
    Younker et al., Appellees and Cross-Appellants, v. Nationwide Mutual Ins. Co. et al., Appellants and Cross-Appellees.
    
      (No. 37522 —
    Decided June 5, 1963.)
    
      
      Mr. Leo W. Kenny, Messrs. Vorys, Safer, Seymour é Pease and Messrs. Schmieding & Fultz, for appellees and cross-appellants.
    
      Messrs. Mahoney, Miller S Rambo, Mr. J. Roth Crabbe and Mr. Thomas B. Stahl, for appellants and cross-appellees.
   Griffith, J.

This case involves a consideration of the law relating to trade names, trademarks and service marks.

A trade name, the broadest of these terms, is descriptive of the identity of the owner of the business. It identifies the source of the product or services, the business itself and need not be affixed to the product, although it may serve to identify not only the business but also the product. Katz Drug Co. v. Katz, 240 Mo. App., 739, 217 S. W. (2d), 286; Gordy v. Dunwody, 209 Ga., 627, 74 S. E. (2d), 886; and Mary Muffet, Inc., v. Smelansky, 158 S. W. (2d), 168.

A trademark is a sign, word or device affixed to a product which identifies the goods of a particular seller or manufacturer and distinguishes them from the goods sold or produced by another. Application of McIlhenny Co., 278 F. (2d), 953.

A service mark, which is comparatively new in the law, is in effect a trademark which relates to a service rather than a product. It is a mark used in the advertising and sale of services of one person or firm to distinguish them from the services of another. Toulman, Trade Mark Handbook, 302. Such service marks may include titles, designations, slogans and character names. 4 Callman, Unfair Competition and Trade-Marks (2 Ed.), 2129; and Section 1329.54, Revised Code.

Although trade names, trademarks and service marks are used differently, they all serve the same basic purposes, viz., to identify a business and its products or services, to create a consumer demand therefor, and to protect any goodwill which one may create as to his goods or services.

The fundamental purpose of the laws protecting interests in a trade name, trademark and service mark is twofold. First, it is to protect the public. Present day consumer purchasing is based frequently on name buying. Consequently, such name must be protected to assure the purchaser that he gets the goods from the source on which he relies. Second, it is to protect the interest of the owner of the name or mark in the goodwill he has created, by keeping another merchandiser or producer from infringing on the goodwill created as to the name or mark. In part, the legal protection afforded is to prevent one from reaping where one has not sown.

The basic principles governing trademarks and trade names are the same. Neva-Wet Corporation of America, Inc., v. Neva-Wet Processing Corp., 277 N. Y., 163, 13 N. E. (2d), 755. Service marks being primarily trademarks relating to services, the law relating to trademarks is equally applicable to service marks. Yandenburgh, Trademark Law and Procedure, 31.

The rights in trademarks, trade names and service marks are acquired by actual user and not by registration. Such rights belong to the one who first actually adopts and uses the name or mark in connection with his business. Johnson v. Glassley, 118 Ind. App., 704, 83 N. E. (2d), 488; Englander v. Mc-Kesson-Roeber-Kuebler Co., 120 N. J. Eq., 480, 187 A., 917; Dell Publishing Co., Inc., v. Stanley Publications, Inc., 9 N. Y. (2d), 126, 172 N. E. (2d), 656; Foss v. Culbertson, 17 Wash. (2d), 610, 136 P. (2d), 711; Hanover Star Milling Co. v. Metcalf, 240 U. S., 403, 60 L. Ed., 713, 36 S. Ct., 357; Faciane v. Starner, 230 F. (2d), 732; and Radio Shack Corp. v. Radio Shack, Inc., 180 F. (2d), 200. The qualified property rights in such names and marks and the right to protection thereof arise as a matter of common law, not as a matter of statute. The registration statutes merely implement the common-law rights and create certain procedural advantages. United States v. Steffens, 100 U. S., 82, 25 L. Ed., 550; Southern Scrap Material Co., Ltd., v. Smith, 253 Ala., 356, 44 So. (2d), 754; Faciane v. Starner, supra; and 4 Callman, Unfair Competition and Trade-Marks (2 Ed.), 2066 and 2087, Sections 97.3 et seq. and 97.4.

It is the actual use of the trade name, trademark or service mark in connection with the business and not the duration of such use which gives rise to legal rights. Axton-Fisher Tobacco Co. v. Fortune Tobacco Co., 82 F. (2d), 295; and Foss v. Culbertson, 136 P. (2d), 711. Thus, one who adopts and uses a name in connection with his business or products acquires the right to the use thereof over one who subsequently registers such name or mark. Womble v. Parker, 208 Ga., 378, 67 S. E. (2d), 133; Tillman & Bendel, Inc., v. California Packing Corp., 63 F. (2d), 498; and 4 Callman, Unfair Competition and Trade-Marks (2 Ed.), 2066 and 2087, Sections 97.3 et seq. and 97.4.

Although theoretically a trade name indentifies a business or source of a commodity, a trademark identifies the commodity, and the service mark is a trademark which identifies services. There are many instances where a trademark serves to identify the business just as much as the trade name and instances where the trade name has become so identified with the product that it is equivalent to a trademark. Thus a trade name also may be a trademark or service mark. Children’s Bootery v. Sutker, 91 Fla., 60, 107 So., 345; A. & H. Transportation, Inc., v. Save Way Stations, Inc., 214 Md., 325, 135 A. (2d), 289; and 4 Callman, Unfair Competition and Trade-Marks (2 Ed.), 2138, Section 98.4 (e). The same may well be true of a corporate name. For example, if a corporate name has actually become identified with a product or a service, equity will enjoin the use by another of such name as a trademark or trade name. American Steel Foundries v. Robertson, Commr., 269 U. S., 372, 70 L. Ed., 317, 46 S. Ct., 160.

The controlling question in cases of this nature is whether one has used a name, word, symbol or other means of identification in connection with his business in such manner that the public associates such name, etc., with a particular business or commodity so that the use by another is likely to create confusion in the mind of the public. Consequently, one having a prior use of such name, etc., is entitled to the use of such name, etc., to the exclusion of all others who wish to adopt it. The question here then is whether plaintiff has used the word, “Securance,” in its business so that its use by another might create confusion in the mind of the public. If through use and advertising plaintiff has created an image in the mind of the public which relates the word, ‘ ‘ Securance, ’ ’ to its business, then it has gained a property right in such name.

This brings us to a consideration of the case presently before us. In 1956, some four years before defendant determined to use the word, “Securance,” as an advertising feature or service mark, plaintiff had incorporated under the name, “Securance Service, Inc.” Since the date of incorporation in 1956 the word, “Securance,” has been used in the promotion of plaintiff’s business through different media of advertising. At least to a limited extent plaintiff used the word, ‘ ‘ Securance, ’ ’ alone in its advertising.

The dominant word in the corporate name of plaintiff is “Securance.” Although it is a dictionary word, both parties have attempted to give it a- secondary meaning by relating it to the insurance business. The use of the dominant word with other words which are relatively unimportant does not defeat the plaintiff’s rights. See Gordy v. Dunwody, supra, 889. There is further evidence that the use of the word, “Securance,” by defendant has created some confusion in the minds of plaintiff ’s customers that plaintiff is now affiliated with defendant.

Plaintiff contends that it is entitled to protection of its name, “Securance,” throughout the United States. The Court of Appeals, however, limited its injunction so as to give protection to the plaintiff in Sandusky County only. One’s interest in a trademark, service mark or trade name is entitled to legal protection in the territory from which he receives, or with the probable expansion of his business may reasonably expect to receive, custom in the business in which he uses his trademark, service mark or trade name. 3 Restatement of the Law of Torts, 604, Section 732. The Court of Appeals found from the evidence that plaintiff uses the word, “Securance,” in both daily and weekly newspapers circulating in Sandusky County and in advertisements on radio and television broadcasts originating in Sandusky, Lucas, Wood, Ottawa, Erie, Huron, Seneca and Hancock Counties. These broadcasts are transmitted to Sandusky County as well as other counties adjoining the county of transmission. The evidence in this case indicates that, although the bulk of plaintiff’s business is conducted in Sandusky County, about 25 per cent thereof is conducted in Lucas County; that plaintiff sells insurance in 12 states other than Ohio; and that about 10 per cent of plaintiff’s business is from outside the state of Ohio. Apparently plaintiff contemplates establishing an office in Arizona. Under the evidence it would appear that reasonable geographical limitations on the legal protection to which plaintiff is entitled would encompass the entire state in which it is operating, since there is a probable expansion of its business throughout the state. See concurring opinion of Holmes, J., in Hanover Star Milling Co. v. Metcalf, supra, 426; Federal Glass Co. v. Loshin, 224 F. (2d), 100; Socony-Vacuum Oil Co., Inc., v. Oil City Refiners, Inc., 136 F. (2d), 470, 475, and cases cited therein. See, also, 3 Callman, Unfair Competition and Trade-Marks (2 Ed.), 1202, Section 76.3 (b) (1), wherein it is stated:

“* * * Despite the actual extent of the market within the state, any valid mark used therein is entitled to state-wide protection. As Mr. Justice Holmes, in his concurring opinion in the Hanover case, stated, if the mark ‘is good in one part of the state, it is good in all.’ In principle, therefore, if the use of a trade mark by a small state business precedes its use by a nation-wide competitor throughout the United States, the former has the priority. * * *” (Emphasis added.)

A question was raised as to the right of the plaintiff to register the word, “Seeurance,” as a service mark in Ohio. Under the finding of facts made by the Court of Appeals, plaintiff clearly had the right to register this word as a service mark, it having a proprietary interest therein by actual use. The provision of Section 1329.55, Eevised Code, that the Secretary of State may accept the registration of a mark as being distinctive to the applicant’s services if used for five years prior to the application is not a limitation on the right to register such name but merely a rule of evidence. A trademark or service mark may be found to be distinctive and hence registerable even though it has not been used for a period of five years. In our opinion there is no valid basis for the cancellation of the plaintiff’s registration of this service mark.

The plaintiff having established a right to legal protection of its trade name and service mark, “Securance,” throughout the state of Ohio, this court in accordance with Section 2, Article IV of the Constitution, hereby modifies the judgment of the Court of Appeals so as to extend the injunction granted by that court to all parts of the state and, as so modified, affirms the judgment of the Court of Appeals.

Judgment modified and, as modified, affirmed.

Zimmerman, Herbert and Gibson, JJ., concur.

Taet, C. J., and Matthias, J., concur in the syllabus but dissent in part from the judgment.

Taet, C. J.,

dissenting in part. I concur in the syllabus but dissent from the judgment insofar as it extends the relief given plaintiff by the Court of Appeals and to the extent that it refuses to provide for cancellation of plaintiff’s registration of “securance” as a service mark.

With respect to the quotation in the majority opinion from 3 Callman, Unfair Competition and Trade-Marks (2 Ed.), 1202, it is stated in the 1961 Cumulative Supplement to that book:

“The determination of common-law rights should not be governed by an arbitrary rule of thumb. The territory may be smaller or larger than one state, and as Judge Woolley in Jacobs v. Iodent Chemical Co., 41 F. 2d 637 (C. C. A. 3rd, 1930) pointed out, the majority of the Supreme Court apparently did not adopt Mr. Justice Holmes’ view. For other opinions disagreeing with the Holmes doctrine, see Food Fair Stores, Inc. v. Square Deal Market Co., Inc., 206 F. 2d 482 (App. D. C. 1953), aff’g 109 F. Supp. 637 (D. C. D. C. 1952); Federal Glass Co. v. Loshin, 126 F. Supp. 737 (D. C. Conn. 1954), aff’d 224 F. 2d 100 (C. A. 2nd 1955); Forzly v. American Distilling Co., 142 F. Supp. 210 (D.C.E.D.N.Y. 1956).”

In 3 Restatement of the Law, Torts, under Section 73'2, which is cited in the majority opinion as authority for the statement incorporated in paragraph two of the syllabus, the comment reads in part:

“The territorial limits within which the right to exclusive use of a trademark or trade name exists may be narrower than the territorial limits of the law that creates the right. * * * If the trade-mark or trade name is unknown in a particular territory and there is no probability that it will become known there, the use of a similar designation in that territory will cause no harm to the person having the trade-mark or trade name, since it cannot lead to mistaken association with that person. Such might he the case of the trade name of a grocery store in a small city in northern New York and a similar designation used for a grocery store in Brooklyn, N. Y. * * * Between the case of the local grocery store, at one extreme, and the nationally advertised house doing a nation-wide business, at the other, there is a progression of businesses with more or less extensive markets. In each ease the issue is whether, in the territory in which the similar designation is used, there are or are likely to be a considerable number of prospective purchasers of the goods or services in connection with which the trademark or trade name is used, who are likely to be misled by the similarity. ’ ’

In the conclusions of fact of the Court of Appeals, there is nothing tending to indicate even a possibility of plaintiff’s business being statewide. Paragraph one uses the words “sale of * * * insurance in Sandusky County * * * with offices * * * in said county.” Paragraph three refers to “employing * * * as * * * service mark in * # * plaintiff’s insurance business located in Sandusky County.” Paragraph four refers to “the promotion, expansion and conduct of plaintiff’s insurance business in and to areas substantially beyond the boundaries of said Sandusky County” but does not indicate how far beyond those boundaries. Paragraph six refers to defendant Nationwide having used the name “ ‘securance’ * * # in unfair competition with plaintiff’s insurance business in Sandusky County.” The conclusion of law finds plaintiff entitled to an injunction against defendant “in the operation of defendant’s insurance business in Sandusky County.” In the final order of the Court of Appeals there is a finding of use as a “service mark” in “plaintiff’s insurance business * * * in Sandusky County” and the injunction is “from using * * * in * * * defendant’s insurance business within * * * Sandusky County.”

Admittedly, there was no registration of the service mark until May 1960 and there had been substantial use by defendant Nationwide of that service mark in its business in other parts of Ohio before May 1960.

Admittedly, the extent of the right to a service mark depends upon the extent of the use or the probability of use in a territory for which the right to the mark is claimed. Here the plaintiff is a local insurance agency. The probability of plaintiff’s use of the mark very far from Sandusky County would be very remote. In fact, on the evidence in this record, there would be no such probability. Hence, under the law as stated in the syllabus of this case, defendant Nationwide, by using that mark in portions of Ohio substantially distant from Sandusky County, acquired a right to the use of the mark in those portions of Ohio.

Section 1329.55, Revised Code, at the time this mark was filed, read in part:

“A * * * service mark * * * shall not be registered if it

“(F) Consists of * * * a * * * service mark * * * previously used in this state by another

In May 1960, when plaintiff sought to register the service mark, that mark had been previously used by Nationwide throughout portions of Ohio as to which there was no reasonable possibility that plaintiff’s business would ever extend. Section 1329.56, Revised Code, required plaintiff’s application to have “(D) a statement that the applicant is the owner * * * and that no other person has the right to use such * * * service mark in the state of Ohio.”

In May 1960, when this application was filed, plaintiff knew that the mark had been used substantially by defendant Nationwide in portions of Ohio which would never possibly be reached by plaintiff’s business. Under the law as stated in the syllabus of this case, the right to the mark in parts of Ohio distant from Sandusky County was in defendant Nationwide and not in plaintiff when plaintiff filed that application.

Section 1329.62, Revised Code, indicates that there should be cancellation when “the registration was granted improperly” and that “a court of competent jurisdiction” may order such cancellation.

The extent to which plaintiff’s business might probably go territorially and therefore the territorial extent of the protection to be given plaintiff involved questions of fact. The Court of Appeals made findings on such facts when it determined that the territorial extent of protection to be given plaintiff should not be beyond Sandusky County. In order to give the greater protection that it is giving to plaintiff, this court would have to find as a matter of law that there was a probability of plaintiff’s business extending throughout the state of Ohio. There is nothing in the record, not even any allegation in the pleadings, to indicate any such probability or even any such possibility.

The effect of this decision is to give plaintiff, as the operator of a local insurance agency, a monopoly in this state in the use in the insurance business of a dictionary word, even though there has been and is no reasonable possibility of any use of that word by plaintiff in most of the territory of this state.

Matthias, J., concurs in the foregoing opinion by Taft, C. J.  