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INTERPACE CORP. v. LAPP

November 18, 1982

Interpace Corporation, Plaintiff,
v.
Lapp, Inc. Defendant



The opinion of the court was delivered by: BIUNNO

 This is a "name" case, a replay of the kind of problem courts have long struggled to solve effectively and fairly. See, for instance, Howe Scale Co. v. Wyckoff, etc., 198 U.S. 118, 49 L. Ed. 972, 25 S. Ct. 609 (1905) ("Remington"); Hilton v. Hilton, 89 N.J.Eq. 182, 104 A. 375 (E & A 1918); 89 N.J.Eq. 472, 106 A. 139 (Ch. 1919), aff'd., 90 N.J.Eq. 564, 107 A 263 (E & A 1919); Hat Corp., etc. v. D.L. Davis Co., 4 F. Supp. 613 (D.Conn.1933) ("Dobbs"); Chas. S. Merton & Co. v. Percy Merton, Inc., 103 N.J.Eq. 380, 143 A. 515 (Ch. 1928); Elgin National Watch Co. v. Illinois Watch Case Co., 179 U.S. 665, 45 L. Ed. 365, 21 S. Ct. 270 (1901); American Waltham Watch Co. v. United States Watch Co., 173 Mass. 85, 53 N.E. 141 (1899); Eureka Fire Hose Co. v. Eureka Rubber Mfg. Co., 69 N.J.Eq. 159, 60 A. 561 (Ch. 1905).

 This case is not one calling for an evaluation of similarities or differences, as between "Cottolene" and "Chefolene", N.K. Fairbanks Co. v. Ogden Packing & Provision Co., 220 F. 1002 (D. Utah 1914), "Havoline" and "Valvoline", Valvoline Oil Co. v. Havoline Oil Co., 211 Fed. 189 (D.N.Y.,1913); or between "Kidde-Koop" and "Kumfy-Crib", Trimble v. Woodstock Mfg. Co., 297 Fed. 524 (D.N.Y., 1923), aff'd., 297 Fed. 529 (CA. 2, 1924).

 Rather, the name's the same; in both cases it is "Lapp". And, while the name is not as common as "Johnson", see S.C. Johnson & Son, Inc. v. Johnson, 116 F.2d 427, at 430 (CA2, 1940), it is nonetheless a surname.

 At one time, the view was that the rule in these circumstances was fixed and immutable. As was said in Stix, Baer & Fuller Dry Goods Co. v. American Piano Co., 211 Fed. 271, at 274 (CA8, 1913):

 
"It is now settled beyond controversy that a family surname is incapable of exclusive appropriation in trade. The right of every man to use his own name in his business was declared in the law before the modern [sic] doctrine of unfair trade competition had arisen."

 Or, as was said earlier in the Howe Scale case, supra., involving the "Remington" family surname in connection with typewriters,

 
"We hold that, in the absence of contract, fraud or estoppel, any man may use his own name, in all legitimate ways, and as the whole or part of a corporate name". 198 U.S. at 140.

 The modern view is not that rigid. If the personal name has come to develop secondary meaning, to serve as an identification of origin (and thus part of the "good will" built up in time), even personal names, geographic names, descriptive names, and the like may be entitled to protection. While broad generalizations are not possible because each case will turn on its own facts, the concept was well expressed in American Waltham, supra:

 
"It is true that a man cannot appropriate a geographical name; but neither can he a color, or any part of the English language, or even a proper name to the exclusion of others whose names are like his. Yet a color in connection with a sufficiently complex combination of things may be recognized as saying so circumstantially that the defendant's goods are the plaintiff's as to pass the injunction line."

 These common law views are substantially codified in the Lanham Act. Thus, 15 USC § 1052, provides in paragraph (e) that registration on the principal register may be refused where the mark

 
(1) is merely descriptive of the goods; or
 
(2) is primarily geographically descriptive; or
 
(3) is primarily a surname.

 Paragraph (f), which appears to apply only to paragraph (e), however, allows registration of a mark which has become distinctive of the applicant's goods in commerce, which looks like a legislative draftsman's way of referring to secondary meaning.

 There are countless well-known examples. "Westinghouse" derives from George Westinghouse, who invented an air brake, railway signals, engines and turbines, hydroelectric and other alternating current generators for the long-distance transmission of electric energy.

 Thomas Alva Edison's name acquired secondary meaning in connection with a host of products he invented and manufactured. Yet, although he had devised the formula for a product, he was entitled to prevent the unlicensed use of his name, picture and testimonial when that product was made and marketed by another, Edison v. Edison Polyform Mfg. Co., 73 N.J.Eq. 136, 67 A. 392 (Ch. 1907).

 Henry Ford, Walter P. Chrysler, the Dodge brothers, Heren Daimler and Benz, and countless others put their names on the radiators and hubs of automobiles they made, and a court would be hard put today, after millions of sales over decades, to recognize another Ford, another Chrysler, another Dodge. The designation of origin for these names is too deep and too strong to allow another, even using his own name, to so identify his product. The origin of such names after a lifetime of use becomes historical, and what had been a surname becomes an anonymous identification of source and origin. When the quality and reliability are high, the secondary meaning becomes a valuable component of good will.

 In other instances, a surname becomes part of the language itself and is available for everyone to use freely. This was the case with Count Alessandro Volta, Professor Andre Ampere, Professor Georg Ohm and James Watt, for examples.

 The "Lapp" surname as used by plaintiff was used in business from 1916, when John S. Lapp formed the Lapp Insulator Co., Inc., with a plant in LeRoy, N.Y., where he was joined by his brother, Grover Lapp, the next year.

 The name was used in connection with the manufacture and sale of electrical insulators made of ceramic, and associated items such as hardware. For a time, the company also made electrical capacitors under the name Lapp, but that branch of the business has been sold off without including any right to use the Lapp name.

 Federal trademark registration was applied for June 30, 1952, and the trademark "Lapp" was registered November 24, 1953 as Registration No. 582,766. (Exh. P. 32). The statement on registration is that the trade-mark was first used on insulators in 1927, and first used in commerce interstate the same year. The mark is claimed to have become distinctive of the applicant's goods through substantially exclusive and continuous use for the 5 years before application filed. Such use gives rise to a statutory level of "prima facie evidence" of secondary meaning despite the fact that the trademark is otherwise primarily a surname, see 15 USC § 1052(f).

 The registration was for use with electric insulators and electric condensers (capacitors) in "Class 21, Electrical apparatus, machines, supplies."

 The Lapp Insulation Company, Inc. was later acquired by Interpace Corporation, and merged into the latter on June 27, 1969, Exh. P-6, since which time the operation has continued as the Lapp Division of Interpace Corporation.

 The federal registration is owned by Interpace and was renewed by it for 20 years from November 24, 1973, Exh. P-39.

 Sales by the Lapp Division in recent years have been of the order of $55. to $73. million a year.

 The earliest market when the business began was for the telegraph and telephone industry to minimize current leakage losses from outdoor wiring in wet weather. As knowledge and skills improved, ceramic insulation products were developed for the radio industry and the electrical power industry. The line of products today is quite broad, going up to ceramic insulators for experimental fusion reactors of the Tokamak type.

 The next largest group of customers are made up of electric utility companies, whose major purchases are of insulators for transmission and distribution lines.

 Next comes a group referred to as engineering consultants, who render professional services to a wide range of clients, covering a range from specific construction projects to engineering design and procurement for manufacturing or production purposes. This class generally works on the basis of specifications to be met, searching for and either recommending or procuring a given manufacturer's product as meeting those specifications.

 Among the various products in the line there is a category called "entrance bushings", which consist of not only a ceramic insulator but also a conductor passing through its center, so that it can provide an electrical path for connecting a wire outside a container, such as the metal shell of a transformer, and a wire inside that container. These are both high and low voltage types, and will be mentioned again later.

 The defendant, Lapp, Incorporated, is a New Jersey corporation formed in 1976, with its facility in Fairfield, N.J. Through common stock ownership it is related to or affiliated with several West German companies: Lapp, Stuttgart, GmbH, and U.I. Lapp, A.K. The group of German companies was formed in about 1957 by one Oscar Lapp, who is still active, primarily to manufacture flexible cables for machine tools in order to replace the rigid metal conduit and wiring traditionally used.

 The Gmbh entity is a manufacturer, drawing fine wire from copper bars, forming flexible conductors by twisting a number of wire strands together, extruding these conductors to coat them with insulation of various colors, and then combining and twisting a number of color-coded insulated conductors and extruding them with a jacket or sleeve. Some types are covered with a basket-weave tinned wire to form a flexible electrical shield.

 U.I. Lapp, K.G. (named after Oscar Lapp's wife, Ursula Ida) is the sales unit. It markets the products made by the GmbH unit, and also other wire and cable products manufactured by others, such as Siemens, and sold under the Lapp name.

 Until the defendant Lapp, Incorporated was formed and started up, sales to the U.S.A. were made by U.I. Lapp KG to customers with whom contact had been made at trade fairs, for example, by direct contact. Some attempts were made to use manufacturers representatives in the U.S.A. but these were not successful.

 The insulated wire and cable products sold by U.I. Lapp KG, whether made by Lapp GmbH or others, are not produced and certified to specifications of Underwriters Laboratories (UL) but to European standards referred to as VDE, for which the working voltages and test voltages are somewhat lower than under UL standards. To the extent that the European products were sold to U.S. customers by U.I. Lapp KG and are now sold by Lapp, Incorporated, they are sold to customers who incorporate these wire and cable items into products to be shipped to and sold in European markets where the VDE specifications are called for.

 What this means, of course, is that the defendant Lapp, Incorporated is not only the U.S. sales outlet for the German companies but also acts as a wholesaler for the goods of others which it sells under its own name. It also means that on the present record it appears that wires and cables shipped from Germany, whether they be Lapp-made or purchased from sources like Siemens, are sold ...


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