No.

162
United States Court of Appeals, Second Circuit

Polaroid Corp. v. Polarad Electronics Corp.

287 F.2d 492 (2d Cir. 1961)
Decided Feb 28, 1961

No. 162, Docket 26460. and other relief. Judge Rayfiel, in an opinion
reported in D.C. 1960, 182 F. Supp. 350,
Argued January 17, 1961.
dismissed both the claim and the counterclaims,
493 Decided February 28, 1961. *493 concluding that neither plaintiff nor defendant had
made an adequate showing with respect to
Donald L. Brown, Cambridge, Mass. (Silver,
confusion and that both had been guilty of laches.
Saperstein Barnett, and Isaac M. Barnett, New
Both parties appealed but defendant has
York City, Tracy R.V. Fike, Scarsdale, N.Y., and
withdrawn its cross-appeal. We find it unnecessary
Herbert S. Kassman, Cambridge, Mass., on the
to pass upon Judge Rayfiel's conclusion that
brief), for plaintiff-appellant.
defendant's use of Polarad does not violate any of
Morris Relson, New York City (Darby Darby and plaintiff's rights. For we agree that plaintiff's delay
Howard C. Miskin, New York City, on the brief), in proceeding against defendant bars plaintiff from
for defendant-appellee. relief so long as defendant's use of Polarad
remains as far removed from plaintiff's primary
Before MEDINA, FRIENDLY and SMITH,
fields of activity as it has been and still is.
Circuit Judges.
The name Polaroid was first adopted by plaintiff's
FRIENDLY, Circuit Judge. 494 predecessor in 1935. It has *494 been held to be a
valid trademark as a coined or invented symbol
Plaintiff, Polaroid Corporation, a Delaware and not to have lost its right to protection by
corporation, owner of the trademark Polaroid and becoming generic or descriptive, Marks v.
holder of 22 United States registrations thereof Polaroid Corp., D.C.D.Mass. 1955, 129 F. Supp.
granted between 1936 and 1956 and of a New 243. Polaroid had become a well known name as
York registration granted in 1950, brought this applied to sheet polarizing material and products
action in the Eastern District of New York, made therefrom, as well as to optical desk lamps,
alleging that defendant's use of the name Polarad stereoscopic viewers, etc., long before defendant
as a trademark and as part of defendant's corporate was organized in 1944. During World War II,
title infringed plaintiff's Federal and state plaintiff's business greatly expanded, from
trademarks and constituted unfair competition. It $1,032,000 of gross sales in 1941 to $16,752,000
sought a broad injunction and an accounting. in 1945, due in large part to government contracts.
Defendant's answer, in addition to denying the Included in this government business were three
allegations of the complaint, sought a declaratory sorts on which plaintiff particularly relies, the sale
judgment establishing defendant's right to use of Schmidt corrector plates, an optical lens used in
Polarad in the business in which defendant was television; research and development contracts for
engaged, an injunction against plaintiff's use of guided missiles and a machine gun trainer, both
Polaroid in the television and electronics fields, involving the application of electronics; and other

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 Polaroid Corp. v. Polarad Electronics Corp. 287 F.2d 492 (2d Cir. 1961)

research and development contracts for what save to draw a further credit report on defendant,
plaintiff characterizes as "electro-optical devices although defendant's sales had grown from a
employing electronic circuitry in combination nominal amount to a rate of several hundred
with optical apparatus." In 1947 and 1948 thousand dollars a year, and the report related, as
plaintiff's sales declined to little more than their had the previous one, that defendant was engaged
pre-war level; the tremendous expansion of "in developing and manufacturing equipment for
plaintiff's business, reaching sales of $65,271,000 radio, television and electronic manufacturers
in 1958, came after the development of the Land throughout the United States." In October, 1951,
camera in 1948. defendant, under its letterhead, forwarded to
plaintiff a letter addressed to "Polarad Electronics
Defendant was organized in December, 1944.
Corp." at defendant's Brooklyn address, inquiring
Originally a partnership called Polarad Electronics
in regard to "Polaroid material designed for night
Co., it was converted in 1948 into a New York
driving"; there was no protest by plaintiff. In
corporation bearing the name Polarad Television
1953, defendant applied to the United States
Corp., which was changed a year later to Polarad
Patent Office for registration of its trademark
Electronics Corp. Its principal business has been
Polarad for radio and television units and other
the sale of microwave generating, receiving and
electronic devices; in August, 1955, when this
measuring devices and of television studio
application was published in the Official Gazette
equipment. Defendant claimed it had arrived at the
of the Patent Office, plaintiff for the first time took
name Polarad by taking the first letters of the first
action by filing a notice of opposition, which was
and last names of its founder, Paul Odessey, and
overruled by the Examiner in April, 1957. Still
the first two letters of the first name of his friend
plaintiff delayed bringing suit until late 1956.
and anticipated partner, Larry Jaffe, and adding
Through all this period defendant was expending
the suffix "rad," intended to signify radio;
considerable sums for advertising and its business
however, Odessey admitted that at the time he had
495 was growing — employees increasing *495 from
"some knowledge" of plaintiff's use of the name
eight in the calendar year 1945 to 530 in the year
Polaroid, although only as applied to glasses and
ended June 30, 1956, fixed assets from $2,300 to
polarizing filters and not as to electronics. As
$371,800, inventories from $3,000 to $1,547,400,
early as November, 1945, plaintiff learned of
and sales from $12,000 to $6,048,000.
defendant; it drew a credit report and had one of
its attorneys visit defendant's quarters, then two Conceding that the bulk of its business is in optics
small rooms; plaintiff made no protest. By June, and photography, lines not pursued by defendant,
1946, defendant was advertising television plaintiff nevertheless claims to be entitled to
equipment in "Electronics" — a trade journal. protection of its distinctive mark in at least certain
These advertisements and other notices with portions of the large field of electronics. Plaintiff
respect to defendant came to the attention of relies on its sales of Schmidt corrector plates, used
plaintiff's officers; still plaintiff did nothing. In in certain types of television systems, first under
1950, a New York attorney who represented government contracts beginning in 1943 and to
plaintiff in foreign patent matters came upon a industry commencing in 1945; on its sale, since
trade show display of defendant's television 1946, of polarizing television filters, which serve
products under the name Polarad and informed the same function as the color filters that
plaintiff's house counsel; the latter advised defendant supplies as a part of the television
plaintiff's president, Dr. Land, that "the time had apparatus sold by it; and, particularly, on the
come when he thought we ought to think seriously research and development contracts with the
about the problem." However, nothing was done government referred to above. Plaintiff relies also

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 Polaroid Corp. v. Polarad Electronics Corp. 287 F.2d 492 (2d Cir. 1961)

on certain instances of confusion, predominantly other variables into account. American Law
communications intended for defendant but Institute, Restatement of Torts, §§ 729, 730, 731.
directed to plaintiff. Against this, defendant asserts Here plaintiff's mark is a strong one and the
that its business is the sale of complex electronics similarity between the two names is great, but the
equipment to a relatively few customers; that this evidence of actual confusion, when analyzed, is
does not compete in any significant way with not impressive. The filter seems to be the only
plaintiff's business, the bulk of which is now in case where defendant has sold, but not
articles destined for the ultimate consumer; that manufactured, a product serving a function similar
plaintiff's excursions into electronics are to any of plaintiff's, and plaintiff's sales of this
insignificant in the light of the size of the field; item have been highly irregular, varying, e.g.,
that the instances of confusion are minimal; that from $2,300 in 1953 to $303,000 in 1955, and
there is no evidence that plaintiff has suffered 496 $48,000 in 1956.1 *496
either through loss of customers or injury to
1 Even the high figure, in 1955, amounted to
reputation, since defendant has conducted its
little more than 1% of plaintiff's business.
business with high standards; and that the very
Plaintiff also cites defendant's sale of
nature of defendant's business, sales to
bicycle headlights and other consumer
experienced industrial users and the government,
products and defendant's patents for a radio
precludes any substantial possibility of confusion.
automatic vehicle guidance system and an
Defendant also asserts plaintiff's laches to be a bar. electronic auto headlight dimmer.
However, the former business, conducted
The problem of determining how far a valid
through a separate division, has been
trademark shall be protected with respect to goods
abandoned, and exploitation of the patents
other than those to which its owner has applied it,
has not been instituted. Our decision is not
has long been vexing and does not become easier
to be understood as dealing with plaintiff's
of solution with the years. Neither of our recent
rights if defendant should resume, or begin,
decisions so heavily relied upon by the parties, activity along any of these lines.
Harold F. Ritchie, Inc. v. Chesebrough-Pond's,
Inc., 2 Cir., 1960, 281 F.2d 755, by plaintiff, and If defendant's sole business were the manufacture
Avon Shoe Co., Inc. v. David Crystal, Inc., 2 Cir., and sale of microwave equipment, we should have
1960, 279 F.2d 607 by defendant, affords much little difficulty in approving the District Court's
assistance, since in the Ritchie case there was conclusion that there was no such likelihood of
confusion as to the identical product and the confusion as to bring into play either the Lanham
defendant in the Avon case had adopted its mark Act, 15 U.S.C.A. § 1114(1), or New York General
"without knowledge of the plaintiffs' prior use," at Business Law, § 368-b, or to make out a case of
page 611. Where the products are different, the unfair competition under New York decisional
prior owner's chance of success is a function of law, see Avon Shoe Co. v. David Crystal, Inc.,
many variables: the strength of his mark, the supra, at page 614, footnote 11. What gives us
degree of similarity between the two marks, the some pause is defendant's heavy involvement in a
proximity of the products, the likelihood that the phase of electronics that lies closer to plaintiff's
prior owner will bridge the gap, actual confusion, business, namely, television. Defendant makes
and the reciprocal of defendant's good faith in much of the testimony of plaintiff's executive vice
adopting its own mark, the quality of defendant's president that plaintiff's normal business is "the
product, and the sophistication of the buyers. Even interaction of light and matter." Yet, although
this extensive catalogue does not exhaust the television lies predominantly in the area of
possibilities — the court may have to take still electronics, it begins and ends with light waves.
The record tells us that certain television uses

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 Polaroid Corp. v. Polarad Electronics Corp. 287 F.2d 492 (2d Cir. 1961)

were among the factors that first stimulated Dr. and these became known to both at the same time,
Land's interest in polarization, see Marks v. a defendant's demand for affirmative relief may be
Polaroid Corporation, supra, 129 F. Supp. at page logically inconsistent with a claim on his part that
246, plaintiff has manufactured and sold at least the plaintiff is barred by laches from making a
two products for use in television systems, and similar demand, see, e.g., Steenberg v. Kaysen,
defendant's second counterclaim itself asserts 1949, 229 Minn. 300, 39 N.W.2d 18; Charleston
likelihood of confusion in the television field. We Library Society v. Citizens Southern Nat. Bank,
are thus by no means sure that, under the views 1942, 201 S.C. 447, 23 S.E.2d 362, although even
with respect to trademark protection announced by in such a case it would seem that the effect was
this Court in such cases as Yale Electric Corp. v. 497 merely evidentiary and that a defendant ought *497
Robertson, 2 Cir., 1928, 26 F.2d 972 [locks vs. not be precluded from taking alternative positions,
flashlights]; L.E. Waterman Co. v. Gordon, 2 Cir., F.R.Civ.Proc. 8(e)(2), 28 U.S.C.A. Moreover, here
1934, 72 F.2d 272 [mechanical pens and pencils the circumstances as to the two parties are not
vs. razor blades]; Triangle Publications, Inc. v. parallel. Plaintiff seeks to prevent defendant's use
Rohrlich, 2 Cir., 1948, 167 F.2d 969, 972 of Polarad in the very areas where that name had
[magazines vs. girdles]; and Admiral Corp. v. been used to plaintiff's knowledge since 1946 or at
Penco, Inc., 2 Cir., 1953, 203 F.2d 517 [radios, least since 1950. In contrast, defendant makes no
electric ranges and refrigerators vs. sewing objection to plaintiff's use of Polaroid in the areas
machines and vacuum cleaners], plaintiff would of optics, and photography which, so far as
not have been entitled to at least some injunctive defendant knew until the Patent Office
relief if it had moved with reasonable promptness. interference in 1955, were the only fields where
However, we are not required to decide this since plaintiff employed it. So far as our research has
we uphold the District Court's conclusion with disclosed, the statement in Southern Pine has not
respect to laches. been applied by Federal courts in trademark and
unfair competition cases; on the contrary, where
Plaintiff endeavors to answer that claim on three
both sides failed to press their claims after
grounds: (1) That defendant is barred from
knowledge of the facts, this Court has reached the
advancing the claim because defendant sought
conclusion, seemingly far more sensible, that both
affirmative relief; (2) that the doctrine of laches
were barred, rather than that defendant had waived
does not apply in trademark and unfair
the defense by seeking cross-relief to which it was
competition cases insofar as the complaint seeks
not entitled, Landers, Frary Clark v. Universal
an injunction rather than damages; and (3) that the
Cooler Corp., 2 Cir., 1936, 85 F.2d 46. Of the state
defense is not made out on the facts. We find no
cases cited by appellant only Bagby v. Blackwell,
merit in any of these contentions.
1948, 240 Mo.App. 574, 211 S.W.2d 69, lies in the
(1) Plaintiff's first position rests upon a remark, trademark and unfair competition field; we do not
quoted in the margin,2 given as an alternative find it persuasive. The statement in Southern Pine
ground of decision in Southern Pine Lumber Co. seems to us to have been undermined even on its
v. Ward, 1908, 208 U.S. 126, 140-141, 28 S.Ct. own facts by the provision in F.R.Civ.Proc. 8(e)(2)
239, 246, 52 L.Ed. 420. Mr. Justice White does that "A party may also state as many separate
not explain what "in the nature of things" claims or defenses as he has regardless of
prevented the defendants there from asserting both consistency * * *" A fortiori do we deem the
that the attachment under which their title arose statement inapplicable where, as here, the plaintiff
was valid and that in any event plaintiff was had long known the circumstance underlying its
barred by laches from attacking it. To be sure, demand for relief but defendant had not known
when both parties are aggrieved by the same facts those relating to its more limited counterclaim.

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 Polaroid Corp. v. Polarad Electronics Corp. 287 F.2d 492 (2d Cir. 1961)

2 "Besides, the contention as to laches when "a newcomer invades another's market by
disregards the considerations which in the the use of the other's mark," since then "every sale
nature of things must arise, when it is is a separate wrong." "If however the question
borne in mind that the defendants, who
comes up, not when the newcomer is actually
claimed title under the attachment
competing in the owner's market, but * * * is
proceedings, did not rest content with
selling goods which the owner has never sold,
defending their alleged title, but made that
though they are like enough to make people think
title the base of an assertion of right to
him their source, the determining considerations
affirmative relief, since they substantially,
by cross-petition, invoked such relief to
are different. The owner's only interest in
maintain the validity of their title, and to preventing such a use of his mark is because he
obtain a cancellation of the trust deed upon may wish to preempt the market for later
which Ward relied." exploitation, or not to expose his reputation to the
hazard of the newcomer's business practices, or
(2) For its second ground appellant relies on the both * * * Here, as often, equity does not seek for
statement in Menendez v. Holt, 1888, 128 U.S. general principles, but weighs the opposed
514, 523, 9 S.Ct. 143, 145, 32 L.Ed. 526, that interests in the scales of conscience and fair
"Mere delay or acquiescence cannot defeat the dealing * * * The owner's rights in such appendant
remedy by injunction in support of the legal right, markets are easily lost; they must be asserted
unless it has been continued so long, and under 498 early, lest *498 they be made the means of reaping
such circumstances, as to defeat the right itself." It a harvest which others have sown."
contends that such defeat can come only from
conduct, such as in Landers, Frary Clark v. (3) The previous summary of the facts shows how
Universal Cooler Corp., supra, 85 F.2d at page 49, far plaintiff came from meeting this rigorous test.
giving a defendant justification for concluding that Plaintiff seeks to excuse its early inactivity on the
plaintiff had no objection to defendant's using its ground that defendant's sales were small. But that
name. See McLean v. Fleming, 1877, 96 U.S. 245, is the very time when the owner of a mark ought
24 L.Ed. 828. However, the portion of the opinion forcefully to claim protection; "the scales of
in Saxlehner v. Eisner Mendelson Co., 1900, 179 conscience and fair dealing" will tip far more
U.S. 19, 21 S.Ct. 7, 45 L.Ed. 60, also relied on by readily for a plaintiff when a defendant will suffer
appellant, which upheld the defense of laches with little disadvantage by changing to another name.
respect to the word "Hunyadi," indicated that See Valvoline Oil Co. v. Havoline Oil Co.,
Menendez v. Holt does not go so far as appellant D.C.S.D.N Y 1913, 211 F. 189, 195. Moreover,
claims, even when a portion of the marks and the even if plaintiff's inaction in 1945 and 1946 could
products are identical. We need not explore just be excused on the basis that defendant's activities
where the boundaries lie in such a case, for the were de minimis and that plaintiff might
Landers, Frary Clark opinion itself and, even more reasonably have expected defendant to fall by the
clearly, Emerson Electric Manufacturing Co. v. wayside, an issue which we do not decide, the
Emerson Radio Phonograph Corp., 2 Cir., 1939, situation had surely changed by the year ended
105 F.2d 908, and Dwinell-Wright Co. v. White June 30, 1951, when defendant made $192,000 in
House Milk Co., 2 Cir., 1943, 132 F.2d 822, 824- catalog sales and $356,000 in sales under military
825, show the doctrine has no such reach as contracts. Plaintiff would have us disregard the
claimed when, as here, the goods are different. latter on the issue of its laches — just why we are
The distinctions are developed in Judge Learned not told — although it relies heavily on confusion
Hand's classic opinion in Dwinell-Wright, where by Federal purchasing agencies as part of its case
he explained that the Menendez rule applies only on the merits. Plaintiff concedes that by 1952

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 Polaroid Corp. v. Polarad Electronics Corp. 287 F.2d 492 (2d Cir. 1961)

defendant "had expanded its business from the

design and construction of special apparatus on
order, to include the manufacture and sale of
television and other devices operable throughout
the entire radio frequency band"; but plaintiff
waited another four years before bringing suit. We
find nothing to support plaintiff's assertion that
defendant has further encroached on plaintiff's
field since 1953; to be sure, defendant has trebled
its business but not by moving away from its
traditional area and into plaintiff's. As said in
Valvoline Oil Co. v. Havoline Oil Co., supra, at
page 195, "it cannot be equitable for a well-
informed merchant with knowledge of a claimed
invasion of right, to wait to see how successful his
competitor will be and then destroy with the aid of
a court decree, much that the competitor has
striven for and accomplished — especially in a
case where the most that can be said is that the
trade-mark infringement is a genuinely debatable
question." True, what the court regarded as
debatable there was the confusing qualities of the
names rather than, as here, the identity of the
product; but the principle applies with at least the
same force. If defendant should move into new
territory more closely related to optics and
photography, different considerations as to laches
as well as on the merits will, of course, apply.

Judgment affirmed.

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Polaroid Corp. v. Polarad Electronics Corp. 287 F.2d 492 (2d Cir. 1961)