German-American Button Co. v. A. Heymsfeld, Inc.

This action is for an injunction to restrain the defendants from using the trade-name of “German-American Hand Crochet

In the year 1912 Nicholas A. Heymsfeld and two others organized the corporation of A. Heymsfeld, Incorporated, with a capital of $1,-000, for the purpose of doing a general merchandise business, including specifically the buying, selling, manufacturing, and selling as agent or factor buttons, button material, and raw products for the manufacture of buttons of any kind and all kinds and description. An important, if not the principal, business of this corporation has thus far been selling buttons manufactured by Hedwig Heymsfeld, wife of Adolph Heymsfeld, who on November 1, 1912, filed with the county clerk a certificate that she had adopted the trade-name of “German-American Hand Crochet Button Works.” The corporation of A. Heymsfeld, Incorporated, advertises itself as “manufacturers and importers of covered and crochet buttons” and as “sole selling agents for the German-American Hand Crochet Works.”

The plaintiff’s claim is that by long-continued use it had established a prior and superior right to the use of the name “German-American,” as used with reference to the manufacture and sale of buttons, and that the adoption of those words as part of the trade-name of a concern engaged in a like business was calculated to produce confusion and consequent loss to plaintiff.

[1] While it is true that two precisely similar unfair competition cases are seldom to be found, there are certain well-established general principles that are applicable to all. The trade-name used by defendants, and the use of which plaintiff seeks to enjoin, is a purely arbitrary one selected by defendants themselves. If it had been attempted to create a corporation under that name, it is very doubtful if it could have been legally done, for it is provided in the General Corporation Law, § 6, that:

“No certificate of incorporation of a proposed corporation having the same name as a corporation authorized to do business under the laws of this state, or a name so nearly resembling it as to be calculated to deceive, shall be filed or recorded in any office for the purpose of effecting its incorporation, or of authorizing it to do business in this state.”

The prohibition thus enacted by statute as to corporations is equally applicable, under general and well-recognized principles, to the adoption of a trade-name by an individual or copartnership. As was said by the Court of Appeals in Chas. S. Higgins Company v. Higgins

“It is well settled that an exclusive right may be acquired in the name in which the business has been carried on, whether the name of a partnership or of an individual, and it will be protected against infringement by another, who assumes it for the purposes of deception, or even when innocently used without right to the detriment of another. * * * In respect to corporate names, the same rule applies as to the names of firms or individuals, and an injunction lies to restrain the simulation and use by one corporation of the name of a prior corporation which tends to create confusion and enable the later corporation to obtain, by reason of the similarity of names, the business of the prior one.”

And in Celluloid Mfg. Co. v. Cellonite Mfg. Co. (C. C.) 32 Fed. 94 it was said:

“The defendant’s name was of its own choosing, and, if an unlawful imitation of the complainant’s, is subject to the same rules ,of law as if it were tne name of an unincorporated firm or company. It is not identical with the complainant’s name. That would be too gross an invasion of the complainant’s right. Similarity, not identity, is the usual recourse, when one party seeks to benefit himself by the good name of another. * * * We may say, generally, that a similarity which would be likely to deceive or mislead an ordinary unsuspecting customer is obnoxious to the law.”

[2] The fact that the distinctive and similar features of both plaintiff’s and defendant’s names consist of a combination of geographical names does not deprive the plaintiff of the right to protection. This feature was present in Kayser v. Italian Silk Underwear Co., 160 App. Div. 607 , 146 N. Y. Supp. 22 , and in Fuller v. Huff, 104 Fed. 141 , 43 C. C. A. 453 , 51 L. R. A. 332 . In the latter case the United States Circuit Court of Appeals for this circuit said:

“The subject of the unlawful use by competitors of the name under which a rival has previously presented himself to the public and has gained a business reputation, although the name is not strictly a trade-mark, and is either geographical or descriptive of quality, has been frequently of late before the courts, which have demanded a high order of commercial integrity, and have frowned upon all filching attempts to obtain the reputation of another.”

So, also, it was said in British-American Tobacco Co. v. British-American Cigar Co., 211 Fed. 933 -935, 128 C. C. A. 431 , 433 (Ann. Cas. 1915B, 363):

“The words ‘British-American’ may be geographical or political, but in this controversy they have acquired a meaning; they have been irrevocably associated with a large tobacco corporation for a decade, and any other tobacco company with the same name is sure to be associated in the public mind with the elder company, and is sure to reap such benefits as accrue from such association. If there were any valid reason for adopting the name, or if the business were other than tobacco, there might be some reason for the defendant’s action; but no honest reason can be suggested for appropriating the name of the old and long-established company. In the absence of any plausible explanation, we have a right to assume that the reason was to secure the advantages which would result from a supposed connection with the well-known company.”

[3] We think that there can be no doubt that the similarity of the name arbitrarily selected by defendants to that long used by plaintiffs is calculated to produce confusion in the trade, and to make it possible,

[4] It seems probable that defendants’ name was intentionally adopted with this end in view, but plaintiff’s right to an injunction does not depend upon the intent with which defendants’ name was adopted. It was so held in Vulcan v. Myers, 139 N. Y. 364 , 34 N. E. 904 , in which the court said:

“The trial court has not found, and the proof does not Indicate, any intention on the part of the defendants to infringe upon tlip plaintiff’s trade-marlc. * * * On the contrary, tlieir conduct has been such since the commencement of the action as to acquit them of the charge of any wrongful or fraudulent intent. But this question does not arise where nothing but preventive relief is granted. It might be material If damages were sought or claimed.”

To the same effect are Grocer’s Pub. Co. v. Grocer’s Pub. Co., 25 Hun, 398 , 402; Chas. S. Higgins Co. v. Higgins Soap Co., supra, 144 N. Y. at page 471, 39 N. E. 490 , 27 L. R. A. 4 -2, 4- 3 Am. St. Rep. 769 ; Holmes v. Holmes, 37 Conn. 278 , 9 Am. Rep. 324 ; American Clay Co. v. American Co., 198 Pa. 189 , 47 Atl. 936 ; Fairbanks v. Luckel, 102 Fed. 327 , 42 C. C. A. 376 .

[5] Nor is it an answer to plaintiff’s demand that it has failed to show that any person has as yet been deceived by the similarity of names. It is the liability to deception and consequent injury which justifies the issuance of an injunction in a case like the present, and if the court can see that confusion and deception is liable to result from the similarity of, names, it will not refuse injunctive relief because the damage has not already been done. Proof that confusion has already resulted is merely evidence of the liability to deception. T. A. Vulcan v. Myers, supra; Society of 1812 v. Society of 1812 in the State of New York, 46 App. Div. 568 -573, 62 N. Y. Supp. 355 ; Church v. Russ (C. C.) 99 Fed. 276 -279.

[6] Of course the probability of confusion and consequent damage' will exist only when plaintiff and defendant are dealing in the same or substantially similar products, and it was upon the ground of dissimilarity of product that the injunction was denied at Special Term; the learned justice relying upon Corning Glass Works v. Corning Cut Glass Co., 197 N. Y. 173 , 90 N. E. 449 . That case, as we read it, differs widely on the facts from the present. The reason why an injunction was refused in that case was because “between the two concerns there has been no competition, nor rivalry, because each produces a distinct class of ware”; that is to say, the plaintiff produced exclusively uncut glass, while defendant produced exclusively cut glass. Between two such essentially dissimilar products there obviously was not likely to arise any confusion. In the principal case the defendants at present produce and deal in a button covered by hand crochet work. The plaintiff produces and deals in a huilón covered by machinery with knitting or crochclting. Both seem toi he known in the trade as “crochet buttons,” although other trade-names are sometimes used to designate the buttons made by plaintiff. Both kinds of buttons arc apparently adapted to the like uses, and are so alike in appearance as to he distinguished with difficulty by others than trained experts.

We are of opinion, on the whole case, that plaintiff has shown defendants to be guilty of unfair trade in the adoption of the trade-name chosen by Mrs. Heymsfeld and used by the corporation of A. Heymsfeld, Incorporated, and that an injunction should issue against the use of the name "German-American Hand Crochet Button Works.”'

[7] We observe that, although there has been no severance of the action, the court has made two decisions, not identical, and has entered two judgments. This is irregular, since without a severance there can be but one final judgment in an action.

The judgments appealed from are therefore reversed, with costs, and a judgment ordered in favor of plaintiff for the injunctive relief demanded in the complaint, with costs. The findings of fact included in the decisions of the Special Term are reversed, and the findings of fact submitted by plaintiff will be found. If other findings are desired, they may be submitted upon the settlement of the order to be entered herein.

Settle order on notice. All concur.