## Facts

- Philadelphia Storage Battery Company (Philadelphia Storage), a Pennsylvania corporation, manufactured and sold radios, radio tubes, batteries, and related electrical products under the brand and trade name “Philco.”
- Philadelphia Storage sold its Philco-branded products nationally and spent heavily to publicize the name, which became widely known and associated with plaintiff’s reputation and product quality.
- Morris Mindlin, a merchant, began selling razor blades using the designation “Philco.”
- The goods at issue were different (electrical products versus razor blades), and Philadelphia Storage was not selling razor blades at the time.
- Philadelphia Storage brought an action in equity in the New York Supreme Court (Special Term, New York County) seeking to enjoin Mindlin from using “Philco” on razor blades, alleging likely confusion as to connection or sponsorship and harm from unauthorized use of its well-known name.

## Issues

1. Whether the owner of a widely known, distinctive trade name and mark (“Philco”) may obtain an injunction against another’s use of the identical name on noncompeting goods (razor blades).
2. Whether use of a famous mark on different goods constitutes unfair competition where the use is likely to cause confusion as to affiliation or origin, or to appropriate the senior user’s reputation and goodwill.
3. Whether equity may restrain a junior user’s adoption of a famous mark when it places the senior user’s reputation beyond its control and may interfere with the senior user’s reasonable future business extension.

## Decision

- The court granted Philadelphia Storage injunctive relief.
- Mindlin was enjoined from using “Philco” in connection with razor blades.
- The court concluded that “Philco” was a valuable, well-known trade name and trade-mark identified in the public mind with plaintiff, and that defendant’s use on razor blades was likely to cause public confusion as to a connection with plaintiff and to trade on plaintiff’s goodwill.

## Legal Principles

- A trade-mark and trade name represent the seller’s reputation in the market; as the court explained, a merchant’s “mark is his authentic seal; by it he vouches for the goods which bear it; it carries his name for good or ill. If another uses it, he borrows the owner’s reputation, whose quality no longer lies within his own control.”
- Relief for unfair competition is not limited to situations of direct product competition; use of an identical or confusingly similar designation on different goods may be enjoined when the public may reasonably assume common source, sponsorship, or business connection.
- Equity protects not only against diverted sales, but also against the misappropriation of the senior user’s goodwill and the risk that the junior user’s goods or conduct will reflect on, and injure, the senior user’s reputation.
- A strong, widely recognized mark may receive broader protection where a junior user’s use would weaken the mark’s distinctiveness or preempt the senior user’s reasonable ability to extend its business into other lines without encountering another’s use of the same name.

## Conclusion

Philadelphia Storage Battery Company v. Mindlin held that Philadelphia Storage could stop a merchant from selling “Philco” razor blades even though Philadelphia Storage made radios and batteries rather than blades. Because “Philco” was a widely known and respected name identified with plaintiff, the court found that defendant’s identical use was likely to cause consumers to believe there was some connection or sponsorship, while allowing defendant to benefit from plaintiff’s established goodwill and placing plaintiff’s reputation outside plaintiff’s control; the court therefore enjoined further use of “Philco” on razor blades.


Philadelphia Storage Battery Company v. Mindlin, 163 Misc. 52, 296 N.Y.S. 176 (1937)