275 F. 752 | 3rd Cir. | 1921
Lead Opinion
The issues in this case are unfair competition and infringement of a common-law trade-mark. We shall give just enough of the facts to disclose the controversy and make dear our decision, referring to the opinion of the trial court reported at 268 Fed. 156 for a statement in detail.
[ 1 ] The plaintiff, Eli Filly & Company, a corporation of Indiana engaged in the manufacture and sale of pharmaceutical products, put upon the market in 1899 a compound called Coco-Quinine. It is a liquid preparation containing quinine as its therapeutic agent; yerba-santa, used to disguise the bitter taste of quinine; and chocolate syrup, used as a coloring and flavoring medium. The plaintiff built up a large trade in the product by having its salesmen first call upon prescribing physicians and explain its merits, and then by selling it to druggists, who retailed it to customers on physicians’ prescriptions and on their own demand. The formula is not patented.
The defendant, Wm. R. Warner & Company, a Pennsylvania corporation, was organized in 1908 to take over the long established business of William R. Warner & Company, pharmaceutical and chemical manufacturers. The defendant corporation, Pfeiffer Chemical Company and Searle & Hereth Company are under one ownership and control. In 1906 the Pfeiffer Chemical Company put on the market a compound which it called Quin-Coco, being identical in color, taste and composition with the Coco-Quinine of the plaintiff. Pater, Quin-Coco ivas manufactured by the Searle & Iiereth Company and distributed by Wm. R. Warner & Company, the defendant. In competing for the trade of retail druggists the defendant did not pass off its Ouin-Coco as CocoOuinine but offered it on the representation that it is the same as Coco-Quinine and could be used as a substitute for it.
By its bill of complaint, the plaintiff avers that its Coco-Quinine was the first liquid preparation of quinine sulphate with the taste of qui
We find ourselves in accord with the learned trial judge on the issue of trade-mark infringement. Although the plaintiff conceived the name Coco-Quinine and gave it a substantial commercial value (as evidenced by the large trade built upon it as well as by its almost literal appropriation by the defendant), the name is, nevertheless, but descriptive of the ingredients in the compound and, therefore, cannot become the subject of trade-mark. 'Nor do we find ourselves at variance with the learned trial judge on the law of 'unfair competition, argued by counsel with great elaboration. We are constrained, however, to differ with him on the application of the law to what we regard as the controlling facts of the case. While these facts are many, they go to a matter that greatly narrows the area of the controversy and calls into operation but one principle of law. They are briefly as follows:
We find this practice of the defendant’s salesmen fully established by the evidence of an unusual number of witnesses, and that the practice, followed by its salesmen with the sanction of their superiors, was so general that the defendant is charged with knowledge of it and is, accordingly, answerable for it in the measure prescribed by law. This measure turns on two questions:
The first question is one of fact,-—whether it is fraud for a druggist to substitute a drug for the one called for by a physician’s prescription or by a customer directly. That substitution of drugs is fraud upon the consumer, who, from the very nature of the transaction, is helpless to protect himself, is so obvious as to require no discussion. For the protection of those who are exposed to the dangers of such fraud, courts will exercise to the utmost all the resources of the law. We have no doubt: that the substitution of Quin-Coco for Coco-Quinine extensively practiced by druggists amounted to fraud and of the same opinion were a number of the very druggists who practiced the deception. This then was fraud, but it was the fraud of druggists.
The next question is one of law,—whether in counseling such fraud and in supplying the means with which to effect it (that means being in itself quite innocent) the defendant also was guilty of fraud. Put in this way the question is not whether the defendant can be held responsible for the fraud of third parties, the ultimate sellers (Hostetter v. Fries [C. C.] 17 Fed. 620), but it is whether in counseling fraud and in supplying an innocent means with which to bring it about the defendant has itself committed fraud. This question turns not alone on the character of the means. Admittedly the plaintiff has no monopoly in its formula nor has it an exclusive right to the use of any of its ingredients. This leaves the defendant and everyone else free to duplicate the plaintiff’s preparation and enter the trade in competition, if, in so doing, they do not infringe the right: of consumers not to have passed off on them the product of one maker as the product of another. This right resides in the public without regard to whether the party for whose goods another product is passed off has or has not a monopoly in them or an exclusive right to use certain of their distinguishing ingredients. A customer has a right to get what he calls for and pays for. If the effect of a practice is to deceive an unwary customer and lull him into the belief that he is getting what he asked for when in fact he is getting something else, the practice is illegal because a fraud upon him. And this is so (certainly where, as in this case, the purpose
With unfair competition thus established, we think an injunction should issue restraining the defendant, directly or indirectly, from inducing and enabling retail drug dealers to substitute Quin-Coco for Cqco-Quinine. But it is said that such an injunction would deprive the defendant of using, as a coloring agent, an ingredient admittedly free to everyone. That is true, but, as we are deciding this case on
It should be noted that by this decision the plaintiff is not given a monopoly in the use of chocolate. Therefore the injunction restraining the use of chocolate in a liquid preparation where the taste of quinine is masked will extend only to the defendant whose practices with reference to it have been unlawful. We are not adjudicating the acts and responsibility of other makers of similar preparations, for with respect to i hem we have not been informed of wrongdoing.
The decree below is reversed with costs.
Rehearing
Petition for Rehearing.
This action, vigorously contested, resulted in an immense record. The testimony was directed to various aspects'of the case, arising from the rather technical law of trade-marks and the much broader law of unfair competition. In analyzing the testimony and distinguishing the law we have been greatly aided by counsel for both parties. Their industry in collecting the evidence and their thoroughness in discussing the law were of such high order and so equally balanced that our labors have been lightened. That our decision finally turned on an aspect of the case which caused others to pass out of view was due to no fault or omission of counsel for the respondent, but to the controlling importance which the court gave the testimony in this regard. By the respondent’s petition for a rehearing, we have not been shown that we have mistaken this testimony or misinterpreted, its imputations, nor have we been persuaded that we have erred in our deductions. We believe that a rehearing would produce nothing more than a repetition of the able argument already made. We are constrained, therefore, to deny the petition for rehearing.