Marsalli's Blue Ribbon Coffee Co. v. Blue Ribbon Products Co.

The respondent is a corporation whose main business is coffee manufacturing and the selling and distribution of high grade coffee to restaurants, hotels and institutions. Its principal office is in San Francisco, and ■it has branches in Oakland, Santa Rosa, Sacramento, San Jose, Chico and Reno, Nevada. Its general marketing area includes Washington, Oregon, Nevada and California, with the major portion of its business being centered in Northern California. Up until 10 years ago, the company also engaged in retail selling on a house to house delivery plan, but now it has practically no retail trade. Once in a while some one remembers the house to house sales and makes a purchase from a delivery truck. Its coffee products, which make up 90 per cent of its sales, have always been sold under the trade name of Blue Ribbon Coffee.

The appellant Charles Marsalli has for many years operated a well known restaurant under his name, on Kearny Street in San Francisco. For more than five years before he incor

The corporate appellant was organized by Mr. Marsalli for the express purpose of selling coffee to restaurants, hotels and institutions in and about Northern California. The business office of this corporation was the same as that of Marsalli’s Restaurant. The officers are Mr. Marsalli, his attorney and the attorney’s secretary. No stock has yet been issued or sold, and the corporation has not actually engaged in selling or distributing coffee under the name of Marsalli’s Blue Ribbon or any other name. Before the formation of the corporation, Mr. Marsalli attempted to buy stock in respondent corporation, but was unable to make any such purchase or to acquire any interest in Blue Ribbon Products Company, Inc.

The respondent sells coffee in one and five pound packages, either directly or through distributors in the general marketing area. It deals in top-grade coffee for which it commands the highest prices. For a great many years, it has featured the trade name in an extensive advertising campaign. Its average yearly sales of coffee for the last six years has been between one and a half million to two million pounds. The name Blue Ribbon appears on all packages, on leased equipment such as urns and stoves, on its 21 delivery trucks, on calendars, on give away restaurant cheeks, and it is the name under which the company sponsors cocktail parties and the like for the trade.

Shortly after the incorporation of the appellant company, it filed this action for declaratory relief by which it requested a declaration of its right to the use of the term Blue Ribbon for its prospective sale of coffee. The respondent answered and cross-complained for an injunction to prevent Mr. Marsalli and Marsalli’s Blue Ribbon Coffee Company, Inc. from using the expression Blue Ribbon in any manner dealing with the sale of coffee in its general marketing area. From a judgment in favor of defendant and cross-complainant, the plaintiff and cross-defendants have appealed. The appellants were enjoined from transacting business under the name of Marsalli’s Blue Ribbon Coffee Company, Inc., from using Blue

Appellants assert that, as there is no conflict in the evidence, only a question of law is presented; that in such a situation the appellate court proceeds anew without being required to give any weight to the decision of the trial court. In support thereof, they cite Moore v. Wood, 26 Cal.2d 621 [ 160 P.2d 772 ]. The situation is not the same for here there was evidence produced by both sides even though it produced practically no factual controversy. In the Moore case, it is said: ‘ ‘ The record includes no evidence offered or received for the purpose of showing the intention of the parties as to their agreement, therefore, the construction of the contract by the trial court presents a question of law which this court must determine.” Estate of Norris, 78 Cal.App.2d 152 [ 177 P.2d 299 ], Estate of Platt, 21 Cal.2d 343 [ 131 P.2d 825 ], and Moffatt v. Tight, 44 Cal.App.2d 643 [ 112 P.2d 910 ], also cited by appellants in support of their contention, hold only that an appellate court is not bound by a construction of a will, contract or document which is based solely on its terms without the aid of evidence. The appellants have evidently overlooked the fact that even with uncontradicted evidence there are inferences to be drawn, interpretations to be made and witnesses to be believed or disbelieved. An appeal of a case, where evidence is received in the trial court, would not become one solely of law just because the appellant refused to cross-examine a witness or call one of his own.

The approach to the problems involved must therefore be according to the rule as stated in Berniker v. Berniker, 30 Cal.2d 439 , 444 [ 182 P.2d 557 ], that “an appellate court (1) will review the evidence in the light most favorable to the respondent; (2) will not weigh the evidence; (3) will indulge all intendments and reasonable inferences which favor sustaining the finding of the trier of fact; and (4) will not disturb the finding of the trier of fact if there is substantial evidence in the record in support thereof.”

In the Applebaum case, the plaintiff sought to enjoin the use of the words Junior Boot Shop, which defendant Senior used in connection with his own name in the conduct of a retail children’s shoe store in Walnut Creek. The plaintiff operated two retail children’s shoe stores in San Francisco and one in San Anselmo under the name of Junior Boot Shop. He and one Mullany had earlier operated a store of children’s shoes in San Francisco under the name Junior Boot Shop with a branch store using the same name in San Mateo County. Mr. Applebaum had bought all the stock in the operating Corporation from Mullany and his wife under an agreement by which the Mullanys received the San Mateo store with the right to use the name Junior Boot Shop in San Mateo County. Mr. Senior started his business in 1951 in Walnut Creek and called his store Senior’s Junior Boot Shop at the suggestion of his former employer, Mr. Mullany, who thought the paradoxical title would be a catchy name for the store. The plaintiff knew all along that defendant was using this name, and he made no objection until several years later; in fact there were occasions when plaintiff and defendant exchanged shoes when one or the other did not have a particular shoe in stock. It is a reasonable inference from such conduct that even plaintiff did not believe that confusion of the public resulted, or that Mr. Senior was guilty of any unfair business practice.

Here the court found that there was a secondary meaning in the coffee trade to the words Blue Ribbon, while in the Applebaum case the court held that no such meaning in the words Junior Boot Shop had been acquired in Contra Costa

While not a deciding factor, the two cases are further distinguished in that there is more than mere coincidence to justify the name Senior’s Junior Boot Shop. There appears no good reason for using the words Blue Ribbon in a contemplated competing business operating in the very same area. The English language affords many other apt expressions for the use of appellants in their new enterprise. In the Applebaum ease, the respondent was using his own name to make an interesting and appealing combination of words; he was not in direct competition with the appellant; and the court found that his conduct was not an unfair business practice and that it was not likely to cause confusion in the minds of the public dealing with these two business adversaries.

“The question of unfair competition is one of fact for the trial court and depends in the last analysis on whether the public is likely to be deceived [citations] . . . Since the court could properly conclude that the name ‘Junior Boot Shop’ was not generally identified with plaintiffs’ business among the public of Contra Costa County its findings above summarized are supported by the evidence and the inferences properly to be drawn therefrom.” (Applebaum v. Senior, supra, p. 410.)

The same rule applied to this case results in a different conclusion by the trial court, because the findings of fact are not the same. In each case there is substantial evidence to support the finding of fact.

In H. Moffat Co. v. Koftinow, supra, the court affirmed a judgment enjoining the defendant, who had for several years before operated as the Manteca Veal Co., from using the word Manteca in- the- sale- of meat products, because the word had gotten a secondary meaning as a trade name. Like Blue Ribbon, the word Manteca is not a fanciful expression unrelated to the quality of the product sold. While neither expression could qualify as a trade mark (Bus. & Prof. Code, § 14242, subd. (e)), they can, if the facts warrant, be appropriated as a trade name if a secondary meaning has been acquired. The Moffat case in at least two particulars is less favorable to the prevailing party than the instant case. There the party enjoined was actually in business and had been using the word Manteca in its name, and secondly, Moffat & Co. was alleged to have been guilty of laches in that it waited such a long time after knowledge before it did anything about it.

The fact that appellant intends always to preface the term Blue- Ribbon with his own name, Marsalli, does not require a finding" that confusion and unfair competition is thereby eliminated. “It is obvious that the requirement that subject matter be added to the words in question to the effect that there was no connection between the two businesses would be ineffective. It would be fraught with the practical danger of

In this case we find the appellants, having bought coffee under the name of Blue Ribbon from respondent for many years, trying unsuccessfully to buy into the respondent company, having never heard of anybody other than respondent using the term in the coffee business and who must certainly have known of respondent’s reputation for high quality coffee, suddenly deciding to go into direct competition with the respondent and using the very two words that respondent had for more than forty years used to favorably identify its product. The choice of these two words must surely be attributable to something more than sheer coincidence. Under the circumstances it is difficult to find any justification for permitting appellants to use those words at all in their proposed business whether alone or in conjunction with other words.

While injunction may in many eases be an extraordinary remedy, to be issued with great caution and only on a clear showing (Wilkins v. Oken, 157 Cal.App.2d 603 , 606 [ 321 P.2d 876 ]), the admonition is scarcely applicable here for the appellants have not as yet started business; the respondent asks for no damages—all it asks is for the court to prevent the use of just two words. This leaves appellants with a myriad choice of words, equally as effective as the two they want to use, except perhaps for the unjustified purpose of confusing the public, the coffee trade or the respondent’s customers. It is unlikely that appellants would be so insistent if respondent had over the years somehow created an impression in the coffee trade that Blue Ribbon stood for poor rather than good quality.

“This thought that a newcomer has an ‘infinity’ of other names to choose from without infringing upon a senior appropriation runs through the decisions.” (Stork Restaurant v. Sahati, 166 F.2d 348 , 361.)

For an elaborate discussion of about every contention an appellant can make to upset a injunction preventing the use of a trade name, reference is made to the case last cited.

Judgment affirmed.

Dooling, Acting P. J., and Draper, J., concurred.