279 Pa. 132 | Pa. | 1924
Opinion by
Plaintiff and defendants are competitors in the business of compounding, placing in counter packages and selling, pharmaceutical preparations and toilet articles. Plaintiff was the first to adopt this method of business, which has grown to large proportions; its package sales, through agents and subagents, amount to a number of millions annually, and large sums have been and still are being expended by it, in advertising its business and selling its goods. Three hundred and eleven kinds of counter packages are put up and sold by it, each of the containers and cartons being distinctively labeled and marked, so as to indicate their origin. In order to still further prevent unfair competition, plaintiff filed for record, in the office of the Secretary of the Commonwealth, in accordance with the provisions of the Act of June 20, 1901, P. L. 582, as amended by the Act of April 24, 1905, P. L. 302, facsimiles of two of the labels used by it, one being of the type placed on bottles and the other on cartons. One of these contained the words “Cod-Liver Oil” and the other the words “Epsom Salts.” It was not stated, although the fact was so, that the labels used, and to be used, by plaintiff, on bottles and cartons containing the other preparations sold by it, were of the same style, the only difference being in the name designating the article in the particular bottle or carton.
Several years after plaintiff established this character of business, defendants began, as they had a right to do, the preparation and selling of counter packages, containing the same pharmaceutical and toilet articles; their fields of sale being in many of the localities where plaintiff’s preparations are sold, although not in the
A number of defendants’ preparations having been sold with labels and in cartons of the imitative character specified, plaintiff filed its bill in equity in this case, alleging unfair competition and a breach of the Acts of 1901 and 1905, above referred to, and prayed an injunction, an accounting, discovery, a decree that defendants pay the penalties prescribed by said statutes, and general relief. An answer was filed. On the trial the chancellor found the facts to be as above set forth, and advised a decree for an injunction, and also an accounting for the profits realized from the sale, in unfair competition, of all of defendants’ preparations. He did not advise an award of penalties under the Acts of 1901 and 1905.
Both parties excepted, and the court in banc sustained the trial judge in everything but the extent of the accounting, limiting this to the sales of cod-liver oil and epsom salts only. The reason given for this restriction is thus stated in its opinion: “Defendants’ conduct was wrong, but an accounting as directed......[in the trial judge’s report] would involve an itemized statement of all goods in containers having thereon labels in imitation of plaintiff’s labels, without regard to whether the retailer was a competitor of plaintiff’s agencies or not.
If the determination of the first of these questions depended on the effect of the labels registered under the Acts of 1901 and 1905, much could be said in support of the restriction; but it does not so depend. As already shown, the court found, and we think correctly, that defendants intentionally imitated the combination of the labels, the sizes of the containers, the arrangement of the printing and the manner in which the words appear on the packages, and that these together, and not separately, resulted in misleading purchasers. It is, therefore, a clear case of wilful unfair competition, remediable in equity even if there had been no statute; or, there being one, if no attempt had been made to comply with its provisions: Penna. Central Brewing Co. v. Anthracite Beer Co., 258 Pa. 45; Hub Clothing Co. v. Cohen, 270 Pa. 487. Under such circumstances, defendants are liable for the profits arising from their sales of any and all preparations marketed in unfair competition with plaintiff’s products: Standard Cigar Co. v. Goldsmith, 58 Pa. Superior Ct. 33. A different question would arise if its imitation had been an innocent one; being intentional, the duty to account is ordinarily a matter of right and of course: 38 Cyc. 911.
No decree can be made for the penalties provided by the Act of 1901, since section 4, which is the only authority for their assessment (P. L. 1901, page 584-5), says that they must be “sued for in any court having jurisdiction of an action for a fine or penalty,” thus excluding a court of equity. The subsequent parenthetical clause, “in addition to the penalty provided for in this section,” following the authorization of an injunction by a “court having jurisdiction of the parties,” does not operate to change a court of equity into a “court having jurisdiction of an action for a fine or penalty,” nor to modify the meaning of these words. It only prevents a possible contention that the recovery of penalties would exclude the right, in equity, to an injunction, damages and an accounting. The difference in the descriptive wording, where the courts are referred to, leads to the same conclusion.
We are aware that when a court of equity has once obtained jurisdiction, it will ordinarily round out the
The decree of the court below is reversed, and the record is remitted that an appropriate decree may be entered, and further proceedings had not inconsistent with this opinion.