92 F. 774 | U.S. Circuit Court for the District of Western Missouri | 1899
This is a bill in equity to enjoin the defendants from unfair competition with the business of complainant. The complainant is a nonresident corporation, engaged in manufacturing and selling silverware known generally in the trade as “Gor-ham ¿Silverware.” The defendant Emery-Bird-Thayer Dry-Goods Company is a domestic business corporation, engaged in general merchandise, conducting what is popularly known as a “department store.” The other defendants are its directors and managing officers. The question as to any invasion of complainant’s trade-mark is eliminated from the discussion, for the reason that there is no evidence that the defendants have in any way attempted any imitation thereof. The only real controversy presented by the evidence is whether or not the defendants have been guilty of unfair competition, by attempting to palm off on the purchasers of silverware, as of the manufacture of complainant, that which in fact was of a different manufacture.
A substantial recitation of the facts which led to- the institution of this suit will be a sufficient defense thereto:
For two or three years prior to October, 181)5, the concern doing business under the firm name of Emery, Bird, Thayer & Co., up to the time of the act of incorporation, — the latter part of October, 1895,— had bought and sold silverware of the manufacture of the complainant, as also silverware of other manufactures, and at the times in controversy had on hand a lot of complainant’s product. In the month of October, 1895, among its many advertisements in the newspapers of Kansas City, it advertised for sale silverware of the Gorham pattern at reduced rates, — below those of establishments in Kansas City engaged especially in the jewelry business. Upon discovering this, the complainant — whether of its own motion, or at the instigation of another jewelry merchant in Kansas City, need not be determined — caused to be inserted in the Kansas City Star, on November 2, 1895, the following notice:
“Where to Buy Gorham Silver. Don’t look for it among the silvery silver of the dry-goods stores, offered at half the price of bullion. Suspicion instantly attaches to all such wares, no matter what they are stamped, or by whom they are sold. On the contrary, the proprietor of any iirst-class jewelry store in the United States will stake his personal reputation upon the sterling quality of Gorham silver. Too good for dry-goods stores; jewelers only.”
This advertisement of the complainant was the only one of a like character it had ever published in any newspaper at Kansas City. It was so evidently directed against the defendant company, that among its advertisements in the Kansas City Times of November 4, 1895, it inserted the following:
“Sterling Silver. Gorham Silver. We. are now selling Gorham Sterling Silverware, made by the Gorham Manufacturing Co. of New York City, at from*776 20 to 40 per cent, below the exclusive jewelers. In a recent advertisement of the Gorham Co., they said their ware was ‘too good for dry-goods stores; jewelers only.’ A rather peculiar announcement for them to make, when we now have quantities of their ware in our store, and have been selling it for some years. Yes, if you want Gorham’s ware, you can get it here, and the price will be from 20 to 40 per cent, below that of the exclusive jewelers. But the patterns of the Gorham Co. are not as pretty and original as those made by another big- silversmith, and of which we sell a great deal more than of the Gorham ware. We are showing these patterns to-day alongside of the Gorham patterns, and the customers nearly invariably select the patterns not made by Gorham. It is simply this: The patterns of the Gorham Co. are too much like stamped plated ware. They are not up to date. Come to the store and compare these two kinds. You can have Gorham’s ware, if you want it. We think you’ll select the prettier, however.”
On the 9th day of November, 1895, the complainant made the following publication in the Kansas City Journal:
“If it is Gorham, it is genuine. Of course, that goes without saying; but is it Gorham? Is it stamped with the lion, anchor, and the letter ‘G’ (trademark)? Don’t buy so much as a teaspoon for solid silver, unless it bears this doubt-dispelling mark. Too good for dry-goods stores; jewelers only.”
Thereafter one Meyer, a jeweler of Kansas City, in the interest of the complainant and himself, sent one of his female clerks to the defendant’s store, with the evident purpose of obtaining, if possible, evidence to show that the defendant company was not in fact selling Gorham silverware; and naturally enough she found, as she supposed, what she went for. Her testimony in chief is to the effect that she asked for a Gorham spoon, and was shown by one of defendant’s lady clerks a spoon represented to be of the Gorham manufacture, which she claims was of a different pattern. She did not buy the spoon, as she did not go there for the purpose of malting a purchase. She could not give the name of the clerk with whom she talked, nor could she identify the person so as to enable the defendant to call her in contradiction. This witness was nearsighted, and on her cross-examination showed an unfamiliarity even with the Gorham trade-mark, or that of the spoon which she claims was exhibited to her; leaving the identification of the goods claimed to have been offered her in a very unsatisfactory condition. 'This was followed up by this same man, Meyer, procuring two other women, friends of his, to visit the defendant’s store “to spy out the land.” One of them claims to have bought for Meyer some spoons represented by the saleswoman to be of the Gorham pattern, which were not. The sale ticket for these goods did not express on its face the name of the manufacturer. They delivered the spoons to Meyer, one of which was marked the next day for identification, which was afterwards put in evidence by, the witness Meyer. The lady clerk who made this sale is of good reputation, and experienced as a saleswoman. She testified that, while she could not recall the circumstances of the particular transaction, she was satisfied it was not possible for her to have sold the spoon exhibited by Meyer as of the Gorham pattern; that there was Gorham ware, such as spoons, in the case, the trademark of which she was familiar with; that she had never made any such misrepresentation to any purchaser, and could have had no occasion so to do. The readiness with which those two women lent
The whole history of the controversy enforces the conclusion that it had its inception in the fact that the defendant company was offering the Gorham ware on this market at a lower price than that sought to be maintained by the exclusive jewelry establishments, and that the real incentive of the complainant’s interposition was to maintain the_ higher pijce for its wares in this market. If the sole purpose of the complainant was to protect its trade-mark and to suppress unfair competition, within the spirit of the law, in the honest belief that the defendant company was palming off on the community spurious wares, or other wares, as those of the complainant, both conventional usage and equity, founded in fair play, demanded that the complainant should have gone to the defendant company and advised it of its grievance, and thus afforded the defendant the opportunity to correct the wrong without a hasty resort to court. The character and reputation of the defendant company, so well known to the community and the country, are such as to have invited this course. The supreme court, in McLean v. Fleming, 96 U. S. 254, declared the law to be that it is not necessary, “in order to give the right to an injunction, that a specific trade-mark should be infringed; but it is sufficient that the court is satisfied that there was an intent on the part of the respondent to palm off his goods as the goods of the complainant, and he persists in so doing after being requested to desist,” — -citing Woollam v. Ratcliff, 1 Hem. & M. 259, in which the chancellor said:
“It further appears that Eaton had given this information to the plaintiff so long ago as December last, and the plaintiff ought, therefore, to have done one of two things: Either he should have communicated at once with Ratcliff, and obtained from him the information which he has given here; or else, if he had determined on applying to this court in the first instance, he should have taken care to show that some one else had been deceived.”
Furthermore, as said by Brown on Trade-Marks (2d Ed., § 43):
“Unfair competition implies a fraudulent intention, while, on the contrary, an enjoinable infringement of a technical trade-mark may he the result of accident or misrepresentation, without actual fraud being an element.”
This principle of law is aptly stated in Simmons Med. Co. v. Mansfield Drug Co., 23 S. W. 175, 93 Tenn. 84:
“Fraudulent intention is not necessary, in a trade-mark, while in unfair competition fraud is of the essence.”
So, in Lawrence Mfg. Co. v. Tennessee Mfg. Co., 138 U. S. 537-549, 11 Sup. Ct. 396, the court said:
“In cases of unfair competition, fraudulent intent upon the part of the defendant must he proven.”
In Hilson Co. v. Foster, 80 Fed. 897, Judge Coxe said:
“The action is based upon deception, unfairness, and fraud, and when these are established the court should not hesitate to act. Fraud should he generally proved. It should not be inferred from remote and trivial similarities. Ju-*779 dieial paternalism should be avoided. There should be no officious meddling by the court with the petty details of trade, but, on the other hand, its process should be promptly used to prevent an honest business from being destroyed or invaded by dishonest means.”
Nobody was deceived or defrauded into the sales claimed to have been made to the detectives sent to the defendant’s store to get evidence. They knew exactly what they were getting. The conduct of complainant’s agent, who, by deceit and falsehood, induced the saleswoman to mark on the sale ticket the word “Gorham,” shows that the scheme and purpose were to procure a wrongful act, to make it the basis of a lawsuit.' A man who procures another to slander him cannot make it the basis of an action for damages. Sutton v. Smith, 13 Mo. 120. This is based upon the fundamental principle that “no person lias the right to entrap another, by false and fraudulent appearances, in order to induce an act on which to base a claim for damages in a court of justice.” How much more should this rule apply in a court of equity, which, in its search after justice, looks into the very heart, to divine the motive.
As confirmatory proof of the underlying purpose of this suit to prevent the defendant company from selling the complainant’s manufactured article at prices which might affect the larger profits of the manufacturer, and suppress the competition of other merchants with the exclusive jewelry establishments, the complainant, both in the interrogatories propounded in the bill, and persistently throughout the cross-examination of the directors, managers, and officers of the defendant company, sought to ascertain from whom they purchased the goods manufactured by the complainant, the evident object of which Avas to enable it to refuse to sell to defendant’s vendors after ascertaining their names. ‘ During the taking of the depositions, on the refusal of one of the witnesses to make answer to such inquiries, the respective counsel laid tin; matter before this court for direction as to whether or not such question should he answered; and the court answered in the negative, for the obvious reason that that was a trade secret, and the development of the fact was not essential to the proper maintenance of the complainant’s suit. When a manufacturer parts Avith his goods, and they go upon the market, any third person has the rigid: to x>urchase and sell them as he pleases, without the consent of the manufacturer; and the courts will not aid the manufacturer, under the guise of protecting his trade-mark or the suppression of unfair competition, by permitting him in such litigation to dis-coA’er the sources from which an objectionable merchant — to him — obtains his supply.
Tills complainant has been guilty of an act which entitles it to less consideration from this court. After it had been conceded a temporary injunction in this case, it published in one of the leading newspapers of this city a perverted construction of tiie purpose and effect of the temporary injunction. This publication, in effect, represented the court as having decided, in granting said injunction, that the court was of opinion that the defendant company had obtained its goods “through second hands, and surreptitiously. * * * Consequently the injunction was granted, and is in active force to-day.”