Dawn Donut Company, Inc. v. Hart's Food Stores, Inc.

267 F.2d 358 (2d Cir. 1959)

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Nature of the Case

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Facts

P has continuously used the trademark 'Dawn' upon 25 to 100-pound bags of doughnut mix which it sells to bakers in various states, including New York. It also marketed a line of sweet dough mixes for use in the baking of coffee cakes, cinnamon rolls, and oven goods in general under that mark. In 1950 cake mixes were added to the line of products. Dawn's sales representatives call upon bakers to solicit orders for mixes and the orders obtained are filled by shipment to the purchaser either directly from P's Michigan plant, where the mixes are manufactured, or from a local warehouse within the customer's state. P supplies exclusive Dawn Donut Shops, with advertising and packaging material bearing the trademark 'Dawn' and permits these bakers to sell goods made from the mixes to the consuming public under that trademark. P's licensing of its mark in connection with the retail sale of doughnuts in the state of New York has been confined to areas not less than 60 miles from D's trading area. P's representative has, without interruption, made regular calls upon bakers in the city of Rochester, N.Y., and in neighboring towns and cities, soliciting orders for mixes and that throughout this period orders have been filled and shipments made from Michigan into the city of Rochester. None of these purchasers employed P's mark in connection with retail sales. D owns and operates a retail grocery chain and the products of Ds bakery, Starhart Bakeries, Inc., are distributed through these stores, thus confining the distribution of Ds product to an area within a 45-mile radius of Rochester. D first used the imprint 'Dawn' in packaging its products on August 30, 1951. The district court found that D adopted the mark 'Dawn' without any actual knowledge of P's use or federal registration of the mark, selecting it largely because of a slogan 'Baked at midnight, delivered at Dawn' which was originated by D's president and used by D in its bakery operations from 1929 to 1935. P's marks were registered federally in 1927, and their registration was renewed in 1947. D had constructive notice of P's marks as of July 5, 1947, the effective date of the Lanham Act. P sued D for infringement. D contends that because P has failed to exploit the mark 'Dawn' for some thirty years at the retail level in the Rochester trading area, P should not be accorded the exclusive right to use the mark in this area. Prior to the passage of the Lanham Act courts generally held that the owner of a registered trademark could not sustain an action for infringement against another who, without knowledge of the registration, used the mark in a different trading area from that exploited by the registrant so that public confusion was unlikely. A junior user of a mark could gain the right to exploit the mark exclusively in that market. During trial, it was presented that P’s sales representative saw product marked with Dawn at D’s operations. Both claims were dismissed and both parties appealed.