130 Va. 144 | Va. | 1921
Lead Opinion
delivered the opinion of the court.
There were both an original and an amended bill, and the defendant having failed to plead, answer or demur, the case was heard upon the bill taken for confessed, and upon certain depositions taken by the complainant. The trial court refused to grant the injunction or the relief prayed for, and dismissed the bill.
It is admitted by the appellant that until the recent decision of International News Service v. Associated Press, 248 U. S. 215, 39 Sup. Ct. 68, 68 L. Ed. 211, 2 A. L. R. 293, the established doctrine was that in order to justify a court of equity in granting an injunction to restrain unfair competition, the acts complained of must be of such a nature as to be likely to deceive the public, or to amount to an attempt to pass off one man’s business or merchandise as that of another, and that this was essential in order to constitute unfair competition. It is, however, claimed, and argued with vigor and ability, that since that decision this doctrine, relied upon by the defendant is no longer binding. It is urged that the law of unfair competition, considered apart from any questions of copyright, patents, trademarks, trade names, and the like, is of very recent development and is now in the process of growth and evolution. That the doctrine is in process of evolution is true, but we do not think the case referred to has overruled or discarded all previous limitations of the rule. .That was a controversy between the International News Service and the Associated Press. The complaint of the Associated Press was that its rival in business took advantage of it by pirating its news
A consideration of these expressions and of the subject matter of that controversy shows how remote that case is from this. While the present case is one of first impression in this State, there have been very many cases in other jurisdictions involving similar questions. Because of this it is deemed advisable to emphasize the guiding rule as well as to cite several of the cases which are considered most pertinent.
In 26 Ruling Case Law 875, unfair competition is thus defined: “Unfair competition ordinarily consists in the simulation by one person, for the purpose of deceiving the public, of the name, symbols, or devices employed by a business rival, or the substitution of the goods or wares of one person for those of another, thus falsely inducing the purchase of his wares and thereby obtaining for himself the benefits properly belonging to his competitor. The rule is generally recognized that no one shall by imitation or unfair device induce the public to believe that the goods he offers for sale are the goods of another, and thereby appropriate to himself the value of the reputation which the other has acquired for his own product or merchandise.”
This is a fair statement from Hopkins on Trademarks, Tradenames and Unfair Competition (3d ed.) section 2: “Unfair competition consists in passing off one’s goods as the goods of another, or in otherwise securing patronage that should go to another, by false representations that lead the patron to believe that he is patronizing the other person. It is of vital importance to healthy business conditions that such competition should be suppressed. It is equally important, however, that fair competition shall not be interfered with. Whether the competitive acts complained of are fair or unfair is the controlling issue in each litigated case.”
The courts of equity can certainly be relied on to extend their protection to the legitimate trader and protect him from unfair competition, however new and subtle the efforts may be on the part of a rival to infringe upon his rights; but they should also be as careful to encourage, and refuse to interfere with, fair competition as they are to restrain unfair competition.
In Coats v. Merrick Thread Co., 149 U. S. 566, 13 Sup. Ct. 967, 37 L. Ed 850, we find this expression: “There can be no question of the soundness of the plaintiff’s proposition that, irrespective of the technical question of trade-mark, the defendants have no right to dress their goods up in such manner as to deceive an intending purchaser and induce him to believe he is buying those of the plaintiffs. Rival manufacturers may lawfully compete for the patronage of the public in the quality and price of their goods, in the beauty and tastefulness of their enclosing packages, in the extent of their advertising, and in the employment of agents, but they have no right, by imitative devices, to beguile the public into buying their wares under the impression they are buying those of their rivals.”
This from the late Chief Justice Winslow, of Wisconsin, in Manitowoc Malting Co. v. Milwaukee Malting Co., 119 Wis. 546, 97 N. W. 389, is also a clear statement of the rule: “Unfair competition in trade is not confined to the imitation of a trademark, but takes as many forms as the ingenuity of man can devise. It may consist of the imi
The rule is thus stated in a note in 20 C. C. A. at p. 167: “Coming then to the specific rule constituting the doctrine of unfair competition in respect to the sale of vendible commodities, it may be stated as follows: Independently of the existence of any technical trade-mark, no manufacturer or vendor will be permitted to so dress up his goods, by the use of names, marks, letters, labels, .or wrappers, or by the adoption of any style, form, or color of packages, or by the combination of any or all of these indicia, as to cause purchasers to be deceived into buying his goods as g,nd for the goods of another.” Many cases are there cited as supporting this rule.
In Lamb v. Grand Rapids School Furniture Co., (C. C.), 39 Fed. 475, rival manufacturers of furniture issued similar catalogues. They were manufacturing similar furniture, each had the lawful right to do so, and this is said: “The manufactures of the complainants are not patented. The defendants may lawfully manufacture just such goods. Can they not publish correct illustrations of them as. adjuncts of their sale? Ought they to be restrained from doing this because the complainants, having done this same thing, have copyrighted illustrations which, while representing their own goods, represent those of the defendant also? It is clear that the books of both parties are published and used solely as means for advertisement. To say that the defendant has not the right to publish correct illustrations of its goods must practically result in creating a monopoly in goods modeled on those designs, in the complainants, and thus give all the benefits of a patent upon un
In the case just cited, it is noted, the defendant, in advertising its own goods, had used illustrations from a copyrighted book, while here the catalogue of the Crump Company was not protected by copyright.
In the case of J. L. Mott Iron Works v. Clow, 82 Fed. 316, 27 C. C. A. 250, the complainant had issued a price catalogue containing illustrations of its wares, such as washbowls, bath tubs, footbaths, etc., and the court held that such articles could not be the subject of artistic treatment, and therefore were not the proper subject of a copyright; hence it refused to enjoin the defendant from copying the designs or cuts found in the catalogue of the complainant, or their publication in the catalogue of the defendant.
In Baker v. Selden, 101 U. S. 99, 25 L. Ed. 844, this language of Lord Romilly, so pertinent to the pending case, is quoted from Colbert v. Woodward, L. R. 14 Eq. 407: “This is a mere advertisement for the sale of particular articles which anyone might imitate, and anyone might advertise for sale. If a man, not being a vendor of any of the articles in question, were to publish a work for the purpose of informing the public of what was the most convenient species of articles for household furniture, or the most graceful species of decorations for articles of home furniture, what they ought to cost and where they might be
In Potter Drug & Chemical Corp. v. Pasfield Soap Co., (C. C.) 102 Fed. 493, there was a controversy between two toilet soap manufacturers, one of whom used the word “Cuticura,” as a trade mark. The defendant also manufactured and put upon the market a toilet soap under the name of “Cuticle” soap. The defendant had wrapped its soap in a printed circular advertising it for similar purposes. As to this circular the court says: “In the body of the complainant’s circular are at least three sentences or paragraphs, the very words of which have been transferred to the defendant’s circular. This pilfering of language is obvious, but the circulars themselves are entirely unlike in appearance, size, and usually unlike in matter, although there are similarities other than those to which attention has been called. The reverse side of the defendant’s circular is blank, while that of the complainant contains advertisements in several foreign languages. Notwithstanding the unfavorable opinion that must attach to this act of the defendant in using the language of the complainant’s circular, yet it cannot be concluded that such a.ct had any effect
In Stevens Linen Works v. Don & Co. (C. C.), 121 Fed. 173, where one manufacturer of crash toweling sought to enjoin a rival manufacturer from using identical letters of the alphabet as marks thereon to indicate the grade and width of the goods, the complainant having used those letters for many years, this is said: “The bill cannot be sustained upon the theory of unfair competition in trade. It must be admitted that there is a growing tendency in the courts to push this doctrine beyond what this court believes to be reasonable limits, and to introduce a spirit of paternalism into the administration of equity jurisprudence beyond the scope of its legitimate authority. The essence of the action is fraud, which here, as everywhere, should be proved and not inferred from every trivial and inconsequential similarity. Where two parties are engaged in selling goods of the same class, it is inevitable that the competition will produce friction and that the agents of each, in their zeal to secure customers, will indulge in exaggerated laudation of their own goods and depreciation of the goods of their rivals. This is well understood and discounted by all who have the least familiarity with the customs of trade and should furnish no basis for the intervention of a court of equity. In the case at bar there is no evidence of fraud.”
The law of unfair competition is but an expansion of the common law of trade-marks; and in controversies between manufacturers and merchants the essence of the wrong is the sale of the goods of one as the goods of the other. Hanover Star Milling Co. v. Metcalf, 240 U. S. 403, 36 Sup. Ct. 357, 60 L. Ed. 718.
In Heide v. Wallace & Co. (C. C.), 129 Fed. 650, the doctrine of unfair competition is thus stated: “After a careful consideration of the various cases bearing on the subject, the conclusion was reached in Draper v. Skerrett (C. C.), 116 Fed. 206, that, to justify a court of equity in interfering in an alleged case of unfair competition, there must be something more than the mere duplication by the one party of the other’s trade-name, and that this was to be found in the deceptive use of imitative methods of display or other device by which the public are led into buying the infringer’s
That case (Heide v. Wallace & Co.) was affirm in 135 Fed. 347, 68 C. C. A. 16, and Dallas, J., quotes this from the opinion of the trial judge, referring to the packages sold by the rival dealers: “There is nothing whatever to suggest an attempt to catch the unwary purchaser, and inveigle him into taking the one when he was seeking the other; nor could the most careless be deceived, except as he was in reality unconcerned as to which he got.”
In Bickmore Gall Cure Co. v. Karns, 134 Fed. 834, 67 C. C. A. 439, it is said: .“Undoubtedly, where two persons are engaged in selling like goods, neither of them has or can acquire the exclusive privilege to aptly designate and describe them, or to attractively present them for sale, with appropriate directions for their use.” In the same case it is said that neither of them has the right to do any of these things in such manner as insidiously to mislead purchasers into the belief that his wares are those of his competitor.
In Rathbone, Sard & Co. v. Champion Steel Range Co., 110 C. C. A. 596, 189 Fed. 26, 37 L. R. A. (N. S.) 259, this is held: “The placing upon the market of a stove, the design of which is copied from that of a rival manufacturer cannot be restrained as unfair competition, if the earlier design had been so recently produced that the public had not become familiar with it as designating the product of the designer, so as to be deceived into buying the copy as his, where the copyist uses his own name and trade-mark
While the case just cited does not involve the copying of advertising material, it nevertheless illustrates the principle, and it seems to us to follow, inevitably, that if one may copy and reproduce the goods of a rival manufacturer, and thus fairly compete with him for the public patronage in the sale of such goods, then competing merchants, both of whom have the unquestioned right to sell similar goods, may certainly, as incidental to such right to sell, reproduce all attractive advertising matter commending such goods to the trade in similar language, if such language is unprotected by copyright or otherwise. The ownership gives the right to sell, and in the public interest trade should be as far as possible left untrammeled. Manufacturers and dealers have the right to protect themselves from imitations by patents, trade-marks, copyrights and labels, and while unfair competition and fraud should be and will be restrained in proper cases, no impediments to fair trade should be imposed by the courts, except for the protection of substantial rights which cannot be otherwise protected.
Van Kannel Revolving Door Co. v. American Revolving Door Co., 131 C. C. A. 650, 215 Fed. 582, was a controversy between two manufacturers of revolving doors, where one had so advertised his door as to cause his competitor to charge him with unfair competition, and this is said: “While, therefore, plaintiff can have no exclusive rights in design, phrase, or picture, nevertheless it is entitled to pro- ■ tection against such use of them by defendant as would constitute fraudulent or unfair competition with it. The bill alleges that ‘ by its wrongful acts above set forth the defendant has diverted to itself trade and custom to which plaintiff was entitled, and that it otherwise would have received.’ Clearly, this is insufficient to sustain a bill to restrain unfair competition. Defendant’s acts, as set forth
This language appears to be peculiarly apposite in the present base. The defendant’s advertisement of goods which were similar in every respect to the goods which the complainant had a right to sell, must of necessity have been quite similar to the advertisements of the complainant commending the same goods. There can be no fair allegation of fraud arising out of the fact that advertisements relating to similar goods were themselves similar. Each has an equal right to compete for the trade by lawful means and the most attractive advertising methods, which are not prohibited.
It is well to remember the caution of Lord Mansfield in Sayre v. Moore, 1 East 361, relating to copyright cases, where he said: “We must take care to guard against two extremes equally prejudicial; the one that men of ability who have employed their time for the service of the community, may not be deprived of their just merits, and the reward of their ingenuity and labor; the other that the world may not be deprived of improvements, nor the progress of the arts be retarded. The act that secures copyright to authors guards against the piracy of the words and sentiments; but does not prohibit writing on the same subject.”
So, in cases of this character, we should avoid extremes equally prejudicial. That which a court of equity will enjoin is unfair competition, but to hold that competing merchants having the right to sell similar goods may not use identical advertisements to commend them to the public notice, where there is neither fraudulent nor deceptive attempt to pass off the goods of the seller upon an unwary
In Farmers’ Handy Wagon Co. v. Beaver Silo & Box Mfg. Co., 150 C. C. A. 63, 236 Fed. 738, which is cited for the appellant, the court was considering an alleged infringement of a patent, and decided that the charge of unfair competition might be united with the allegation that the patent had been infringed. It is in that connection that the court refers to the appropriation of the advertising literature by the defendant, and therefore the case is not authority upon the question here involved, because here each of the litigants have equal right to advertise their commodities, while there the defendant had no right either to sell or to advertise the devices which infringed the patent.
Mr. Justice Field, in Goodyear’s India Rubber Glove Mfg. Co. v. Goodyear Rubber Co., 128 U. S. 598, 9 Sup. Ct. 166, 32 L. Ed. 535, in denying relief in that case, said this: “Relief in such'cases is granted only where the defendant, by his marks, signs, labels, or in other ways, represents to the public that the goods sold by him are those manufactured or produced by the plaintiff, thus palming off his goods for those of a different manufacture, to the injury of the plaintiff.”
The case most nearly like this, so far as we are advised, is Hamilton Mfg. Co. v. Tubbs Mfg. Co. (D. C.), 216 Fed. 410. There, however, instead of two competing merchants, as here, there were two rival manufacturers, one of whom was making, advertising and selling articles which were imitations, except in minor details, of those made and sold by
The briefs for the Crump Company cite a number of cases relating to special trade information, a typical case being F. W. Dodge & Co v. Construction Information Co., 183 Mass. 62, 66, N. E. 204, 60 L. R. A. 810, 97 Am. St. Rep. 412, where the plaintiffs collected and compiled early information relative to the proposed erection of- buildings, the construction of sewers, water works, etc., for sale to its subscribers, who appear to have been merchants, contractors and builders, who desired to use such information with the reasonable expectation of profit from getting it promptly by making contracts and selling supplies, and the
So likewise the distribution of quotations of prices on dealings upon a board of trade which were collected by the plaintiff and confidentially communicated to numerous persons under a contract not to make them public, is entitled to the protection of the law just as trade secrets are. This right to privacy is not lost to a plaintiff who has collected such valuable information at his expense even though it be communicated to many persons in confidence under such a contract, and strangers can be restrained from using such information, which they acquire only by inducing a breach of trust by those entitled to the quotations, but under obligation to maintain such secrecy. Board of Trade v. Christie Grain & Stock Co., 198 U. S. 250, 49 L. Ed. 1039, 25 Sup. Ct. 637; National Teleg. News Co. v. Western U. Teleg. Co., 56 C. C. A. 198, 119 Fed. 294, 60 L. R. A. 805.
Reverting to the facts of this case, it appears that these catalogues are easily distinguishable from each other. For example, the color of the cover of the Crump catalogue is gray, its size 6 3/4 x 10, and it has 480 pages; while the cover of the Lindsay catalogue is of a different color, being very light green with a dark brown border, has a larger page, it being 7 3/4 x 10 3/4 inches in size and contains only 280 pages. Each catalogue has at the top of each page the corporate name, one that of the Crump Company and the other that of the Lindsay Company. So that there is nothing in the appearance of the Lindsay catalogue either to the casual or' acute observer suggestive of an effort to take away the trade of the Crump Company by fraudulently or unfairly simulating.its catalogue. Every cut appearing in both catalogues was supplied by the manufacturers, and would have been furnished to any other jobber.
As to the precise injury, it seems too impalpable to be grasped, even by the astute counsel for the appellant, for in' his petition for the appeal, he uses this language: “We can conceive of no basis upon which any actual damages could be ascertained with any degree of certainty, nor have we
In view of these concessions there seems to us to be little left as a basis for complaint except pride of authorship. An injury which is thus manifestly a mere state of mind, as to which no actual damages can be even alleged, does not afford ground for equitable intervention or relief.
The function of courts is to determine and declare the legal rights of litigants, and they are not vested with power to prevent breaches of ethical rules which violate no law. We do not mean, however, to express approval of the practice of making photographic copies of advertising material of a rival in business without his consent. Indeed, the disapproval of the appellant is justified. A fair consideration of the facts of this case, however, and a proper regard for judicial precedents and expressions, which we believe to be based upon right reason and a scrupulous regard for the substantial rights of litigants, as well as of the interests of the public, for the preservation of fair competition in trade, lead us to conclude that there is no error in the decree of the trial court dismissing the bill.
Affirmed.
Concurrence Opinion
concurring:
I concur in the result of the majority opinion in this case, but I reach that result by a somewhat different view Of the principles involved.
Now. from any standpoint such a method of business is unquestionably unfair, and is not. supported by any right of the company so acting to so appropriate and use the result. of- the- work, and - expenditure - of another. But. under qur system of jurisprudence a court of equity, will- not adjudicate an abstract question of whether-.a def endant pos
It is at this point that the Crump Company fails to make out its case. It has failed to show that the aforesaid unfair conduct of the defendant, Lindsay Company, in any way threatens it with substantial injury. . If it had shown that the aforesaid conduct of the Lindsay Company threatened it with substantial injury by lessening its profits, by reducing its sales, or otherwise, I would feel that the injunction sought should be awarded. I do not feel that such an injunction would, in such case, mean that it would sustain a monopoly in the form of the illustrations and descriptive advertising matter aforesaid.
To illustrate: As the case-stands upon the record before us, it is merely one in which the defendant, Lindsay Company, has, by the conduct in question, created for itself ari opportunity to take away some of the trade of the Crump Company, as for example by cutting prices, or, if prices are not cut, an opportunity to make a larger percentage of profits on its sales, as compared with the net percentage of profits the complainant company has the opportunity to make on its sales. But it is obvious that if the Lindsay Company has not cut prices, or threatened to do so, and if the gross sales and total net profits of the Crump Company have not otherwise in fact been at all lessened, or threatened to be lessened, by the conduct of the defendant