This case brings up for decision unique issues in the law of trademarks, especially the question whether numbers may become common law trademarks. Defendant Gardner Bender, Inc. (“Gardner”) appeals from an order dated January 10, 1979 of the United States District Court for the Eastern District of Wisconsin, Honorable John W. Reynolds, Chief Judge, which granted plaintiff Ideal Industries, Inc.’s (“Ideal”) motion for a preliminary injunction. Gardner was enjoined from selling any electrical connectors bearing the numbers claimed by Ideal to be its trademarks and using the numbers on the labels of cartons or on sales literature. Gardner also was ordered to recall cartons and connectors in the hands of distributors once modified cartons and connectors become available. The district court stayed enforcement of its order on January 15, 1979; this court continued the stay pending resolution of Gardner’s appeal.
Ideal is a Delaware corporation with its principal place of business in Sycamore, Illinois. Gardner is a Wisconsin corporation which has its principal place of business in Glendale, Wisconsin. Both parties are in the business of making and selling various electrical products. The district court’s subject matter jurisdiction rested on the diversity of citizenship of the parties. 28 U.S.C. § 1332 (1976).
I.
Understanding of the present controversy requires a brief review of the past. Early in the 1930’s Ideal began to market the product now at issue: barrel-shaped, screw-on electrical connectors. These connectors have a hard outer shell made of an electrically-insulating material which is molded around a coiled spring. They connect two or more wires securely when they are screwed onto the bared ends of the grouped wires. Such connectors are usually sold in a range of sizes. Ideal has sold, and continues to sell, a range of six sizes under the trademark “Wire Nut”.
Beginning in 1936, Ideal adopted an arbitrary series of numbers to designate the different sizes. The number “71” was applied to the smallest, followed by numbers 72, 73, 74 and 76. There are no records which show whether these numbers corresponded to some characteristic of the connectors other than relative size. In 1946, Ideal began to make these connectors with a Bakelite rather than phenolic shell and added a capital “B” to each of the numbers to indicate the new material. The connectors were identified as 71B, 72B, 73B, 74B and 76B (hereinafter referred to as the “71B series”). A sixth, larger size was added in 1966 and was designated “78B”. Although Ideal has long used a different material than Bakelite, the 71B series numbers have continued to appear on the connectors, on carton labels, in advertising, and in catalogs since 1946.
In 1965 or 1966, Ideal redesigned the cartons, and their labels, in which the connectors were sold. Besides modernizing the look of the label, Ideal increased the size of the 71B series designations so that they became the largest symbol on the labels. Ideal claims that this change was made because the company realized that the 71B series numbers had come to stand for the source of the connector. 1 The labels continued to carry the registered trademarks
*1021 “Ideal”, “Wire Nut” and a registered crow’s-foot design logo representing Ideal. Underneath the 71B series designation appeared the word “model” in parentheses. In 1969 the connectors and carton labels were color-coded to indicate size differences but this change had no effect on the label design or the relative prominence of the 71B series designations.
The 71B series numbers appear on the tops of the connectors themselves to satisfy the requirements of Underwriters Laboratories, Inc. (“UL”) and the Canadian Standards Association (“CSA”) that electrical connectors be marked with a type or catalog-number designation. The imprints of UL and CSA also appear on the top of Ideal’s approved connectors, along with the trademark “Ideal” and numbers which indicate the range of wire sizes which the connector can accommodate. All these markings satisfy the CSA and UL requirements.
Ideal is the dominant firm in the market for barrel-shaped, fixed-spring electrical connectors. Its chief competitors are Hi-Scale Products Corp., Inc. (“Hi-Scale”), ITT Holub Industries (“Holub”), Eagle Electric Mfg. Co. (“Eagle”), and Gardner. Holub sells its connectors under its trademark “Hi” and the size designation series “No. Hi-3”, “No. Hi-4” and “No. Hi-6”. Beginning around 1972 Holub’s carton labels displayed a 71B series number along with the word “size” in a blue circle to indicate the size comparability between Ideal’s and Ho-lub’s products. Holub’s own number series was still the most prominent label designation and continued to appear on the connectors themselves.
Prior to 1975, Hi-Scale’s labels bore Hi-Seale’s own series numbers, such as “HS-18” or “HS-7” as well as the appropriate 71B series number in smaller print adjacent to the word “size”. The connectors displayed Hi-Scale’s own series designations. In 1976, after Gardner entered the market, the 71B series number began to appear on Hi-Scale labels in approximately the same size print as the Hi-Scale series numbers. The 71B series numbers were still accompanied by the adjacent words “Approx. Size”.
This case arises from the entry of Gardner into the electrical connector market in 1976. Instead of creating its own series numbers, Gardner adopted the 71B series as the sole type designation for its connectors. In addition, the catalog numbers for each size are similar. While Ideal uses the catalog number “30-073” to represent its 73B connector, Gardner uses “10-073” to represent its own 73B connector. Since Gardner also adopted’ Ideal’s color coding scheme for the connectors, the only way to tell a Gardner connector from one made by Ideal is the presence of a “GB” in place of “IDEAL” on the top of the connectors. All else on the connector is the same. The Gardner carton labels are the same color as Ideal’s, although they bear Gardner’s “GB” trademark prominently, in addition to Gardner’s distinctive logo. The word “style” appears next to the 71B series number on the carton labels.
Ideal commenced this action in May 1976, charging that Gardner was engaged in unfair competition and common law trademark infringement. The complaint sought preliminary and permanent injunctive relief and damages. Ideal filed its brief and exhibits in support of its motion for a preliminary injunction in January, 1977. Not until November 30, 1978 did the district court hold a hearing on the motion. Ideal relied only on its claim that Gardner was infringing its alleged common law trademark rights in the 71B series; the unfair competition claim was not pressed as support for the preliminary injunction. The motion was considered on the affidavits, deposition transcripts and exhibits submitted by the parties as well as the pleadings and the arguments made at the hearing. The district court expressly absolved Ideal of fault for the long delay between the filing of the motion and the hearing. The district court rendered its decision and order in favor of Ideal on January 10,1979; Gardner appeals. We affirm with modifications and remand for further proceedings.
*1022 II.
The scope of review at this stage is quite restricted. An order granting a preliminary injunction in a trademark case “will not be set aside by a Court of Appeals unless it is contrary to the principles of equity or the result of improvident exercise of judicial discretion”.
Doeskin Products, Inc. v. United Paper Co.,
The basic issue is whether it is likely that Ideal’s 71B series numbers are common law trademarks. Gardner’s chief argument on this appeal is that numbers which originally were adopted to indicate different sizes of a product rather than its origin cannot be trademarks. Gardner relies heavily on this court’s statements in
William H. Keller, Inc. v. Chicago Pneumatic Tool Co.,
“There can be no question but what [sic] a number may become a good trademark, if its primary adoption be solely to indicate origin. On the other hand, if the figures indicate a grade or a quality only, they may not be the basis for a valid trade-mark.”298 F. at 59 .
The numbers at issue in the case indicated the length of a piston stroke in a riveting hammer. The quoted statement was a restatement of the Supreme Court’s holding in
Coats v. Merrick Thread Co.,
The general rule with respect to descriptive terms was stated by this court as follows:
“A merely descriptive term specifically describes a characteristic or ingredient of an article. It can, by acquiring a secondary meaning, i. e., becoming ‘distinctive of the applicant’s goods’ (15 U.S.C. § 1150(f)), become a valid trademark.” Miller Brewing Co. v. G. Heileman Brewing Co.,561 F.2d 75 , 79 (7th Cir. 1977), cert. denied,434 U.S. 1025 ,98 S.Ct. 751 ,54 L.Ed.2d 772 (1978).
Substantial authority supports the idea that terms which were originally descriptive of style or grade ought to be treated the same way as any merely descriptive term.
Clairol, Inc. v. Gillette Co.,
Gardner further argues that the 71B series designations have become generic or common descriptive terms, which by their nature cannot become trademarks.
Miller Brewing Co. v. G. Heileman Brewing Co., supra,
The 71B series numbers are not “arbitrary” marks in the trademark sense. Although the numbers were chosen arbitrarily in the sense that they do not refer directly to a characteristic of the connectors, the progression of numbers was adopted, and is currently used, to describe the relative sizes of the connectors. Hence, they are merely descriptive, not arbitrary, terms.
Ideal concedes that proof of secondary meaning is necessary and argues that there is enough proof in the record to support the district court’s finding that the 71B series numbers do have secondary meaning.
When evaluating alleged proof of secondary meaning, a court should be chiefly concerned with the attitudes of purchasers towards the mark.
Union Carbide Corp. v. Ever-Ready Inc.,
The district court quite properly discounted the value of the Gardner affidavits because the affiants were Gardner’s sales representatives and thus had an interest in belittling the trademark value of the 71B series numbers. The same is true of the depositions by the officers of Ideal’s competitors. Furthermore, the exhibits submitted by Ideal represented the opinions of
purchasers
of the product in contrast with Gardner’s exhibits. The
Union Carbide
case stressed the importance of
purchasers’
attitudes. When these statements are added to the fact that Ideal has marketed its connectors with the 71B series designations for over 30 years and that during that period Ideal has been the dominant firm (over 80% of the market in 1976) in the market, we conclude that the district court could properly infer that the 71B series numbers had acquired secondary meaning.
See W. E. Bassett Co. v. Revlon, Inc.,
Of course, at trial Ideal must substantiate the inference that the 71B series designations have come to have a secondary meaning according to the standard stated by Judge Denison in
G. & C. Merriam Co. v. Saalfield,
“So it was said that the word had come to have a secondary meaning, although this phrase ‘secondary meaning’ seems not happily chosen, because, in the limited field [the particular trade and branch of the purchasing public], this new meaning is primary rather than secondary; that is to say, it is, in that field, the natural meaning.”
See also
Restatement of Torts § 716, Comment b (1938);
Kellogg Co. v. National Biscuit Co.,
The last issue which relates to the likelihood of Ideal’s succeeding on the merits is the question whether Gardner’s use of the 71B series numbers will create a likelihood of confusion as to the source of the goods. Gardner’s argument that no proof of actual confusion was submitted is unavailing. No evidence of actual confusion is required in order to prove a likelihood of confusion.
Helene Curtis Industries v. Church & Dwight Co., supra,
Looking at the facts here, we see that the marks are the same, the products are the same, the manner of use of the marks is the same, and the geographical markets overlap or are identical. As if this were not enough, there is evidence that customers are not very careful in ordering the connectors. Two witnesses stated in depositions that sometimes a customer would ask for connectors by the 71B series number alone, without mentioning a producer. Gardner disingenuously argues that these customers are merely indicating indifference as to the source of the goods. The contrary infer *1025 ence is more likely when one remembers that Ideal has been the dominant supplier of connectors using the 71B series numbers for over thirty years. The likelihood of confusion is almost obvious, and is not reduced by Gardner’s decision to copy Ideal’s color coding scheme in addition to using the 71B series numbers. This issue is subject to further proof at trial but, for present purposes, the likelihood of confusion is strong enough to justify a preliminary injunction.
III.
In order to obtain a preliminary injunction, a plaintiff must show, in addition to a likelihood of success on the merits, that it will be irreparably injured unless steps are taken to preserve the status quo.
Helene Curtis Industries v. Church & Dwight Co., supra,
Gardner argues that Ideal’s long delays in commencing and prosecuting this action have vitiated Ideal’s claim that it will be irreparably injured unless a preliminary injunction is granted. Ideal filed its complaint seven months after learning of Gardner’s intention to enter the market. Eight months later, after accumulating seven affidavits and eight depositions from independent distributors, Ideal filed the brief and supporting papers on its motion for a preliminary injunction. Twenty-two months after this second filing the district court held the hearing on the motion. In its decision and order the district court stated that the twenty-two month delay after the motion papers were filed was “not fairly attributable to the plaintiff". Apparently the delay resulted from the condition of the district court’s calendar.
Gardner is correct in arguing that the plaintiff’s delay in moving for a preliminary injunction has been considered by some courts in assessing the probability of irreparable injury.
W. E. Bassett Co. v. Revlon, Inc., supra,
The existence of irreparable injury is positively supported by the fact that the alleged trademark and the infringing use are identical, that the products are the same, and that the markets are the same. These factors by themselves are indicative of irreparable injury. One commentator has noted:
“Also essential to trademark law is the presumption that use of a trademark or trade name identical with that of a competitor, on similar goods and in a similar business, causes deception and confusion of the public.” Nims, The Law of Unfair Competition in Trademarks 1078 (4th ed. 1947).
*1026
And, as this court has already said, “the damage to the goodwill and prominence of the [plaintiff’s] trademark through public confusion of it with the [defendant’s] trademark is, in itself, an irreparable injury”.
Helene Curtis Industries
v.
Church & Dwight Co., supra,
The district court has an obligation to weigh the relative hardship to the parties in relation to its decision to grant or deny a preliminary injunction, even when irreparable injury has been shown. Gardner’s brief presents an array of costs which it will have to bear if the preliminary injunction is imposed. Elimination of the 71B series numbers from Gardner’s connector molds would shut down its manufacturing operations for at least one month, if Ideal’s contentions are accepted, or up to seven months, if Gardner’s claims are correct. Gardner’s current inventory of connectors, worth approximately $180,000, would be a total loss. This amount is one-half of Gardner’s net worth. Ideal’s claim that such a high inventory level is the product of mismanagement may be- correct; nevertheless, the inventory is a fact which must be considered. Finally, the requirement that all connectors be recalled from the possession of Gardner’s distributors would irreparably damage Gardner’s relations with its dealers and would create substantial replacement costs.
The district court did not fully discuss the relative hardships of the parties but seems to have been handicapped by Gardner’s failure to present all the facts prior to the issuance of the injunction. In light of the facts presented to us, we affirm the issuance of an injunction but remand for modification of the order for reasons stated below. The hardships which Gardner will suffer do not warrant denial of all preliminary relief to Ideal. One entering a field already occupied by another has a duty to select a trademark that will avoid confusion.
Watkins Products, Inc. v. Sunway Fruit Products, Inc.,
Nonetheless, the facts necessitate a different balance in the hardships suffered by the parties. Prior to and during the long delay before a hearing was held on the preliminary injunction motion, Gardner continued to produce the offending connectors to a point where its current inventory constitutes almost half of its net worth. A remedy like the injunction at issue, which renders this inventory a total loss, seems overly harsh. Gardner claims that there is a risk that it will become insolvent. Ideal would be reasonably protected if the district court fashioned a modification to its order, allowing Gardner to make normal sales from its inventory during the time necessary for Gardner to alter its machinery. Ideal claims the changes can be made in one month; Gardner says they will take seven. This is a question for the district court. The district court should exercise its discretion to ensure that Gardner’s sales from inventory will be made in good faith *1027 and will not subvert our intent by flooding the market with connectors which may confuse buyers. This modification is necessary to maintain Gardner’s cash flow and prevent financial disaster to Gardner from loss of its total inventory.
IV.
Although the record contains sufficient evidence to support a preliminary injunction with the modification suggested above to protect Ideal’s alleged trademarks, additional evidence apparently not considered by the district court calls for a further modification of the injunction order. Gardner has raised the defense that its use of the 71B series designations is a “fair use” of the numbers in their descriptive sense only. In situations where a mark has both a trademark function and a descriptive function, the “fair use” defense allows a junior user of a mark to use the mark in good faith in its descriptive sense, as opposed to its trademark sense. J. T. McCarthy,
Trademarks and Unfair Competition,
§ 11:17 at 377 (1923). The analytical focus of the defense, which exists under both the Lanham Act, 15 U.S.C. § 1115(b)(4) (1976), and the common law, is on how the term is being used.
Venetianaire Corp. of America v. A & P Import Co.,
This case is a slight variant of the typical case. The 71B series numbers had no descriptive meaning prior to their use by Ideal. However, over time they came to have a descriptive meaning which apparently is recognized and used throughout the market. The district court found that it is probable that the 71B series numbers have come to have, in addition, a secondary meaning distinguishing Ideal’s products from those of its competitors. These two aspects of the mark can be recognized. Ideal may prevent use of the terms by others in their trademark sense as symbols of the goods of a single producer such that buyers are likely to be confused, but may not claim an exclusive right to use of the marks in their generally accepted descriptive role. See J. T. McCarthy, Trademarks and Unfair Competition, § 11:17 at 379 (1973); Restatement of Torts, § 727, Comment a (1938).
Gardner argues that it only uses the 71B series numbers in a descriptive sense, as indicative of size or style. It claims that its packaging and advertising clearly show use of the terms “size” and/or “style” in conjunction with the 71B series designations. An examination of the reproduction of Gardner’s packaging and advertising contained in the briefs and appendices reveals that the word “style” appears on the carton labels and in the advertising; nowhere does Gardner show that it is using the 71B series to describe “size”. Yet Ideal said that the series in part designates size, Ideal’s distributors said it indicates size, and Ideal’s competitors only use it to indicate size. Even the affidavits submitted by Gardner declared that the designations indicated the size of the connectors. No one but Gardner thinks the series numbers are descriptive of “style” or type.
On the evidence in the record, we conclude that to the extent the 71B series numbers are descriptive, they are descriptive only of size, not of a “style” or “type”. When Ideal uses the numbers with the word “model” on Ideal’s carton labels, the numbers are being used in their trademark sense. However, in light of the “fair use” doctrine, the district court’s order goes too far in prohibiting Gardner from using the 71B series numbers in any way on its cartons. For the purposes of establishing fair preliminary protection for Ideal’s alleged trademarks, Gardner should be allowed fairly to use the numbers on Gardner labels, adjacent to the word “size”, to inform buyers of the size of the connectors. A final *1028 determination of the scope of the “fair use” defense must await the trial.
Ideal appears to have implicitly accepted this limited use of the numbers in the course of defending the nature of Holub’s use of the 71B series numbers in contrast to Gardner’s use. It seems that as long as Holub uses its own series numbers on the connectors and in a dominant manner on the carton labels, Ideal has no strong objection to Holub’s discreet use of the numbers on the carton as indicators of the size of the connectors. Ideal, of course, condemns Hi-Scale’s expanded use of the 71B series numbers, which began on the heels of Gardner’s appropriation of the series numbers. In any event, Holub began using the 71B series numbers as size designations on its cartons in 1972 and Ideal was aware of that use. Not until five years later, after Ideal commenced this suit, did Ideal object to such use of its alleged trademarks. In all fairness, Gardner should not be preliminarily enjoined from engaging in a use which Ideal allowed to Holub for five years. This conclusion is particularly appropriate where the prior use by Holub appears to be within the scope of the “fair use” defense.
The district court properly enjoined Gardner’s use of the numbers on the tops of the connectors to indicate its type, as required by UL and CSA standards. Gardner’s decision to adopt Ideal’s color coding scheme as well as Ideal’s series numbers increases the likelihood of customer confusion. Gardner will have to create its own series designations for use on the connectors in compliance with the UL and CSA requirements until such time as this case comes to final judgment after trial.
In summary, the preliminary injunction should be modified to allow Gardner to sell connectors from its inventory until it can produce connectors without the infringing numbers on top and to use the 71B series numbers on cartons fairly to describe the size of the connectors. We remand the case to the district court for it to exercise its discretion in modifying its order consistent with this opinion and for trial.
Notes
. We reproduce here the labels of Ideal and Gardner for one size of connector.
. For an excellent presentation on the difference between a merely descriptive term and a common descriptive term, see the example of the “Deep Bowl Spoon” in
Abercrombie & Fitch Co. v. Hunting World, Inc.,
. Olin Blocker, an electrical distributor from Atlanta, Georgia, described in a deposition his perception of the 71B series as follows:
*1024 “Well, I don’t recall anybody using these numbers other than Ideal, and it has been, I guess, one of the leaders in the field, and if anybody would say 73B wire nuts, I think that the trade generally thinks of Ideal wire nuts.”
