Theodore Rectanus Co. v. United Drug Co.

DENISON, Circuit Judge (after stating the facts as above). 1. It is not denied that, in the Massachusetts litigation against Jaynes and [548] the United Drug Co., Mrs.„ Regis’ claim to the .trade-mark was earnestly contested and that every available defense was presented. The opinion of the Supreme Judicial Court of Massachusetts and the testimony in the present record alike impel us to the conclusion that her claim of prior right is thoroughly established) and that before 1880 she had so adopted and so used the word that her title thereto as a trade-mark — and with all the incidents of a commoñ-law trade-mark —was perfected. 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. [1] 3. The validity of the trade-mark is attacked, because it is said that the article is useless or harmful, and that putting it on the market as a remedy is fraudulent. The proofs do not sustain this contention. It has as its basis an element which was once commonly prescribed for some digestive troubles, and which is still prescribed by some physicians. The expert witnesses agree that it may do. some good along the line of its advertised benefits, and there seems to be no substantial reason to think that it will be injurious, unless it is taken in too great quantities. If the fact that an excessive amount is harmful were to condemn an article as fraudulent, many useful remedies would suffer. [2] 4. The District Judge thus clearly stated the final difficulty: “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. [3] We must classify this case as one of those to which we have just referred. Conceding to Mrs. Regis and her successor the broad or the prima facie original exclusive right to the mark, and conceding, wilhout deciding, that no particular standard of diligence should be enforced against them in the matter of expanding their trade over the country, we find much moré than lack of- diligence; we find com550 píete indifference. If we take the year 1900 for comparison, we see that, for more than 15 years, Rectanus had been using the mark in his own trade, had expended probably several thousand dollars in making the mark well known, and had established a considerable, although local,, business in Louisville and vicinity. His excursions outside of that local field are too inconsiderable to have importance. Although an active druggist, familiar with the literature of the trade, he had never heard of Mrs. Regis’ remedy or of her trade-mark. On the other hand, during more than 20 years after the adoption of the mark, Regis & Co. had then done nothing whatever to make it known outside of the New England states, save sporadic sales in territory practically adjacent to those states. So far as Kentucky was'concerned, they sent no salesmen there and did no advertising whatever intended to reach that, territory. They had registered the mark in Massachusetts, thus getting the local effect of the state statute; but not until 1900 did they indicate-by registration in the Patent Office that they claimed an interstate trade-mark. Speaking practically, they confined to. one' corner of the country their trade and their efforts to get trade. This might not be important, if it had characterized their conduct for 1 or 2 years, or some other short period, or if it could be said that they were merely awaiting a natural development. Such absolute disregard of the Kentucky territory for 20 years indicates rather more than indifference, and they were bound to know that others were likely to act upon the assumption that the field was open and that their silence would mislead any one who did act in reliance on that assumption. 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 [551] mark, add the refusal Ip enforce it against Mcllvaine in the territory occupied by him was put solely upon the ground of ladies which amounted to an estoppel. In Macmahan Co. v. Denver Co. (C. C. A. 8) 113 Fed. 468, 51 C. C. A. 302, it appeared that while the word involved, “Antiphlogistinc,’’ might be capable of appropriation as a trade-mark, the plaintiff’s use of the word had been so trifling in amount and so exclusively confined to single and small classes of cusíomers that there had not been a sufficient appropriation to create in the plaintiff the normal, full, and exclusive trade-mark right in the word as applied in a broader field. The substantial decision was that, in fact and in law, plaintiff never acquired the trade-mark right. The case, on ils facts, was an obvious effort by a former officer of defendant to destroy what he bad sold, and the result reached was plainly the right one. In Hanover Co. v. Allen Co. (C. C. A. 7) 208 Fed. 513, 125 C. C. A. 515, it appeared that plaintiff adopted “Tea Rose” as a 'rade-mark for flour in 1872. It had sold its flour only in states noith of the Ohio river, and in the Southeastern states it had, apparently, up to the time of commencing suit, been selling its flour only under other trade-names. The defendant had adopted the same name, in 1893, without know-ledge of plaintiff’s prior use, and from 1894 until suit commenced, probably 1912, it had been pushing its trade under that name in the Southeastern states, and built up a large business, so that, in the flour trade in that territory, the mark had come to mean defendant’s flour and nothing else. An injunction was refused as against this particular Southeastern trade. The opinion rests, to srr.te extent, upon the idea that a trade-mark is wholly and merely pertinent to an existing trade, that it cannot be enforced beyond the field which is already occupied by that trade, and that, outside of that field, a later comer may acquire rights in the same trade-mark; but it is not necessary so to interpret the opinion. Plaintiff, while using the trade-mark for 40 \rears, had kept it out of the Southeastern rerrii ory, and it would be difficult to distinguish such indifference from a positive abandonment; the defendant, without objection and to an extent which would have brought notice to plaintiff, if plaintiff had been claiming- rights there, had been for 18 years using the mark in promoting its business in that territory; even when suit was commenced, plaintiff had no trade which was or could be injured by defendant's act; in that territory it had only expectation or possibility thn it might some time acquire such trade: and, on these facts, it might well he. said that plaintiff was not entitled to aid from a court: of equity.1 ()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 [552] questions are not involved. We now hold only, as the Court of Appeals in the Second Circuit did in the Baltimore Club Case, and as we think the Court of Appeals in the Eighth Circuit did in Kahn v. Gaines, 161 Fed. 495, 88 C. C. A. 437 (see our discussion of this case in Gaines v. Rock Spring Co., 226 Fed. 531, - C. C. A. -, this day decided), that the defendants may continue to do the thing at which the suit was directed — in this instance, use the word “Rex” upon and in connection with their blood purifier. 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. Footnotes [1] 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.