A. & H. Transportation, Inc. v. Save Way Stations, Inc.

Brune, C. J., delivered the opinion of the Court. The plaintiffs, A. & H. Transportation, Inc. and Harry Waller, appeal from a decree of the Circuit Court of Baltimore City dismissing their bill for an injunction and an accounting against the defendants, Save Way Stations, Inc., (“Maryland Save Way Stations”) a Maryland corporation, Save Way Stations, Inc., (“Pennsylvania Save Way Stations”) a Pennsylvania corporation, and Meadville Corporation, (“Meadville”) a New Jersey corporation, which owns all of the stock of the first two defendants. The injunction sought was to prevent the defendants’ use of the name “Save Way” in the State of Maryland in connection with the operation of gasoline filling and service stations, and to prevent their use of any words similar to or simulating the trade-mark or trade name “Savon Gas”, which is claimed by the plaintiffs. The bill also sought an accounting of profits and damages alleged to have been suffered by the plaintiffs as a result of allegedly unfair competition by the defendants.

The individual plaintiff, Harry Waller, is the owner of substantially all of the stock of the corporate plaintiff, A. & ³²⁹ H. Transportation, Inc. (“A. & H.”). A. & H. operates four service stations in or near the City of Baltimore which are on land owned by the individual plaintiff Waller and his wife. These stations are leased by the Wallers to A. & H. The individual plaintiff Waller owns the alleged trade-mark “Savon Gas” and permits A. & H. to use this name in the operation of its filling stations. On January 7, 1952, Waller registered the trade-mark “Savon Gas” with the Secretary of State of Maryland under the trade-mark law then existing, which was contained in Code (1951), Article 27, Sections 60 to 65. 1 Section 63 of Article 27 provided for suits to enjoin the manufacture, use, display or sale of any counterfeit or imitation of trade-marks registered in accordance with Section 62 and for the issuance of injunctions and the award of damages.

Section 63 of Article 27 was repealed by Chapter 411 of the Acts of 1953, and it was also included among the sections repealed by Chapter 63 of the Acts of 1954. The latter Act repealed Sections 60 to 65, inclusive, of Article 27 of the Code (1951) and enacted in lieu thereof Sections 87A to 87N, inclusive, of Article 41 of the Code (1957 Supp.). Section 87A (a) defines a trade-mark as “any word, name, symbol, or device or any combination thereof adopted and used by a person to identify goods made or sold by him and to distinguish them from goods made or sold by others.” Section 87E (d) provides for continuing in force, for a period which may extend to ten years after the date of registration, any registration in force on June 1, 1954, and also makes provision for renewals. In January, 1954, Waller filed an application in the United States Patent Office for the federal registration of the trademark “Savon Gas”, and in December, 1955, which was after the institution of the present suit, Waller was notified that his application for registration had been examined and that the official examiner had passed the trade-mark for publica ³³⁰ tion in the Official Gazette of January 10, 1956.

Nothing further is shown in the record in this case with regard to Waller’s application for federal registration and we are not advised of any specific claim based thereon. The plaintiffs’ original filling station is located in the 4100 block of the Pulaski Highway, which is in the eastern part of the City of Baltimore, and the filling station belonging to Maryland Save Way Stations is located in the 6800 block of the Pulaski Highway, approximately two miles from the plaintiffs’ station on that street. This suit was instituted a few days before the Maryland defendant’s station was to be opened. Meadville is a holding company which owns the stock of Maryland Save Way Stations, Pennsylvania Save Way Stations and of other service station corporations operating in other states.

We shall refer to Meadville and its subsidiaries as the “Meadville group”. One of its subsidiary companies, Houston Petroleum Company, has a large station of the partially self-service type at Rinden, N. J. This was opened in December, 1949. It featured the word “Save” and the name “Save 5”. This name was intended to signify that a customer could save 5(í a gallon by buying gasoline at this station as against the price of so-called branded gasoline sold at stations owned by or affiliated with some major oil refining company.

It soon became apparent, however, that such a price differential could not be maintained, and thereupon Houston changed from the name or slogan “Save 5” to “Save Way”. Between June 20, 1950 and October 6, 1955, eleven more stations using the name “Save Way” were opened in other adjoining or eastern states by one or another of Meadville’s subsidiaries. Of these, one was in New Jersey, four were in Pennsylvania, three were in New York, two were in Delaware and one was in Connecticut. In addition, the Meadville group also operates a number of gasoline filling stations in New England, New Jersey and Pennsylvania under the name “Merit”, and the group has also operated and licensed one station in Michigan and one or two in Ohio under the name of “Giant”. “Giant” stations are of the partially self-service type, as are all of the stations of the Meadville group which operate un ³³¹ der the name “Save Way”.

Attendants service the automobiles of customers at the “Merit” stations, but at both the “Giant” and the “Save Way” stations customers attend to such matters as wiping their own windshields, getting water for their radiators and air for their tires. Maryland Save Way Stations was originally incorporated in 1949 under the name of “Save 5 Stations, Inc.” It remained inactive until about the time of the construction of its station on the Pulaski Highway, though in 1949 Meadville caused a survey to be made of possible sites for service stations in the Baltimore area. In May, 1955, the name of Maryland Save Way Stations was changed from “Save 5 Stations, Inc.” to “Save Way Stations, Inc.” The question on this appeal is whether or not the plaintiffs are entitled to an injunction prohibiting the defendants from using the name “Save Way” for one or more filling stations in Maryland. The answer depends upon, first, whether or not the plaintiffs have a valid trade-mark or trade name and, second, whether or not there is such similarity between the names used by the plaintiffs and the defendants as to be likely to cause confusion in the mind of the ordinary purchaser.

Questions of the protection of business names have been before this Court in a number of cases. Among the most recent are Edmondson Village Theatre, Inc. v. Einbinder, 208 Md. 38 , 116 A. 2d 377 (1955), and National Shoe Stores Co. v. National Shoes of New York, Inc., 213 Md. 328 , 131 A. 2d 909 (1957), the opinions in which review the principles of law applicable to the present case. The plaintiffs-appellants argue, but do not seem to put their main reliance upon the contention, that they have a technical trade-mark. This is the first of three categories of name protection into which the decided cases tend to fall.

See Nims on Unfair Competition and Trade-Marks (4th Ed.) §§ 10, 11, and the National Shoe case, supra, 213 Md. at 335 . The others involve fraud and deceit or common words which have acquired a secondary meaning. Under the Maryland statute in force when the Savon Gas name was registered, the mere fact that the Secretary of State ³³² had accepted a name for registration as a trade-mark was not determinative of whether or not that name can constitute a valid, technical trade-mark. Sherwood Co. v. Sherwood Distilling Co., 177 Md. 455, at 460 , 9 A. 2d 842 .

Our present law, Code (1957 Supp.), Art. 41, Sec. 87B (5), prohibits-registration of a merely descriptive trade-mark unless it has-“become distinctive of the applicant’s goods”, and permits-the Secretary of State to accept five years’ continuous use by the applicant as evidence that it has become distinctive. It is not, however, made conclusive evidence even for purposes of registration; and the validity of a trade-mark is clearly subject to attack in litigation. See Art. 41, Section 87H (4) and (5). Our new statutory law seems to be in accord with the Sherwood Co. case, supra, and with the rules recognized in the Restatement, Torts, §§ 715 and 720-722.

See also U. S. C. A., Title 15, Section 1052 (e) and (f). Because of the patently descriptive character of the term “Savon Gas”, this name could constitute under common law rules a trade-mark only if it fell within one of the recognized exceptions to the rule stated in Section 715 (c) of the Restatement, Torts. That Section states (in part) that a trademark may not be “a designation descriptive of the goods or their quality, ingredients, properties or functions,” unless it falls within one of the exceptions stated in §§ 720-722 of the Restatement, Torts. Of the three sections referred to, § 721 is the one here pertinent.

The general rule there stated is this: “A designation cannot be a trade-mark for goods if it is likely to be regarded by prospective purchasers as a common name or generic name for such goods or as descriptive of them-or of their ingredients, quality, properties, functions or uses.” Comment a under that Section states in part: “That a designation may have a suggestive significance in connection with the goods does not render it inappropriate for use as a trade-mark. The test is the imaginativeness involved in the suggestion, that is,. whether the suggestiveness is so close and direct that it is apparently descriptive and generally useful in approximately that form to all merchants marketing such goods or is so remote and subtle that it is fanciful and ³³³ not needed by other merchants of similar goods.” 2 It is difficult to think of a term less subtle, less fanciful and less requiring of imagination to ascertain its meaning than “Savon Gas.” The mere fact that the first “word” is a misspelling or corruption of the two words “Save” and “on” cannot give it vitality as a trade-mark. Restatement, Torts, § 725. We conclude that the words “Savon Gas” do not constitute a valid technical trade-mark.

We turn next to the second category of cases of name protection — those involving fraud and deceit. In the voluminous record extract in this case we find no evidence which would sustain such a charge, and it is indeed difficult to determine whether the plaintiffs undertake to press such a charge in this Court. We note that the word “Save” was featured by many gasoline service stations in other states selling gas at prices less than those prevailing at stations identified with major oil producers prior to the time when the plaintiffs began to use the name “Savon Gas” or sought ³³⁴ to register that name as a trade-mark. In view of the publicity which some of the stations, particularly those on the West Coast, received in a publication of wide circulation in the petroleum industry, it seems difficult to believe that Mr. Waller was unaware of this use before “coining” (as he describes it) the word “Savon”.

(There is no suggestion from either side that the word “Savon” is of French derivation.) He testified that he did not remember having read such articles prior to thinking of “Savon”, and he also testified that he did not remember having seen an illustrated article in a national magazine of general circulation dealing with one of the Meadville group’s stations, which featured the word “Save”. It is also to be noted that a gasoline service station was incorporated in Maryland under the name of “Save-More, Incorporated” in August, 1950. Also, as already stated, the Maryland corporate defendant was incorporated under the laws of this State as “Save 5 Stations, Inc.” in November, 1949. The plaintiffs also seek to derive support from alleged imitation of their station design by the defendants.

The facts seem to be that the use of multiple pumps at a single gasoline “island” was not originated by any of the parties to this suit, but such a design had been used by others elsewhere, including corporations in the Meadville group, before the plaintiffs established their first “Savon Gas” station and long before the plaintiffs first used such a design at any of their stations. The same comments are applicable to placing islands at an angle to the highway upon which a station abuts. The effort of the plaintiffs to show that the defendants imitated the color design of the plaintiffs’ station shows the contrary to- be the fact and also shows that the plaintiffs have closely followed the color design of the pumps of a large oil company.' Indeed, the plaintiffs’ Pulaski Highway station was formerly operated as a service station dispensing products of that very company. The plaintiffs’ main contention on the subject of trademarks and trade names rests upon the premise that they have established a secondary meaning for “Savon Gas”, which en ³³⁵ titles that name to protection in Maryland or at least in the Baltimore area, even though it may not constitute a technical trade-mark and even though it may be descriptive in its primary significance.

They cite the substantial amounts of money which they have spent for advertising the name “Savon Gas”, and the advertising media which they have employed. A careful review of the evidence fails to convince us that “Savon Gas” has acquired a secondary meaning as defined in the National Shoe case, supra, and in the case of Baltimore Bedding Corp. v. Moses, 182 Md. 229 , 34 A. 2d 338 . In the National Shoe case Judge Henderson quoted from the Baltimore Bedding case a passage taken from Merriam Co. v. Saalfield, 198 F. 369, 373 , in which it was said that “It [secondary meaning] contemplates that a