Any attempt to encroach upon the business of a trader or other person by the use of similar trademarks, names, or devices, with the intention of deceiving and misleading the public, is a fraud for which equity will grant relief.
(Orig. Code 1863, § 3112; Code 1868, § 3124; Code 1873, § 3181; Code 1882, § 3181; Civil Code 1895, § 4035; Civil Code 1910, § 4632; Code 1933, § 37-712.)
Cross references.- Registration and use of trademarks and service marks generally, § 10-1-440.
JUDICIAL DECISIONSANALYSIS
General Consideration
Construction of section.
- This section is remedial in nature, is designed for the suppression of fraud, and should be liberally construed. Kay Jewelry Co. v. Kapiloff, 204 Ga. 209, 49 S.E.2d 19 (1948).
Application of section.- In place of an affirmative showing of specific intent, Georgia courts will apply this section when it is shown that: (1) the defendant was put on notice or had knowledge of the plaintiff's trade name and (2) the similarity in names is likely to confuse or mislead the public. Thompson v. Alpine Motor Lodge, Inc., 296 F.2d 497 (5th Cir. 1961).
Damages already sustained recoverable.
- Plaintiff seeking damages for trade name use infringement may seek recovery for damage already sustained where the illegal use has not ceased. Miller & Meier & Assocs. v. Diedrich, 174 Ga. App. 249, 329 S.E.2d 918, aff'd in part, rev'd in part on other grounds, 254 Ga. 734, 334 S.E.2d 308 (1985).
Cited in Gordy v. Dunwody, 209 Ga. 627, 74 S.E.2d 886 (1953); East Ga. Motor Club v. AAA Fin. Co., 212 Ga. 408, 93 S.E.2d 337 (1956); Royal v. Royal Poultry Co., 213 Ga. 813, 102 S.E.2d 44 (1958); Pearl Optical, Inc. v. Pearle Optical of Ga., Inc., 218 Ga. 701, 130 S.E.2d 223 (1963); Multiple Listing Serv. v. Metropolitan Multi-List, 225 Ga. 129, 166 S.E.2d 356 (1969); White's Wig Imports v. Wigmaster's Import Co., 226 Ga. 779, 177 S.E.2d 678 (1970); Tri-State Culvert Mfg., Inc. v. Tri-State Drainage Prods., Inc., 236 Ga. 157, 223 S.E.2d 202 (1976); Rolls-Royce Motors, Ltd. v. A & A Fiberglass, Inc., 428 F. Supp. 689 (N.D. Ga. 1977); Robert B. Vance & Assocs. v. Baronet Corp., 487 F. Supp. 790 (N.D. Ga. 1979); Original Appalachian Artworks, Inc. v. Toy Loft, Inc., 489 F. Supp. 174 (N.D. Ga. 1980); Southern Bell Tel. & Tel. Co. v. Associated Tel. Directory Publishers, 756 F.2d 801 (11th Cir. 1985); Morton B. Katz & Assocs. v. Arnold, 175 Ga. App. 278, 333 S.E.2d 115 (1985).
Prior Use
1. Trade Name
Effect of prior use of trade name.
- While generic names, geographical names, and names composed of words which are merely descriptive are incapable of exclusive appropriation, words or names which have a primary meaning of their own, such as words descriptive of the goods, service, or place where they are made, or the name of the maker, may nevertheless, by long use in connection with the business of the particular trade, come to be understood by the public as designating the goods, service, or business of a particular trader. Multiple Listing Serv., Inc. v. Metropolitan Multi-List, Inc., 223 Ga. 837, 159 S.E.2d 52 (1968), later appeal, Kidd v. Finch, 188 Ga. 492, 4 S.E.2d 187 (1939).
A person, by long and exclusive use, may acquire a trade name; and when thus acquired, such trade name is as much descriptive of the manufacturer or producer as is his own name, and the infringement of such trade name of an individual will be enjoined by a court of equity when a proper case is made. Womble v. Parker, 208 Ga. 378, 67 S.E.2d 133 (1951).
Knowledge of prior use of trade name raises presumption of fraud.
- When a person knows of a trade name used by another person, and, notwithstanding this knowledge, uses a similar name in his own business operations, the courts will presume that he has encroached upon the name of the other intentionally and fraudulently. Womble v. Parker, 208 Ga. 378, 67 S.E.2d 133 (1951); Thompson v. Alpine Motor Lodge, Inc., 296 F.2d 497 (5th Cir. 1961).
Because plaintiff corporation produced no evidence from which a reasonable jury could have concluded that it had exclusively and continuously used "CCI" as a trade name such that it was entitled to trade name protection, the corporation's claim for trade name infringement under O.C.G.A. § 23-2-55 was summarily dismissed. Corrpro Cos. v. Meier, F. Supp. 2d (M.D. Ga. Oct. 5, 2007).
2. Color
Effect of prior use of particular color.
- While the color of merchandise or its wrapper or container may be one of the important indicia of a fraudulent purpose, if accompanied by other confusing factors such as size, shape, name, printing, or design in the make-up of the article, yet color alone, except possibly where some peculiar and distinctive combination of colors is employed, is not sufficient to establish fraudulent intent, since no one is permitted from the mere prior use of such an all-belonging thing as a color to obtain a monopoly in its use for any particular purpose. Seybold Baking Co. v. Derst Baking Co., 196 Ga. 391, 26 S.E.2d 536 (1943).
Testimony of defendant's manager, that he was forced to discontinue less expensive white waxed paper and use more costly "tango" colored cellophane wrapper for his whole wheat bread in order to meet the competition of the plaintiff, could not be taken to establish a fraudulent purpose as a matter of fact, when the act itself did not so indicate, where he also testified that cellophane was a more desirable and more attractive wrapper, and that the color was a more suitable and appropriate transparent wrapper for the brown bread, and where the product was without any other similarities as to the plainly printed labels both inside and outside the wrapper, the ones outside being strikingly different in color. Seybold Baking Co. v. Derst Baking Co., 196 Ga. 391, 26 S.E.2d 536 (1943).
Unfair Competition
1. In General
The general purpose of the law controlling trade names and unfair competition is the prevention of fraudulent interference with rights of the lawful holder of a trade name and protection of the public from imposition. Thompson v. Alpine Motor Lodge, Inc., 296 F.2d 497 (5th Cir. 1961).
The basic principle of the law of unfair competition is that no one has a right to dress up his goods or business or otherwise represent the same in such a manner as to deceive an intending purchaser and induce him to believe he is buying the goods of another, and that no one has the right to avail himself of another's favorable reputation in order to sell his own goods. Thompson v. Alpine Motor Lodge, Inc., 296 F.2d 497 (5th Cir. 1961).
The good will and reputation of a business is as much an asset as its physical properties, and it may as well be the subject of a fraudulent encroachment by an infringer. Kay Jewelry Co. v. Kapiloff, 204 Ga. 209, 49 S.E.2d 19 (1948).
An encroachment on the business of another may be made without direct market competition. Gordy v. Dunwody, 209 Ga. 627, 74 S.E.2d 886 (1953), later appeal, 210 Ga. 810, 83 S.E.2d 7 (1954).
The words "encroach upon the business of a trader" cannot be said to limit the equitable relief available to those in direct and actual market competition with an alleged infringer or to those cases where it is shown that there has been an actual diversion of trade from one business to another. Kay Jewelry Co. v. Kapiloff, 204 Ga. 209, 49 S.E.2d 19 (1948).
2. Confusing Similarity
Similarity must confuse the public.
- Unless it appears that there is or will probably be a deception of ordinary buyers and the general public into thinking that the goods or business of one is the business or goods of another and thus bring about the sale of one man's goods as the goods of the other, the case is damnum absque injuria for which no action lies. Atlanta Paper Co. v. Jacksonville Paper Co., 184 Ga. 205, 190 S.E. 777 (1937).
While geographical names and words which are merely descriptive are not generally the subject of exclusive appropriation as trade-marks or trade-names, such names and words when used so long and exclusively by a trader, manufacturer, or producer that they are generally understood to designate his business or merchandise, may acquire a secondary signification or meaning indicative not only of the place of manufacture, but of the name of the manufacturer or producer, or of the character of the product, so that the name or title thus employed, including the geographical name and descriptive words, may be the subject of protection against unfair competition in trade, and authorize equity to enjoin a newcomer competitor from the appropriation and use of a trade-name or trade-mark bearing such resemblances to those of the pioneer as to be likely to produce uncertainty and confusion, and to pass off the goods or business of one as those of the other. Womble v. Parker, 208 Ga. 378, 67 S.E.2d 133 (1951).
Although the rights in a trade name are exclusive within certain geographical limits, this section does not create rights good against anyone, anywhere. The outer limits are set by the requirement that the plaintiff must show a similarity that is confusing to the public. Thompson v. Alpine Motor Lodge, Inc., 296 F.2d 497 (5th Cir. 1961).
An infringement upon the real name or trade-name of an individual or corporation is such a colorable imitation of the name that the general public, in the exercise of ordinary care, might think that it is the name of the individual or corporation first appropriating the name. Multiple Listing Serv., Inc. v. Metropolitan Multi-List, Inc., 223 Ga. 837, 159 S.E.2d 52 (1968), later appeal, 225 Ga. 129, 166 S.E.2d 356 (1969).
Actual confusion.
- Promoter presented sufficient evidence of the strength of the promoter's marks and of actual confusion amongst the relevant consumer class to avoid summary judgment, and the appellate court reversed the district court's grant of summary judgment for the group and remanded for trial on the claims of infringement under the Lanham Act, 15 U.S.C. § 1114, false designation of origin under 15 U.S.C. § 1125, deceptive trade practices under O.C.G.A. § 10-1-372 and unfair competition under O.C.G.A. § 23-2-55 et seq., because: (1) the car dealership promoter had shown actual confusion and the district court erred by overvaluing lack of confusion exhibited by the general public; (2) "Slash-It! Sales Event" attained federal incontestable status, so the district court erred in holding that the mark was merely descriptive and not entitled to strong protection; (3) the promoter created a disputed issue of material fact that the slasher slogans left the same impression, weighing in favor of likelihood of confusion; and (4) the similarities between the two sales allowed for the inference that a reasonable consumer could possibly attribute the products here to the same source. Caliber Auto. Liquidators, Inc. v. Premier Chrysler, Jeep, Dodge, LLC, 605 F.3d 931 (11th Cir. 2010).
Confusion found.- Summary judgment was inappropriate as to trademark infringement liability and unfair competition claims because while the "Xylem" mark was at least suggestive, the marks were substantially similar, and the trademark holder documented over 100 instances of actual confusion resulting from misdirected checks, phone calls, faxes, and emails, the court could not find that no reasonable juror would find there was no confusion created by the accused infringer's use of the Xylem name and mark. ITT Corp. v. Xylem Group, LLC, F. Supp. 2d (N.D. Ga. Aug. 5, 2013).
3. Proof
A. In General
Grant of equitable relief notwithstanding absence of evidence of actual unfair competition authorized.
- It is not essential, as a prerequisite to the granting of equitable relief in an action for infringement of a trade name, that actual and direct market competition between the litigants be shown, and that the test as to whether equitable relief is available, should not be limited to those cases where it is shown that there has been an actual diversion of trade from one business to another. Kay Jewelry Co. v. Kapiloff, 204 Ga. 209, 49 S.E.2d 19 (1948).
The early common-law rule, and the rule still maintained in some jurisdictions, has been to the effect that there must be shown actual or direct competition between the litigants as an essential prerequisite to relief in an action for infringement of a trade name or unfair trade competition. Under this view, the exclusive test is whether there is a diversion of trade from one business to another, and injury to the good will and reputation of the original user of the trade name, or other injuries as contemplated by the theories of relief afford no basis for equitable relief. Under the modern view, the emphasis is no longer on direct and actual market competition, or diversion of trade from one business to another, but rather on the injury suffered by the complaining party and the public from the confusion resulting from the infringer's acts. Kay Jewelry Co. v. Kapiloff, 204 Ga. 209, 49 S.E.2d 19 (1948).
Diversion of trade and the attendant direct loss of sales is not the only injury that may result from infringement of a trade name, but other injuries would necessarily follow, such as an injury to the complaining party's reputation and good will. Kay Jewelry Co. v. Kapiloff, 204 Ga. 209, 49 S.E.2d 19 (1948).
Plaintiff's established infringement of trade name warranting injunction.
- Plaintiffs made requisite showing that trade name reacquired upon foreclosure of their security interest had acquired such a secondary meaning and that defaulting buyers knowingly had adopted a confusingly similar name, which had in fact confused plaintiffs' former customers, thus entitling plaintiffs to injunction. Reis v. Ralls, 250 Ga. 721, 301 S.E.2d 40 (1983).
B. "Passing Off" Rule
The "passing off" rule is sufficient to afford a test as to whether there is unfair competition. The test under this rule is whether the goods or business of one are in fact "passed off" as the goods or business of another, and it has been said, in cases between litigants in actual and direct market competition, that nothing less than such conduct will constitute unfair competition. Kay Jewelry Co. v. Kapiloff, 204 Ga. 209, 49 S.E.2d 19 (1948).
Actionable unfair competition.
- Any conduct, the nature and probable tendency and effect of which is to deceive the public so as to pass off the goods or business of one person as and for the goods or business of another, constitutes actionable unfair competition. The essence thereof consists in the sale of the goods of one manufacturer or vendor for those of another. Atlanta Paper Co. v. Jacksonville Paper Co., 184 Ga. 205, 190 S.E. 777 (1937).
Any conduct, the nature and probable tendency and effect of which is to deceive the public so as to pass off the goods or business of one person as and for the goods or business of another, constitutes actionable unfair competition. Thompson v. Alpine Motor Lodge, Inc., 296 F.2d 497 (5th Cir. 1961).
C. Intent to Deceive
Intent to deceive public as basis of unfair competition.
- In Georgia, to have a word or words claimed as a trade mark protected by injunction from use by another, it should appear that the defendant's use of them was with intent to deceive or mislead the public. Atlanta Paper Co. v. Jacksonville Paper Co., 184 Ga. 205, 190 S.E. 777 (1937).
Relief depends upon showing of intent to deceive. However, this intent may be presumed if encroachment is done with knowledge of the prior right. Giant Mart Corp. v. Giant Disct. Foods, Inc., 247 Ga. 775, 279 S.E.2d 683 (1981).
Words, acts and conduct prove intent, and are the usual and ordinary means adopted by courts of justice to establish it. Thompson v. Alpine Motor Lodge, Inc., 296 F.2d 497 (5th Cir. 1961).
Although intent must be found to warrant an injunction, when it comes to finding intent courts look to the effect of a defendant's "words, acts and conduct" and ask the objective questions of whether the plaintiff held an exclusive right to the trade mark or name and whether the defendant encroached upon it. Thompson v. Alpine Motor Lodge, Inc., 296 F.2d 497 (5th Cir. 1961).
Finding of intent to deceive.
- Injunctive relief cannot be grounded on O.C.G.A. § 23-2-55 if the court makes no finding of intent to deceive. Giant Mart Corp. v. Giant Disct. Foods, Inc., 247 Ga. 775, 279 S.E.2d 683 (1981).
Intent may be presumed if encroachment is done with knowledge of the prior right. Giant Mart Corp. v. Giant Disct. Foods, Inc., 247 Ga. 775, 279 S.E.2d 683 (1981).
Knowing and willing participant in alteration of cellular telephones.- Because plaintiff cellular telephone trademark holder's complaint properly alleged that defendant competitor was a knowing and willing participant in an enterprise that bought the holder's phones in bulk then altered the phones to circumvent prepaid airtime then resold those phones under the holder's marks, the complaint properly stated claims for unfair competition and deceptive trade practices. Tracfone Wireless, Inc. v. Zip Wireless Prods., 716 F. Supp. 2d 1275 (N.D. Ga. 2010).
RESEARCH REFERENCES
Am. Jur. 2d.
- 27 Am. Jur. 2d, Equity, § 20. 37 Am. Jur. 2d, Fraud and Deceit, § 257.
23A Am. Jur. Pleading and Practice Forms, Trademarks and Tradenames, § 78.
C.J.S.- 30 C.J.S., Equity, § 48.
ALR.
- Protection of business or trading corporation against use of same or similar name by another corporation, 115 A.L.R. 1241.
Doctrine of secondary meaning in the law of trademarks and of unfair competition, 150 A.L.R. 1067.
Use of "family name" by corporation as unfair competition, 72 A.L.R.3d 8.