On appeal from the Superior Court, Appellate Division.
For modification and remandment -- Chief Justice Weintraub, and Justices Heher, Burling, Jacobs, Francis and Proctor. Opposed -- None. The opinion of the court was delivered by Weintraub, C.J.
Plaintiff sued to enjoin defendants from using the symbol "A & P." The Chancery Division found generally for defendants but gave some limited relief, and the Appellate Division ordered a slight extension of the restraint. 51 N.J. Super. 412 (App. Div. 1958). We granted plaintiff's petition for certification. 28 N.J. 147 (1958).
The facts appear in the opinion of the Appellate Division. For many years the symbol "A & P" has been widely established as a trade-mark on food products merchandised by plaintiff and a trade-name in its operation of a vast chain of retail stores and supermarkets. The symbol was unmistakably identified with plaintiff in 1945 or 1946 when a partnership was formed under the name of A & P Trucking Company and in 1947 when the corporate defendant was organized to succeed it.
There is no competition, present or prospective, between the litigants. The corporate defendant is a common carrier, whereas plaintiff is engaged in the field just described. But each is concerned with trucking. Some 9,000 vehicles, owned either by plaintiff or its contract carriers, serve plaintiff's national needs and bear the symbol "A & P." Defendant's trucks carry the same symbol either in isolation or as part of defendant's full corporate name. Trucks of both parties move extensively in the same territory.
There being no competition, the question arises whether plaintiff may nonetheless be granted relief. Defendants do not seriously contend that today equity will act only when the litigants compete for the same customer. Early holdings to that effect, reflected for example in National Grocery Co.
v. National Stores, 95 N.J. Eq. 588 (Ch. 1924), affirmed 97 N.J. Eq. 360 (E. & A. 1925), have yielded to a demand for a higher level of commercial morality and to the needs of a changing economy. Huge sums are expended in advertising both the product and the producer. Goodwill is a sensitive asset, particularly vulnerable today by reason of mobility of population and the media of mass communication. Industrial enterprises tend to diversify, entering fields alien to the area of initial success. Hence the consumer may more easily be misled by identical or simulated marks or names, notwithstanding differences in product, service or geographical area of operation. For this reason, the possessor of a valuable, well-regarded name may experience the ill-repute of another who employs it, despite the absence of direct competition between them.
The emphasis today is upon protection against unfair trade practices whether or not competition exists. Judge Learned Hand well expressed the thesis in Yale Electric Corporation v. Robertson, 26 F.2d 972, 974 (2 Cir. 1928):
"However, it has of recent years been recognized that a merchant may have a sufficient economic interest in the use of his mark outside the field of his own exploitation to justify interposition by a court. His mark is his authentic seal; by it he vouches for the goods which bear it; it carries his name for good or ill. If another uses it, he borrows the owner's reputation, whose quality no longer lies within his own control. This is an injury, even though the borrower does not tarnish it, or divert any sales by its use; for a reputation, like a face, is the symbol of its possessor and creator, and another can use it only as a mask. And so it has come to be recognized that, unless the borrower's use is so foreign to the owner's as to insure against any identification of the two, it is unlawful."
This view was adopted in 3 Restatement of Torts (1938), § 730. It is well supported here and elsewhere. See 51 West 51 st St. Corp. v. Roland, 139 N.J. Eq. 156 (Ch. 1946); Goldscheider v. Schnitzer, 3 N.J. Super. 425 (Ch. Div. 1949); American Shops, Inc. v. American Fashion Shops of Journal Square, Inc., 13 N.J. Super. 416 (App. Div. 1951), certification denied, 7 N.J. 576 (1951); Annotation,
148 A.L.R. 12, 22 (1944). The present-day approach may be said to have been anticipated in Edison Storage Battery Co. v. Edison Automobile Co., 67 N.J. Eq. 44 (Ch. 1904) and Cape May Yacht Club v. Cape May ...