244 F. 508 | D. Conn. | 1917
This is a suit in equity, charging the defendants with unfair trading, and is now before the court on final hearing upon pleadings and proofs.
The gravamen of the bill is contained in the fourth and fifth paragraphs which reads as follows:
(4) “That from the beginning of the manufacture of whole wheat hiseuit by your orator’s predecessors and continuously to the present time your orator has manufactured for sale and consumption such biscuit in a particular and peculiar shape and form; that such biscuit was produced and baked so as to present a distinguishing eye appearance, at once recognized by the configuration of such biscuit, from any other form of food product ever before manufactured either from wheat or any cereal of similar or allied purpose; that the whole wheat biscuits-of your orator were Composed and built up of wheat fashioned in peculiar form, laminated in structure and appearance, and to which your orator has attached the fanciful name of ‘shreds’ — the biscuit as completed in final form being a rectangular flattened oval, with rounded sides or edges and sharply severed ends being a biscuit browned in appearance as to its upper face and rendered crisp and palatable as to its separate parts in baking.”
(5) “That during nearly a quarter of a century that your orator has formed and baked its whole wheat biscuit product in the form and conditions above recited and identified, said biscuits have become known for a long period of years past to the using'and purchasing public by reason alone of the particular form, shape and structure of the individual biscuit itself as above described; your orator averring that for many years past such whole wheat biscuit of your orator has come to have and now has a secondary significance and meaning to the purchasing public by reason of the facts above set forth, and to thus mean and signify only the product and biscuit output of your orator, your orator averring that, when your orator’s said biscuit product is separated from your, orator’s carton and advertising matter, and standing alone without other means of identification, your orator’s said biscuit has come to have the meaning and significance of the product and output only of your orator’s plant.”
The defenses pleaded at length may be summarized as follows:
(1) “That the form, size, color, and appearance of the biscuits (plaintiff's and defendants’) involved in this controversy result from, and are essential to, the economic manufacture of a commercial biscuit from shredded whole wheat. * * * ”
(2) “That the defendants’ biscuit is composed of shredded whole wheat, the physical characteristics of which are such that the biscuit cannot be directly branded or stamped with the name or trade-mark of the maker.”
(3) “That to inclose the individual biscuits of the defendants in an envelope or wrapper would be commercially prohibitive, by reason of the increased cost of that procedure.”
(4) “That the defendants’ biscuit is not labeled or dressed in simulation of plaintiff’s product; but, on the contrary, the dress of the defendants’ product is most decidedly individual and distinctive.”
*511 Í5) “That the defendants’ biscuit is a patent-expired product.”
((>) “That the size, form, shape, color, and appearance of plaintiff’s biscuit were not adopted or selected for the purpose of pointing to the origin or ownership of the article, but are the natural characteristics of a shredded wheat biscuit, made in full accordance with the patent-exiüred machines.”
So that the issue to be here determined is this: Are the defendants guilty, in view of the facts in the case, of unfair competition in trade in selling a biscuit of substantially the same size, form, color, and appearance as that of the plaintiff?
The bill of complaint, as it was originally filed, named five defendants — the Ross Food Company, a New York corporation, Andrew Ross, Ralph Valentine, the Humphrey Cornell Company, a Connecticut corporation, and Frederick H. Towne. Of these defendants, the first three have been dropped on motions challenging the jurisdiction of the court, and tire action has been continued and is now pending against the defendants the Humphrey Cornell Company and Frederick H. Towne, as to both of whom the court has retained jurisdiction. Although the defendants named in the bill as originally filed, other than the Humphrey Cornell Company and Towne, are not parties to this action, they must, by reason of their subsequent participation in the trial with the knowledge of the court and of all the parties to the record, as was the case here, be held to be privies to any judgment which may be recovered herein, and will be fully bound thereby. Souffront v. Compagnie Des Sucreries, 217 U. S. 475, 486, 30 Sup. Ct. 608, 54 L. Ed. 846; Washington Gas Co. v. District of Columbia, 161 U. S. 316, 16 Sup. Ct. 564, 40 L. Ed. 712.
The-facts as developed by the evidence are as follows:
The plaintiff is the successor in business of the Cereal Machine Company, a Colorado corporation organized in 1893 by Henry D. Perky, the founder of the business. The shredded wheat product, so called, of the plaintiff, is now, as it always has been, made from whole wheat of the highest grade and quality, and with great skill, iti the plaintiff’s plant in Niagara Falls, N. Y., the sanitary and mechanical methods of which, in all of their appointments, are of superlative excellence. The product retains the body and substance of the whole wheat in final biscuit form, and is at once recognized by the configuration of the biscuit from all other forms of food products ever before manufactured from wheat or any cereal of similar or allied character.
The whole wheat berry is thoroughly cooked by boiling without destroying the berry form, and then all parts of the individual berry are-swaged and commingled together by passing through grooved rollers, from which they are discharged in the form of long, fine filaments or threads of porous character having a rough exterior, so that they are adapted to and do adhere together when being massed to form loaves or biscuits, and the food as discharged from the rolls is ready for use without further cooking, or it can be shaped for baking in various ways. After it is discharged from the rolls it is baked a golden brown, 12 biscuits are packed in a carton, 36 cartons in each case, and the product is shipped to the wholesale grocer, who in turn sells it to the retail grocer, and he to the ultimate consumer.
An enormous trade in these biscuits has been built up and established all over the world by -the plaintiff as the result of a long campaign covering a period of about 15 years by vigorous and expensive advertising. So great has been the advertising expense that in 1914 between $800,000 and $1,000,000 was expended. The business has steadily and consistently increased from year to year. In 1901 the number of individual biscuits produced and sold amounted to 175,000,000, and this production constantly increased until in 1915 it amounted to approximately 500,000,000 biscuits. In other words, the gross business increased from about $1,250,000 in 1901 to over $4,000,000 in 1915.
The ultimate consumer, whether in private homes, boarding houses, or at hotels and restaurants, only knows the individual biscuit to which he has become accustomed, and never sees' the package in which it is offered for sale by the retailer.
Some six years after the expiration of the design patent, Ross, Towne, and Valentine, who had been in the employ of the plaintiff and were familiar with the manufacturing processes and business and advertising and trade policies of the plaintiff, organized the Ross Food Company, a New York corporation located at Batavia, for the purpose of entering into competition with the plaintiff, although there was then, and for quite a time previous thereto had. been, other forms of shredded wheat biscuit, which could be and were easily identified from the product of the plaintiff and its predecessor.
Towne, who is a stockholder in and the New England agent for the Ross Food Company, thereupon solicited the Humphrey Cornell Company, a wholesaler and jobber in this district, to distribute the product of the Ross Food Company throughout Connecticut, Rhode Island, and parts of New York, which the Humphrey Cornell Company undertook to do and did do, and the defendants’ product was sold by the Humphrey Cornell Company and Towne to the retail trade in the territory named, but in very small quantities.
The visual appearance of the defendants’ product, as it is made and served, is exactly like that of the plaintiff in shape, size, color, and form, all of which were adopted by the plaintiff, not because of any inherent or functional advantage or value resulting therefrom, but purely as'a matter of accident,' resulting from tire size and shape of -the rolls of the plaintiff’s machinery from which it was discharged ready for use. Indeed, there is an apparent disadvantage in the shape and size of the product as made by the plaintiff and copied by the defendants, as a circular biscuit would be much more adaptable to a saucer or bowl than is one of oblong form, and a very different gen
Although the carton or package containing the defendants’ biscuit is of an entirely different shape and color from that of the plaintiff’s .carton, there is, nevertheless, printed upon the face of defendants’ package a picture of a shredded wheat biscuit which is an exact reproduction of plaintiff’s product, and although the defendants characterize their product as “floss’s Whole Wheat Biscuit,” they do not in any other way show or attempt to show that their product is not that of the plaintiff, and the individual biscuit of the defendants, when disassociated from the carton, bears no mark, stamp, brand, or tag whereby the individual consumer can be informed that it is not the plaintiff’s product. The machinery used by the Ross Food Company in the manufacture of its product is substantially copied from that used by the plaintiff in building up and carrying on its trade. Moreover, the plaintiff’s product has been particularly recognized solely by reason of the form, shape, size, and color of the individual or unit biscuit, and through the personal efforts of the plaintiff’s officers and salesmen the plaintiff’s business has been so directed and conducted as to definitely fix and impress this fact upon the public.
“the production of an article of food or bread, consisting of externally rough porous threads or filaments of wheat or similar grain, having the outer nutrition bran and gluten of the entire berry visibly mingled with the interior starchy portion thereof and adapted by their composition of entire grain berries and their rough and porous threadlike or shredlike form to constitute, without other shortening or aeration, bread of especially light and wholesome character.”
And it consists—
“in the novel art or method of preparing the grain or berry and reducing it to form without taking from' the grain any of the beneficial qualities provided by nature and presenting the same in convenient form for service as a superi- or article of food without the aid of experts or skilled labor now required to produce palatable bread.”
Its feature of patentable novelty, wherein it is distinguished from the prior art, lies in the fact that the wheat is taken in the whole berry
“1. A food or bread composed of superposed or massed layers or deposits of dry, externally rough, porous, sinuous threads or filaments of cooked whole wheat containing intermixed the bran, starch, and gluten of the entire berry, and which is absolutely free from leavening or raising materials, or their products.”
Claim 2, which is for the process, is:
“2. The process of reducing cereals for food, consisting first, in cooking the grain with salt, after it has been thoroughly cleaned, without destroying the whole berry form'; second, partially drying the grain with constant agitation until its interior and exterior portions are of substantially the same consistency ; and finally, compressing the grain to intimately commingle the outer or bran coats, gluten layers, and starchy, interior portions in the form of porous, rough filaments or threads, substantially as described.”
It will be seen, from a careful reading of the specification and claims of this process patent, that it has nothing to do whatsoever with the form or shape or size of the biscuit, and, so far as this patent is concerned, it was open to the defendants upon its expiration, to make and sell a whole wheat biscuit without copying in any way the form, shape, size, or color of the plaintiff’s biscuit as disclosed in the process patent.
The design patent, as the specification states—
“has relátion to a certain new and original design for biscuits; and it consists in the novel form and configuration thereof, as hereinafter described, and shown in the accompanying drawings.”
The specification then goes on to state that:
“The leading feature of the design consists in a biscuit, which presents a fibrous interstitial appearance, showing superimposed layers or irregular interlacing threads or filaments, which are wound or disposed in such loose relation to each other that the threads or filaments of the inner layers are visible from the surface to a greater or less degree through the interstices of the outer layers. The general form of the biscuit shown in the drawings, when viewed in plan, is that of a parallelogram, and when viewed in end elevation or cross-section is a flattened oval, with slight creases along the longitudinal edges; its distinguishing characteristic being mainly, as above stated, its fibrous interstitial appearance.”
The design patent has nothing to do with the form, shape, or size of the biscuit, and the distinguishing characteristic of the design was “its fibrous, interstitial appearance.” I am therefore impelled to the conclusion tfiat neither of these patents, nor, indeed, any'of the other patents offered in evidence, and. which are purely mechanical, take
‘•as to induce in purchasers the belief that they are getting the goods of the manufacturer who has heretofore employed it as his trade-mark.”
And if that is the case the law clearly imposes upon the defendants the burden of being required to use the carton, and the words, and ¡he article itself with sufficient distinguishing marks to prevent the purchasing public from being deceived into buying the defendants’ product as and for the plaintiff’s product.
There is nothing in the Singer Case, or in any of the other authorities, which is in any way inconsistent witli this conclusion. In the Singer Case, where the right of the defendant to use the name “Singer” in relation to sewing machines was established, it was coupled with the restriction that in so doing it must be made clearly and unmistakably to appear that the machines were manufactured by others than the complainants. Although the right to manufacture Singer sewing machines had become public property by the expiration of the patents, nevertheless the right of the original manufacturers to be protected from fraudulent imitation of the indicia by which Singer machines made at their establishment had been known to the trade was upheld, without regard to the fact whether these devices had been adopted during the life of the patent or after its expiration. Mr. Justice White, in delivering the opinion of the court in Singer Mfg. Co. v. June, 163 U. S. 169, 197, 16 Sup. Ct. 1002, 1013 [41 L. Ed. 118], qirotes with approval from Pouillet, Brevets d’lnvention, Nos. 327, 328, as follows:
“The expiration of a patent has for its natural effect to permit every one to make and sell tlio object patented; and it has also for effect to authorize every one to sell it by the designation given it by the inventor, but upon the condition in every case not, in so doing, to carry on unfair competition in business (concurrence de loyal) against him. * * * ”
And the closing paragraph of his opinion in (Singer Mfg. Co. v. Bent, 163 U. S. 206, 16 Sup. Ct. 1016, 41 L. Ed. 131, is as follows:
“There is no doubt that the marks were imitations of those used by the Singer Company, and were intended to deceive, and were made only seemingly different to afford a plausible preiext tor asserting that they were not illegal imitations, althoug'h they were so closely imitative as to deceive the public. The defendant, therefore, must be treated as if he had actually used the Singer marks. So treating him, however, we should bo obliged to allow Hie use of the name ‘Singer,’ since that name, as wo have already held in the case just decided, fell into the domain of things public, subject to the condition on the one who used it to make an honest disclosure of the source of manufacture.”
This view of the law, and particularly in its aspect pertinent to the case at bar, is admirably stated in G. & C. Merriam Co. v. Saalfield, 198 Fed. 369, 117 C. C. A. 245, by the Circuit Court of Appeals for the Sixth Circuit. It was there distinctly held that, on the expiration of a patent or copyright, the situation arising with respect to the use by others of the name of the patented article or copyrighted book cannot be differentiated from that arising with respect to the use of any other descriptive word, and that, while any subsequent maker of the article or publisher of the book has the right to use the name, because it has come to be a word of apt description, if, by reason of its long and exclusive use by the original maker of purchaser, it has come to be indicative of his product, and he continues its use, he is entitled to protection against unfair competition in such use, and the right of another to use it is qualified by the requirement that he must accompany it with an explanation which will unmistakably inform- the public that the article or book is of his production.
In the same case — Merriam v. Saalfield — which again came before the Circuit Court of Appeals on appeal from decrees entered in purported compliance with the mandate contained in 198 Fed. 369, 117 C. C. A. 245, the court reiterated its views in an opinion handed down January 13, 1917, and found in 238 Fed. 1, on page 8, - C. C. A. -, and said:
“It is not of controlling importance to the true application of the secondary meaning theory that the public should appreciate the personal indentity of the manufacturer. The deception involved in every such case, as in a trademark case, is said to be a deception as to the origin of the goods; but this is a formula for expressing the ultimate result. With reference to articles which have trade-names, it is the article itself and its good qualities, which the public appreciates and which cause it to desire to get the genuine article, made by the manufacturer who has established its reputation, rather than something made by some one else. Particularly under present-day conditions, the purchasing public may have a fixed purpose to buy a given article, and not a substitute therefor, and yet be quite ignorant whether the genuine article is made by one or another manufacturer. Even under earlier conditions,*517 the purchaser of ‘Stone Ale,' or ‘Camel’s Hair Belting,' or ‘Glenfield Starch,’ very likely knew as little as he eared about the personal identity of the maker.”
In Jenkins Bros. v. Kelly & Jones Co., 227 Fed. 211, 142 C. C. A. 11, a case of unfair competition arising after the expiration of patents on the plaintiffs goods, it was held that courts do not decide misleading markings on manufactured goods, the patent on which has expired, by the caveat emptor rule of buyer and seller, but on the theory that a buyer who has become accustomed to a particular article is entitled to be unmistakably informed that a person other than the former maker is manufacturing the same, and that the rights of rival makers are not the only thing to be considered. Judge Buffington, delivering the opinion of the court, said (227 Fed. on page 213, 142 C. C. A. on page 13):
“From this it will be seen that the sum and substance of the marking is not the mere literal, physical stamping, printing, or engraving of the maker’s name on an article which in the public mind is associated with another’s business, but the name must be accompanied with such indications that the thing manufactured is the work of the one making it as will ‘wnmistalcably inform the yuhlie of that faei.’ ”
I am convinced that the plaintiff is entitled to an injunction, and the only question is as to the extent to which it shall go. in view of the circumstances of the case, taken in connection with the settled practice obtaining in this circuit, the terms of the injunction will be settled before its issuance, and in order to avoid any farther argument on this question, the terms of the injunction order, together with the reasons for the same, are set forth at length.
As was said by Mr. Justice Bradley in Celluloid Mfg. Co. v. Cellonite Mfg. Co. (C. C.) 32 Fed. 94, 97:
“SimJilarity, not identity, is tlie usual recourse, when one party seeks to benefit himself by the good name of another.”
The controlling principle is well stated by Lord O’Flagan in Singer v. Wilson, 3 L. R. Appeal Cases, 376, in the following words:
“I think we should be cautious in holding that, although a person of intelligence and observant habits might, in a case like this, by exercising reasonable vigilance, escape misleading, there should be no restrictive interference to prevent others from being misled. It is a question of degree, of more or less; there can be no rigid rule, and the special facts must be considered in every case. There are multitudes who are ignorant and unwary, and they should be regarded in considering the interest of traders who m'ay be injured by their mistakes. If one man will use a name, the use of which has been validly appropriated by another, he ought to use it under such circumstances and with such sufficient precautions that the reasonable probability of error should be avoided, notwithstanding the want of care and caution which is so commonly exhibited in the course of human affairs.”
Judge Lacombe, speaking for the Circuit Court of Appeals for this circuit in Enterprise Mfg. Co. v. Landers, Frary & Clark, 131 Fed. 240, 241, 65 C. C. A. 587, 588, said:
“A court of equity will not allow a man to palm off his goods as those of another', whether his misrepresentations are made by word of mouth, or, more subtly, by simulating the collocation of details of appearance by which the consuming public has come to recognize the product of his competitor.”
The test in all cases of this kind is: Has the ensemble come to be a public guaranty of origin and quality? Enoch Morgan’s Sons Co. v. Ward, 152 Fed. 690, 81 C. C. A. 616, 12 L. R. A. (N. S.) 729.
In view of all the circumstances of the case as set forth in the proofs, it seems reasonably clear that the words “Shredded Wheat” and “Shredded Whole Wheat,” although in a way abstract in character, have become associated with the goods of the plaintiff in particular, and
“Tile name of a person, or words forming part of tlio common stock of language, may become so far associated witli the goods of a particular maker that it is capable of proof that the use of them by themselves without explanation or qualification by another manufacturer would deceive a purchaser into the belief that he was getting the goods of A. when he was really getting the goods oí B.”
As pointed out in Merriam v. Saalfield, supra, there is nothing abstruse or complicated about this theory, although its application may sometimes be difficult. Judge Denison said (198 Fed. page 373, 117 C. C. A. page 249);
“It contemplates that a word or phrase originally, and in that sense primarily, incapable of exclusive appropriation with reference to an article on the market, because geographically or otherwise descriptive, might neverthe-Jess have been used so long and so exclusively by one producer with reference, to his article that, in that trade and to that branch of the purchasing public,*520 the word or phrase had come to m'ean that the article was his product; in other words, had come to be, to them, his trade-mark. So it was said that the word had come to have a secondary meaning, although this phrase, ‘secondary meaning,’ seems not happily chosen, because, i" the limited field, this new meaning is primary rather than secondary; that is to say, it is, in that field, the natural meaning. Here, then, is presented a conflict of right. The alleged trespassing defendant has the right to use the word, because in its primary sense or original sense the word is descriptive; hut, owing to the fact that the word has come to mean, to a part of the public, something else, it follows that when the defendant approaches that same part of the public with the bare word, and with nothing else, applied to his goods, he deceives that part of the public, and hence he is required to accompany his use of the bare word with sufficient distinguishing marks normally to prevent the otherwise normally resulting fraud.”
In Elgin Nat. Watch Co. v. Illinois Watch Co., 179 U. S. 665, on page 673, 21 Sup. Ct. 270, on page 274 (45 L. Ed. 365), Chief Justice Fuller, in writing the opinion of the Supreme Court, said:
“But it is contended that the name ‘Ifilgin’ had acquired a secondary signification in connection with its use by appellant, and should not, for that reason, be considered or treated as merely a geographical name. It is undoubtedly time that where such a secondary signification has been acquired, its use in that sense will be protected by restraining the use of the word by others in such a way as to amount to a fraud on the public, and on those to whose employment of it the special meaning has become attached. In other words, the manufacturer of particular goods is entitled to the reputation they have acquired, and the public is entitled to the means of distinguishing between those, and other, goods; and protection is accorded against unfair dealing, whether there be a technical trade-mark or not.”
Then follows a succinct statement of the rule applicable in cases of unfair competition, which, is particularly pertinent here. The Chief Justice said:
“The essence of the wrong consists in the sale of the goods of one manufacturer or vendor for those of another.”
The evidence shows cases of actual deception, as well as a liability to such deception, and it also shows a particular kind of product attaching to the personality of the maker. George G. Fox Co. v. Glynn, 191 Mass. 344, 78 N. E. 89, 9 L. R. A. (N. S.) 1096, 114 Am. St Rep. 619, and George G. Fox Co. v. Hathaway, 199 Mass. 99, 85 N. E. 417, 24 L. R. A. (N. S.) 400, are much in point. In these cases the plaintiff was the first to manufacture a particular kind of bread, using in it milk and malt, and applying to it, as a trade-name, the word “Creamalt.” The bread was made in an oval loaf, unusual in shape and size, and having a peculiar broken and glazed surface, so as to produce an odd visual appearance. This combination of external characteristics was neither
“But goods! often come to be known as of a particular manufacture, and acquire a valuable reputation, by means of a designation that could not be made the subject of a trademark, because others may have occasion to make som'e use of the words or marks chosen. It is important to every one who lias acquired a valuable good will in his business in that way, to have it protected, as his other profterty is protected. It is also important to the public to be able to recognize articles of manufacture, as produced by a Tmoion and trustworthy maker, through the appearance by which they have come to be known.”
In the Hathaway Case the facts relied upon by the plaintiff to prove its case were substantially as they were stated in the Glynn Case, although it was claimed by the defendants that their loaf was without the label, and was therefore easily distinguished from the plaintiff’s loaf, inasmuch as the two loaves were conspicuously distinguished by their labels. A small label bearing the name “Creamait” was pasted upon the plaintiff’s loaf, and a broad paper band bearing the names “Hathaway’s Log Cabin Bread, Malted,” encircled the defendant’s loaf. It was held that the principles which were stated in the Glynn Case were applicable, and that the use by the plaintiff of the combination of the size, shape, color, and conditions of the surface to produce a general visual appearance for its loaf of bread made in part of malt and milk, gave -it substantial rights, particularly as there were no intrinsic advantages in the combination which produced this general visual appearance, and that a very different general appearance would be just as advantageous to the defendants, unless they wished, by deceit, to get away the plaintiff’s customers. In the opinion (199 Mass, page 102, 85 N. E. page 418 [24 L. R. A. (N. S.) 400]) the court said:
“The plaintiff had no exclusive right in any one of the features of the combination, and if the defendants had acquired the use of this combination for the successful prosecution of their business, they would have had a right*522 to usé it, by taking sucb precautions as would prevent deception of the public and interference with the plaintiff’s good will. But the evidence shows that the defendants had no occasion to use this combination, and therefore they were not justified in producing an imitation of the plaintiff’s loaves, the natural effect of which would be to deprive it of a part of its trade through deception of the public. There are numberless shapes and sizes in which loaves of bread m'ay be produced, and various peculiarities of appearance in color and condition of surface. These that the defendants adopted had been combined to distinguish the plaintiff’s Creamalt bread, and it was the duty of other manufacturers to recognize this fact. Not, indeed, to the abandonment of their right to do what was reasonably necessary to success in the management of their own business; but to the extent of so conducting their business as not unreasonably and unnecessarily to interfere with the plaintiff’s business through deception of the public.”
If the shape and form of the plaintiff’s product, and which the defendants have copied, were purely functional (that is, if they had certain elements of value for use and sale, which were peculiar to that form), a different question would be presented; but no such condition or features attach to the plaintiff’s or defendants’ product, and, as has been pointed out, the form of the biscuit made by the plaintiff was, at the outset, a matter of accident, and, indeed, a much more convenient form could have been chosen.
After oral arguments and submission of briefs, counsel for defendants further cite Miller Rubber Co. v. Albert Behrend et al., 242 Fed. 515,- C. C. A.-, decided by the Circuit Court of Appeals for the Second Circuit in February, 1917, and reported in the New York Law
Let an injunction issue in accordance with the views herein expressed. Decree accordingly, together with costs.
