Cahn v. Gottschalk

Headnote

In an action to restrain the use of a trade-mark and for an account of profits from its use by defendant, it appeared that plaintiffs, liquor sellers, registered a design trade-mark bearing the words “ Maryland Club Rye Whiskey,” and applied it to a certain kind of whiskey sold by them in barrels, pasting the printed design on the head; that they had other trade-marks representing other whiskeys sold by them; that ten years after such registry, defendant used the words “Maryland Jockey Club Rye Whiskey,” stencilling them on barrel-heads with a design entirely different from plaintiffs’. Held, that plaintiffs were entitled to a trade-mark in the words “ Maryland Club Rye Whiskey,” they not indicating quality, but origin and ownership, notwithstanding plaintiffs had other marks to represent other whiskeys; and that defendant’s mark constituted an infringement, though the design used by him was different.

Plaintiffs’ design trade-mark contained the words “ Pure Old Rye Whiskey.” Held, that the falsity of such statement was not proven by the facts that whiskey which was sold under such trade-mark was mixed or blended, and that it was diluted with water, it not appearing that commercially “pure” whiskey is understood to be whiskey of the strength indicated by the government test.

The use of the word on a trade-mark of “ Pat.,” followed by the date of registering the trade-mark, will not vitiate it, where it appears that the word was not used to deceive the public.

Plaintiff, after knowledge by his agent of the infringement of his trademark, delayed for five years to bring his action for an injunction and for an accounting of profits. Held, that he was barred by his laches from recovering profits.

A partnership, resident in another state, whose firm name includes the fictitious use of the word “ Company,” doing business in this state through a local agent, is not within section 363 of the Penal Code, forbidding the fictitious use of the word “ Company.”

Appeal from a judgment of this court entered upon the report of a referee.

The facts are stated in the following opinion delivered upon trial of the action by the referee, Stephen H. Olin, Esq.

Since 1872 the plaintiffs have sold whiskey in barrels marked “ Maryland Club Rye Whiskey.” Since 1882 the defendant has offered for .sale whiskey in barrels marked “ Maryland Jockey Club Rye Whiskey.” This action is brought to restrain the use of these words. The issues tried are whether the plaintiffs have a trade-mark in the name “ Maryland Club Rye Whiskey,” whether the defendant has infringed this trade-mark, and whether the plaintiffs stand in such an attitude as entitles them to the aid of a court of equity in restraining an infringement.

It is very clear, upon the whole evidence, that the plaintiffs -applied the name “Maryland Club Whiskey” to an article in which they dealt, as a designation by which it was to be known to dealers and to the public, and it is clear that the result has agreed with their intention, and that this article of their manufacture has been widely dealt in under the designation chosen by them, and that it is bought and sold under this designation and thereunder is well known to the public.

The defendant contends that the name employed cannot be a trade-mark, on the ground that it indicates quality or use, and not origin and ownership, under the authority of Corwin v. Daly ( 7 Bosw. 222 ) and Bininger v. Wattles ( 28 How. Pr. 206 ). In Corwin v. Daly the words claimed as a trade-mark were “ Club House Gin.” It was testified that “ Club House ” had been used to designate superior quality in gin and other articles for twenty years in London and Dublin, and all the witnesses concurred in the opinion that it was a name for mere quality. The court say, “ the evidence in this case shows the constant use, for a quarter of a century, of those words to indicate a superior quality, including the article in question (gin), being in fact the natural result of the high standard required in such institu-

tions. It meant no more than Royal, Imperial, or Princely would do.”

In Bininger v. Wattles, Beady, J., says, “ The plaintiff in this case has no property in the title ‘ Old London Dock Grin.’ These words do not denote the goods or property, or particular place of business of the plaintiff, but only the nature, kind, or quality of the article in which he deals.”

The case at bar is readily distinguished from these authorities. The words “Maryland Club” have not been used, so far as appears, to denote excellence, nor do they indicate that the whiskey was used hi or made for the Maryland Club. They have been arbitrarily chosen by the plaintiffs to designate particular merchandise sold by them, they have become widely known as affi-xed to the plaintiffs’ merchandise, and in this sense have come to denote their goods. “ A name which does not, in itself, indicate what an article is or what are its qualities or component parts, hut which is invented or adopted by a manufacturer solely for the purpose of distinguishing liis products, and whose exclusive appropriation to that purpose in no way restricts others from properly describing similar articles produced by them, may be appropriated as a trade-mark and protected as such ” (Rapadlo, J., in Selchow v. Baker, 93 N. Y. 59 , 63).

The defendant contends that this recent and authoritative definition does not apply, because the name was not adopted solely for the purpose of distinguishing the plaintiffs’ products, but, on the contrary, was adopted to indicate grade or quality, and not ownership. The evidence on this point is, that in August, 1872, the plaintiffs registered in the patent office two trade-marks. One bore the words “ Maryland Club Rye Whiskey, C. B. & Co., Special TradeMark,” surrounding the seal of the State of Maryland, a monogram, and a representation of a club or clover leaf. The other trade-mark was different in design, but contained the plaintiffs’ names. The name “Maryland Club Whiskey” was used only with the first trade-mark, of which it formed a part. Under the second were sold six other grades of whiskey which were known respectively as “ Original Mar-

tin,” “Imperial Wedding,1” “ Washington County Cabinet,” “W. C. Maryland,” “Old Continental,” and “Standard Belt.” One of the defendants testified that the whiskeys were of different qualities, and the names were given to them to indicate the different qualities. Britton, the plaintiffs’ New York agent, testified that the different names were used by the plaintiffs to distinguish different grades. .Upon this testimony it is claimed that the rule laid down in The Royal Raising Powder Oo. v. Sherill ( 98 N. Y. 331 ) applies. The principle is there stated that there 'can be no exclusive right to the use of words or marks which have no relation to the origin or ownership of goods, and are only meant to indicate their quality or grade. Now it cannot be said that the name “ Maryland Club Whiskey ” has been only used to indicate quality or grade. The witness Britton says, “ It is used because it is a popular brand; it is used in consequence of its popularity, as well as to distinguish it,” and the whole evidence showed that the name was used to distinguish this particular quality of whiskey, sold by the plaintiffs, from all other whiskeys, primarily from all not made by the plaintiffs, and, afterward, from all other whiskeys of their manufacture. I can see no reason why such a name should not be a trade-mark. No rule exists that a person shall not have more than one trade-mark, and if any one has several applied to articles of a different kind or quality, he will almost necessarily use the trade-marks to distinguish from each other his goods so diversely marked. He will not, therefore, lose his rights. A trade-mark applied to only a portion of a manufacturer’s products will not become invalid simply because, besides its function of denoting the origin or manufacture of the goods, it may further be used in the manufacturer’s business to distinguish the goods to which it is applied from others of his goods not so marked.

In Grillott v. Esterbrook ( 47 Barb. 455 ) the defendant was enjoined from marking his pens with the figure “ 303,” a mark used by the plaintiff to distinguish certain of his pens from those of different size and quality. The judgment was

affirmed by the Commission of Appeals ( 48 N. Y. 847 ), on the ground that the number “ 303 ” was selected and used by the plaintiff as his trade-mark, to indicate, in connection with his name, the origin and ownership of the pens, and not to designate their quality merely. It is well settled that no one can appropriate words in commerce which in themselves indicate the character, kind, quality, or composition of an article of manufacture, as “ Ferro-Phosphorated Extract of Calasaya Bark” (Caswell v. Davis, 58 N. Y. 223 ); nor can a trade-mark exist in arbitrary symbols which the manufacturer has only employed to designate the different qualities of his goods, as was the case with the letters “ A. C. A.,” in Manufacturing Co. v. Farmer ( 101 U. S. 51 ), or with the words “ Galen,” “ Lake,” “ Cylinder,” and “ Wayne,” in Stokes v. Landgraff ( 17 Barb. 608 ). But when the words in themselves do not indicate quality or composition, and have been employed to mark goods of a particular manufacturer, there is no authority for holding that they cannot be considered a trade-mark merely because, being applied only to goods of a certain quality, they necessarily distinguish goods of that quality from others made by the same manufacturer (Browne Trade-marks §§ 153-160).

The plaintiffs’ trade-mark seems to be the name of an institution and not a place. The decisions relating to the use of geographical names as trade-marks do not, therefore, apply. I think that the plaintiffs have established the right to a trade-mark in the words used by them.

The defendant contends that he has not been guilty of an infringement. The plaintiffs have heen accustomed to place upon the head of each barrel of the Maryland Club Whiskey, a copy of their filed trade-mark, printed upon white paper about six inches square; the plaintiffs’ initials, “ C. B. & Co.,” form part of this design. Below this, and occupying rather more than half the barrel-head, are the words “ Maryland Club Rye Whiskey.” The defendant paints his barrel-heads yellow, and stencils thereon in black the words “Maryland Jockey Club Rye Whiskey,” in such a way that the words “ Maryland ” and “ Whiskey ” form a

circle round the barrel-head in letters an inch and one-half high, the word “ Club ” appears in letters two and a half inches high, and the word “Jockey” is printed in letters seven-eighths of an inch high. No dealer’s name or place of manufacture is indicated on the defendant’s barrel-head. The barrel-heads are not likely to be mistaken for each other by any one who examines them with any attention. On the other hand, a person who knew the plaintiffs’ whiskey from its name, but was not acquainted with the form in which its trade-mark appears upon the barrel, might readily suppose that the defendant’s barrel contained Maryland Club Whiskey. There is no proof that any one has been deceived by the defendant’s acts, but when a trademark consists of words, it is not necessary to show that fraud has been accomplished or even intended. The words cannot be used by another in any form when applied to similar articles (Sier v. Abrahams, 82 N. Y. 519 ).

It may be said that this case is an illustration of the justice of this rule. The plaintiff and the defendant both sell whiskey in barrels to dealers, who sell it by the glass or the bottle. Often only the first purchaser will see the barrel-head, while the consumer knows the brand of whiskey only from labels upon the bottle, or from signs put in the bar-room. Although the man who purchases whiskey by the barrel may not himself be deceived, he will be willing to buy an article, which by reason of its name will satisfy his customers’ demands for plaintiffs’ whiskey, and the plaintiffs thus be injured. Clearly, then, it is possible, in such a case, to obtain all the benefits of an infringement, by an adoption of the words of a trade-mark, with or without slight alterations, and it makes no difference in result, whether or not the form in which the trade-mark appears on the original package is simulated.

I think, therefore, that the defendant is shown to have infringed the plaintiffs’ trade-mark, and they are entitled to an injunction, unless they have come into court with unclean hands and guilty consciences, and must therefore be denied equitable relief. The cases where such relief

lias been refused are summarized by Judge Eabl in Hennessey v. Wheeler (69 N. T. 271, 275), as “cases where the trade-mark is used to deceive or impose upon the public, or where it is used upon a spurious, worthless, or deleterious compound, or where the ■ business in which it is used is carried on systematically in a dishonest or fraudulent way.”

It is contended that the words “ Pure Old Rye Whiskey,” forming part of the registered label, contained a false statement because the whiskey is, as one of the plaintiffs testified, “ mixed ” or “ blended ” in Baltimore. The proof fails to show that this mixing or blending is anything more than a combination of different whiskeys, and no reason is shown for believing that the result of such a combination may not truthfully be called pure. The plaintiff, Belt, testified upon cross-examination that the barrels containing Maryland Club Whiskey bore one government stamp, that whiskey just as it comes from the distillery bears two stamps, that it is distilled'at high proof, and that if the proof be reduced by water, even to the extent of putting half a gallon of water in the barrel, a single stamp has to be put on.

If this testimony be taken most strongly as an admission that the plaintiffs’ whiskey is to some extent diluted, it falls short of showing that the label is false. A representation made upon a trade-mark that an article is pure, is to be understood as affirming purity in the sense ordinarily required in commercial dealings, not absolute purity as attested by chemical analysis. There are some admixtures which would obviously destroy the purity of whiskey, but it cannot be said that a dilution with water would have that effect, in the absence of proof that in commercial transactions pure whiskey is understood to be whiskey of the proof indicated by two government revenue stamps. Fraudulent dealing must be proved, and is not to be presumed.

Indeed, as the fact that a barrel bears but one stamp is patent to every purchaser, it would seem improbable that the label, “ Pure Old Rye Whiskey,” was understood in the

trade as. signifying whiskey of the purity indicated by two stamps.

I think, too, that the defendant has failed to show that the statements in the label printed by the plaintiffs to be pasted by then- customers upon bottles of the Maryland Club Whiskey, are false.

As part of the plaintiffs’ registered label, there appear in very small letters, the words “ Pat. Aug. 13th, 1872.*’ It is claimed that this must be taken as a false affirmation that the whiskey was patented. I do not think it amounts to this. As used upon the barrels of whiskey, it is almost impossible that it could suggest to any one this idea. The words were not used in such a way as naturally to indicate the existing or present protection to the whiskey of a patent, as in JY. Y. Card Co. v. Union Card Co. ( 39 Hun 611 ). The words seem to indicate the date of registry of the trade-mark, and not to have been used for the purpose of deceiving the public, and this explanation, which is consistent with truth and honesty, is the most reasonable, and the court will not, for the mistaken use of these words upon a label, refuse the plaintiffs relief (Insurance Oil Tank Co. v. Scott, 33 La. Ann. 946 ; Browne Trade-marks 87).

It is claimed that the plaintiffs have offended against section 363 of the Penal Code because they have but two partners, and use the firm name of Cahn, Belt, & Co. The plaintiffs have resided in Baltimore and carried on business there. They have employed an agent in this state. I do not believe that this penal statute can be so construed as to make what they have done in this respect a crime, even if chapter 347 of the laws of 1849 does not apply to the case. This statute expressly allows foreign commercial co-partnerships to use their styles or firms in this state.

The agent for the plaintiffs has known for almost five years of the sale of whiskey under the title of Maryland Jockey Club. He has for that period known the signs and the barrel-head used by the defendant. It would at any time have been easy for him to learn that the defendant sold the whiskey so marked. Under these circumstances, the

delay in bringing this suit is such laches as disentitles the plaintiffs to an accounting of profits (McLean v. Fleming, 96 U. S. 245 ; Beard v. Turner, 13 L. T. N. S. 747; Browne Trade-marks § 497).

The plaintiffs should have judgment granting the injunction prayed for, and -with costs, but without a reference to take an account of the profits.

From the judgment for plaintiffs entered upon this decision defendant appealed.