Drummond Tobacco Co. v. Addison Tinsley Tobacco Co.

Rombauer, P. J. The plaintiff, a tobacco manufacturer in the city of St. Louis, brought this action against the defendant, a tobacco manufacturer of Louisiana, Missouri, for the purpose of restraining the latter from using on plug tobacco manufactured by it any colorable imitation of a horseshoe, which is the plaintiff’s trademark on that class of tobacco. The petition states that, continuously since 1876, the plaintiff and its assignors used the mark of a horseshoe as a trademark for distinguishing certain plug chewing tobacco manufactured by them; that at first this mark was affixed to each one pound plug by way of a paper tag, but since the year 1879 it was affixed by way of a tin tag in the following form: Which mark the plaintiff caused to be recorded in the United States Patent Office and in the county recorder’s office of St. Louis. The petition further states that the — 16 — assignors of the plaintiff were the first in adopting said mark, and acquired by such adoption an exclusive right therein when affixed to plug tobacco; that the plaintiff’s assignors and the plaintiff built up a very extensive trade in this article, which, owing to its tag, became generally known in the trade as horseshoe tobacco. The petition then states that the defendant, well knowing the premises, thereafter commenced to manufacture and to sell on the same market where plaintiff was selling its said horseshoe tobacco a brand of tobacco, affixing thereto a tin tag (hereinafter designated as tag A) in the following form: That said mark resembled a horseshoe, and that its use by the defendant was fraudulent and deceptive and designed to mislead the trade and public, and cause on their part the purchase of defendant’s tobacco as and for the horseshoe tobacco of plaintiff; that, in 1889, the plaintiff complained to the defendant of said colorable imitation, and the defendant agreed to change its tags so as to avoid all probability of deception, and thereupon did change its tags to the following form (hereinafter designated as tag B): That the plaintiff still complained of said tag B as an infringement of its trademark, and the parties sub — 17 — raitted the question to an arbitration of the executive committee of the Trade-Mark Association of Plug Tobacco Manufacturers, who made a unanimous award that tag “B” would deceive the consumer into the belief that the plug marked with it was horseshoe tobacco; that the defendant, being advised of the award of the committee, agreed with plaintiff that said tag UB” should be so altered as to be mutually satisfactory, but that the defendant has failed to make such alteration, and has continued to use said tag fraudulently ever since. The petition further states, as indicating a fraudulent intent on part of the defendant, that the defendant also imitated the outward appearance of the boxes in which the plaintiff shipped its said horseshoe tobacco; that plaintiff once branded the horseshoe on the outside of its boxes in red, whereupon the defendant began to affix its simulated mark on the outside of its boxes in red; that the plaintiff then changed its brands to blue, whereupon the defendant immediately changed its brands from red to blue; and that the defendant in other respects is fraudulently using a label on boxes containing its tobacco in fraudulent imitation of the plaintiff’s labels. The plaintiff prays for a decree restraining the defendant from offering for sale any tobacco with the tag “B,” or any other colorable imitation of plaintiff’s horseshoe trademark attached thereto, and also for an account of the profits made by the fraudulent use of plaintiff’s trademark. The damages are laid at $2,000. The defendant’s answer generally denies all the allegations of the petition, and specifically denies any fraudulent design on part of defendant to imitate the plaintiff’s trademark. It avers that it didin good faith — 18 — in the year 1879 adopt a spur as and for its trademark to be attached to certain kinds of plug tobacco of its own manufacture, and has used said trademark ever since. It denies that such spur is a colorable imitation of the plaintiff’s horseshoe or was intended to be such, or that it is likely to deceive anybody. It admits that plaintiff did complain of the use of said mark by the defendant as a colorable imitation of its horseshoe, but it denies that the defendant agreed to submit the question, whether it was an infringement of plaintiff’s trademark, to the Trade-Mark Association of Tobacco Manufacturers. It admits that it was informed that the question had been submitted to said association by the plaintiff, and that thereupon as a matter of courtesy it did authorize its tin tag or trademark to be exhibited to said association, with a proper representation of the facts connected with its use by defendant. It denies that it agreed to abide by the decision of the association, and denies that it ever agreed with plaintiff to cease using said trademark or to make such further changes in the form of the tag as should be mutually satisfactory. It denies the fraudulent imitation of the label on plaintiff’s boxes, denies that its trademark ever interfered with that of plaintiff, and prays judgment. The trial court upon a full hearing dismissed the plaintiff’s bill. For our convenience, all the original exhibits which have been used in the court below have been reproduced in the argument before us. We have carefully examined them, as well as the voluminous record of the testimony given at the trial, and find the facts to be as follows: The plaintiff’s title to the use of the horseshoe trademark is not questioned. Its manufacture and trade in that particular brand of plug tobacco is very extensive, its out-put in 1889 being five million, seven hundred and seventy-eight thousand pounds; in — 19 — 1890, six million, one hundred and thirty-five thousand pounds, and in 1891, five million, four thousand five hundred and five pounds. The defendant’s output of all brands of plug tobacco during the year 1890 seems to have been about one million, two hundred thousand pounds. The defendant is the successor of some firms and corporations, which in the main have consisted of the present stockholders of the defendant, and one of these firms (McCune, Palmer & Knight) in the year 1881 adopted the spur as a trademark, and attached to 'its navy plugs what purports to be a representation of a spur, by way of tin tags in the shape of tag “A,” in the same manner in which the plaintiff’s horseshoe tags were attached to its navy plugs, and of the same size, color and general appearance. The origin of the mark is stated by one of the defendant’s officers to have been owing to the fact, that the defendant had an extensive trade in Texas, then the main cattle state, where the spur would be an attractive mark to cow boys and cattle men generally, although one of the defendant’s witnesses, a very-extensive cattle dealer, testifies that the spur in itself would not recommend the tobacco to cattle dealers more than any other brand. Before the firm of McCune, Palmer & Knight was absorbed in the defendant corporation, but about the same time as the spur brand was started, the defendant company adopted a “C” as a trademark, it not being clearly shown what the “C” was supposed to stand for, and placed tin tags supposed to represent that letter on its plug tobacco, which tin tags were colorable imitations of a horse shoe. The plaintiff at once complained of both these devices as infringements of its horseshoe mark, and the president of the defendant company gave to plaintiff upon request the following written declaration: — 20 — “To whom it may concern: The plug chewing •tobacco exhibited to us this day by M. Q-. Smith, attorney of the Drummond Tobacco Company, with the similitude of a horseshoe was made by us under the following circumstances: Thirty boxes only were made, when, discovering the similitude to the hoiseshoe, we have ceased making same, and will make no more in future. Our trademark is a little “c” which we claim is our own.” The defendant’s evidence, however, furnishes no explanation why, if its trademark was a little “c,” it attached to its plugs a capital “G,” the similitude of which to the horseshoe, plaintiff’s well-known trademark, the defendant at once conceded. We further find that, upon plaintiff’s complaint of the tag “A,” a member of the firm of McCune, Palmer & Knight, who, however, is not now a member of the defendant corporation, called upon the plaintiff’s then president, and some conversation was had in regard to avoiding deception by placing the defendant’s tags differently on the plug than the plaintiff placed its tags, but that no definite arrangement for the settlement of the matter was arrived at. The defendant’s boxes at that time were marked on the outside by a dark plug hat, represented as standing on the flat side of the plug of tobacco, a white spur being prominently displayed in the center of the hat. In the year 1889 the plaintiff’s then president, while traveling on the Pacific coast, found in the trade there boxes of the defendant’s spur tobacco, labeled on the outside in a manner resembling those of the plaintiff’s horseshoe tobacco boxes, and containing in the inside the defendant’s plug tobacco marked with tag “A.” He at once made complaint by letter* to the secretary of the Trade-Mark Association above referred to, and the secretary in — 21 — September, 1889, addressed a letter to tbe defendant as follows:— “Gentlemen: — Tbe Drummond Tobacco Company complain that the ‘spur’ tag used by you is so like their ‘horseshoe’ tag, that it is sold for ‘horseshoe’ to consumers. Please send us a plug with the ‘spur’ upon it, such as you sell, for comparison. Also what you have to say about their complaint. An early reply will oblige. To this letter the defendant replied in the following manner: “As requested in yours of ninth instant, we send you by express to-day a plug of our ‘spur’ tobacco just as it goes to the trade. On comparing same with ‘horseshoe’ plug, we think your committee will agree with us that there is no reasonable ground for claiming that it is mistaken for that brand. There is a marked difference in spacing and manner of placing tags on the lump, which, with the wide difference between ‘spur’ and ‘horseshoe’ tags, makes it next to impossible to mistake one for the other. We have sold these goods quite largely throughout the South and West since ’81, and not a single instance has come to our notice of this having been done. We will be . glad to have you advise us of any decision your committee will arrive at in this matter.” The secretary at once sent the plugs of the plaintiff and the defendant to each of the members of the committee of arbitration, all of whom seriatim, and without any consultation as far as appears, gave it as their opinion that the defendant’s so-called spur tag was likely to deceive the ordinary consumer of plug tobacco into the belief that it was the plaintiff’s horseshoe tobacco he was buying. This award of the committee was at once communicated to the defendant. We find that the Trade-Mark Association of Plug Tobacco Manufacturers is a voluntary association of — 22 — plug tobacco manufacturers of the United States, which any manufacturer of the article may join. The assessments by which it is supported are based on the annual out-put of the article by its respective members. Its object is to protect its members in the use of their legitimate trademarks, and of defending them against infringements. It has an executive committee, selected by the members of the association annually, which acts as a committee of arbitration in case of any complaint for infringement made by one member against any other member, or against an outsider. The award of the committee is not conclusive on any member, but, if the controversy is between members of the association, the association, at its own expense, defends or prosecutes, as the case may be, any suit in the courts growing out of the infringement claimed so as to vindicate its award. The only difference between the rights of a member and non-member, in case of an award by the committee in favor of either, is that the non-member must vindicate the award of the committee at his own expense, which, in view of the fact that the non-member contributes nothing towards the support of the association, is natural. The members of the executive committee, as the evidence shows, are persons selected with a view to their competency to deal with the questions before them. Nor is there anything to indicate that it,lies in their interest, or in that of the association, to make awards unsupported by the facts of the case, and thereby entail upon themselves and the association the costs of an unwarranted litigation. It was in evidence that in a recent controversy between a member and a non-member of the association the committee made an award in favor of the non-member. When the defendant was notified of the award of the committee, two. of its officers called upon the plaintiff to adjust matters. We find that the discus — 23 — sion at the conference turned upon the question how the spur should be represented on defendant’s plugs so as to avoid the possibility of its being taken for the plaintiff’s horseshoe. The plaintiff’s president drew the representation of a spur which in his opinion could not be mistaken for a horseshoe, it being a spur with a very small band and a very large rowel. The defendant’s officers agreed to have similar tags cut by hand and to submit them to plaintiff by letter, and claim that they did so, submitting the tag B. Plaintiff never received any such letter, and, noticing the marketing of the defendant’s plugs with the tag B in the latter part of 1890, the plaintiff again complained to the secretary of the Trade-Mark Association of the alleged infringement, and the secretary at once wrote the defendant, advising it of that fact. The defendant, thereupon, wrote a long letter to the secretary, stating what had transpired since the last award, and also sent some of its plugs of tobacco marked with tag “B,” claimingthat tag “B” was radically different in form and general design from tag “A.” This letter concluded: “We do not believe that any unprejudiced man will say that the spur tag we now use is in any manner an infringement of the Drummond Tobacco Company’s horseshoe, or calculated to deceive, and we are perfectly willing to have your executive committee pass on same.” The matter was again laid before the committee of arbitrators, who this time convened and sat as a body. The defendant was represented at that hearing by a person of its own selection. The committee again unanimously decided, each member giving his opinion seriatim, that tag “B” was an infringement of plaintiff’s horseshoe tag trademark, and liable to deceive the consumer. The defendant was at once notified of this decision,. and refused to state whether it would abide by it. — 24 — It replied Tinder date of March 18, 1891, as follows: “New York. “Theo. E. Allen, Secretary. “Dear Sir: — Referring to your favor sixth inst., advising us of the decision of the executive committee in a matter of complaint of the Drummond Tobacco Company of our ‘spur’ tag, and asking if we will abide by said decision, will say one of our company has called on the Drummond Company with a view of making such change in the tag as will be mutually satisfactory, and the matter is now under consideration.” We find that thereupon an officer of the defendant company called upon the plaintiff’s president and submitted to him a tag, cut out by hand, of zinc, of which the following is a fac simile (the same being hereinafter designated as tag “C”) : The plaintiff’s president told the officer exhibiting the device to cut it out of tin, put it on the plugs in a box of tobacco, and send him the box of tobacco, as the defendant intended to put it upon the trade. This was never done, and the defendant continued to sell on the markets its tobacco, the same as theretofore, with the tag “B” attached thereto. Two questions arise for decision upon this record: First. Is the defendant’s tag “B,” as now used and complained of, a sufficiently colorable imitation of plaintiff’s horseshoe tag, likely to deceive the ordinary — 25 — consumer of the article; and, next, was the adoption and use of the spur tag by the defendant a mere matter of accident, or, if design, a design in good faith without any attempt at piracy upon plaintiff’s trade in the horseshoe tobacco. If we conclude that the similitude between the two marks, as at present used, is not of a character likely to deceive any ordinary consumer of the article, the judgment dismissing the bill must be affirmed, even though the defendant was guilty of bad faith in the adoption of the symbol originally, because no action can be predicated upon fraud, unaccompanied with damages, even in equity. Courts deal with the principles of ethics only as far as they affect property rights. It is not claimed, either in the bill or in the evidence, that the similitude between the two tags is likely to deceive either the jobber or retailer. These persons buy the article in larger quantities; it is billed to them as an article of a certain kind; they have ample opportunity of close examination; and, hence, their deception by any simulated trademark, short of a downright forgery, is out of the question. The consumer of the particular article is to be considered almost exclusively in determining the question of infringement, because, in the case of an attempted deception, he is substantially the only party likely to be deceived. Sykes v. Sykes, 3 B. & Cr. 541; Farina v. Silverlock, 1 K. & J. 509; Rose v. Loftus, 47 L. J. Ch. 576; Singer Mfg. Co. v. Loog, 18 Ch. D. 395, 412. It is a notorious fact, amply supported by the evidence in this case, that consumers of plug tobacco consist in the main of persons engaged in manual labor, who purchase the article without close scrutiny, and mostly in small quantities, known as ten-eent cuts, and that it is for this reason that the little tin tag is attached to the plugs in short intervals so as to show — 26 — one on each ten-cent cut. The evidence further shows-that this class of purchasers generally call for the-article by the brand, and cannot give a very critical examination to the tag, as they have neither the means of comparison nor the facilities for careful examination. It is not essential to the right of relief to show that anyone was actually deceived. Filley v. Fassett, 44 Mo. 168. The evidence in this case however shows, and we so find, that some purchasers were actually thus deceived, the retailer handingthem defendant’s spur tobacco when they called for the plaintiff’s horseshoe, and that the similitude in the external appearance of the boxes and the general appearance of the tag was such that, in two-instances, even the plaintiff’s salesmen were deceived by looking at the boxes from some distance. There is ample and credible testimony, offered by the plaintiff by way of expert opinion on the part of salesmen and others, of a likelihood of deception, and such testimony finds corroboration in the award of the executive committee of the Trade-Mark Association, whose competency to-pass upon the question as experts is conceded in the defendant’s letter of February 20, 1891. The defendant’s counsel urge with zeal and learning that the question of similitude is after all a question of mere inspection, and, as all the exhibits used upon the trial are before us, we have the same facilities for determining the question as the witnesses examined and the committee of arbitration had, and that we-should pass our judgment upon the evidence of inspection. That the main test of the alleged resemblance is inspection, has been frequently decided (Abbott’s Trial Evidence, 752), but it has also been decided with equal uniformity that the resemblance need not be such as. would deceive persons seeing the two marks side by side. Seixo v. Provezende, 1 Ch. App. Cas. 191, 195; — 27 — Colman v. Crump, 70 N. Y. 573, 578; Hier v. Abrahams, 82 N. Y. 519; Pike Mfg. Co. v. Stone Co., 35 Fed. Rep. 896; McCann v. Anthony, 21 Mo. App. 83. The ruléis similar whether the alleged infringement relates to a trademark, trade label or trade name, as the underlying principles are the same. The court cannot upon bare inspection determine whether an ordinary customer, having neither the opportunity for comparison nor time for examination, would likely be deceived by the similarity of the marks. On that question the opinion of witnesses familiar with the trade, and the habits of the customer, is of weight, and, when aided by evidence of instances of actual deception, should be controlling, unless the dissimilarity between the two marks is such as to exclude any probability of deception. Grinded by these considerations, we conclude that the plaintiff’s evidence makes out a, prima facie case that the defendant’s so-called spur tag “B” is, under the circumstances shown in evidence, an infringement of plaintiff’s trademark of the horseshoe tag. This brings us to the second and not less important part of the inquiry, whether the adoption of the spur tag by the defendant as a trademark was a mere matter of accident, unaccompanied by any design of illegal encroachment on the plaintiff’s trade. We go into the inquiry, owing to the voluminous evidence adduced by defendant tending to show that the similitude between the two tags is not such as to deceive any person using ordinary caidion, and hence no serious injury has resulted or can result to plaintiff’s proprietary rights by the alleged interference. We state at the outset that, while fraud on defendant’s part is in no way essential to protect plaintiff’s proprietary rights in the trademark from interference when the interference is made out by the unequivocalproof, yetless cogentproof of the probability of deception will ¡suffice where an intention to deceive — 28 — is shown. The merchant or manufacturer, who by an unfortunate accident adopts a trademark already in use by another, occupies in a court of conscience a different position from one who, knowing of the other’s trademark, and designing to profit by the reputation established through the efforts of another, seeks to get part of the benefit of the trade and reputation of the ■other by means of a colorable imitation of his trademark. Fraud was the very origin of the exercise of jurisdiction of courts of equity in this class of cases. This distinction is obvious, and has been frequently recognized. Browne on Trade-Marks, sec. 202. McLean v. Fleming, 96 U. S. 245; Curtis v. Bryan, 2 Daly, 312; Edelsten v. Vick, 11 Hare, 78. “The finding of a fraudulent design must in itself, to some extent at-least, influence the finding of the court as to the similarity of the imitation, because, whenever the .similarity is such as may probably deceive, it comes with ill grace from the defendant to say that he intended to deceive but failed because the resemblance was not close enough. If either party is entitled to the benefit ■of a presumption in the case above stated, it is the plaintiff and not the defendant.” The American Brewing Co. v. Brewing Co., 47 Mo. App. 14, 22. We have announced and acted upon this rule in many cases. Sanders v. Jacob, 20 Mo. App. 96; McCann v. Anthony, 21 Mo. App. 83; Trask Fish Co. v. Wooster, 28 Mo. App. 408, 419; Plant Seed Co. v. Plant & Seed Co., 23 Mo. App. 579. As bearing upon this question, we find the facts to he as follows: All the different firms and corporations, which by succession now form the defendant company, were all along familiar with the plaintiff’s horseshoe trademark, and knew that the tobacco marked with the horseshoe tag, and known as horseshoe tobacco, had •an extensive reputation. With full knowledge of that — 29 — fact, the firm of McCune, Palmer & Knight, defendant’s assignor, adopts a spur as a trademark, and places-a tin tag purporting to represent a spur upon their plug tobacco in exactly the same ráanner as the plaintiff’s is placed, and creasing their tobacco in the same manner as the plaintiff’s is creased. The representation of .this so-called spur has a short shank, the tag exhibiting the flat side of the band of the spur and of the shank and rowel, which we need not say is an impossible representation of a spur from any point of view. Plaintiff complains of this tag as an infringement, and the firm promises to remedy matters' so as to avoid deception. Shortly afterwards the defendant corporation places upon its tobacco a tag in the shape of a capital C, and, when the plaintiff complains of it as an infringement, it at once admits that this tag is a similitude of plaintiff’s horseshoe, and desists. The defendant, having by this time acquired the spur brand from the firm of McCune, Palmer & Knight by assignment, does away with the outside box label of the-spur tobacco used by McCune, Palmer & Knight, namely a black hat with a white spur across it, and places on the outside of its boxes a. label of a plug crossed with a spur in the identical manner in which the plug on the label used on plaintiff’s-boxes is crossed by a horseshoe. No explanation of how this change came to be made is given, nor is any satisfactory explanation given why the color of the branded spur on the outside box is changed so as to-correspond with the color of plaintiff’s boxes containing the horseshoe tobacco. It is highly improbable that all these coincidences are results of mere accident, and, in the absence of any satisfactory showing that they were the results of accident, we must conclude that they were the result of a deliberate design to obtain part of the benefit of the reputation acquired by the article manufactured by plaintiff through the — 30 — means of a colorable imitation of its distinguishing mark. It is also shown by the evidence of disinterested witnesses (and, although this evidence is contradicted by the defendant, we find the occurrences probable) that the defendant’s traveling salesmen, in pushing the spur tobacco in the market, designated it as the new horseshoe or spur, they being offered special inducements for pushing this particular brand. We also find that, in isolated instances, such salesmen suggested to the retailers that, on cutting the plug into five-cent pieces and thereby severing the spur tag, there would be left a horseshoe on one piece and on the other a star, and that some retailers availed themselves of the suggestion. The star brand of tobacco, on which the star is somewhat similar to the rowel on the spur tag, was and is a favorite brand in the western market. It is the same trademark, the infringement of which by a fraudulent and spurious imitation, called the “buzz saw,” was perpetually enjoined by the supreme court of this state in Liggett & Myers Tobacco Co. v. Sam Reid Tobacco Co., 104 Mo. 53. That the Sam Reid above named, as is shown by the evidence, is a former bookkeeper of the Tinsley Tobacco Company, a son-in-law of Addison Tinsley, and is the party who was selected to represent, and who did represent, the defendant in the arbitration had before the Trade-Mark Association in the case at bar, is also an unfortunate coincidence. We recite these minor facts, not because we consider they would be entitled to consideration if standing alone, but, because, in the aggregate, they are entitled to some weight in connection with the other facts in determining the defendant’s good faith in the premises. It results from the foregoing that the judgment of the trial court, dismissing the bill, must be reversed. The only remaining inquiry is, what judgment we — 31 — should render under the statute, which commands us to render such judgment as the trial court should have rendered. The plaintiff’s bill contains a prayer for general relief. It also contains a prayer for specific relief as follows: “That said defendant, its agents, servants and employes may be perpetually enjoined and restrained from manufacturing, selling (or offering for sale), directly or indirectly, any plug tobacco having affixed thereto the mark of a ‘horseshoe,’ not the genuine mark of plaintiff, or the mark used by defendant and heretofore last described, or any other colorable imitation of plaintiff’s ‘horseshoe’ -tobacco trademark as hereinbefore stated, which has made plaintiff’s tobacco known by the name of ‘horseshoe’ tobacco. “That defendant may be compelled to render before this court a full, true and perfect account of all profits of every description which it has made by use of the simulated mark aforesaid, and that the said defendant may be decreed to pay over to plaintiff all .such profits.” We shall grant no relief to plaintiff under its prayer for an account in this proceeding. The facts that for many years the defendant has used the spur tag in various shapes and forms, and for part of the time without any active objection on part of the plaintiff, and that different changes were introduced in its shape and general appearance, in the various attempts to settle the matter amicably, raise propositions which make it difficult to determine the exact data which form the elements of such an account, even if plaintiff were entitled to it. Hence, without prejudice to plaintiff’s rights, we shall make no order on that part of the plaintiff’s bill, leaving it at liberty, if so advised, to proceed at law for damages. We, however, decree that — 32 — the defendant, its servants and agents be perpetually enjoined from marking either the plug tobacco manufactured by them, or the outside of the boxes in which such tobacco is shipped and exposed for sale, with the tag hereinabove mentioned as tag B, or any other colorable imitation of plaintiff’s horseshoe trademark; the defendant to be at liberty to use for that purpose, if they so_ desire, tag C, both on their plugs of tobacco, and on an outside label of their boxes, and, if used on the outside labels of their boxes, the spur to be placed lengthwise on the plug, or else in some other manner-distinct from the relative positions of the plug and horseshoe on plaintiff’s boxes. So ordered. Judge Thompson concurs. Judge Biggs does not participate-in the decision.