Hanover Star Milling Co. v. Allen & Wheeler Co.

• Citation: 208 F. 513
• Decision Date: 21 April 1913
• Docket Number: 1,926.
• Parties: HANOVER STAR MILLING CO. v. ALLEN & WHEELER CO.
• Court: United States Courts of Appeals. United States Court of Appeals (7th Circuit)

208 F. 513

HANOVER STAR MILLING CO. v. ALLEN & WHEELER CO.

No. 1,926.

United States Court of Appeals, Seventh Circuit.

April 21, 1913

Henry Fitts, of Birmingham, Ala., Edgar L. Clarkson and Jas. E Morrisette, both of Tuscaloosa, Ala., and Louis Clements, of Danville, Ill., for appellant.

L. O Whitnel, H. L. Browning, and Thos. E. Gillespie, all of East St. Louis, Ill., and J. Fred Gilster, of Chester, Ill., for appellee.

Before BAKER, Circuit Judge, and ANDERSON and SANBORN, District judges.

BAKER Circuit Judge.

This is an appeal from a preliminary injunction. Bill, affidavits counter affidavits, and exhibits disclose the following facts:

Complainant (appellee), an Ohio corporation, owns and operates a flour mill at Troy, Ohio. Since 1872 it has used the words 'Tea Rose' as a common-law trade-mark to designate one of its makes of flour. Though its bill and affidavits say generally that its trade extended throughout the United States, the only particulars exhibited disclose that its trade was within the territory north of the Ohio river. And the showing of defendant clearly establishes, on the present record, that complainant never had any trade in its 'Tea Rose' brand in the southeastern territory comprising Georgia Florida, Alabama, and Mississippi. In recent efforts to establish a trade in said southeastern territory, complainant has used only its 'Trojan' and 'Eldean Patent' brands. Complainant did not learn until in 1912, shortly before the bringing of this suit, that defendant had built up and was conducting an extensive trade in a 'Tea Rose' brand of flour throughout said southeastern territory.

Defendant is an Illinois corporation, owning and operating a flour mill at Germantown, Ill. Continuously since 1893 defendant has used the words 'Tea Rose' in marking its flour sacks. Beginning in 1904 defendant conducted an active campaign to build up a large trade in its 'Tea Rose' flour in said southeastern territory, with the result that when this suit was filed defendant's sales of 'Tea Rose' flour in that market amounted to more than $150,000 a year. Defendant adopted 'Tea Rose' as its mark in perfect good faith, with no knowledge that any one else was using or had used those words in such a connection. In the flour trade in said southeastern territory the mark 'Tea Rose' has come to mean defendant's flour, and nothing else.

If this were what is commonly known as an 'unfair competition' case in distinction from a technical 'trade-mark' case, complainant could not be given any relief for two reasons: (1) There is not and never has been any competition between the two flours in the same markets, hence no 'unfair' competition, no palming off of defendant's flour as complainant's, no trespass committed or threatened upon complainant's established good will. And (2) if the words 'Tea Rose' were open to common use, like the family name of the maker or the geographical designation of the place of manufacture or words descriptive of the grade of the goods, the make-ups of the two bags are so distinctive in color, lettering, wording, and names and addresses of makers, that, from a comparison alone, it could not be found that confusion would be likely to result. On the facts as now presented this case therefore turns on the correctness of complainant's insistence that, the words 'Tea Rose' being proper for adoption as a technical trade-mark, and complainant having appropriated the mark and applied it to its flour, thereby complainant acquired the mark as its property and had the right to exclude others from using it in the flour trade throughout the territory of the United States, irrespective of the questions of how far complainant's trade, reputation, and good will actually extended, and whether defendant had interfered or was threatening to interfere with complainant's established business.

Use of an arbitrary and distinctive mark to indicate the origin or ownership of articles of trade-- the dealer's 'commercial signature'-- is very old. It may have begun because the general run of consumers of those ancient times could not have read the dealer's business name and address if he had written them upon his articles in the vernacular. And throughout, the question whether or not a trade-mark is property has often been mooted. Lord Langdale, in Perry v. Truefitt, 6 Beav. 73: 'I own it does not seem to me that a man can acquire a property merely in a name or mark. ' Vice Chancellor Sir W. Page Wood, in The Collins Co. v. Brown, 3 K. & J. 423: 'It is now settled law that there is no property whatever in a trade-mark. ' Lord Herschell, in Reddaway v. Banham, A.C. (1896) 199: 'I doubt myself whether it is accurate to speak of there being property in a trade-mark. ' On the other hand, the books are full of cases in which by implication or direct statement it is declared that trade-marks are property. But the dispute is only apparent; the minds of the various courts are found to be in accord when the basis of the cause of action and the reason for granting injunctive relief are considered.

In Perry v. Truefitt, supra:

'I think the principle upon which both the courts of law and of equity proceed in granting relief and protection in cases of this sort is well understood. A man is not to sell his own goods under the pretense that they are the goods of another man. He cannot be permitted to practice such a deception, nor to use the means which contribute to that end. He cannot, therefore, be allowed to use names, marks, letters, or other indicia, by which he may induce purchasers to believe that the goods which he is selling are the manufacture of another person.'

In The Collins Co. v. Brown, supra:

'A person may acquire a right of using a particular mark for articles which he has manufactured, so that he may be able to prevent any other person from using it, because the mark denotes that articles so marked were manufactured by a certain person; and no one else can have a right to put the same mark on his goods, and thus to represent them to have been manufactured by the person who originally used that particular mark. That would be a fraud upon the person who first used the mark in the market where his goods are sold. The simplest case is where a man puts his name and address on the goods which he manufactures; it would be unlawful for another manufacturer to put that name and address on his goods, because to do so would be to give to all the world the impression that they were manufactured by the person whose name and address they bore.

'The simple question in these cases is: Has the plaintiff, by the appropriation of a particular mark, fixed in the market where his goods are sold a conviction that the goods so marked were manufactured by him; and if so, and if no one else has been in the habit of using that mark, another man has not the right to use that mark, so as to commit the fraudulent act of palming off his goods as being the goods of the person known to have been in the habit of using it.'

So it is evident that those who deny that trade-marks are property agree with the others that complainants are entitled to protection in the use of trade-marks. And both sides meet in finding that the cause of action is the injury done or threatened to a complainant's trade in which he has used the marks in question to designate the origin or ownership of his goods and that the appropriate relief is to enjoin the defendant from using the marks to divert trade that otherwise would have gone or would go to the complainant. Whether trade-marks are accurately called property or not, it is clear that some of the rights that are incident to property do attach to them; and therefore, just as courts sometimes state jurisdictional facts by describing corporation parties as 'citizens,' it may be convenient to speak of trade-marks as 'property,' as a short way of expressing a limited truth that requires ampler means for a complete and accurate statement. And that limited truth is as compactly defined as anywhere else in Weston v. Ketcham, 51 How.Prac. (N.Y.) 455:

'There is no such thing as a trade-mark 'in gross,' to use that term of analogy. It must be 'appendant' of some particular business in which it is actually used upon or in regard to specified articles.'

It is not the trade-mark, but the trade, the business reputation, and good will, that is injured; and the property or right in the trade is protected from injury by preventing a fraud-doer from stealing the complainant's trade by means of using the complainant's 'commercial signature.'

From these considerations of the nature of trade-marks and the basis and scope of trade-mark suits, it would follow that complainant in this case has no property in the mark 'Tea Rose,' like property in its mill and wheat and flour; has no monopoly of the use of the mark, like the monopoly of a patent or a copyright; has no right at all to the mark 'in gross,' but a right only to the extent that the mark is 'appendant' to its trade; has no basis of complaint except for injury to its business; and (since defendant has traded honestly in markets where complainant is unknown and has neither committed nor threatened an injury to complainant's reputation and good will) has no cause of action in equity. But complainant nevertheless relies upon expressions to the effect that trade-marks are without 'territorial limitation,' are the exclusive property of their first adopters throughout the sovereignty within which they were anywhere applied by them to articles of commerce, and contends that the 'unfair competition' cases in which the concurrent use of marks or names not susceptible of adoption as technical trade-marks was permitted, provided fraud and deception were sufficiently...