This case requires the court to determine the extent of protection accorded a trade name which describes the location of a business and the service it provides.
Plaintiff, Edison Electric Company (Edison Electric), an electrical contractor, brought suit for trade name infringement against three other electrical contractors which also have the name "Edison" in their trade names, Edison Contracting Company -- Electrical Contractors (Edison Contracting), Edison Electrical Contractors, Inc. (Edison Electrical), and Edison Electrical Maintenance and Construction Company, Inc. A settlement was reached with the last named defendant but the case proceeded to trial against the other two.
Edison Electric was the first of the parties to use "Edison" in its trade name. It commenced use of its name in 1954, Edison Contracting in 1974 and Edison Electrical in 1979. Edison Electric and Edison Contracting are both located in Edison. Edison Electrical is in Pleasantville.
Plaintiff alleges that there is not only an inherent likelihood of confusion of its name with those of defendants but that the record shows actual confusion. Such confusion, according to plaintiff, is sufficient to support a judgment enjoining defendants
from continuing to do business under any trade name which includes the word "Edison."
The courts of this state have long entertained actions to enjoin unfair trade practices including infringement of trademarks and trade names. See, e.g., Red Devil Tools v. Tip Top Brush Co., 50 N.J. 563 (1967); Great Atlantic & Pacific Tea Co. v. A & P Trucking Corp., 29 N.J. 455 (1959); American Shops, Inc. v. American Fashion Shops of Journal Square, Inc., 13 N.J. Super. 416 (App.Div.1951), certif. den. 7 N.J. 576 (1951). However, no case has enjoined use of a trade name simply upon a showing that it was similar to the trade name of a prior user or that there was actual or potential confusion between the names. Rather, a finding of infringement invariably has been predicated on a comprehensive evaluation of a variety of factors, including the nature of the parties' trade names, the character of their businesses, the manner in which their products or services are marketed, the competitive relationship between the parties and the objective of the alleged infringer in adopting its trade name. See, e.g., Red Devil Tools v. Tip Top Brush Co., supra, 50 N.J. at 566-568; Great Atlantic & Pacific Tea Co. v. A & P Trucking Corp., supra, 29 N.J. at 459-462; American Shops, Inc. v. American Fashion Shops of Journal Square, Inc., supra, 13 N.J. Super. at 427-431; B. DiMedio & Sons, Inc. v. Camden Lumber & Millwork Co., 23 N.J. Super. 365 (Ch.Div.1952); 51 West 51st Corp. v. Roland, 139 N.J. Eq. 156 (Ch.1946); Delaware, L. & W.R.R. v. Lackawanna Motor Freight Lines, Inc., 117 N.J. Eq. 385 (Ch.1934).
Commentators in the field of trade names and trademarks distinguish between names which are purely arbitrary and those which are descriptive, including geographically descriptive, of the nature or source of a product or service. They conclude that the latter type of name does not receive as much protection as the former. For example, one commentator has observed:
Certain words, terms or names are regarded in the law as incapable of exclusive appropriation. Of this class are generic terms, geographical names and words and terms which are merely descriptive of the goods, services, place where made, the character of the business or the name of the maker . . . . [T]he preemption of such designations as geographic and generic terms for corporate names, if permitted, would unduly interfere with the necessary or proper use of them by others in the same locality or business. [6 Fletcher, Cyclopedia Corporations (1979), § 2427 at 62; footnotes omitted]
See also 3 Callman, Unfair Competition, Trademarks & Monopolies (4 ed. 1983), § 18.15 at 109. However, a name which originally was descriptive or geographical in nature may become uniquely associated with a particular product or service. It is then said to have acquired a "secondary meaning" which will receive protection. Fletcher, supra, § 2427; Callman, supra, § 19.25.
The same approach may be found in the Restatement of Torts and in the Lanham Trademark Act, 15 U.S.C.A. § 1051 et seq. The Restatement indicates that a geographical or descriptive name will be protected against infringement only if it has acquired "special significance" as the name of a particular business. 3 Restatement, Torts, § 716 at 558; see also § 720-721 at 575-582.*fn1 The Lanham act excludes from federal registration any mark which, as applied to the goods of the applicant, is "merely descriptive" (15 U.S.C.A. § 1052(e)(1) or "primarily geographically ...