In this action the plaintiff seeks an injunction against an alleged infringement of a registered trade-mark, and an accounting of profits. The defendant denies infringement and, in a counterclaim, seeks to have the plaintiff enjoined from an alleged intimidation of his customers, and a declaration that the plaintiff’s trade-mark No. 521,-322, issued on February 21, 1950, be declared invalid.
Findings of fact
Mendes, the plaintiff herein, invented a collating and tipping machine in 1939, and sometime thereafter called it a PADDY machine, this name being adapted from a nickname for one of his daughters. He did some advertising of this machine in a leading trade periodical. At first he did business as an individual under the name of Paddy Machine Company, but later had this Company incorporated and it became the Paddy Machine Company, Inc. Prior to 1943 the Company had sold and shipped from Boston two machines bearing the label PADDY, one to Canada and one to Cininnati, Ohio. The war stopped production of his machines. In 1947 Mendes recommenced the manufacture and sale of collating machines under the name of J. Curry Mendes, and with one exception the machines were la-belled as either “Mendes” or “JCM”. The name PADDY, although still used in his correspondence, was being reserved by him for an improved collating machine which he intended to produce, while “Mendes” and “JCM” served as broader terms to designate all of his products. In order to secure exclusive rights to the use of the PADDY mark, Mendes, on advice of his attorney, shipped two collating machines bearing the PADDY mark from Boston to New York, one on May 31, 1949, to his sales office, and another on July 14, 1949, to a purchaser in New York. On June 29, 1949, the plaintiff, citing his May 31 shipment as the first use in commerce of the PADDY trade-mark and asserting on belief his ownership of the mark, filed application for the trade-mark registration, which issued on February 21, 1950.
Shortly thereafter Mendes learned that the defendant was using the name PADDY in certain advertisements in trade periodicals. The defendant had, in fact, been employing this name in correspondence and circulars since the latter part of 1948. The plaintiff then removed the trade-marikl PADDY from the two machines which had been shipped to New York and stopped ap *560 plying the mark until such time as it could be demonstrated by legal decision that he was the owner of this mark, and that his registration was in fact good.
In 1948 the defendant, New England Duplicating Co., entered an agreement with one Herbits by which the defendant was to sell and advertise under the PADDY label collating machines produced by Herbits. The latter purported to have the right to use the PADDY name by virtue of a chattel mortgage executed by that company on all its assets and good will. Use of the mark by Herbits, 'by the Graphic Machine Corporation which he formed in 1949, and by the defendant has been confined to advertisements, correspondence, circulars, and trade magazines.
Discussion
The law governing the issues in this case is the federal law. It was decided by this Court that issues arising under the head of infringement of a federally registered trade-mark are governed by federal rather than by state law. See Bulova Watch Co. v. Stolzberg, D.C.,
This brings us now to the real question in the case, and that is, “Who is the owner of the name PADDY?” There is no doubt that the word PADDY is a fit subject to be registered as a trade-mark. Ownership in it must be determined as between the parties, by priority of appropriation and use. Columbia Mill Co. v. Alcorn,
affixed to the goods which it purports to distinguish, or to wrappers or packages containing the goods, or labéls attached thereto, and that these goods be sold with the mark so affixed. Battle Creek Sanitarium Co. v. Fuller,
The next question with regard to this shipment is whether or not it was made in 'good faith or was merely a token conformity with the statute in order to bolster his claim for the trade-mark registration. He could gain no rights in the latter case. Phillips v. Hudnut,
The defendant relies upon the chattel mortgage on all of the Paddy Company’s assets and good will as the basis of Herbits’ power to authorize it to use the Paddy mark. Aside from the scanty evidence to support the defendant’s burden of proof on this point, it is noted at the very start that the chattel mortgage did not and could not convey any trade-mark rights of the PADDY Machine Company as the instrument did not purport to convey the company’s franchise and business and thus is invalid as an assignment of the company’s good will and trade-mark, because the latter species of property cannot be owned in gross and therefore cannot be sold or transferred apart from the franchise and the business of the company. In re Leslie-Judge Co., 2 Cir.,
I find that there was no abandonment by the plaintiff Mendes from the first day that he used the name PADDY in 1939. He did suspend the use of it, but only until the real owner of the mark could be determined and not with the intent to abandon it This was not an abandonment which would place the mark in the public domain.
I find that the use of the name PADDY by the defendant in intra-state commerce would seriously affect inter-state commerce.
The defendant’s counterclaim for an injunction and damages must be dismissed by reason of the fact that the plaintiff is herein determined to be the owner of the trademark and, as such, acted on his own rights.
Conclusions of law
From the foregoing I conclude and rule that the Trade-Mark Registration No. 521,-322 dated February 21, 1950, is a valid registration of the name PADDY.
I conclude and rule that the plaintiff is the owner of the Trade-Mark Registration No. 521,322.
I further conclude and rule that the plaintiff is entitled to an injunction against the defendant’s use of the name PADDY in either intra-state or inter-state commerce.
I conclude and rule that the defendant’s counterclaim must be dismissed.