262 F. 880 | 1st Cir. | 1919
This is a trade-mark infringement case. The plaintiff is a wholesale dealer in oleomargarine, organized as a corporation under the laws of New Jersey, with headquarters at Jersey City. It and its predecessors in title have used since 1891 the trade-mark “Queen of the West” on oleomargarine sold by them. In
The earlier Narragansett Company adopted the use of the word “Queen” in good faith and with no intent to infringe upon any rights of the plaintiff. Both the plaintiff and the old company sold their goods as their own to their own customers. There is no evidence of any confusion of goods or of any unfair competition.
It thus appears that up to September, 1915, two concerns were carrying on the same general line of business, partly in the same territory, each operating under trade-marks likely at some time to confuse the purchasing public, but each in fact reaching its own customers, and without any real confusion in the trade.
The District Court held that “the plaintiff’s right to an injunction is not free from doubt, but seems justified in order to prevent confusion likely to arise in the natural expansion of trade. * * * The plaintiff’s equity rests upon its showing a prior use of the trade-mark ‘Queen of the West’ and of the trade-name ‘Queen.’ ”
The court below also held that it was “unnecessary to determine whether the defendant has succeeded to the rights, if any, of the earlier Narragansett Company.” An injunction was granted, but the plaintiff’s prayer for an accounting for profits and damages was denied. Both parties appealed.
The decision of the District Court was made on December 12, 1918. On December 9, 1918, the Supreme Court had decided the case of United Drug Co. v. Rectanus Co., 248 U. S. 90, 39 Sup. Ct. 48, 63 L. Ed. 141, with a most illuminating opinion by Mr. Justice Pitney. This case was not cited by the District Court, and would not, in the natural course of events, be in print or otherwise available for its guidance.
The legally significant facts in the Rectanus Case are, we think, substantially on all fours with the case at bar. In that case, it appeared that as early as 1877 Mrs. Regis, at-Haverhill, Mass., had adopted the word “Rex” as a trade-mark for certain medicines prepared by her. These medicines were thereafter sold by her and her successor in title, the United Drug Company, under this trade-mark in Massachusetts
“Tine entire argument for the petitioner is summed up in the contention that whenever' the first user of a trade-marlv has been reasonably diligent in extending the territory of his trade, and as a result of such extension has in good faith come into competition with a later user of the same mark, who in equal good faith has extended his trade locally before invasion of his field by the first user, so that finally it comes to pass that the rival traders are offering competitive merchandise in a common market under the same trademark, the later user should be enjoined at the suit of the prior adopter, even though the latter be the last to enter the competitive field and the former have already established a trade there. * * *
“The asserted doctrine is based upon the fundamental error of supposing that a trade-mark right is a right in gross or at large, like a statutory copyright or a patent for an invention, to either of which, in truth, it has little of no analogy. Canal Co. v. Clark, 13 Wall. 311, 322 [20 L. Ed. 581]; McLean v. Fleming, 96 U. S. 245, 254 [24 L. Ed. 828]. There is no such thing as property in a trade-mark except as a right appurtenant to an established business or trade in connection with which the mark is employed. The law of trademarks is but a part of the broader law of unfair competition; the right to a particular mark grows out of its use, not its mere adoption; its function is simply to designate the goods as the product of a particular trader and to protect his good will against the sale of another’s product as his; and it is not the subject of property except in connection with an existing business. Hanover Milling Co. v. Metcalf, 240 U. S. 403, 412-414 [36 Sup. Ct. 357, 60 L. Ed. 713].
“The owner of a trade-mark may not, like the proprietor of a patented invention, make a negative and merely prohibitive use of it as a monopoly. See United States v. Bell Telephone Co., 167 U. S. 224, 250 [17 Sup. Ct. 809, 42 L. Ed. 144]; Bement v. National Harrow Co., 186 U. S. 70, 90 [22 Sup. Ct. 747, 46 L. Ed. 1058]; Paper Bag Patent Case, 210 U. S. 405, 424 [28 Sup. Ct. 748, 52 L. Ed. 1122].
“In truth, a trade-mark confers no monopoly whatever in a proper sense, but is merely a convenient means for facilitating the protection of one’s good will in trade by placing a distinguishing mark or symbol — a commercial signature — upon the merchandise >or the package in which it is sold.
“It results that the adoption of a trade-mark does not, at least in the absence of some valid legislation enacted for the purpose, project the right of protection in advance of the extension of the trade, or operate as a claim of territorial rights over areas into which it thereafter may be deemed desirable to extend the trade.”
The statute under which the collector of internal revenue proceeded against the defendant contains no mention of trade-marks, good will, going concern value, or any other sort of intangible property. It provides that the delinquent taxpayer “shall forfeit the factory and manufacturing apparatus used by him, and all oleomargarine and all raw material for the production of oleomargarine found in the factory and on the factory premises, and shall be fined,” etc. Act Aug. 2, 1886, c. 840, § 17, 24 Stat. 212 (Comp. St. § 6229). As this is a penal statute, it cannot be extended by construction. No attempt was made by the collector to sell any trade-mark, good will, or other intangible assets. The schedule of property sold by the collector to Matthews and transferred by Matthews to the new corporation contains no mention of trade-mark, good will, or other intangible property. The old corporation has not been dissolved. It is, so far as this record shows, still legally alive. The sale of its tangible property simply killed its business; and it abandoned thereafter all attempts to preserve its good will, including any right in its trade-marks previously used. The case is in these respects like the Jaysee Corset Co. Case (D. C.) 201 Fed. 779, where, subsequent to the sale of the chattels of a bankrupt, the trustee in bankruptcy attempted to sell the good will and trade-marks of the bankrupt’s former business. Judge Hough said:
“In due course of time the trustee sold the goods and chattels of the bankrupt, but made no attempt to sell the good will of? the bankrupt’s business, nor the trade-mark; nor did he sell the business as a going concern. The effect of these proceedings by the trustee was to kill the good will and destroy the*884 trade-mark; for it is admitted that this particular kind of trade-mark cannot pass, except in conjunction with the good will of a business. What has become of the bankrupt’s business? It stopped by bankruptcy, was killed by the trustee’s sale, and the present intended action on the part of the trustee is an attempt to galvanize" it into life again, something which cannot be done.”
This pungent statement is really nothing but an assertion of the same doctrine laid down by Mr. Justice Pitney in United Drug Co. v. Rectanus, 248 U. S. 97, 39 Sup. Ct. 50, 63 L. Ed. 141:
“There is no such thing as property in a trade-mark, except as a right appurtenant to an established business or trade in connection with which the mark is employed.”
Where the business goes, tfie trade-mark goes, whether in life or to death.
We reach, therefore, the same conclusion as to the plaintiff’s right to an injunction reached by the court below; but, guided by the decision of the Supreme Court in the Rectanus Case, on different grounds.
It is true that the plaintiff promptly notified the defendant in September, 1915, that its use of the word “Queen” was an infringement upon the plaintiff’s rights, and that the defendant thereafter wrong
The decree of the District Court is affirmed, and neither party recovers costs of appeal.