597 F.2d 496

ARMSTRONG CORK COMPANY and Armstrong World Industries, Inc., Plaintiffs-Appellants, Cross-Appellees, v. WORLD CARPETS, INC., et al., Defendants-Appellees, Cross-Appellants.

No. 78-1919.

United States Court of Appeals, Fifth Circuit.

June 21, 1979.

Rehearing Denied Aug. 10, 1979.

*497Oscar M. Smith, Rome, Ga., David H. T. Kane, Siegrun D. Kane, Kane, Daleimer, Kane, Sullivan & Kurucy, New York City, for plaintiffs-appellants.

Mitchell, Mitchell, Coppedge, Boyett, Wester & Bates, Warren N. Coppedge, Jr., James H. Bisson, III, Dalton, Ga., Beveridge, DeGrandi, Kline & Lunsford, Julius R. Lunsford, Jr., Atlanta, Ga., for defendantsappellees.

*498Before BROWN, Chief Judge, COLEMAN and TJOFLAT, Circuit Judges.

JOHN R. BROWN, Chief Judge:

In this case, we fly by magic carpet through the exotic and esoteric realm of trademark law and the Lanham Act, 15 U.S.C.A. §§ 1051-1127. Armstrong Cork Company (Armstrong), plaintiff below, appeals from a District Court order enjoining Armstrong from using its proposed new corporate name, Armstrong World Industries, Inc. World Carpets, Inc. (World), defendant below, appeals from the District Court’s ruling that Armstrong had not violated the Georgia Fair Business Practices Act of 1975, Ga.Code Ann. §§ 106-1201 to 1217. The main issue on appeal is whether, the District Court was correct in ruling that Armstrong’s use of its proposed corporate name would infringe World’s rights in its registered trademarks WORLD and WORLD with a globe symbol. We conclude that the District Court’s finding of trademark infringement was incorrect. The District Court’s order of injunction is reversed and its ruling on the state law issue is affirmed.

I. In The Beginning The Carpetbaggers

Armstrong is a Pennsylvania corporation that manufactures home furnishing products, including hard surface flooring, ceiling material, furniture, and carpeting. Armstrong has ten foreign subsidiaries and affiliates located in eight foreign countries. Armstrong’s products are sold in over 100 countries. From 1950 to 1976, Armstrong spent approximately 180 million dollars in advertising.

Armstrong sells its products under various trademarks, such as Armstrong with a circled A and Evans & Black. Armstrong is also the owner of registered trademarks INDOOR WORLD and THE INDOOR WORLD, which refer to Armstrong’s interi- or decorating services and cotton piece goods.

Although Armstrong is best known for its hard surface flooring products, Armstrong is also a manufacturer of tufted carpets. In the early part of this century, Armstrong manufactured or sold carpet under various trade names, culminating with the Deltox label that was discontinued in the early 1960’s. In 1966, Armstrong acquired Brinton Carpets, a Canadian producer of woven and tufted carpeting. In 1967, Armstrong acquired Evans & Black of Texas and Georgia, a tufted carpet producer. Armstrong is now one of the largest producers of carpets. As required by federal law, the Armstrong corporate name appears on every label of carpet manufactured or warranted by Armstrong.

Since 1973, Armstrong has operated a wholly-owned subsidiary, Pacific World. Pacific World is the wholesale distributor of Armstrong carpets in California and the surrounding areas. Pacific World has approximately six to seven million dollars in annual sales.

For some time now, Armstrong has been considering a name change. Because cork has ceased to be a significant part of Armstrong’s product line, Armstrong’s executives concluded that the corporate name Armstrong Cork Company no longer provided an appropriate description of Armstrong’s business. Deciding to change to a corporate name that was “more reflective of what the Armstrong Cork Company is today,” Armstrong embarked upon what has been a rocky road to name change. Testimony of James Binns, Pres., Armstrong Cork Co.

Before deciding upon Armstrong World Industries, Inc., Armstrong considered other names, such as Armstrong International, Armstrong Industries, and Armstrong Indoor World Industries. Armstrong International and Armstrong Industries could not be cleared for use in certain states because of existing companies with identical names. Armstrong Indoor World Industries was not adopted because it was considered too restrictive.

*499Armstrong eventually settled upon the name Armstrong World Industries, Inc. The proposed name was approved by Armstrong’s shareholders in 1977. Armstrong then formed a Delaware nameholder corporation, Armstrong World Industries, Inc., and received permission to do business in that name in all fifty states.

At this point, World pulled the rug from under Armstrong’s corporate feet, objecting to the proposed name change.

The Rug Beaters

World is a Georgia corporation manufacturing tufted textile carpets in a variety of styles and colors. Organized in 1954, World is a closely-held corporation with subsidiaries in seven metropolitan areas throughout the United States and with export sales in twenty-five countries, including Australia, England, Germany, and Japan. World’s annual sales exceed 100 million dollars. World has an established reputation in the carpet industry as a “trend setter.” Nationwide, World has spent approximately eighteen million dollars on newspaper, magazine, and television advertising.

World is the owner of federal registered trademarks WORLD and WORLD with a globe symbol. The federal trademark WORLD has become incontestable under Section 15 of the Lanham Act, 15 U.S.C.A. § 1065.

World and Armstrong are major competitors in the carpeting industry. Their manufacturing processes are similar. They have similar sales and distribution methods. For example, the companies frequently market their products through the same retail stores. Both companies typically furnish distributors and retailers with sample books, display racks, and other promotional materials. Armstrong and World both advertise in the same magazines, often on adjacent pages. The companies use the same toll-free telephone number for consumer inquiries.

II. How It Went: A Rug By Any Other Name

When efforts to resolve the name change dispute failed, Armstrong brought this declaratory judgment action, seeking a ruling that its proposed new corporate name did not infringe or unfairly compete with World’s rights in its registered trademarks, WORLD and WORLD with a globe symbol.1 World counterclaimed for an injunction restraining Armstrong’s use of the new name and for damages and attorneys fees for violations of the Georgia Fair Business Practices Act of 1975, Ga.Code Ann. §§ 106 1201 to 1217. A jury was impaneled for a determination of World’s counterclaim for damages. The jury found that World was not entitled to exemplary or punitive damages. The jury also made advisory findings of fact that Armstrong’s use of the proposed name was likely to cause confusion, was not a good faith, fair, and descriptive use of the word World, and was an unfair trade practice. The District Court then made its own findings of fact and conclusions of law and enjoined Armstrong from using the proposed name.

The District Court held that World was entitled to injunctive relief because Armstrong carpet sold by Armstrong World Industries, Inc. would likely be confused with carpet sold by World and that therefore Armstrong’s use of its proposed corporate name would infringe World’s trademark rights.2 The Court further held that Arm*500strong could not claim protection under the “fair use” defense of Section 33(b)(4) of the Lanham Act.3

The Court ruled against World on the state law issue, finding that Armstrong had not passed off its goods as those of World and that no one was actually confused by the proposed name change. The Court upheld the jury’s refusal to award damages to World.

On this appeal, Armstrong attacks the holdings adverse to it. World attacks the District Court’s resolution of the state law issue. We need discuss only one of these challenges.4

III. The Legal Standard: Confusion Reigns

In a trademark infringement case, the controlling issue is whether the alleged infringer’s imitation of a registered mark is “likely to cause confusion, or to cause mistake, or to deceive . . . .” Lanham Act § 32(1), 15 U.S.C.A. § 1114(1); RotoRooter Corp. v. O'Neal, 5 Cir., 1975, 513 F.2d 44; World Carpets, Inc. v. Dick Littrell’s New World Carpets, 5 Cir., 1971, 438 F.2d 482; Continental Motors Corp. v. Continental Aviation Corp., 5 Cir., 1967, 375 F.2d 857; American Foods, Inc. v. Golden Flakes, Inc., 5 Cir., 1963, 312 F.2d 619.5 *501Therefore, as the District Court rightly observed, the case turns upon the correctness of the District Court’s finding that Armstrong’s use of World’s trademark in its corporate name created a likelihood of confusion in the minds of the carpet buying public.6

The finding of likelihood of confusion is one of fact and is therefore reviewed by this Court under the “clearly erroneous” test of F.R.Civ.P. 52(a). T. G. I. Friday’s, Inc. v. International Restaurant Group, Inc., 5 Cir., 1978, 569 F.2d 895; Holiday Inns, Inc. v. Holiday Out In America, 5 Cir., 1973, 481 F.2d 445. The question for us is whether the District Court’s finding of likelihood of confusion was clearly erroneous.

A finding of fact of the District Court 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.” United States v. United States Gypsum Co., 1948, 333 U.S. 364, 395, 68 S.Ct. 525, 542, 92 L.Ed. 746. In other words, we reverse when the result in a particular case does not reflect the truth and the right of the case. W. R. B. Corp. v. Geer, 5 Cir., 1963, 313 F.2d 750, 753, cert. denied, 379 U.S. 841, 85 S.Ct. 78, 13 L.Ed.2d 47. We have such a result here. Having considered all the evidence in this case, we are convinced that the District Court was mistaken when it found that Armstrong’s use of its proposed corporate name would create a likelihood of confusion with World, World’s products, or any other aspect of World’s business.

IV. The Standard Applied: Who’s Confused? By What?

A finding of likelihood of confusion is based upon an evaluation both of the marks themselves and of certain extrinsic conditions, such as the parties’ business operations or the intent of the alleged infringer.7 The evaluation of the marks themselves is of course the most important consideration, for it is in their similarity that the roots of the confusion lie. See Kentucky Fried Chicken Corp. v. Diversified Packaging Corp., 549 F.2d at 386; B. H. Bunn Co. v. AAA Replacement Parts Co., 5 Cir., 1971, 451 F.2d 1254, 1261; I. T. S. Industria Tessuti Speciali v. Aerfab Corp., S.D.N.Y., 1967, 280 F.Supp. 581, 586; Callmann, supra note 5, § 80, at 538.

In this case, although the District Court found similarities in Armstrong’s and World’s business operations, the Court based its finding of likelihood of confusion primarily upon findings of similarities in the companies’ products and marks.8 The Court found that the companies’ carpets were, without the federally required label, indistinguishable. Findings of Fact No. 31. This factor, coupled with what the Court considered to be the “substantial similarity” in the companies’ marks, was the deciding consideration leading to the Court’s finding of likelihood of confusion: “The carpet products are so closely related that use of substantially similar marks would create a strong likelihood of confusion.” Id.

Of course, the findings of similar marks and products are also governed by the clear*502ly erroneous standard. In this case, it is an error in one of these findings that tars the finding of likelihood of confusion with the brush of clear error. The Court’s finding that Armstrong’s proposed name and World’s trademark are “substantially similar” is clearly erroneous, and without this finding, the finding of likelihood of confusion cannot stand.

The mere fact that Armstrong’s proposed corporate name contains the word World does not, of itself, make the name “substantially similar” to World’s trademark. A mark must be viewed in its entirety and in context. It is the overall impression that counts. B. H. Bunn Co. v. AAA Replacement Parts Co., 451 F.2d at 1262 n. 2; Restatement of Torts § 729, Comment b (1938).

Part of this “overall impression” includes the manner in which a particular mark or designation is to be used. Callmann, supra note 5, § 82.2(e). In this case, the Court attached significance to the fact that Armstrong would use its corporate name on its carpet labels and that this would likely cause confusion with World. Therefore, a comparison of World’s carpet label and Armstrong’s proposed carpet label9 seems appropriate:

*503

*504

Armstrong’s proposed carpet label.

An examination of Armstrong’s proposed label shows that the diminutive appearance of the word World — in fine print at the bottom right of the label — is obviously quite different from the appearance of World’s bold WORLD. The attention-getting feature in Armstrong’s label is unquestionably Armstrong’s own trademark — Armstrong with a circled A. The import of each label is altogether distinctive. With such clearly dissimilar labels, we fail to see how the ordinary purchaser of carpets would likely be confused between the two companies’ products.10 Cf. Robinson Co. v. Plastics Research & Development Corp., W.D.Ark., 1967, 264 F.Supp. 852, 861.11

*505Moreover, it must be emphasized that Armstrong seeks merely to change its corporate name. There is no showing that Armstrong is seeking to feature either the new name in its entirety or, more significantly, the term World to denominate or advertise its carpets. There is nothing in the record that suggests that Armstrong will deviate from its present policy of promoting its own admittedly well-known and distinctive trademark.12 Under such circumstances, we believe that the District Court was clearly erroneous in finding that Armstrong’s proposed corporate name is substantially similar to World’s trademark.

Once the Court’s finding of similarity of marks is rejected, the other factors supporting the Court’s determination appear insignificant. The only other factors cited by the Court in its findings were the similarities in the companies’ business operations and products. These findings, standing without the critical finding of trademark similarity, are hardly sufficient to support a determination of likelihood of confusion.

Indeed, much other evidence at trial seems to support a contrary finding. For example, the existence of eighty-five different carpet companies using without objection from World the word World in their business — not to mention World’s toleration of Armstrong’s own use of the terms INDOOR WORLD and Pacific World — militates against the finding of likelihood of confusion.13 Restatement of Torts § 729, Comment (g), at 596 (1938) (“The greater the number of identical or more or less similar trade-marks already in use . the less is the likelihood of confusion.”).

World, however, contends that there is evidence showing not merely likelihood of confusion, but even actual confusion. First, World points to commentary in a trade magazine that purportedly suggests that Armstrong might have acquired World. This information came into the record via Armstrong’s answer to World’s interrogatory.14 The commentary itself was properly excluded as hearsay. We find this evidence to be practically useless. From the interrogatory, it is of course impossible to know exactly what was written in the trade magazine. It is also impossible to determine whether the author of the comments was *506actually confused, merely speculating, or attempting to be humorous about whatever it was he or she was writing about.

World also cites the testimony of two businessmen who stated that upon first learning of Armstrong’s proposed name change they entertained short-lived impressions that Armstrong had acquired or merged with World.15 To the extent that this evidence shows confusion at all, it is insufficient to tip the scales in World’s favor. The fact that there might have been some evidence to support a particular finding does not make that finding impervious to F.R.Civ.P. 52(a) reversal if the reviewing court is convinced that a mistake has nonetheless been made. W. R. B. Corp. v. Geer, 313 F.2d at 752; Sanders v. Leech, 5 Cir., 1946, 158 F.2d 486, 487.

V. Conclusion

Our evaluation of the evidence adduced at trial convinces us that the District Court was clearly erroneous in its finding of similarity of marks and that without this finding there was no evidence from which one could reasonably find that Armstrong’s adoption of the name Armstrong World Industries, Inc. would create a likelihood of confusion with World Carpets, Inc., its products, or whatever. Hence, there is no trademark infringement.16

We reverse in part and affirm in part, upholding only that portion of the District Court opinion denying World monetary damages and relief under state law.

REVERSED IN PART; AFFIRMED IN PART.

Armstrong Cork Co. v. World Carpets, Inc.
597 F.2d 496

Case Details

Name
Armstrong Cork Co. v. World Carpets, Inc.
Decision Date
Jun 21, 1979
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597 F.2d 496

Jurisdiction
United States

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