts it&business.
_ 3. Defendant’s use of “Esso” infrin es plaintiff’s rights and
constitutes unfair competition.
4. The registration of “Esso” in the United. States Patent
Office, whether by the defendant, Esso, Incorporated, or by
Standard Oil Company of New Jersey or Standard Oil Company
(New Jersey), has not created any trademark rights therein
’ effective in any of the states in which plaintiff operates.
8. Defendant, Esso, Incorporated, is estoppeq. to deny plain-
tiff’s exclusive trademark rights in “S.O”, “S O C O”,. “Stand-
ard”, “Standard Oil” and “Standard Oil Company” in the states
in which it does business and is further estopped to deny that -
“Esso” is the equivalent of “S O” and that said defendant’s use
of “Esso” in such states is an infringement of plaintiff’s rights in
“SO”, “S O C O”, “Standard”, “Standard Oil” and “Standard
Oil Company”. x
5It is urged that the word “Esso” is not so similar to the trade-
- marks “Standard Oil,” “S O,” and “S O CO” as to be confusing. It
is the accepted rule that similarity of sound, as well as appearance, of
the words or letters may constitute infringement . . . “Esso,” when .
pronounced, is indistinguishable from “S O.” The initals of the
Standard Oil Company are the source from which these marks and
brands were derived, and we surmise the value of the brand “Esso”
“lies in the fact that it suggests “Standard Oil” .
. It is the purpose of the law to protect not only the owner in
his property, but to protect the public from being deceived by reason
-of a misleading claim that the article bearing the trade-mark is the
articie produced or manufactured ° by the owner of the trade-mark
when in fact it is not.
It was not necessary to show that any person had been actually
deceived hy the defendant’s use of the trade-names or trade-marks in
questidh: and led to purchase its goods on the belief that they were
the goods of plaintiff... . The court, however, found this to be the
fact, and this finding is sustained by the evidence... .
The circumstance which distinguishes this case from many others
is the fact that defendant’s parent company bears the same name sub-
stantially as the plaintiff, and, confessedly, in its own trade territory
it would have the right to use any of the words or names it is now
; \
\
\ \
j
RRR eer Re .
All
Appendix A
Thus the matter rested 30 years ago.°
Other background material. 1. After the dissolution of
the Standard Oil Trust} some of the companies constituent
thereto, including Jersey and Indiana, expanded their re-
spective operations beyond their originally allotted terri-
tories. For the most part, however, these expansions were
under names and marks other than Standard Oil or its
_ derivatives or abbreviations.
‘2. On November 27, 1923, the mark ESSO was regis-
tered as Trade-Mark 176,408 in the United States Patent
using. The question is, therefore, can it use these names, letters and
marks \in plaint#ff’s trade tertitory. .. . ;
The owner’s right to have his trade-mark protected is coextensive
~ only with the territory throughout which it is known and from which
it has drawn its trade. . . .
In the. instant case, the court found that the letters, words and
names in controversy have, by reason of their long use in connection
with the business and trade of plaintiff, come to be understood by the
public in the states named, as designating the godds and products of
plaintiff. In these circumstances, defendant, being subsequent in time
in the territory mentioned, is not entitled tottse these terms or names,
even though they may be abbreviations of its own name, because to do
so would cause its goods and products to be kndwn in the market of
those states as those of plainttff- -
It is argued that the defendant is endowed by inheritance or other-
wise, with the name “Standard Oil Company,” and that plaintiff is not
entitled to a monopoly of the: Standard Oil reputation. The only
Standard Oil reputation known to the public in the state§ mentioned is
the reputation of the plaintiff in this suit. .... There was no right of
good will established in this territory by the New Jersey Compagy.
There-was no good will owned in common, but a separate good will
appertaining to the separate business as carried on by the various
companies in their allotted territory. Not only has the New Jersey
Company never had any actual business in these states, but that com-
pany has for many years acquiesced in the asserted claim of the ©
various companies formerly in combination to the right of good will
in their separate territories, and has itself claimed such rights in the
territory occupied by it.
_ °For a current chapter in that 3-decades-old litigation, see
Standard Oil Co. [Indiana] v. Standard Oil Co. (New Jersey), 239
F.Supp. 97 (E.D. Mo. 1965). :
3
S
Re
ao... See
le | Appendix A
Office by Standard, Oil Company (New Jersey), a New
Jersey corporation. The registration was renewed Novein-
ber 27, 1943, to Standard Oil Company of New Jersey, a
- Delaware corporation, later, by change of ‘name, Esso
Standard Oil Company, a Jersey affiliate.”
_ 3. Esso and Indiana were the only actual parties to the
litigation resulting in the 1937. decree and its affirmance.
By the pleadings, however, Humble and American acknowl-
edge that each of them is necessarily “interested in and
affected by” that decree.
, 4. Indiana was incorporated in the State of Indiana in
1889. In its'multistate area Indiana has used the Startdard
- Oil name continuously since its incorporation. As herein- .
above noted, its territory at the time of the 1911 Supreme’
Court decision consisted of 11 states in the Midwest. Three
more, Montana, Wyoming, and Colorado, had been added
by the time of the 1937 decree. Still another, Nebraska,
was added in 1939 when Indiana acquired Standard Oil
Company: of Nebraska and rights to the name in. that
state. Thus Indiana’s primary area of operation, where
it of its predecessors have used the Standard Oil name
generally and (except for litigation hereinabove described )
without question by other. Standard Oil companies,’ is a
15-state contiguous complex in the central or midwestern
part of the nation. :
5. By 1960 Humble, as a result of the merger into it of
other Jersey subsidiaries, was marketing in 35 states and
announced its intention to market nationwide. —
6. By the time Jersey and Indiana, in 1960 and 1961
respectively, placed themselves in positions to market
nationwide through single subsidiaries, it had become ob-
‘Al3
Appendiz.A -
vious that it was desirable to attain, if possible, uniform
identification of stations and products. -
7. Incontrast, at the time the 1937 decree was entered,
Indiana, in its then 14-state area, was conducting its sta-
tion operations with its own distinctive red, white and
blue color scheme under Standard names and trademarks,
_- but subsidiaries, marketing outside that area, were operat-
ing under different names, symbols and color schemes.
About 1946 Indiana moved toward uniformity by the
adoption, for itself and* subsidiaries, of a sign consisting
of a red, white and blue oval and torch. This was brought
to a head with the 1961 merger of the marketing com-
panies into the wholly-owned American. The torch and
- oval sign continued to be used with the word-“Standard”
therein in the 15-state area arid the word “American”
elsewhere. Uniformity of station design, slogans,. and the
like, was also accomplished.. Indiana’s prior use of the
initials S O, which had been extensive in 1937, began to
lessen. .
8. A like development took place on the Jersey side.
In the thirties,. the name ESSO was in use in 18 states
(Maine, New Hampshire, Vermont, Massachusetts, Con-
necticut, Rhode Island, New York, New Jersey, Pennsyl-
vania, Delaware, Maryland, Wést Virginia, Virginia, North
— South Carolina, Tennessee, Louisiana, - and
xas), the District of Columbia, Canada, and:135 foreign
areas. The plaintiffs’ brief describes ESSO as “without
_—_————_ ; : ¢
‘The ESSO trademark was also used by Humble in Alabama,
Florida, Georgia, Kentucky, and Mississippi from 1961 until 1967
when. its use in those states ceased as a result of the decision in
‘Standard Oil Co. (Kentucky) v. Humble Oil & Refining Co., supra,
363 F.2d-945. yh .
— _ @ 2 ~ he) Fate Wa hes oh ake vue
Knee atl RS ORG TORREY, PE FINE 3 “ye Uwe
.
2 APE ER EET OE Te
.
Al4
- Appendix A
any doubt one of the best known trademarks in the world,
and a recognized symbol at airports and service: stations”
here and abroad. The plaintiffs assert that ESSO belongs
to and is used exclusively by Jersey, Humble, and- -their
affiliates and carinot be used anywhere by Indiana or
‘American without Huinble’s or Jersey’s permission.
With the 1960 merger Humble adopted a uniform de-
sign for its service: stations. This featured the name
Humble, the slogan “Happy Motoring”, and a red, white and
blue color scheme. The nationwide use of ESSO, however,
was complicated by the 1937 injunction in the 15-state mid-
west area and: elsewhere where the principle of that in-
junction was considered to be applicable by other Standard
Oil companies, and by the settlement stipulation mentioned
in paragraph 11, infra, with Standard of California and
Standard of Texas. Humble therefore adopted the name
“ENCO”, from “ENergy COmpany”, for use in those
areas of complication. |
9. Obvious factors promoting this trend toward uni-
formity were the propensity for travel 1 in the United States
and national advertising.
10. The Standard name came to be eliminated from
Humble’s marketing operations by 1961. Jersey manage-
ment testified to this effect at the trial and further stated
that neither Jersey nor Humble now had any intention
of resuming the-~yse of the Standard name in United
States marketing and would not protest if American or
‘any other Standard Oil company were to use the Standard
name in any area where Humble uses ESSO. Apparently
this policy decision was not without some disagreement
in Jersey’s executive structure.
q@
\ — AlS
Appendix A
11. Other Standard Oil companies moved in the same
direction. Standard of California continued its use of the
Standard name in nine states (Texas, New Mexico, Ari-
zona, California, Nevada, Oregon, Washington, Idaho, and
Utah) but in the late fifties adopted a national identifica-
tion with its red, white and blue Chevron symbol. . That
. company also used the name CALSO in the Midwest and
in the East until about that time and did so without ulti-
. mate objection from Jersey. In 1954 Humble brought an
action in a Texas federal court, as it states, “to protect
ESSO against confusing advertising by Standard of Texas
[a Standard of California subsidiary] of the letters S.O.”.
This suit was settled by a stipulation between Humble,
California, and Texas. Thereby Humble recognized the
right of Texas to use the Standard name in Texas and
New Mexico, and Texas recognized the right of Humble
to use ESSO in Texas. Further, Humble agreed that it °
would not use ESSO in states where California or Texas
had an activésprior use of the Standard name.®
12. Standard Oil Company, an Ohio corporation, uses
SOHIO in its traditional area whith is the State of Ohio.
“But it also operates in Michigan, Pennsylvania, and Ken-
- tucky under the mark BORON. Its service station design
is generally the same for all four states.
13. Califorpia Standard and Indiana arrived at an
understanding in 1955. Each agreed that it would not
use marks or names with the letters-S O in the other’s
_ area. Each, however, also agreed that the -other could
8In its brief, the plaintiffs state, “[w]e recognize that the conten-
tions herein made, if upheld, would also affect the validity of that
stipulation.” eee
ey
Geet,
OEM INA a OBE NIN ore ra
A16
Appendix A
use the Standard name in advertising media which had
as much as 15% circulation in the area where the other
used the Standard name. This agreement served to ter- .
minate California’s approximately 20-year use of the name
CALSO in the Midwest.
The starting point. In their brief the plaintiffs state
that they, “in this action to modify the 1937 injunction,
do not dispute in any way the validity of the findings at
that time or the holding based on such findings.” Regard-
s of whether, at this late date, the plaintiffs would or
uld not have a choice in that matter,” this acknowledg-
ent on the part of the plaintiffs necessarily provides a
starting point. Judge Moore’s 1937 findings and conclu-
sions, certain of which we have set forth in footnote 4,
supra, embrace, among other things, a) an admission that
the Standard name, as used where each Standard Oil
company operated, indicated only the company there oper-
‘ ating; b) representations to various courts by plaintiffs’
predecessor-affiliates to that effect; c) the identity and
equivalency of ESSO with S O and Standard Oil, and the
predecessor-affiliftes’ court representations to that effect;
d) confusion on the part of the buying public; and e) an
estoppel of the present plaintiff, Esso, Incorporated.
This is, indeed, a disadvantageous and precarious start-
ing point, albeit one of 30 years ago, for the present plain-
tiffs. Using football phrases, it is poor field position and
late in the game.
The plaintiffs’ argument. It is. argued that, since the
litigation of 30 years ago, “a fundamental factual change
has occurred.” The goodwill and reputation of the Stand-
~
-®“The injunction, whether right or wrong, is not subject to im-
peachment in its application to the conditions that existed at its
making.” United States v. Swift & Co., 286 U.S. 106, 119 (1932).
- Al7
Appendix A
‘ard Oil name in the 15-state area is no longer attributable |
to Indiana but is actually that of all the Standard Oil
companies. The name is no longer distinctive. Further, :
ESSO itself has become distinctive and “is no longer gen-
erally regarded as denoting ‘Standard Oil.’” Thus, the
controlling facts have changed and, since this is so, “the
basis for holding that the use of ESSO by Humble in the
midwest would constitute unfair competition with or in-
fringement of appellees’ use of Standard no longer exists.”
The change is attributable to “present marketing, trade-
mark and environmental conditions.” The“ allocation of |
the goodwill of the Standard name “on‘a territorial basis
involves restraints. on effective competition contrary to °
trademark law and the public policy of the antitrust laws.”
Further, the basic premise of the decision in the district
court is not that the only Standard Oil reputation known
to the public in the 15-state area is that of Indiana but
rather that the prior decisions have established that each
Standard Oil company retained the ‘ ‘exclusive right” to
use the’name in its “particular trade-area.” Again, the
fundamental question is “whether today, in contrast to
1937, the Standard Oil reputation in the subject area_ is
exclusively” that of Indiana and that this would have to
be the basis for any holding that Indiana is still entitled to
‘a monopoly of the reputation of the name. in the Midwest.
Thus, it is suggested; Indiana is really trading ¢ on the .
goodwill of all the Standard companies.
The litigation instituted by Indiana against Standard
of Ohio relating to Ohio’s use of SOHIO in Michigan was .
begun in 1954. The plaintiffs would.explain and differ-
entiate the Tenth Circuit’s decision, supra, 252 F.2d 65,
on the ground that the finding there, to the effect that the
Standard Oil reputation in the area involved was only that —
of Indiana, was based on the mutual concession, 252 F.2d
A18
‘ Appendix A
at 70, that each party: litigant had thé exclusive right to
use the Standard name in its own territory. Thus, the
plaintiffs say, the Wyoming. federal district court and the
Tenth Circuit were not asked to determine the fundamental
question whether the Standard Oil 1s nate in Michigan
was in fact isolated to Indiana.
The plaintiffs would also distinguish. the Fifth Circuit’s
decision, supra, 363 F.2d 945. Although recognizing that
the Court of Appeals held that the district court’s findings
there as to the absence’ of public confusion between ESSO
and Standard Oil were clearly erroneous, 363 F.2d at 948,
the plaintiffs assert that the respect in which the court
found confusion is significant. It is said that the confusion
is with the general name Standard Oil and not with
Standard of Kentucky; that the court expressly recog-
nized that the goodwill and the Standard Oil name is
attributable to all the Standard Oil companies; and
_ that all the companies must share the Standard Oil idea or
meaning. 363 F. 2d at 950-52. It is thus argued that the
Fifth Circuit recognized that the Standard Oil reputation
and goodwill is a shared reputation and goodwill. It is said,
- however, that the court did’not focus on the essential fact
that Indiana in 1937 had a right to foreclose the use of
ESSO in its 14-state area only because to the public the —
Standard Oil name in that area meant Indiana exclusively.
Thus the plaintiffs would utilize the Fifth Circuit’s decision ee
as authority for shared reputation and shared goodwill but
would question it as misguided authority for monopoly of
that reputation and goodwill in a particular area.
The legal standard. A court of equity has power “to
modify an injunction in adaptation to chariged conditions.”
_ This is so whether the power is or is not expressly reserved.
in the decree and “whether the decree has been entered
oe
Al9
Appendix A
after litigation or by consent.” United “States v. Swift &
Co., 286 U. S. 106, 114 (1932).. In that case the Supreme
Court reversed the trial court’s modification of its earlier
injunction. Two dissenters stressed changed competitive
conditions and “discouraging. operating losses” of those
theretofore restrained. 286 U. S. at 120-23. But the four-
justice majority (three justices took no part), in.an opin-
ion by Mr. Justice Cardozo, pronounced the “applicable
standards:
There is need to keep in mind steadily the limits of
inquiry proper to the case before us. We are not fram-
ing a decree. We are asking ourselves’ whether any-
thing has happened that will justify us now in changing —
' adecree. The injunction, whether right or wrong, is not
subject to impeachment in its application to the condi-
tions that existed at its making. We are not at liberty
to reverse under the guise of readjusting. Life is
‘never static, and the passing of a decade has brought
changes to the grocery business as it has to every other.
The inquiry for us is whether the changes are so im-
portant that dangers, once substantial, have become
attenuated to a shadow. No doubt the defendants will
be better off if the injunction is relaxed, but they are
not suffering hardship so extreme and unexpected as .
to justify us in saying that they are the. victims of
oppression. Nothing less than a clear showing of priev-
ous wrong evoked by new and unforeseen conditions
should lead us to change what was decreed after years
of litigation with the consent of. all concerned.
. What was then solemnly adjudged as a final com-
position of an historic litigation will not lightly be. un-
done at tHe suit of the offenders, and the composition
held for nothing. 286 U. S. at 119-20.
ane
PIO ERPS, MET SOB
‘
A20 eee
Appendix A
We glean, from this, certain factors of importance: (1)
that, where modification and amendment of an existing
decree is under consideration, there are. “limits of in-
quiry” for the decree court and for the reviewing court;
(2) that the inquiry is “whether the changes are so im-
portant that dangers, once substantial, have become at-
tenuated to a shadow”; (3) that the movants must be
“suffering hardship so extreme and unexpected” as to be
regarded as “victims of oppression”; and (4) that there
must be “[n]othing less than a clear showing of grievous
wrong evoked by new and unforeseen conditions.” Placed
in other words, this means for us that modification is
only ¢autiously to be granted; that some change is not
enough; that the dangers which the decree was meant
to foreclose must almost have disappeared; that hardship
and oppression, extreme and unexpected, are significant ;
and that the movants’ task is to provide close, to an un-
answerable case. To repeat: caution, substantiat change,
unforeseenness, oppressive hardship, and a clear showing
are the requirements. : '
The Supreme Court, in subsequent opinions, continues
te recognize an equity court’s power to modify and amend
and yet gives no indication of any retreat from the require-
ments of Swift: See, for example, System Federation No.
91 v. Wright, 364 U. S. 642 (1961); Columbia Artists .
Management Inc: v. United States, 381 U. S. 348 (1965),
-and the dissent at 352; and United States v. United Shoe
Machinery Corp., 391 U. S. 244, 248 (1968), where it was
said:
Swift teaches that a decree may be changed upon an
appropriate showing, and it holds that-it may not
be changed in the interests of the defendants if the
purposes of the ‘litigation as incorporated in’ the
decree ... have not been fully achieved.
%
immctentcl
:* Aa
Appendix A
This court, too, has recognized the same principles with
a reference to “significant changes in conditions not fore-
seeable at the time the injunction was granted,” -thus em-
phasizing change and unforeseeability. Bowdil Co. v.
Central Mine Equip. Co., 216 F. 2d 156, 160 (8 Cir. 1954),
cert. denied, 348 U. S. 936. See Hygrade Food Prods. C orp.
v. United States, 160 F. 2d 816, 819 (8 Cir. 1947).
_ At this point we advert to thé plaintiffs’ brief and to the
following statements which it contains:
It follows from these principles that a party is en-
titled to modification when the original injunction, based
on a different set.of facts, could not properly have been’
entered on the state of facts that now exists... . |
The essential issue before the Court is whether,ion
the facts shown to exist today, which wete demon-
strated in an exceptionally full record, and pursuant
to the policy of the trademark and antitrust laws, the
Court would issue the injunction that it issued in
Serr ‘
- . We feel that these statements, gtanding alone, are not
- consistent with the language and with what we regard as
the requirements of Swift. As Mr. Justice Cardozo said
in Swift, 286 U.S. at 119, “We are not framing a decree.”
_ We are confronted here not with a question of the grant-
ing of injunctive relief but with the question of the with-
drawal or modification of injunctive relief granted in the
past. It is in the latter situation—the one which confronts
us—where the Cardozo precepts are the operating guide-
lines. Despite the quoted words from their brief, we
really do not understand the plaintiffs to argue otherwise.
The evidence. We must.agree with the defendant-appel-
lees that the controlling issue, in both. the 1937 litigation
es
‘ ~A22
Appendix A
and the present proceeding, is an issue of fact, ‘namely,
whether the use of ESSO in the 15-state area would occa-
sion confusion in the buying public. |
, This being so, it follows that the usual salen rules
have application, namely, that findings are not to be set
aside unless clearly erroneous and ‘only pon clear dem-
onstration that they are without- substantial evidentiary
support or that they are induced by an erroneous view of
the law,” and that a ‘finding is clearly erroneous when,.
“although there ‘is evidence to support it, the reviewing
court on the entire evidence is left with the definite and
firm conviction that a mistake has been committed.” Rule
52(a), Fed. R. Civ. P.; Cole v. Neaf, 334 F. 2d 326, 329
(8 Cir. 1964) ; United S tates v. United S tates Gypsum C 0.,
333 U. S. 364, 395 (1948).
The key findings of fact made by Judge Meredith in the
present case are the following : bY
The isse of the name “Standard” and all derivatives
thereof belongs to Standard Oil (Indiana) in the mid-
west states as this Court held in 1937. To permit this ~
, decree to be modified on the evidence presented to this
‘Court would cause the motoring public a great deal of
‘ confusion and would cause a stibstantial loss to the de-
fendants. Their customers would not know the differ-
ence between the Standard torch and oval as used in the
midwest and the Esso in the oval as used by the plain-
tiffs. The motoring public in the-midwest would be.”
buying plaintiffs’ products thinking they were defend-_
ants’ . . . While the defendants -in this case have
had some change in the use of the initials “S O”-and
“S O'C O” from 1937 to the present date, there has
been a substantial and continued use of these initials.
A23
Appendix A
In the early stages of this case the court reporters had
great difficulty i in determining whether the lawyers were
saying - or “Esso”. ‘When pronounced they sound
identical. Both mean Standard Oil. 259 F. Supp. at
566.
\
Thus Judge Meredith found essentially the same facts.
for the present day as Judge Moore did for his day, namely,
that ESSO would caus@ confusion to the public and that pur- ©
chasers would be buying Indiana’ s products thinking they
were those. of Jersey. .
We turn to thé,specific evidence in order to determine
the sufficiency of the present record to support these find-
ings. The plaintiffs base their factual case on a number of
items:
-1. Reputation as one company or several. The plaintiffs |
introduced evidence that a major sector of the general pub-
lic, both in the East and in the Midwest, does not regard
the respective Standard Oil companies as separate and dis-
-tinct entities but considers them to be either a single com-
pany or separate parts of one company. Various studies
over the years 1942-61 tend to bear this out. The plaintiffs
_ also introduced evidence that even executives and directors .
of Indiana recognized this but felt that it accrued to Indi-
ana’s benefit and thus were not particularly concerned. The
Supplemental fact, of course, is that the same studies dis-
close that from 16% to 27% of the population do regard
the Standard Oil companies as separate entities. And there
are from 11% to 13% in the “don’t know” category.
2. Changing motoring habits. The plaintiffs introduced
statistical data showing a large increase since 1937, well
beyond projected forecasts, in per capita vehicle registration
_ ——
—A24
. Appendix A
and in travel mn one Standard territory to another, not.
~ only over long distances but also i in short commuter traffic.
3. Population origin. The plaintiffc -also produced
United States Census Bureau reports which suggest that
approximately one-sixth of the midwest population consists
of persons born outside the 15-state area who presumably=
brought with them, when they came ‘to the Midwest, an
exposure to marks used by other Standard Oil companies.
4. Advertising methods.’ The plointifte urge, as a fac-
tor unforeseeable i in 1937, the great advances in radio and
; _ television. This was mentioned by Judge Meredith. 259 F.
: Supp. at 563. It was a factor, the plaintiffs suggest, in
| the 1955 agreement, mentioned above, between Indiana and
California, concerring advertising spillover at their com-
mon, boundary. ~
a 5. Credit cards. The plaintiffs introduced evidence
; showing great increase since 1987 in the use of gasoline
: ' credit cards under-exchange agreements among the various
Standard Oil companies. These cards distinguish between
affiliated and nonaffiliated companies but allow a customer
i= to use the card at the station of any Standard company.
The plaintiffs say, “It clearly appears from these cards,
therefore, that American is satisfied that Humble’s ESSO
mark can be disclosed, indeed advertised, by it to its cus-
tomers in wal 15-state area as the mark of a ‘non-affiliated’
company .
6. Surveys. A number of surveys entered the record.
Judge Meredith referred briefly to some of this evidence.
259 F. Supp. at.564. We could devote many pages outlining
ArT WOR ae its tig Sa ine et wis a aR
A25
“Appendix A
the methods and details of these studies but we endeavor
to summarize them with the hope that we do so fairly:
a. Three surveys by Louis Harris & Associates, Inc., in °
the<fall of 1965. These are heavily relied upon by the
plaintiffs. Mr. Harris himself testified. The first related
to the 15-state midwest area, the second was nationwide,
and the third covered four states (Arkansas, Kentucky,
Ohio, and Utah) bordering the 15-state area. The latter
_two surveys were designed to provide a check against the
first. In the midwest study, 80% recognized the ESSO
mark, on a recognition test, as being real,-63% had seen
it, 38% associated it with gasoline, and only 5% associated
it with Standard Oil. Thus, it is.said, ESSO stands in-
dependently as a gasoline trademark. “Esso Extra” as a
brand of gasoline was associated with Standard Oil sta-
tions by 14.4%. Finally, 7% of those familiar with sta-
tions selling Standard Oil gasoline in their states would
go to an ESSO station to purchase the same products.
Mr. Harris testified that these percentages could not be
totalled because of overlap but that they established a
range of association. Allowing for a 3% margin of error,
the study disclosed a maximum association of ESSO with
Standard Oil in the Midwest of 18%. In the separate
national survey the figures checked closely with those ob-
tained for the midwest area.
b. A survey conducted for Indiana during the summer
of 1965 by S. H. Britt, professor of marketing at North-
western University. The result here was that 29%: in the
Midwest associated ESSO with Standard Oil. This was
strenuously attacked on cross examination: oer of pos-
sible bias occasioned By a preliminary question."
Tn the Piumnble Sastacky litigation criticism of survey method
was noted. 363 F.2d at 949.
Fs NR ep SS BS al Lae ROG ea RAE.
Katia! RSA Ne LK ek AB ALN Ls BEBE
Bass rine Giseay ia easMt
Appendix A
4
e. The Popkin survey. This consisted of interviews by
_ counsel for the-defendants with 109 persons whg had been
interviewed in the first Harris survey. It indicated that —
49% gave Standard Oil answers to the ESSO mark. This
result would tend to controvert the Harris surveys. Mr.
Harris, however, questioned its validity because the per-
sons seen had aiready been exposed to questioning along
the same line. Mr. Popkin conducted a second investiga-
tion with a team of lawyers for the purpose of obtaining
witnesses for the trial. Persons were interviewed on the
' street in 13 midwestern cities. Thirty-eight per cent said
the-word ESSO meant Standard Oil.
d. The McCann-Erickson study. This was a small pilot
survey conducted for Jersey by an advertising agency in
1957. It concluded that there was greater potential for
Esso in Indiana territory than for Indiana in Esso terri-
tory, maily because more midwesterners had seen or used
an Esso station than easterners had seén or used an In- .
diana station. The study also disclosed that, although a
large majority of motorists stay with a single brand, the
primary reason for their doing so is that they trade at a
convenient neighborhood station where they have come to
know and like the personnel. ;
7. The change in Indtana’s use of S O and SOCO. In
1937 Judge Moore found that Indiana’s products had long
been known by the symbols S O and SOCO and that these
were abbreviations and equivalents of Standard Oil and
recognized as such by the public. On appeal this court
noted “their long use” in connection with Indiana’s busi-
ness and that they hdd come to be understood by the mid-
western public as designating Indiana’s products. 98
F.2d at 7. The present record discloses that the use of
o
———
A27 ae
i
Appendix A ee
S O and SOCO by the etenannns in-the inter:m bad
_ diminished to such a point that defendants’ trademark
counsel became concerned. and recommended increased use
of the symbols. The letters S O do appear on Indiana’s
road maps, ‘on gasoline pumps.in small letters, on certain
industrial ang household products, and in some newspaper
and television advertising. The use of SOCO has been.
greatly curtailed. Brand names such as Solite and Stano-
lind have been progressively phased out. There is evi-
dence that attempts.were made by Indiana to slow the
disuse of these names and marks.
8. The importance of: nationwide marks and names.
These, of course, can be advertised easily on a national
basis. It simplifies labeling and product distribution. It
enables a company to compete more effectively. Thus in
- 1964 Standard of Ohio. made 31% of the retail gasoline
’ sales under the SOHIO label in Ohio but less than «2%
of the sales in the adjacent three states where it uses the
name BORON. -In the 15-state area Indiana has 18% of
the gasoline market. Humble has less than “1.7% and
neither California (including Kentucky) nor Ohio has as
much as .5% In-contrast, in the former Socony area’
comprising the New England states and New York, Mobil
continues to lead the market with approximately 16%
but Humble, using ESSO in this territory, is a close
competitor with about 12% of the market.
Our reactions to this factual material are about as fol-
lows: : :
th ;
1. The evidence as to the single or multiple company
character of Standard Oil goodwill cuts, of course, both
ways. On the one hand the evidence has a tendency to
BB vetctintisss A ebreeey PX
Fee i ect hat Kt A eae ES AAG NA at RE ESA ie RIL
A28
Appendix A
establish, as the plaintiffs urge, that the Standard Oil,
image is a general one to most of the purchasing public.
But on the other hand it also reflects public confusien
to a substantial Gegree. We thus find the evidence Persua-
sive neither way.
In any event it is instructive to note that in this respect
the present record is scarcely to be distinguished from the
record of the 1937 case. The earlier record contains the
testimony of public witnesses identifying the several
Standard Oil companies as one and the same. And a
public opinion survey of 1938 of Iowa and Wisconsin
males shows 67.2% ‘as feeling Standard Oil was all one
company or parts of a iarger company and even 12.1%
who “don’t know.” Judge Meredith observed that many
persons are unaware that the companies are, in fact, sepa-
rate and distinct. He found, “This situation existed in
» 1937 and it exists today’’*and “the conditions which exist
today are merely an extension of conditions that led up
to the 1937 decree.’ 259 F. Supp. at 563, 564.
This feature of the evidence afforded Esso, Incorpo-
-rated, no relief in 1937-38. We could:not hold, contrast-
ingly, that it now serves as support for affording the
plaintiffs relief. In passing, we note that the same public
reaction factor was observed in the Kentucky and Wyo-
_ ming litigation, mentioned above, 363 F. 2d at 951; 141
F. Supp. at 881, and did not prevent the iene of injunc-
tive relief.
2. No one familiar with American life could dispute the
fact that there have been changes since 1937. Motoring has
become more widespread and more complex. This is indeed
a generation on wheels. The nation is probably more geo-
graphically oriented and more nationally conscious than
‘>
nee A29
Appendix A
ever before. Avenues of communication have grown re-
markably in use and sophistication and show little heed,
even if once they did, to geographical boundaries. Gasoline
credit cards tend to blur the distinctions between. market-
ing companies. All this must be accepted as established
and as characteristic cf modern living.
3. Despite all this, the surveys, singly and as a group,
do not dispel the existence of a percentage of confusion
which we may not dismiss as de minimis. The percentage
figure varies. from 11% to as high as 49%. The lower
figure itself is not an insignificant percentage. The record
discloses that the number, of motorists in the Midwest is
in, the millions. Eleven per cent of a figure in the millions
is a large number. In the Kentucky case the Fifth Circuit
described the confusion disclosed in the record before it
as “profound.” 363 F. 2d at 952.
4. One reason, of course, for the lesser use by Indiana
of the S O and SOCO marks was the assumed inability
to use them outside the 15-state area. Another reason was
the convenience and desirability of national advertising |
rather than area-segregated advertising. Although the
evidence demonstrates that Indiana’s use of S O and SOCO
has diminished markedly since 1937, it also shows that,
albeit by recommendation from executive headquarters and
legal advisors, some use of those symbols still remains.
Whatever may be the lessening use by Indiana of S O
and SOCO, the record clearly demonstrates that it has
never abandoned the use of the Standard name in the
15-state area. Indeed the emphasis there of late has been
on “Standard Oil Division” of American Oil Company. —
5. Jersey’s figures as to comparative shares of the gaso-
line market are to be tempered somewhat by the fact: that
A30
Appendix A
Jersey’s entrance into the Midwest has been comparatively
recent except for the Rocky Mountain region where it has
marketed under the Carter name since 1943. Jersey, now
using ENCO, has 13% of the Montana market -and more
than 5% in Colorado and Wyoming. This appears to be
consistent with the conclusion of the McCann- Erickson
pilot sutvey that people tend to trade at local. stations
because they like the personnel, service, and convenience.
This a market share may be said to be more appropriately
linked to the number of stations and the length of time
a company has been marketing in the area rather than to
brand name or identification sign. The sign does play a
- more important part when people are away from home.
In our view the case presents the situation where Fersey,
having developed ESSO, as it says, into “one of the best-
known trademarks in the world,” has arrived at the point
where it is confident enough in its strength that it pro-
poses not to challenge the use by others of the Standard
name in its traditional area and, in return, feels entitled
to the use @f ESSO elsewhere. But it is prevented from
' this by the 1937 decree and, in certain states, by the Fifth
Circuit’s decision and, in still others, by the settlement
stipulation made with Standard of California and Stand-
. ard of Texas By the present action it seeks to break
the hold and impeding effect of the 1937 decree. We are
not advised as to how Jersey expects to avoid the effects
of the Fifth Circuit decision and of the settlement agree-
ment with California and Texas.
We return to the precepts of Swift and of our own
Bowdil case, supra, 216 F.2d at 160. We have listed these
in detail above and have summarized them as “caution,
substantial change, unforeseenness, oppressive hardship, and
a clear showing.” Does the present record then provide
a case for relief? | aes
A3l
A ppendix A
We have noted that change has come about since 1937.
Motoring habits are different. Distances are less signifi-
cant, are easily surmounted and are no longer much. of _
a deterrent. The motoring public-thinks nationally and
is mobile. Advertisements are not to be limited _b _ geo-
graphical configurations. The credit economy is agveling
and unifying influence. But we are not persuaded that
these changes have been unforeseen and “so important
that “dangers, once substantial, have become attenuated to
a shadow.” This record reveals that more than a, mere’
shadow of the midwest public still regards the Standard
name and its abbreviations and derivatives as the badge
of the products of Indiana. In this respect the public
identity of Standard Oil companies has been shown to be
little different in 1966 than it was in 1937. The change that
has taken place is‘ not of that degree of substantialness
and the dangers against which the 1937 decree guarded
, are not so attenuated as to satisfy the precepts of Swift.
J Neither has the requirement of “extrete and unex-
pected” and oppressive hardship been demonstrated. The
record shows that the plaintiffs have been able successfully —
to establish outlets under the ENCO name and sign in the —
15-state areq (except Missouri) and elsewhere. Between
1959 and 1964, Jersey’s share of the market in the area
where ENCO was used increased in every state except two
(Illinois and Indiana). For the same period, jn the terri-
tory originally allocated to Jersey and its predecessors
‘and where it marketed under the name ESSO, its share
of the market decreased in’15 states and increased in- only
three and in the District of Columbia. About 20% of ©
Humble’s total motor fuel business is done under the name
ENCO. At the time of the 1937 decree Jersey had service
stations in 18 states and the District of Columbia; at the
-\time of the 1966 trial, Humble had stations in 47 states
x : 'A32
Appendix A
- Between 1937 and 1964, Jersey’s total assets increased
from over two billion dollars to almost 12% billion and
net profits from about 148 million to over a billion. The
-plaintiffs are the largest petroleum marketers in the world.
They account for one-sixth of the sales of petroleum prod-
‘ucts in the free world.”
We realize that it is not always safe to utilize growth
figures in this way. Nevertheless, although it would be ©
easier, more beneficial, and far more convenient for Jersey
to use ESSO in the Midwest, it is not easy for us to.extract
oppressive hardship from all these facts. Jersey is free to.
compete and does compete. As _—_ Meredith said, -259
F. ‘Supp. at 566,
The injunction of 1937 does not prohibit the plaintiffs
here from competing with the defendants in the mid-.
west. They are.at-+tiberty to build all the filling sta- -
tions, sell all the gasoline and do anything else they
want '0.do, under the name “Encg” or any other
name they choose to adopt other than “Esso” or some
derivative of the name “Standard Oil”. This, they
are ahd have been doing. ~
It is perhaps not amiss to point out, repetitively, that
the handicap, if it be a handicap, under which the plaintiffs
operate in the 15-state area finds its counterpart in the Fifth
Circuit’s decision in 1966, rendered wellafter the beginning
- of thé trial of the present case, relating to five states where
the plaintiffs had 776.ESSO stations. 363 F. 2d at 948. It
also has its counterpart, for other states, in the agreement
with Standard of California and Standard of Texa¥?
Similarly, Indiana, Standard of California, and Standard of Ohio
have been able to capture noticeable shares of the market outside their -
respective traditional areas under names other than Standard or its
abbreviations and derivatives, °
ee .
re. ot > Se eee
0
A33 parca,
A ppendix A
We are fully aware of Jersey’s argument that the real
reason for the 1937 injunction was the limited experience
of the midwestern public at that time with any Standard .
Oil company other than Indiana and that thus the name
actually did identify Indiana as the source of its products
whereas today the name no longer so identifies Indiana, ,
We feel that Jersey's argument misconstrues the function .
of trademarks and trade names as source indicators. The
Second (arcuit has appropriately observed,
Although a valid trademark must serve ag an indication
of origin; we are not to be construed as saying that it is
necessary that purchasers actually know the name of the
manufacturer of the goods they purchase. “It suffices
that the public normally assumes that articles bearing
the same mark are from‘the same source.” 3 Callmann,
Unfair Competition and Trade-Marks, § 84.1, at 1628
(2-ed. 1950). Feathercombs, Inc. v. Solo Prods. C orp.,
306 F. 2d 251, 255 (2 Cir. 1962), cert. denied 371 U. S. “
910.
Thus Indiana’s use of the name in the 15-state area iden-
tifies a certain chain of stations and certain products as
coming from a particular source. The fact that it does not
precisely identify Indiana as that source may well be ‘un-
important since Indiana is the only company which prop-
erly has used the name in the Midwest. The Standard
name possesses a distinctiveness as a source indicator in
the area even though it’ does not make Indiana’s customers
aware of Indiana’s precise relationship to the other Stand-
_ ard Oil companies.”
_ 47In Walter Baker & Co. v. Slack, 130 F. 514, 518 (7 Cir. re
the court observed, in-granting relief, “We may safely take it for
granted that not one in a thousand knowing of or desiring to purchase |
Fen Cocoa’. or ‘Baker’s Chocolate’ know of Walter Baker & Co.,
imited”, ,
<)-
Siesta t'be®
‘ ee :
AAR Neen ith ily & latenn SON SohahMe UN ED wslag itd ea
ee en Eee ee Pert We MY co Or Oe
7 Gta eelett tein Loe
A34
Appendix A
Jersey would draw an analogy from the generic name
decisions, contending that these hold that loss of distinc-
tiveness in a name follows as a matter. of law from loss
of exclusiveness of reputation and goodwiil in that name.
Among the citations are: Bayer Co. v. United Drug Co.,
272 F. 505 (S. D. N. Y. 1921) ; Du Pont Cellophane Co. v.
Waxed Products Co., 85 F. 2d 75 (2 Cir. 1936), cert.
denied, 299: U. S. 601 and 304 U. S. 575; King-Seeley
Thermos Co. v. Aladdin Indus., Inc., 321 F. 2d 577 (2 Cir.
1963) ; Dixi-Cola Laboratories, Inc. v. Coca-Cola Co.,8117
F. 2d 352 (4 Cir. 1941), cert. denied, 314 U. S. 629;
Kellogg Co. v. National Biscuit Co., 305 U. S. 111 (1938).
In these cases the name contested had become the
generic or popular term for the article in question. This
~ was so even though there was a small minority who still
regarded the word as indicative of source. In the present
case, however, even though many people are aware of the
various Standard Oil companies and have been exposed to
them, it is not true that Indiana’s Standard name has lost
all significance as a source indicator. The géneric name
cases hold that, if a name no longer serves in any way
as a source indicator, it loses its” protection. The loyalty
of Indiana’s midwest customers arises from the fact that
they like its products. Those products for many years
have been sold exclusively under the Standard name in the
Midwest. The fact that people-are aware-of other Stand-
ard Oil companies does not mean that the”’Standard names:
in the Midwest is not indicative of the source of the prod-
ucts sold under that name. On the contrary, it is indicative’
of the company which operates the Standard stations. As
’ such, it is still entitled to protection.
_ The impact of the antitrust laws. The plaintiffs suggest
that, with the continuance of the 1937 decree and territori-
A35
Appendix A
alization, the ities is wronged by being denied the oppor- -
‘tunity of effective competition among all Standard Oil com-
panies. It is said that if the territorial allocation were the
product of agreement rather than the result of court decree,
there would be little doubt that it would: violate the ~\
trust laws. White Motor Co. v. United States, 372 U.S.
253, 259 (1963), and other cases are cited.
This is not a new argument. We encountered an aspect
of it in the appeal from the 1937 decree. 98 F. 2d at 8. It
was answered effectively in Standard Oil Co. ( Kentucky) |
v. Humble Oil and Refining Co., supra, 363 F. 2d 945; 953- —
54, where the Fifth Circuit said: ,
On oral argument, Humble also contended that this,
Court would be violating the intent of the 1961 anti-
_ trust consent decree if we prevented its competing’ with
_ Kentucky under the Esso name. This is precisely the
same argument that has been made and rejected numer-
ous times as to the intent of the 1911 dissolution decree.
Esso, Inc. v. Standard Oil Co. (of Indiana), 98 F. 2d ©
1, at 8 (8 Cir. 1938) ; Standard Oil Company (Sohio)
v. Standard Oil Company. (of Indiana), 252 F. 2d 65,
at 76 (10 Cir. 1958) ;-Standard Oii Co. of Maine v.
Standard Oil Co. of New York, 45 F. 2d 309, at 313
(1 Cir. 1930). The antitrust laws require epmpetition,
not piracy. The essence of competition is the ability of
competing products to obtain public recognition based
on their own individual merit. A product has not won
on its own merit-if the real reason the public purchases
it is that the public believes it is obtaining the product
of afother company. There is not now, nor has there
ever been, a conflict between the antitrust laws and
trademark laws or the law of unfair competition. The ~
we
=r -
2 WMA aaa re ie
‘continue in effect.
. A36
Appendix A
antitrust laws could go further than to envision Hum-
_ble’s enteririg the market and competing under -one of
its non-Standard Oil tradenames and marks. In this
way Humble could obtain customers based on its own»
merits.
Further, as has been pointed out, there is no absence of
effective competition among the varicus Standard Oil com-
panies and there is no price-fixing tie-in with trademark
use. The competition may not be ‘so great or so effective
or so convenient as perhaps would be the case were the name
_ ESSO universally usable. But that fact, upon the circum-
stances here, is not an antitrust violation.
We therefore conclude and, except for the volutninous-
ness of the record, do so without too much difficulty, that
Judge Meredith’s findings on the merits find adequate sup-
port in the record. The standards pronounced by the gentle
Cardozo in Swift over 35 years ago are still the law appli-
cahle here and, in-our view, the plaintiffs have not demon-
strated the substantial change, the unforeseenness, and the
oppressive hardship which those standards require. Having
in mgnd, too, that by Swift our inquiry has limitations and
that there must be a clear showing of nothing less than
“grievous wrong,” the,1937 decree, on this record, must
Were the slate clean, one might argue with some force
that full and unlimited comipetition among all the Stand-
ards—one on each corrier of the intersection, so to speak
—would be good for the public and would be in the na-
tional tradition. Perhaps. But the Standard slate is not
clean and unencumbered. It is colored and indeed com-
posed of the 1911 decision; of the dissolution of the old
Trust; of the territorial allotment flowing from that dis-
A37
Appendix A
solution; of the 1937-Eighth Circuit decree; of the Wyo-
ming-Tenth Circuit decree; and of the ‘Kentucky-Fifth
Circuit result. This is the full slate which confronts us,
and the plaintiffs as well, and with which we all must
work, As Mr. Justice Cardozo observed—and, in so saying,
he touched the nerve—we are not framing a decree. In-
‘stead the district court and we are asked to modify or
amend an existing one. There is a world of difference
between the two situations.
Unclean hands. This was an alternate ground for the
district court’s decision. In‘ view of our holding on the
merits, there is no need for us to explore and rule upon
this aspect of the case. We say only that we find ourselves
somewhat less certain of agreement with the district
court’s ruling on the application of the doctrine of unclean
hands than we are with its ruling on the merits. Con-
versely, however, we are entirely satisfied that the court’s
ruling on the merits was not tainted by its conclusion as’
to unclean hands. We therefore affirm but, in so doing, we
expressly refrain from approving or disapproving the .
district court’s on the®nclean hands issue.
Affirmed.
Bl
APPENDIX B
_ Judgment
UNITED STATES COURT OF APPEALS.
For THE EIGHT Circuit
No. 18,596—September Term, 1968.
_+~
=
Humble Oil & Refining Company, a Corporation, ‘Esso,
Incorporated, a Corporation, and Standard Oil Company,
a New Jersey Corporation,
Appellants,
VS.
American Oil Company, a Corporation, and Standard Oil
Company, an Indiana Corporation.
A
~>
AppkaL from the United States District Court for the
Eastern District of Missouri.
_. THIS CAUSE came on to be heard on the record from the -
United States District Court for the Eastern District of —
Missouri, and was argued by counsel.
ON CONSIDERATION WHEREOF, it is now here ordered
and adjudged by this Court, that the judgment of the said
District Court, in this cause, be, and the same is hereby,
affirmed. — es \
January 9, 1969
Cl
APPENDIX C
Opinion of the District Court Filed September 29, 1966
UNITED STATES DISTRICT COURT
EasTERN District Missouri, EASTERN DIvISION
Humes te Om & REFINING CoMPANY, a
corporation, Esso, INCORPORATED, a
corporation, and STANDARD O1rL Com-
PANY, a New Jersey corporation,
; Plaintiffs ee
wv. BS No. 63 C 251(2)
AMERICAN OIL CoMPANY, a corporation,
and STANDARD O1L COMPANY,’ an
Indiana corporation,
Defendanis.
FINDINGS OF FACT AND
CONCLUSIONS OF LAW
- MeEREpDITH, District Judge.
This proceeding was brought under and pursuant to
Rule 60(b) of the Federal Rules of Civil Procedure;sto
modify an injunction decree of this Court entered in 1937
in case No. 11407, which-was affirmed on appeal in Esso, ©
Inc. v. Standard Oil Co. (Indiana), 98 F. 2d 1 (8 Cir. 1938).
Under the 1937 dectee “Esso, Incorporated, its agents, serv-
ants, representatives, employees, attorneys, confederates,
and all others acting for, with, through or under it and each
of them?’ were perpetually enjoined from using ‘in the
petroleum industry in the States of Colorado, Illinois, Indi- |
ana, Iowa, Kansas, Michigan, Minnesota, Missouri, Mon-
. ek
C2
Appendix C
tana, North Dakota, Oklahoma, South Dakota, Wisconsin
and Wyoming “the term Esso alone or in combination with
other names, terms, letters, marks, symbols, or syllables,’
or the trade names or trademarks Standard, Standard Oil,
Standard Oil Company, S O, or S O C O, or ‘any names,
terms, marks or symbols colorably similar thereto in sound,
appearance, significance of meaning.”
Plaintiffs in this proceeding are Humble Oil & Refining
‘Company, a Delaware corporation (herein called Humble),
Esso, Inc., a corporation, and Standard Oil Company, a
New Jersey Corporation (herein called Standard Oil [New -
Jersey] ). Humble is wholly owned by Standard Oil (New
Jersey), and Esso, Inc., is wholly owned by Humble. Esso,
Inc., was a defendant in the 1937 case.
Defendants in this proceeding are The American Oil
Company, a Maryland corporation (herein called Ameri-
can), and Standard Oil Company, an Indiana’ corporation
(herein called Standard Oil [Indiana] ), which owns all of
the capital stock of American. Standard Oil (Indiana) was
the plaintiff in the 1937 case and obtained the above-men-
tioned injunction.
Plaintiffs herein seek to modify the 1937 inlesiotion to
permit Humble to use the name and mark “Esso” in the
petroleum industry in the fourteen midwest states covered
by the decree and in the State of Nebraska. Following the
entry of the 1937 injunction, Standard Oil (Indiana) began
_ marketing in Nebraska. These fifteen states are hereafter
referred to as the midwest. |
Plaintiff Humble is now the owner of record of the -
federal registration of the trademark “Esso”. Plaintiff is
prohibited from using it in the midwest by virtue of the
1937 decree.
C3
5 Appendix C
To understand the problems of this litigation, a brief
history of the Standard Oil Company is necessary. “The
Standard Oil trust began in 1870. By 1899 Standard Oil
was the leading and dominant name in the American Oil In-
dustry. A holding company, Standard Oil of New Jersey,
was formed and through this holding company various
Standard Oil Companies were controlled from 1899 to 1911.
During this period of time the name “Standard Oil’, by
extensive national advertising and excellent products,
- achieved a nationwide reputation. In 1911 the Supreme
Court ‘held that the method of operation of Standard Oil’
violated the Sherman Antitrust Act and ordered the com-
pany dissolved. Standard Oil Co. of New Jersey v. United
- States, 221 U. S. 1, 31S. Ct. 502, 55 L. Ed. 619 (1911).
After 1911 the courts determined that various Standard Oil
Companies had the exclusive right to use the Standard
name and marks in their own territories, as this Court so
held in 1937 in relation to fourteen midwest states.
The courts throughout the United States have uniformly
held that the particular Standard Oil Company which first
and continuously ‘used the name “Standard” and derivatives
thereof in a particular trade area had the exclusive right to
use that name and all derivatives therefrom to the exclusion
of the other Standard Oil Companies and to the exclusion of
all strangers who attempted to use the name. See Standard
Oil Company (Sohio) v. Standard Oil Company (Indiana),
141 F.Supp. 876 (D. Wyo. 1956) aff’d 252 F. 2d 65, 76 A.
L.R. 2d 600 (10 Cir. 1958) ; Standard Oil Co. of Colorado v.
Standard Oil Co. (Indiana), 72 F. 2d 524 (10 Cir. 1934),
cert. den. 293 U. S. 620, 55 S. Ct. 216, 79 L. Ed. 708 ;
Standard Oil Co. of New Mexico v. Standard Oil ‘Co. of
California, 56 F. 2d 973 (10 Cir. 1932); Esso Standard
Oil Co. v. Standard Oil Co. of New England, 170 F. Supp.
See eas
C4
A ppendix j
71 (D. N. H. 1958) ; Standard Oil Co. (Indiana) v. Stand-
ard Oil of North Dakota, 123 F. Supp. 222 (D. N. D. 1954) ;
Esso Standard Oil Co. v. Bazerman, 99 F. Supp. 983 (E. D.
N. Y. 1951) ; Standard Oil of New York v. Standard Oil of
Maine, 38 F. 2d 677 (D. Maine 1930), aff’d 1 Cir., 45 F. 2d
309; Standard Oil Co. (Indiana) v. Michie, 34 F. 2d 802
(E. D. Mo. 1929). The one exception to this universal
holding was found in the case of Humble Oil & Refining Co.
v. Standard Oil Co. (Kentucky), 229 F. Supp. 586 (D.C.
Miss. 1964), where Standard Oil (Kentucky) had been dis-
tributing Esso products under a licensing agreement which
had expired. ‘Thereafter, Humble began using Esso prod-
ucts in the five southeast states area, Alabama, Georgia,
Florida, Kentucky and Mississippi, in its own right. The
district court held that if any confusion resulted, it was the
fault of —— Oil (Kentucky), and it could not now
complain. This case was reversed hy the Fifth Circuit
Court of Appeals on July 1, 1966, Standard Oil Co. (Ken-
tucky) v. Humble Oil & Refining Co. 363 F. 2d 945 (5
Cir. 1966), and an application for certiorari is now pending
in the United States Supreme Court. .
The plaintiffs contend essentially that’ the marketing
practices and conditions of the opener and the habits
of the motoring public have changed so much since 1937 that
the continued enforcement of the 1937 decree is inequitable
- and works an extreme hardship upon the plaintiffs; that it
deprives the motoring public of the competition that would
_ be engendered in the event the decree were modifid to permit
the introduction of plaintiffs’ products in the midwest under
the name “Esso”. Plaintiffs further contend that the intro-
duction in‘ the midwest of plaintiffs’ products “under the
name “Esso” would cause no confusion. Plaintiffs contend
that practices of the plaintiffs since 1937 are > changed in
.. 2
Appendix C
such a manner that the motoring public is now able to dis-
tinguish between the products of the plaintiffs and those of
the defendants. This Court finds at the outset that the
plaintiffs herein stand before this Court of Equity with un-
clean hands. Their appeal to the conscience of the Chancellor
has fallen on stony ground. Relief to them would be denied —
on this ground alone, even had they met the burden of proof. .
required with clear and convincing ‘evidence. In: addition,
the plaintiffs have not met the burden of. proof on any of
their essential cgntentions.
In 1937 Standard Oil (Indiana) was doing business as
an operating company and as a holding company. It was
operating on.its.own name in the fourteen states of the
midwest and through subsidiaries in other parts, of the
United States. Its subsidiary, the Utah Oil Refining Com-
- . pany, operated in Utah, Idaho and Nevada, and after 1937
began to magket in Washington and Oregon.. A subsidiary,
Pan-Am Southern Corporation, operated in Louisiana, Mis-
sissippi, Alabama and Tennessee. A subsidiary, the defend-
ant in this case, American, operated in New York, New .
Jersey, P&hnsylvania, Delaware, Maryland, Virginia, West
Virginia, North Carolina, South Carolina, Georgia, Florida,
Ohio and the District of Columbia. Iri 1937 these subsi-
diaries were not wholly owned by -defendant Standard Oil
(Indiana). Between 1937 and 1961 Standard Oil (Indiana)
acquired all of the outstanding stock of. these subsidiaries
and merged them into a. single wholly-owned subsidiary, de-
fendant, American. Since 1961 Standard Oil (Indiana) has
operated only as a holding company and policy-making com-
pany.
From 1937 t® 1961 the defendants’ subsidiaries used a
variety of brand names of gasoline, service station color
schemes, and other marks and symbols. Prior to 1961
PE SMELLING POPE LE LI
C6
Appendix C
Standard Oil (Indiana) began to.adopt the torch and oval
as an I D sign on the service stations of its subsidiaries. It
also began to adopt certain slogans in connection with radio,
television and other advertising. The slogans were: “You
expect more from _and you get it” and “As you
‘travel, ask us”. The red, white and blue color scheme was
adopted at varioys times by its subsidiaries -prior to 1961
and was uniformly adopted by all of them in 1961. Since
1937 to date, the service stations of defendants in the mid-
west have had the name “Standard’’ on thé stations and in
the I D signs. Since 1937 to date, the defendants’ color
scheme in the midwest has been red, white and blue on the
service stations. From 1937 to date, the defendants have
used at various times and during various intervals in the
midwest the initials “S O” and “S O C O” on road maps,
on radio and television advertising, on newspaper and mag-
azine ads, on trucks, and certain products such as charcoal
starter, Solite lighter fluid and on gasoline pumps. There is
no indication from the evidence that the defendants have
ever abandoned or intended to abandon the use of the letters
“3 O" or "S OG OO.
Since 1961 the I D sign of defendant American has :con-
tinued to carry the name “Standard” in-the torch:and oval
at all filling stations in the midwest. Outside the midwest
Fin the territory of the other Standard Companies, the torch
and oval has carried in the I D sign the name “American’’.
Atlas tires and other Atlas products are sold and have been
sold at the service stations of defendants, of plaintiffs, and
of all the other Standard Oil cae ae throughout the
United States. -
The name “Standard Oil’ was employed by ie plain-
tiffs’ predecessors in plaintiffs’ territory in the east at the
time of the decree in 1937 and the name “Standard” was
Pe)
C7
Appendix C
; tad
continued in use in that eastern territory until a few yéars
ago. The trademark “Esso” was a word developed from the
letters “S” and “O”, which were the initials of Standard Oil.
From 1925 to date, the name ‘‘Esso” has been used in the
eastern part of the United States and this name “Esso” has
been and is now used in Canada, Europe, Africa, South
America, Asia, and in other parts of the world. )
From 1937 to 1960 plaintiffs acquired a number of sub-
sidiary companies, including Carter Oil Company, Pate Oil
Company, Oklahoma Oil Company of Chicago, and Gase-
teria Oil Company of Indianapolis. In 1944 Standard Oil
Company of Louisiana was merged into Standard Oil Com-
pany of New Jersey, and in 1948 there was a merger of
these companies with Standard Oil Company of Pennsyl-
vania, Colonial Beacon Oil and Kesbec to form the Esso
Standard Oil Company. In 1960 all of the operating com-
panies of the plaintiffs were merged into the plaintiff Hum-
ble, a wholly-owned subsidiary of plaintiff Standard Oil
(New Jersey). Prior to 1960 plaintiffs began to adopt
throughout the country a uniform red, white and blue color
scheme at their filling stations and the slogan “Happy
Motoring”. In 1948 plaintiffs ‘adopted as their I D sign at
the service stations in the United States in the territory
where this could be used the word “‘Esso” in an oval. This
was primarily in the eastern United States. From 1960 to
date, the I D sign of the plaintiff Humble outside its eastern
- states territory has contained the name “Enco”. The I D
sign of “Esso” is used in other Parts of the world as plain-
tiff’s principal identification.
Since 1961 the I D sign of the plaintiff Humble has con-
tained the word “Esso” in the five. southeastern states of
Standard Oil (Kentucky) territory, about which litigation
iS ‘presently pending.
&
- Appendix C
From 1948 to 1960 the name “Esso Standard Oil Com-
pany” was used in advertising throughout the east on radio,
‘television, in newspapers, magazines, on gasoline pumps,
trucks, maps and outdoor advertising. Since 1960 the I D
sign of plaintiff Humble has been standardized to use the
word “Esso” in an oval in the eastern states and the five
southeastern states in which litigation is presently pending.
Outside the eastern states, in the midwest and the west, the
- ID sign of plaintiff contains the word “Enco” in an oval.
This name “Enco” was derived from “the leading ENergy
COmpany”. | :
The various Standard Oil Companies throughout the-
United States have uséd the name “Standard” or some deri-
- vative thereof within their own exclusive territories, Out-
_ side their territories-they have used other names and D
signs. Standard Oil (California) uses the name “Chevron”
in other ‘parts of the United States. Standard Oil (Ohio)
uses the name “Boron” outside of Ohio. Each of these
Standard Oil Companies.has been very. diligent in the protec- |
tion of the use of the name “Standard” and derivatives
thereof within its exclusive territory. ~
Plaintiffs have filed objections to the use of any deriva-
tive of the name “Standard” ‘or “Esso” relating to trade-
_ mark matters pending before the Patent Office. They have
‘advised by Jetter any interlopers within their territory that
the name “Standard” or “Esso” cannot be used in their
territory. In a number of cases where a letter did not sop
the use of a name, they have filed suit. Their complaints
have contained the allegations that “Esso”. means ‘“Stand-
ard’. Plaintiffs have made the same allegations before the
Patent: Office on numerous occasions in their objections to
certain trademark matters. Generally, the various Stand-
_ ard Oil Companies have tried to confine the use c * the name
: ye
Appendix C
“Standard” and derivatives thereof to their own territories.
However, there has been some overlapping in relation to
radio, television and split-ryn ads on national publications
resulting in a spilling over. ai advertising matter into each
other’s territory. Because of the fact that at one time there
was only one Standard Oil Company and that company has
been divided, a great number of persons are unaware that
the Standard Oil Companies are, in fact, separate and dis-
tinct companies. This situation existed in 1937 and it exists
today. In the middle west a number of surveys in evidence
show that the name “Esso” means Standard Oil. As a
matter of fact, outside the midwest¢ plaintiffs have used on
outdoor billboards a sign saying “Welcome to Tennessee -
where Esso means Standard Oil’
In 1954 Humble Oil and Refining Company, a Texas
corporation, which at that time was a marketing subsidiary
of plaintiff Standard Oil (Néw Jersey), settled its differ-
ences with Standard Oil (California), which were being
litigated and the terms of this contract provided that the
name or mark “Esso” may not be used in the States of
New Mexico, Arizona,. California, Oregon, Washington,
Idaho, Utah and Nevada. In these states Standard Oil
_ (California) claims the exclusive right to use the name and
mark “Standard,” and all derivatives thereof. Plaintiffs
contend that it works a great hardship on them not to be ©
able to use the name “Esso” throughout the United States.
Even though this Court were to grant the relief they desire,
it would appear that they could not use the name “Esso” in
_the western states nor can they use the name ‘‘Esso” in the —
southeastern states. This is one of the hardships which
plaintiffs contend is being imposed upon them by this decree.
At the trial ‘of this case witnesses for the plaintiffs
stated that they had no objections to the defendants using
L % &
\
~~
C10
Appendix C
the name “Standard” in the east. This testimony is in con-
trast to and not consistent ‘with the many objectiéns which
the plaintiffs had made to the use by anyone, including de-
fendants, of the name “Standard” in plaintiffs’ eastern
region.
Plaintiffs state that their inability to advertise one brand
name nationwide prevents competition. They want to use
the name “Esso” nationwide. This cannot be done. “There
is nothing to prevent plaintiffs from using the name “Enco”
nationwide. Plaintiffs are now competing: vigorously with’
defendants in the midwest and in other areas under the . —
name “Enco”,
In 1955 Standard Oil (Indiana) entered into an agree-
ment with Standard Oil (California) concerning advertis-
ing in each other’s territory. This agreement provides that
the companies shall not use the name “Standard” in each
other’s territory. This agreement is not a division of terri-
tory as plaintiffs contend, but is merely a codification of what
the courts have already decided the parties are entitled to
have and use.
Among the changes which plaintiffs contend the Court
could not foresee in 1937 is the extensive use of radio and
- television and the great increase in the mobility of the trav-
eling public both by our interstate highway systems, by air
travel, and the development of the use of the credit cards.
Plaintiffs contend this hag caused the. motoring public to
recognize and dist@@zuish the different Standard Oil Com-
panies and particularly to distinguish “Esso” as being a
separate and distinct company. There was some exchange
of credit cards prior to 1937 and there is no’ question that
this has increased greatly. At the present time, by and
large, the various Standard stations throughout the coun- -
try recognize and accept each other’s credit ‘cards. Radio
i Se
A ppendix-C
was in its infancy in 1937 and television had not begun and
there is no question that this has had an impact on th® buy-
ing public. The traveling public has become more. mobile,
both by automobile and by air. But, this Court cannot say
that such conditions were unforeseen by the Court in 1937
or that they constitute such a change that the injunction
should be modified. The fact remains that the confusion
which existed in 1937 continueseto exist and the conditions
which exist today are merely an extension of conditions
that led up to the 1937 decree.
The plaintiffs introduced a survey conducted by the firm
of Louis Harris & Associates, Inc. The essence of this -
survey concerning the midwest, according to Mr. Harris, is
that the maximum association between “Esso” and “Stand- —
ard” in the midwest is eighteen percent of the population.
Defendants introduced a survey conducted by Steuart
Britt. The essence of his survey was that thirty percent of.
the people in the midwest associated “Esso” with Standard
Oil. a
In 1956 a survey was made by the advertising agency
of McCann-Erickson. Of the persons responding in the
midwest 44.9% thought that the gasoline sold at Esso was
made by Standard Oil or a related company.
An attorney for the defendants interviewed 1,965 people
in thirteen cities in the midwest and showed them a picture
of an Esso station; 38% of these persons thought this sta-
tion sold. Standard Oil gasoline.
Whatever the piecise percentage of confusion between
the products of thé plaintiffs and those of the defendants
may now exist, taking only the evidence introduced by the |
plaintiffs as to confusion in its most favorable light, there
is still too much confusion‘in the minds of the public for
the Court to permit a modification of the 1937 decree.
C12
A prendis G
In 1937 Standard Oil (New Jersey) had assets of ap- -
proximately two billion dollars*and annual-net profits of
approximately one hundred fifty million dollars. -By 1964.
the assets of Standard Qil (New Jersey) had increased to
twelve and one-half billion, dollars and its net profits had
increased to over a billion dollars. Based on-these figures,
it would appear to the Court that the decree entered by tiiis
Court in 1937 has not only failed to work an extreme hard-
ship upon the plaintiffs, it has hardly even caused them an
inconvenience.
In 1956 defendant Standard Oil (Indiinay, obtained an
injunction from the District Court of Wyoming against the’
use by Standard Oil (Ohio), of the name “Sohio” in the
midwest. This judgment was affirmed by the ane Circuit
Court of Appeals in 1958.
On March 21, 1960, Rufus S. Day, Jr., and Maurice
Hanning, representing Standard Oil (Ohio), met with
Einar B. Paust, Assistant ~General Counsel of Standard
Oil (New Jersey), Francis X. Clare, Trademark Counsel
for Standard Oil (New Jersey), Leslie D. Taggart, out-
side trademark counsel for Standard Oil (New Jersey),
and Nelson Jones, general counsel of plaintiff ee in
the office of Mr. Paust in New York.
This Court first heard of this meeting in a hearing
on the supplemental bill during December 1964, and the
Court’s decision on that matter is reported at 239 F. Supp.
97. The testimony and proceedings on the supplemental
bill were introduced in evidence and are a part of this pro-
ceeding. As a result of this hearing, the Court enjoined
the plaintiffs from continuing a lawsiut in Oklahoma City,
Oklahoma.
_ Mr. Day testified at both the hearing on the sniatianental
bill and at the trial of this cause. He stated that he made
~ .
Appendix C
notes of the March 1960 meeting on the airplane returning
to Cleveland, and a few days later his secretary typed up a
‘memorandum from these notes, The.memorandum was,
_ before the Court on the hearing on the supplemental bill and >
at the time of this trial. The essence of Day’s testimony
is that the attorneys for’ Standard Oil (New Jersey) pro-
posed that Standard Oil (Ohio) cooperate with Standard
Oil (New Jersey) and that Sohio start a station using the
“Sohio” name in Esso territory and Esso start a station in
Sohio territory using the “Esso” name and theg that litiga-
tion be instituted with cross-claims, which would’fesult in
judicial decisions that there is mo confusion between these
names. Of the basis of such decisions Standard Oil (Ohio)
could use them in an attempt to get the Wyoming District
Court decree thodified. Standard Oil (New Jersey) would
use such decisions in an attempt to get the 1937 St. Louis
decree modified. An alternate proposal was that the names
“Esso” and “Sohio” be used side by side and surveys be
conducted to show that the public was not confused by the
use of these names.
The hearing on the initinnieni was held in De-
cember 1964. Francis X. Clare was present in the court
room at the time of this hearing and did not take the stand
to deny the testimony, of Mr. Day. He later testified that the
reason he did not take the stand at the hearing on the.sup-
plemental bill was on advice of counsel that this proceeding —
was not material to the main issues involved. It is remem-
bered by the Court that in December 1964 discovery was
going on between the parties and at that time plaintiffs did :
not know what evidence the defendants might secure relat-
ing to this meeting from the various files which the Court
had ordered Standard Oil (New Jersey) to produce. By
the time this case came on for a final hearing in January and
7
‘
EEPeY ISR Oe
. C14
Appendix C
February, 1966, both parties knew exactly what would be
introduced in evidence because of pretrial orders requiring
a listing of documents, and discovery had been completed.
At the time of the trial, Day and Hanning confirmed the
testimony given by Day at the time of the hearing on the —
supplemental bill. All of the attorneys for the plaintiffs who,
attended the March 1960 meeting took the stand and cat-
egorically denied under, oath that these suggestions for
litigation had been made by them and stated that there: had
been no discussion whatsoever of. litigation. It was called
to the attention of plaintiffs’ attorneys who took the! witness
stand that their testimony was in direct conflict with that of
the attorneys for Standard Oil (Ohio). These witnesses
were given an opportunity to reflect on their testimony and
to change it, if they so desired. After reflecting, they re-
iterated their testimony. Plaintiffs’ attorneys who testified,
also testified that no notes were made by them and no memo-
randa were written by them as to what occurred at the
March 1960 meeting. Standard Oil (Ohio) rejected the
proposals made to them by plaintiffs’ attorneys. After the
_ meeting irr March 1960, Humble entered Ohio but used the
name “Enco” and not “Esso”. The Court is of the opinion
- that the testimony of Day and Hanning is the. truth.
The Court is of the ‘opinion that the meeting in New
York between the lawyers of Standard Oil (Ohio) and the
lawyers of Standard Oil (New Jersey) is material and
directly related to the instant litigation. The proposals made
by plaintiffs’ attorneys at the New York meeting were not
legitimate attempts to solve business problems. . Those pro-
posals go beyond the point a lawyer may go in behalf of a
client. A-corporate employee and attorney may not attempt
to deceive the courts to advance the interests of his em-
ployer. The proposals made in the New X ork meeting,
~*
é
C15
A ppendix G
coupled with the abortive suit in Oklahoma, which was —
stopped by this Court, and the testimony of plaintiffs’ em-
ployees and lawyers in denying the proposals, ate con-
demned by this Court. Their conduct falls squarely within
the doctrine of unclean hands. Even though the evidence
presented by the plaintiffs were more convincing and even
though plaintiffs had shown the Court by clear and convinc-
ing evidence that they were entitled to relief, no relief would
be granted to them because of their conduct _
The leading case on the subject of modifying an injunc-
tion is United States v. Swift & Co., 286 U. S. 106, 52 S. Ct.
460, 76 L: Ed. 999 (1932), and this case has been followed
by the 8th Circuit Court of Appeals, see Bowdil Co. v.
- Central Mine Equipment Co., 216 F. 2d 156 ( 1954). Just-
ice Cardozo speaking for the Court at page 119 of.the Swift
& Co., case,.52 S. Ct. at page 464, supra, said:
“We are not framing a decree. We are asking our-
selves whether anything has happened that will justi-
fy us now in changing a decree. The injuction,
whether right or wrong, is not subject to impeach-
ment in its application to’the conditions that existed
at its making. We are not at liberty to reverse under
the guise of readjusting *.* *, The inquiry for us is ©
whether the changes are so important that dangers,
once substantial, have become attenuated to a shadow.
No doubt the defendants will be better off if the in-
junctions is relaxed, but they are not suffering hard-
ship so extreme and unexpected as to justify us in
saying that they are the victims of oppression. Noth-
ing less than a clear showing of grievous wrong
evoked by new and unforeseen conditions should lead
-us to change what was decreed * * *,” a
OT ORM OE eh
FRET RE NE EINE EES Se
AMET Oe
.
2 VORP ROOT PERE Ee
ee } &
Appendix C
The use of the name “Standard” and all’ derivatives
thereof belongs to Standard Oil (Indiana) in the midwest
states as this Court held in 1937. To permit this decree to be
modified on the evidence presented to this Court would cause
the motoring public a great deal of confusion and would |
cause a substantial loss to the defendants. Their customers
would not know the difference between the Standard torch
and oval as used in the midwest and the Esso in the oval
as used by the plaintiffs. The motoring public in the mid-
webt would be buying plaintiffs’. products thinking they were
defendants’. The injunction of 1937 does not prohibit the
plaintiffs here from competing with the defendants in the
midwest. They are at liberty to build all the filling stations,
sell all the gasoline and do anything ela# they want to do,
under the name “Enco” or any other name they choose to.
adopt other than “Esso” or some derivative of the name
“Standard Oil’. This, they are and have been doings They
have sufferered no hardship. While the defendants in this
-case have had gome change in the use of the initials “S O”
and “S O C O” from 1937 to the present date, there has
been a substantial and continued use of these initials. In
the early stages of this case the court reporters had great
difficulty in determining whether the lawyers were saying
“S O” or “Esso”. When pronounced they sound identical,
Both mean Standard Oil.
. The test of losing the right to the’ use of a trademark
may be by abandonment, non-use, laches, or acquiescence,
and abandonment must be coupled with intent to abandon.
Hanover Star Milling Co. v. Metcalf, 240 U. S. 403 36 S.
Ct. 357, 60 L. Ed. 713 (1916). None of these has been
shown by the evidence. No abandonment of the defendants’
right or any intention to abandon the name “Standard” or
its derivatives has been shown by the evidence.
Ree He ae
P
* ,
C17
Appendix C |
Turning now to the 1960 meeting between plaintiffs’ at-
torneys and the attorneys for Standard Oil (Ohio), and the |
subsequent conduct of plaintiffs’ attorneys, ‘does this fall a
within the doctrine of unclean hands? Thé courts have
set out the guidelines for the doctrine of unclean hands
on a number of occasions. The Supreme Court speaking
throught Justice Murphy in Precision Instrument Mfg. Co.
v. Automotive Maintenance Machinery Co., 324. U. S. 806,
65 S. Ct. 993, 89 L. Ed. 1381 (1945), said: *
“The guiding doctrine in‘this case is‘ the equit-
’ able maxim that ‘he who comes into equity must
come with clean hands.’ This maxim is far more
than a mere banality. It is a self-imposed ordinance -
that closes the doors of a court of equity to one
tainted with inequitableness or bad faith relative
to the matter in which he seeks relief, however
improper may have been the behavior of the de-
fendant. That doctrine is rooted in the historical
concept of court of equity as a vehicle for affirma-
tively enforcing the requirements of conscience and
good faith. * * * Thus while ‘equity does not de-
mand that its suitors shall have led blameless lives,’
* * * as to other matters, it does require that they
shall have. acted fairly and without fraud or deceit
wave . 7
SP Mer tne Reena
PLETE NS AER NER DL SORE E STN:
TOR EY Hate ee
PEEL ET ASI PLY EY PVT REE TS RN
as to the controversy in issue, * * *
“k * * Accordingly one’s misconduct need not
necessarily have been of such nature as to be punish-
able as a crime or as to justify legal proceedings
of any character. Any willful act concerning the
cause Qf action which rightfully can be said to.
trangress equitable standards of conduct is sufficient
' cause for the invocation of the maxim by the chan- =
cellor.”’ :
PI LUCE EONAR (22 SIR Gi RIL TA
. .
C18
Appendix C
The conduct of the plaintiffs’ attorneys in the 1960 meetjng
-in New York was a long-range effort to get the St. Louis _ | |
decree modified and the abortive suit brought. by the plain-
- tiffs in Oklahoma, which was stopped by this Court, and
the testimony. of plaintiffs’ attorneys at the trial fall
squarely within the doctrine of unclean hands. See also
Keystone Driller Co. v. General Excavator Co., 290 U. S.
240, 54 S. Ct. 146, 78 L. Ed. ‘293 (1933); Morton Salt
Co. v. G. S. Suppiger Co., 314 U: S. 488, 62 S. Ct. 402,
86 L. Ed. 363 £4942); Shaver v. Heller & Merz Co., 108
F, 821, 65 L. R. A. 878 (8 Cir. 1901). |
A decree will be entered dismissing the plaintiffs’ com-
plaint and continuing the injunction granted by this Court
in 1937.
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.