# Petition for Writ of Certiorari — Humble Oil & Refining Co. v. American Oil Co. > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385604_0891%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition for Writ of Certiorari - **Published:** January 1, 1969 - **Citation:** 395 U.S. 905 ## Text Et Bere acer =. : te ; Mah ig offe - 7 ss ein . a. * ‘| Office-Supreme Cou 2UPREME COURTs U, & pa -Difice Supreme Court “MAR Zo (969 IN THE : JOY F, DAVIS, CLERK ERA ON ip Ue Aa » Bt ai se a ti sl Rk fac a ee _ Supreme Court. of the ited States | ' OcTOBER TERM, 1968 a ° >» — : ‘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: , - y ws ‘ { — 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. ~, “2 ee STOIC ere 2 ‘rile Meta Nabe J okie ath Mle je Sa apie ee. ci thisniitinin snes ths ° * * - Elavil ee iO Ral i EAE TE bd . 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 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 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”, , 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 s [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385604_0891%3A1. Public record. Not legal advice.