226 F. 545 | 6th Cir. | 1915
Lead Opinion
(after stating the facts as above). 1. It is not denied that, in the Massachusetts litigation against Jaynes and
The difficulties in this case arise from the fact that Theodore Rec-tanus, the business predecessor of the defendant corporation, undoubtedly adopted and used the same word as a trade-mark upon a medicinal compound. He began this use about 1883, and it is safé to say that, as early as 1885, he had used the mark so considerably in Louisville that — save for Mrs. Regis’ prior adoption — it clearly would have become his rightfully exclusive trade-mark. This adoption by Rectanus was in good faith, and its use was continued without intermission by him and his corporate successor, and without challenge of any kind from any one, from before 1885 until 1912 — a period of at least 27- years. The real problem in this case is how these conflicting rights and their dependent equities shall be respectively treated.
2. The defendant contends that there is no infringement, because the Regis article has always been put up in pill or tablet form, and was originally, and until after the Rectanus rights had been initiated, labeled and advertised only as a dyspepsia cure, while the Rectanus article has always been put up in bottles and liquid form and called a blood purifier.. To this contention'the plaintiff replies • that, both articles being intended to have medicinal effect through the stomach and digestive organs, with similar ultimate result, they are “of the same descriptive properties,” and that, therefore, a trade-mark, valid for one, must extend to the other. In view of the result otherwise reached, it becomes unnecessary to pass upon these contentions, and for the purposes of this opinion we assume that such infringement exists as requires us to consider the further questions.
“In our broadly extended country, the separate and Independent use of these two trade-marks ran along contemporaneously in widely separated localities, without either of the parties most interested knowing what the other was doing, until comparatively a few months before this action, was brought. The*549 judgment in this case, we think, must necessarily work a hardship upon one or the other of the parties, and possibly upon both.”
The demand of the Drug Company for an injunction against Reclaims rests upon the proposition that a trade-mark right once ac< quired is exclusive, and extends at least throughout all places subject to the laws of the United States. This is a proposition often expressed in one form or another and formulated in the text-books. Hopkins on Trademarks, §§ 10, 13. District Judge Baker, in Church v. Russ (C. C.) 99 Fed. 276, 279, said:
“It is commonly said that there is a right of property in a technical trado-mmk, and ail Infringement is spoken of as a violation of a property right. Whether tins view; be correct or not is quite immaterial, because it is "universally agreed that some of the rights which are incident to property do inhere in a technical trade-mark.”
In Lawrence v. Tennessee Co., 138 U. S. 537, page 548, 11 Sup. Ct. 396, page 401 (34 L. Ed. 997), the Supreme Court said:
The jurisdiction to restrain the use of a trade-mark rests upon the ground ox the piaintiif’s property in it, and of the defendant’s unlawful use thereof.”
Based upon this theory of a property or equivalent right perfected by adoption, or by adoption and use, it may follow logically enough that a later appropriator is a trespasser, and should be suppressed, even though, at the time of the later appropriation, the prior claimant of the mark had not extended his trade into the defendant’s territory. Tint there had been no actual conflict of trade, and so no present injury, is not of itself a sufficient answer to the claimant’s demand, because by defendant’s conduct there is a threat or certainty of future injury to the naturally increasing trade and custom of the plaintiff. There can be no fixed standard of this normal expansion, and we are no» called upon to declare any standard for other cases. It is clear that Hiere may be instances where the plaintiff’s delay to carry his trade into a particular territory lias been so inconsistent with the ordinary conduct of business as to amount practically to an abandonment or disclaimer of that territory; and if in such case it has come about iba: with the express or implied knowledge of plaintiff another has occupied the territory in ignorance of any claim of prior right, and so has been misled into a large expenditure in building up a business, we hav e not merely that laches which make a court hesitate to enforce the prior right, but that estoppel which forbids such enforcement. Even at law, the statutes of adverse possession recognize that plaintiff, with good title to an estate, may lose the right to recover that part of it which he permits an adverse claimant to occupy for too long a time; and there are many familiar instances where courts of equity are moved by the principles of laches or of estoppel to deny specific relief to one whose general or original title is broadly good.
The compelling equity in the position of defendants, situated as Rectanus is, has in several instances led courts of equity to refuse an injunction in aid of the first adopter of the mark; and sometimes in so doing they have seemed in some degree to reject the general principle that the right is exclusive and belongs to the one who first adopts and uses. We are not called upon to decide how far the force and effect of this principle usually go; each case beyond its reach, whether by negation or by exception, depends upon particular facts; and each one of the decided cases which has been brought to our.attention can be reconciled with, and perhaps should be considered as standing upon, the theory which we have stated, viz., that, even if we concede to the first appropriator of the mark the prima facie right exclusive against all others and everywhere, courts of equity will not enforce it where the rules of laches or estoppel make such enforcement unjust, and that in such case the original owner does not lose his general right, but only the power of enforcing it, in a particular territory, against a specified person and to the extent that plaintiff has acquiesced.
Some of the language of the opinion of the District Court in Carroll v. McIlvaine (the “Baltimore Club” Case) 171 Fed. 125, seems to indicate that the trade-mark right may not go beyond the extent to which plaintiff has actually taken possession of the trade; but when the case came to the Circuit Court of Appeals of the Second Circuit (183 Fed. 22, 105 C. C. A. 314) it was distinctly held that Carroll, by prior adoption, had acquired the better right to the trade
()ur conclusion is that, on the fads of this case, plaintiff was not entitled to the injunction sought. We decide nothing further. Whxther Reclaims has any affirmative right whatever, as distinguished from the merely defensive one which we have considered, and whether that defensive right extends to the use of the mark upon any article, excepting where, as in the case of the blood purifier, that use had continued so long witiiout challenge as to raise an estoppel — these
It follows that the bill of complaint must be dismissed, and for that purpose the decree is reversed, and the case is remanded, with the costs of this court to appellant.
Upon the subjects of lachos and estoppel, see, further, Saxlehuer v. Eisner Co., 179 U. S. 19, 21 Sup. Ct. 7, 45 L. Ed. 60.
Rehearing
On Petition for Rehearing.
The petition for rehearing urges us to reconsider the conclusion that plaintiff’s valid trade-mark is not entitled to full protection by injunction against Rectanus. It is said that our opinion is without precedent, in that it finds that plaintiff owns a valid trade-mark and has moved promptly after having actual knowledge of the infringement and yet .refuses relief; in other words, and using the nomenclature of the petition, it is said that an injunction, in a trade-mark case has never been denied on the ground of “estoppel by negligence,”
We did not originally fail to
We cannot join in counsel’s apprehension that from this principle serious harm will come to trade-mark owners. We carefully refrained, in this opinion and the accompanying opinion in Gaines v. Rock Spring Co., 226 Red. 531, - C. C. A. -, from.deciding what degree of diligence, if any, by the trade-mark owner in exploiting his claims, was necessary to protect him from losing, in this way, a fraction of his trade-mark right. Only in an extreme case would a court reach the conclusion which we here reached. The trade-mark owner, prosecuting and exploiting his business in the ordinary way, can have nothing to fear from the rule of the opinion. Not only will the cases, where this situation arises, be rare, but only in a fraction of those cases will there be practical difficulty in determining the conflicting rights of the general owner and the one, who must be left in the possession of what he has taken. Such difficulties as may develop we must think to be a lesser evil than it would be to permit plaintiff, by asserting a prior right, to destroy that which had been built up in the reasonable belief, induced by plaintiff’s conduct, that no such prior right existed. Of course, it is not necessary to the theory of
So much by way of reference to the principles, the proper application of which must control this case. We turn now to the decided cases, and the discussion of them in the petition. Those cited in our opinion, so far as petitioner’s counsel think they give color of support to the conclusions of the opinion, are sought to be distinguished on one or the other of two grounds. It is said that the finding of an estoppel, where that result has been allowed to defeat a valid trade-mark (as in the Baltimore Club Case, 183 Fed. 22, 105 C. C. A. 314, in the Circuit Court of Appeals) has been based on actual knowledge by plaintiff that defendant was using the mark and on plaintiff’s acquiescence after such knowledge. In the case just cited, this is true; but it is difficult to distinguish between the effect of knowledge proved in fact and knowledge imputed by law. A doubtful inference is not so satisfactory as clear and direct proof; but, when once the inference is drawn, the fact is established. We must doubt whether ihe result in the Baltimore Club Case would have been different if it had appeared only that plaintiff had done nothing for 20 years toward extending his trade-mark beyond Baltimore; that plaintiff had been indifferent as to what was done in New York; that any ordinarily vigorous pushing of plaintiff’s business, at any time for twenty years, would have disclosed defendant’s use; and that the mark consisted of such a quasi descriptive or suggestive word as to he rather likely to be selected by others. We think that case differs from ¡he present, not in principle but in degree.
Nor can we think that the presence of actual competition between the parties at the time suit'is commenced is the sole criterion by which cases are to be distinguished, as the petition urges with reference to Hanover Co. v. Allen Co., 208 Fed. 513, 125 C. C. A. 515, supra. Whether the ground of the defense be laches or estoppel, if the defense is good to-day, it does not seem that it can be bad next week, merely because in the meantime plaintiff first brings in and offers for sale ids goods in the local territory where defendant is established. If so, then neither defense could ever avail, because plaintiff could always delay bringing suit for a few months or a year and until after he liad come in and was selling some goods in defendant’s territory —which is practically wdiat happened in this case.
The insistence of the petition that our opinion runs counter to settled principles is based chiefly on McLean v. Fleming, 96 U. S. 245, 24 L. Ed. 828; and Menendez v. Holt, 128 U. S. 514, 9 Sup. Ct. 143, 32 L. Ed. 526. In the former case, plaintiff’s acquiescence and delay were held sufficient to bar an accounting, but not to prevent an injunction; but it clearly enough appeared that defendant’s actions liad not been innocent. He had been fully aware of plaintiff’s right to the marks and labels, and he„had copied them as closely as he dared. His contention was that he had not infringed; but he had ahvays known that if he was wrong in this contention his conduct
Reliance is had, also, on the two Hunyadi-Janos Cases in 179 U. S. — the Eisner Case, 179 U. S. at pages 19, 39, 21 Sup. Ct. 7, 45 L. Ed. 60, and the Siegel-Cooper Case, 179 U. S. at page 42, 21 Sup. Ct. 16, 45 L. Ed. 77. In the Eisner Case, the conclusion reached seems to have depended on the theory of unfair competition, and not on that of trademark infringement. The title to the word “Hunyadi,” as a trade-mark, was held to have been lost; but the characteristic red and blue label was protected against fraudulent simulation. Not only was the original ground of relief found to lie in defendant’s fraud, but perhaps for the same reason only the defense of laches was overruled. In the Siegel-Cooper Case, it appeared that defendant was merely a retailer .under purchases made from the Eisner Company, and that the Eisner Company was the actual defendant. Perhaps it was inevitable that the case should have the same result as the Eisner Case; and yet it is not quite clear why, in the latter case, relief should have been denied on.the ground of trade-mark infringement and given on the ground of fraud, and in the Siegel-Cooper Case the absence of any fraudulent intention by defendant should have been held immaterial, and on the authority of strict trade-mark cases; but, whatever may be the proper view of the Eisner and Siegel-Cooper Cases, they do not militate against the defense of “estoppel by negligence” in a proper case. Not only did neither defendant claim an estoppel, but the Eisner Company could not have done so because estoppel cannot be based on fraud, and the -Siegel-Cooper Company could not have done so because it had made no expenditures based upon its belief, in its own title to the subject-matter, nor was it ignorant of plaintiff’s claim.
We are cited, also, to several decisions in patent cases (of which Taylor v. Sawyer Co. [C. C. A. 31 75 Fed. 301, 22 C. C. A. 203, and Ide v. Trorlicht [C. C. A. 8] 115 Fed. 137, 53 C. C. A. 341, are typical) to the effect that an injunction against the continuation of a patent infringement will not be denied because of equities which have arisen in defendant’s favor through plaintiff’s indifference or delay. These cases usually themselves save the question of a possible estoppel; but suits upon a patent and a trade-mark present, in this respect, a very imperfect analogy. A patent is an absolute monopoly; the pat-entee is under no obligation to work the patent; he has received a
A study of these cases, as well as of the others presented, has not convinced us that our conclusion was mistaken, and the petition for rehearing is denied.
It should be understood, as was more fully stated in the “Old Crow” Case, that, such an adjudication as is here directed is confined in its effect to the territory' which the Rectanus Company had reached and was occupying to a substantial extent when it received notice of plaintiff's claims. How far, if at, all, it may promote an increase or accept a natural increase constitutes one of the “difficulties which may develop” from conflicting rights, as specified in a previous paragraph, and which we do not undertake to consider.
By this phrase meaning that estoppel which at last rests, not upon a trade-mark owner’s actual knowledge of the use by the person afterwards made defendant, but rather upon a knowledge imputed to the owner because of his indifference and neglect.
Mrs. Begis sent a few bores into Maine, New Hampshire, Vermont, and New York. She sold a few which the buyers were to send to Canada or Virginia. No one of these is fixed as before 1900; all may as well have been, as the business reached its largest volume shortly before she sold out in 1910.