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Trade Name Infringement

Blue Ribbon Feed Co., Inc. v. Farmers Union Cent. Exchange, Inc., 731 F.2d 415 (Cir. 1984) is a case in which a company vindicated its rights in its trade name and demonstrated that, under certain conditions, the user of a trade name is entitled to protection against infringement of that trade name in the same manner and to the same extent as the user of a trademark.

In 1951, the Sather family purchased a farm products retail store in Wisconsin.  The Sathers changed the name of the store to Blue Ribbon Feed Company (hereinafter “BRF”) and commenced selling agricultural products, specifically dairy animal feeds.  Some of these products were sold under the store’s “Blue Ribbon” label.

Farmers Union Central Exchange, Inc. (hereinafter “CENEX”) was selling farm products in thirteen states across the northern tier of the United States through a network of cooperatives, 112 of which were located in Wisconsin.  In 1968, CENEX began marketing certain of its products under the name “Blue Ribbon”, a designation it chose to signify products of the highest quality.

The Sathers became aware that CENEX was marking products under the name “Blue Ribbon” in 1978.  Two years later, the Sathers brought suit in Wisconsin seeking relief for CENEX’s infringement of the “Blue Ribbon” trade name under Wisconsin law.  CENEX removed the case to federal court.  That federal court determined that CENEX had profits from the sales of Blue Ribbon products of $114,999, which it awarded to BRF as damages, and issued an injunction prohibiting CENEX for selling, distributing, or advertising any of its animal feed products under the name “Blue Ribbon” within a twenty-mile radius of the BRF store.  CENEX appealed this judgment and BRF cross-appealed (contending that the monetary and injunctive relief were not adequate).

The United States Court of Appeals for the Seventh Circuit heard the appeal.  CENEX argued that BRF merely asserted rights in its trade name and that a trade name is legally distinct from a trademark.  The Seventh Circuit Court disagreed with CENEX’s argument and cited the Restatement (Second) of Torts, Section 717, which the Supreme Court of Wisconsin expressly adopted in a 1978 case as the common law of Wisconsin: “The weight of the authority … supports the proposition that if a tradename has acquired distinctiveness, or secondary meaning, and thus identifies a particular business entity, the user of such tradename is entitled to protection against infringement of that tradename in the same manner and to the same extent as the user of a trademark which has acquired secondary meaning”.  The Seventh Circuit Court continued by citing the said Wisconsin Supreme Court case, which stated that the mere use of a trade name does not lead automatically to exclusive rights in that name but, rather, “it is necessary for the plaintiff to show that the effect of the use has been to identify the particular business entity and to distinguish it from others and that the actor’s use is likely to cause confusion and deception” to be entitled to prevent others from using a name.

The Seventh Circuit Court held that the federal district court property found that (1) “Blue Ribbon” identified BRF’s business and distinguished it from others and (2) CENEX’s later use of the name “Blue Ribbon” was likely to cause confusion and deception, quoting again from the Restatement (Second) of Torts Section 717: “an actor infringes another’s trade name if he uses the name in a manner likely to ‘cause prospective purchasers to believe that the actor’s goods or services emanate from the same source as the other’s goods or services’”.  It also held that the district court correctly ordered CENEX to pay BRF $114,999 with interest and correctly enjoined CENEX from selling, distributing, or advertising any of its animal feed products under the “Blue Ribbon” name within a twenty-mile radius of the BRF store.

If you need assistance determining whether your company may be infringing on the trade name rights of another company, counsel as to how to avoid trade name infringement before the formation of your company, or assistance determining whether your company has become the victim of trade name infringement, please contact me immediately.  If I cannot help you, I will do my best to connect you with somebody who can.

Matthew T. Kincaid

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