United States District Court, Southern District of California, Central Division
December 9, 1952
STE. PIERRE SMIRNOFF, FLS., INC.
HIRSCH ET AL.
The opinion of the court was delivered by: Tolin, District Judge.
The Complaint alleges that defendants' use of the trade-mark
"Smarkoff" for vodka infringes the following registered
trade-marks owned by plaintiff:
The words "Ste Pierre Smirnoff
Fls" and a picture of a crown Registration No. 309,865
The words "Pierre Smirnoff" Registration No. 326,253
Picture of a shield Registration No. 328,594
The words "Ste Pierre Smirnoff
Fls" and a picture of a crown Registration No. 330,899
The word "Smirnoffka" Registration No. 394,058
The word "Smirnoff" Registration No. 513,428
Unfair competition is also charged.
Plaintiff is a Connecticut corporation, organized January
12, 1939. It is the successor to a New York corporation of the
same name which was organized September 19, 1933.
Defendants are citizens and residents of California.
In 1818 a Mr. Pierre Smirnoff began to make and sell vodka
in Russia under his surname "Smirnoff". The business was
continued in Russia by his descendants under the "Smirnoff"
name. The "Smirnoff" vodka attained a considerable reputation
After the Bolshevik revolution the owners of the "Smirnoff"
business fled to Poland where they established a firm which
did business in Poland, France and elsewhere.
In August 1933, in consideration of a lump sum, the Polish
firm sold its rights for the United States of America to its
trade-marks, formulas and processes to Mr. Rudolph Kunett. Mr.
Kunett's rights were later transferred to the New York
predecessor of plaintiff.
Beginning in 1934, this predecessor New York corporation
began to sell "Smirnoff" vodka nationally, including sales in
The New York corporation secured Registration No. 330,899 on
December 17, 1935, under the former Trade-Mark Act of 1905,
which was replaced on July 5, 1947 by the Lanham Trade-Mark
Act of July 5, 1946 which went into effect on July 5, 1947, 15
U.S.C.A. § 1051 et seq.
The registered mark No. 330,899 displayed the corporate name
of the New York corporation, the picture of a crown, and the
pictures of four medals granted for the original Russian vodka
in 1877, 1882, 1886 and 1889. It also registered "Pierre
Smirnoff" as No. 326,253 on July 16, 1935 under the Trade-Mark
Act of March 19, 1920.
When plaintiff became the successor to the said corporation,
it secured an additional registration under the Act of
February 20, 1905. This registration was No. 394,058, issued
March 17, 1942 for "Smirnoffka".
From the beginning the domestic vodka of plaintiff and its
predecessor had been plainly marked and advertised as being of
During World War II defendants manufactured a vodka which
they sold under a trade-mark and name dissimilar to those
involved in this litigation. It enjoyed modest success in a
firmly established market wherein defendants also sold other
alcoholic beverages. During the war years there was difficulty
in obtaining high-grade distilling material and some of
defendants' established trade complained of a falling off of
good-will for defendants' vodka because of inferiority of the
product attributable to war conditions. After defendants
returned to their prior standard of product, they sought to
recapture such of the vodka market they had lost and to
re-establish complete good will with such as they had
retained. In aid of this project they renamed one of their
brands "Smarkoff". Defendants' testimony is that they coined
the name "Smarkoff" by combining parts of the names of two
Russian cities. As compared to plaintiff's open, extensive and
exclusive claim of exclusive right, defendants have used the
name "Smarkoff" only since May 25, 1948. It is one of several
brand names under which defendants' vodka is sold. It is
conceded that "Smirnoff" is a family name and while not
conceded by defendants, it is established that plaintiff is
the rightful successor of the original users. "Smarkoff" is a
Plaintiff has long advertised its product in magazines of
national circulation and has induced hotels to feature the
"Smirnoff" vodka on menus. Defendants did no substantial
advertising of their "Smarkoff" vodka. They did no magazine
advertising but did procure the listing of their product in
catalogs and publications which circulated only in the trade.
They relied upon the solicitation of wholesalers, jobbers,
etc. by their salesmen who also sold defendants' full line of
liquor. They relied largely on the already established good
will of their firm. The evidence is not clear when plaintiff
first learned of defendants' use of the name "Smarkoff".
The Lanham Act*fn1 went into effect on July 5, 1947 and
defendants began to use "Smarkoff" on May 25, 1948 after
plaintiff had registered its several marks which include the
The evidence is undisputed that plaintiff notified
defendants on April 25, 1951 that it deemed "Smarkoff" an
infringement of its right and called upon defendants to
desist. It also is undisputed that although "Smarkoff" is a
coined word, the "Smark" portion of it imparts to the entire
word a meaning so odious to a person familiar with the Russian
language, that it is not an appropriate name for a Russian
beverage. It is not difficult to find, and it would be
extremely difficult not to find, that the trade-mark
"Smarkoff" as viewed by the conventional retail purchaser, is
so similar to "Smirnoff" as to amount to a colorable imitation
of a registered mark, likely to cause confusion or mistake or
to deceive purchasers as to the source of the contents of the
bottles so labeled. This is prohibited by the Lanham Act, 15
U.S.C.A. § 1114(1)(a), which forbids:
"* * * use, without the consent of the
registrant, any reproduction, counterfeit, copy,
or colorable imitation of any registered mark in
connection with the sale, offering for sale, or
advertising of any goods or services on or in
connection with which such use is likely to cause
confusion or mistake or to deceive purchasers as to
the source of origin of such goods or
services; * * *." (Emphasis supplied.)
For a discussion of the principles applied by courts in
determining whether marks are confusingly similar, see N.K.
Fairbank Co. v. Luckel, King & Cake Soap Co., 9 Cir., 102 F.
327; and American Distilling Company v. Bellows & Company,
Inc., 102 Cal.App.2d 9, 226 P.2d 751.
Plaintiff has not proved any pecuniary loss and very little
actual confusion but it has proved a high potential for
confusion and the climate and ingredients for a free ride by
defendants upon the expensively established and nurtured name
and good will of plaintiff's product and the trade-marks
protective of its name. Plaintiff is old in the field,
defendants newcomers. In Stork Restaurant, Inc. v. Sahati, 9
Cir., 166 F.2d 348, at page 361, it was said:
"This thought that a newcomer has an `infinity'
of other names to choose from without infringing
upon a senior appropriation runs through the
decisions like a leitmotiv."
Defendants contend that plaintiff is without a protective
right because it is a mere licensee while the original
"Smirnoff" concern still operates abroad. The evidence shows
that plaintiff is the owner by virtue of a purchase for a lump
sum of the entire exclusive and irrevocable right in the
business, good will of the business, and the name "Smirnoff"
within the United States. It has been repeatedly held over a
long period of time that the grant of an exclusive and
irrevocable right to use a mark in a designated territory is
an assignment and not a mere license. The territory here is as
broad as that protected by the Lanham Act. It is the entire
United States, its possessions and territories.
See Scandinavia Belting Co. v. Asbestos & Rubber Works of
America, Inc., 2 Cir., 257 F. 937, at page 955, wherein the
"* * * one who has the exclusive right to use a
trade-mark in the United States has such a
special ownership therein as entitles him to its
registration during the period of his exclusive
use. * * *"
See Griggs, Cooper & Co. v. Erie Preserving Co., C.C.,
W.D.N.Y., 131 F. 359, in which it was held that an exclusive
license under trade-marks is not "* * * a mere license, but
assigns the exclusive ownership and good will in the
trade-marks, * * *."
The question next arises as to the scope of relief to be
granted to plaintiff. It seeks damages, an accounting of
and an injunction. It has not offered evidence of substantial
past confusion or loss of business. It has shown past and
present invasion of its rights, a threat of continuance
thereof, and a reasonable certainty of confusion of goods in
the future. The evidence shows that plaintiff's business has
increased beyond mere simple prosperity. During the past
twelve years plaintiff did $14,000,000 worth of "Smirnoff"
business in vodka sales. All but about $275,000 of those sales
took place in the years 1948 to 1952. In the Los Angeles Area
alone, sales of "Smirnoff" vodka have increased from 3,040
cases in 1946 (the first full post-war year) to 107,670 cases
during the first eight months of the current year. In the full
year 1951, 120,952 cases were sold in this immediate area. It
complains that defendants have also prospered and attributes
that prosperity to the appropriation by defendants of the name
"Smarkoff" in infringement of plaintiff's trade-marks. This it
has not proved. The good will of vodka as a beverage is
rapidly increasing in the United States. The setting is such
that unless restrained, defendants will continue a course of
conduct reasonably certain to bring about the confusion in
customer minds which equity will seek to inhibit by
injunction. This justifies the full injunctive relief sought.
Defendants had a substantial business in vodka before they
simulated plaintiff's trade-mark. They had made substantial
sales to regular customers, purveying their vodka under a name
dissimilar to "Smarkoff". When the misfortunes of war and the
impossibility of manufacturing to pre-war standard during the
war brought about a deterioration of their product, they
changed the name contemporaneously with their ability to again
deliver vodka according to their former standard of quality.
They sold to the same customers who were willing to continue
to deal with them even though the good will of their
particular product had so suffered that a change of brand name
was necessary. It is impossible for the Court to determine how
much of defendants' increase in vodka sales has resulted from
a general popularizing of the beverage, how much to the
natural increase of business with those who already accorded
defendants substantial good will, and how much has amounted to
a free ride upon the good will of plaintiff. Among these
uncertainties there is the reasonable certainty that strong
likelihood of confusion of products by reason of similarity of
names exists. In view of the uncertainties, the judgment must
limit plaintiff to its clear right to injunctive relief
against further use of the name "Smarkoff" with respect to
vodka, and must deny plaintiff the conventional remedy of an
accounting for profits because of the impossibilities which
would stultify any master asked to hear an accounting.
Defendants have positioned themselves for a free ride but, to
the present time, the Court cannot say that they have done
more than create a situation in which confusion of product is
bound to occur if they be permitted to continue use of the
Plaintiff will submit findings and an appropriate