Illinois Watch-Case Co. v. Elgin Nat. Watch Co.

JENKINS, Circuit Judge, upon this statement of the case, delivered the opinion of ¡he court. It was ruled in Trade-Mark Cases, 100 TJ. S. 82, that the act of congress approved August 14,1876 (19 Stat. 141), was void for want of constitutional authority, but the court expressly left the question undecided “whether the trademark bears such a relation to commerce, in general terms, as to bring it within congressional control when used and applied to the classes of commerce which fall within that control.” That the congress had no power, under the commerce clause of the constitution, to regulate the subject, was ruled by the circuit court of the United States for the Eastern district of Wisconsin in Leidersdorf v. Flint, 8 Biss. 327, Fed. Cas. No. 8,219. This is the only direct adjudication upon that question. Following the decision of the supreme court in the Trade-Mark Cases, the congress of the United States enacted the present law (Act March 3, 1881; 21 Stat. 502), limiting its operations to trademarks used in commerce with foreign nations or with the Indian tribes. Títere has been no ruling upon the constitutionality of this act, and it need only be said that its validity is fairly doubtful. The appellee, the comjilainant below, by its bill asserts and seeks to maintain its right to the use of the word “Elgin” as a, trademark, claiming that right as one arising under federal law. It is, of course, clear that this bill cannot be sustained, all of the parties to it being citizens of the same state, unless its right can be sustained as one arising under the laws of the United States. The statute does not define what shall constitute a trade-mark. To determine, therefore, what that trade-mark is wiiicb is protected by this statute, we must be referred to the common law. It is not now a question that no one can acquire an exclusive right to the use of geographical names as trade-marks. Canal Co. v. Clarke, 13 Wall. 323; Lawrence Mfg. Co. v. Tennessee Mfg. Co., 138 U. S. 547, 11 Sup. Ct. 396; Chemical Co. v. Meyer, 139 U. S. 542, 11 Sup. Ct. 625; Mill Co. v. Alcorn, 150 U. S. 464, 14 Sup. Ct. 151; Mills Co. v. Eagle, 58 U. S. App. 490, 30 C. C. A. 386, and 86 Fed. 608; Iron Co. v. Uhler, 75 Pa. St. 467; Elgin Butter Co. v. Elgin Creamery Co., 155 Ill. 136, 40 N. E. 616. In Mill Co. v. Alcorn, supra, the court observes that “the word ‘Columbia’ is not a subject of exclusive appropriation, under the general rule that a word or words in common use as designating locality or section of country cannot be appropriated by any 670 one as his exclusive trade-mark. * * * The appellant was no more entitled to the exclusive use of the word. 'Columbia/ as a trademark, than he would have been to the use of the word ‘America,’ or the 'United States,’ or ‘Minnesota,’ or Minneapolis.’ These merely geographical names cannot be appropriated or be made the subject of exclusive property. They do not in and of themselves indicate anything in the nature of origin, manufacture, or ownership.” But, while one cannot obtain the exclusive right to use a geographical name as a trade-mark, and cannot make a trade-mark of his own name to deprive another of the same name from using it in his business, that other may not resort to artifice to do that which is calculated to mislead the public as to the identity of the business or of the article produced, and so create injury to the other beyond that which results from the similarity of name. There are a large number of cases in which this principle has been declared. Croft v. Day, 7 Beav. 84; Holloway v. Holloway, 13 Beav. 239; Wotherspoon v. Currie, L. R. 5 H. L. 508; Thompson v. Montgomery, 41 Ch. Div. 35; Reddaway v. Banham (1896) App. Cas. 199; Lawrence Mfg. Co. v. Tennessee Mfg. Co., 138 U. S. 537, 11 Sup. Ct. 396; Chemical Co. v. Meyer, 139 U. S. 540, 11 Sup. Ct. 625; Coates v. Thread Co., 149 U. S. 562, 13 Sup. Ct. 966; Singer Mfg. Co. v. June Mfg. Co., 163 U. S. 169, 186. 16 Sup. Ct. 1002; American Waltham Watch Co. v. U. S. Watch Co. (Mass.; March, 1899) 53 N. E. 141. We have spoken to the same effect, and with no uncertain sound. Meyer v. Medicine Co., 18 U. S. App. 372, 379, 7 C. C. A. 558, and 58 Fed. 884; Pillsbury v. Mills Co., 24 U. S. App. 395, 12 C. C. A. 399, and 64 Fed. 211; Mills Co. v. Eagle, 58 U. S. App. 490, 30 C. C. A. 386, and 86 Fed. 608; Kathreiner Malzkaffe Fabriken mit Beschraenkter Haftung v. Pastor Kneipp Med. Co., 53 U. S. App. 425, 27 C. C. A. 472, and 82 Fed. 321; Johnson v. Bauer, 53 U. S. App. 437, 27 C. C. A. 374. and 82 Fed. 662; Raymond v. Baking-Powder Co., 55 U. S. App. 575, 29 C. C. A. 245, and 85 Fed. 231. This class of cases does not proceed upon the ground of an infringement of a trade-mark, but upon the ground of fraud, and that equity will not permit one, aside from any question of trade-mark, to palm off his goods as the goods of another, and so deceive the public, and injure that other. It is not necessary in such cases, in order to give a right to an injunction, that a specific trademark should be infringed (McLean v. Flemming, 96 U. S. 245, 250), but that the conduct of the party should show an intent to palm off his goods as the goods of another. The allegations respecting trademarks are in such cases only “regarded as matter of inducement leading up to the question of actual fraud.” The court below sustained this bill upon the ground that the word “Elgin” had acquired a secondary signification, and through a long course of business had come, as applied to watches, toi designate the manufacture of the appellee, and as an article of approved excellence, and that therefore the word in that connection performed distinctly the function of a trade-mark, and could be registered and upheld as a trade-mark, under the act of congress. In this we think there was error. The word “Elgin” was not, and could not be, made a trade-mark. The fact that the 671 word bad acquired that signification might be forceful if the word was shown to be used to palm oil the goods of one as the goods of another, which, coupled with other evidence evincing intent to mislead and to defraud, would be operative to move a court of equity to prevent the wrong. It is said that the evidence in this case is o£ that persuasive character which irresistibly leads to the conclusion that here was such gross fraud that a court of equity should not stay its hand, but should enjoin the guilty party from further deception and wrong. Unfortunately, however, if we should concur with counsel to the full extent of his contention, we are, as we think, without jurisdiction to grant relief: or, to say the least, that jurisdiction is of so doubtful a nature and so limited in extent, and under an act of doubtful constitutionality, that we must decline to exercise it. The right of the appellee arises under the act of congress, and is limited to a trade-mark. By the statute, the right of action is given to him to recover damages “for the wrongful use of said trade-mark,” or he may have his remedy, according to the course of equity, “to enjoin the wrongful use of such trade-mark used in foreign commerce or commerce with the Indian tribes.” It is only by virtue of that statute, and for the protection of a right arising under the federal law, ¡hat the appellee has standing in the federal court, for all the parties to this suit are citizens of the same slate. The remedy in equity for fraud, to which we first referred, is one which existed before the statute, and is not given by it. It was not applied to protect the infringement of a trade-mark, but, recognizing the invalidity of the supposed trade-mark, was applied for the prevention of fraud; and, that a federal court may have jurisdiction in such a case, we think there must exist and appear from the record the necessary diverse citizenship of the parties. It may also be remarked that this bill is not framed upon any theory of fraud or fraudulent conduct upon the part of the defendants thereto, except as- it is to be inferred from the use of the complainant’s registered trade-mark. It is not alleged That they have ever represented or sold their goods as the goods manufactured by the complainant. The one is a manufacturer of watch movements, the other of watch cases. To be sure, it is claimed, and possibly is established by the proof, that the watch cases of the appellanis have been used by dealers to contain watch movements of inferior quality to those made by (he appellee, and possibly the purchaser deceived into believing that he had purchased a watch manufactured by the appellee. But this is not charged to have been done by the appellants, or with their knowledge or consent, or that they have entered into any scheme or combination to impose upon the public. The "only imposition suggested is the possibility that from' the general reputation of the watches manufactured by the appellee, and their known designation as Elgin watches, confusion is likely to result, and the purchaser be induced to purchase the one article when he desires another. That might result from the lawful use of a geographical name, and is. without remedy, unless coupled witli fraud upon the part of the appellants or those acting for and under them. However strong, the proof must respond to the allegations of the bill. 672 So that, whether we consider the case Irom the standpoint of jurisdiction, or-from the case made by the bill, we are constrained to the conclusion that the decree below was erroneous. The courts of the state furnish ample remedy for the wrong, if any, under which the appellee suffers. We have no right to redress or prevent trespass upon the common-law rights of the appellee, the citizenship of the parties forbidding jurisdiction. If it were allowable to us to assume jurisdiction to grant equitable relief upon the ground of fraud, if the bill were aptly framed to that end, the relief could only extend in restraint of the wrong, so far as it affected foreign commerce and commerce with the Indian tribes. The proofs show that such commerce in the case before us has been so slight as to be practicably immaterial, and that the real controversy is concerning state and interstate commerce'-in the manufactured article. Complete remedy for the wrongs suffered by the appellee can only be given in the courts of the state in which the parties are resident. It is therefore not becoming, as we think, to assume a doubtful jurisdiction under a statute of doubtful validity. The decree is reversed, and the cause remanded, with direction to the court below to dismiss the bill.