American Thermos Bottle Co. v. W.T. Grant Co.

Decision Date25 February 1922
Docket Number1133.
Citation279 F. 151
PartiesAMERICAN THERMOS BOTTLE CO. v. W. T. GRANT CO. [1]
CourtU.S. District Court — District of Massachusetts

Robert B. Killgore, of New York City, and Charles F. Rowley, and Peabody, Brown, Rowley & Storey, all of Boston, Mass., for plaintiff.

Arthur Black, of Boston, Mass., for defendant.

ANDERSON Circuit Judge.

1. This is a trade-mark infringement case. On June 27, 1921, the parties stipulated, inter alia, that the plaintiff is the owner of the trade-mark 'Thermos' for 'double-walled vacuum vessels with vacuum between the walls,' etc., duly registered in the United States Patent Office January 7, 1908, certificate 67,002. Belatedly defendant's counsel suggests that 'Thermos' is a descriptive word, and that the trade-mark is therefore not valid. This issue was not pleaded, if it needs to be. When the stipulation was made, the parties probably intended by implication to cover the validity as well as the ownership of the trade-mark. The question is not absolutely free from doubt. The vacuum bottles are vessels excluding and including heat, and in that aspect 'Thermos' is descriptive. There is no evidence in the record that Thermos means to the public vacuum bottles produced by the plaintiff. Compare Coca-Cola Co. v. Koke Co., 254 U.S. 143, 146, 41 Sup.Ct 113, 65 L.Ed. 189. For present purposes I assume without deciding that the plaintiff has a valid trade-mark.

2. The defenses really relied upon are two:

(a) That the plaintiff procured and induced the use of its trade-mark on the goods in question, and therefore cannot now be heard to complain of such use.
(b) That the plaintiff does not come into court with clean hands, in that it is alleged to have so fraudulently used its trade-mark in connection with the sale of goods of foreign origin as to mislead the purchasing public.

3. The first contention, (a), that the plaintiff procured and induced the use of its trade-mark on the goods in question is grounded on a contract, and relations arising from that contract, between the plaintiff and the American Steel Export Company, dated December 6, 1920. The Export Company is not a defendant. but it has obviously, apparently admittedly, assumed the defense of this case. The exact relations between the Export Company and the Grant Company have not been disclosed. It is a fair inference that the Grant Company has either bought the goods in question from the Export Company, or that it is marketing them for the Export Company. It is not claimed that the defendant's rights as to the use of the plaintiff's trade-mark are greater than those of the Export Company.

The contract of December 6, 1920, relates to the purchase by the plaintiff from the Export Company of German-made fillers and vacuum bottles: 600,000 pint thermos fillers identical with a sample marked 'Schmidt Pint Filler No. 1,' to be shipped from a European port at the rate of 100,000 per month for six months, commencing December, 1920; 300,000 quart fillers identical with sample marked 'Schmidt Quart Filler No. 2,' to be shipped from a European port during six months commencing January, 1921, at the rate of 50,000 per month; and in paragraph 3 for the goods, here involved, 100,000 pint complete aluminum bottles identical with sample marked 'Schmidt Full Aluminum Bottle Pint Size No. 3,' except to be of seamless aluminum, to be shipped during the six months commencing January, 1921, at the rate of 16,666 per month. The contract contains provisions that defective or broken bottles are to be credited or replaced at the option of the Export Company. The contract price of the pint bottles is 50 cents, freight and duty paid; payments for all goods delivered to be 50 per cent. on arrival at New York or any other Atlantic seaboard port, and 50 per cent. within ten days after delivery to carrier at port of arrival.

In paragraph 12 of the contract it is provided that the Export Company 'or East European Trading Company, Inc., or any of their connections or agents, will not sell, during the life of this contract, any vacuum bottles or fillers to others than the American Thermos Bottle Company in the United States of America or Canada, without the written consent of the American Thermos Bottle Company. ' It thus here, and elsewhere in the evidence, appears that the East European Trading Company and the Export Company are affiliated concerns; just how affiliated does not appear. This provision manifestly contemplates a continuing control by the plaintiff over at least one channel of supply of German-made vacuum bottles and fillers.

It appears from the agreed statements of fact that after the execution of this contract on December 6, 1920, and prior to the receipt on January 27, 1921, of notice as to rescission, hereinafter referred to, the plaintiff received from the Export Company a large number of pint fillers. 'Whether or not the goods so delivered conform to the specifications of the contract is a matter of evidence,' so runs the stipulation. But no evidence has been adduced warranting a finding that the fillers did or that they did not conform to the specifications. It is also stipulated that the plaintiff had not paid the Export Company for any of such fillers so received prior to receipt of the notice of rescission. The plaintiff argues that the defendant waived its right to payment of 50 per cent. on receipt of such fillers at port, and that therefore failure to pay was no breach of the contract by the plaintiff. The evidence is insufficient for a finding either for or against such waiver.

But it is agreed that on January 27, 1921, the Export Company gave written notice to the plaintiff that it had defaulted in payment of the contract price of thermos bottle fillers, and that the Export Company 'has elected and does hereby elect to rescind, and does hereby rescind, said contract so far as such contract remains unperformed.'

On that date, January 27, 1921, none of the complete pint bottles covered by paragraph 3 of the contract had been delivered to the plaintiff. To what extent, if at all, they had been manufactured and marked with the plaintiff's trade-mark, does not appear. Whether they were manufactured for the Export Company under a valid and enforceable contract made with some German concern, does not appear.

Under the contract, the Export Company was to deliver in the month of January 16,666. On this record it is impossible to find that all or any part of the 100,000 complete pint bottles had or had not then been manufactured or marked, either or both. What does appear is that at some time between January 27, 1921, and early June, all, or substantially all, of the 100,000 complete pint bottles were received in the United States and put on the market by the defendant, and perhaps by some other concerns. Eighty-odd thousand of the 100,000 are now held under the preliminary injunction. The balance have apparently been marketed by the defendant and other merchandising concerns.

The defendant advertised these German-made bottles for sale at the retail price of $1 each. One advertisement put in evidence is to the following effect: 'Another Grant Triumph (with illustration of the Thermos bottle). ' Then: 'Thermos trade-mark stamped on each bottle. $2.75 vacuum bottle for $1.00. Ordered by and made for the American Thermos Bottle Company pint size, hot and cold bottle in aluminum case. Special cup top. Perfect in every way. A $2.75 value for only $1.00. First time ever sold at this price.'

It will be observed that this advertising, 'Ordered by and made for the American Thermos Bottle Company,' is nearly, if not quite, an accurate statement. The plaintiff was not attempting to deceive the purchasing public as to the actual origin of the goods, except so far, if at all, as a sale of bottles so marked might deceive. Compare United Drug Co. v. Rectanus Co., 248 U.S. 90, 97, 39 Sup.Ct. 48, 63 L.Ed. 141.

One of these bottles is marked Exhibit A of the Killgore affidavit, and is by reference made a part of this opinion. This and the balance of the 100,000, the subject-matter of this controversy, were marked on the bottom in accordance with an arrangement made between the plaintiff and the Export Company in December, 1920, after the contract was made. The contract is silent as to marking. The Export Company then submitted a sketch showing the proposed stamping for the 100,000 complete pint bottles called for by the contract. This sketch, substantially larger than the bottom of the bottle, contained, as submitted to the plaintiff, the words: 'Thermos

'Trade-Mark

'Germany

'Pat. Nos.

'13093 Mch. 15, '10

'38834 Sept. 24, '07'

The plaintiff's president, Walker, thereupon wrote in the circular margin, 'American Thermos Bottle Company, Norwich, Conn., U.S.A.,' and with this insertion approved the sketch on December 30, 1920. Parol evidence and a letter of the Export Company to the plaintiff both show that the parties to the contract intended that the word 'Germany' should be 'in as small letters as possible. ' Both parties, as the evidence conclusively shows, realized that German-made goods were particularly unpopular in this country at that time, and both intended that the marking on these German-made goods should be as inconspicuous as might barely pass the customs officials as being a compliance with section 5297, Compiled Stats., providing for marking articles and packages to indicate the country of origin. This statute is quoted and discussed below.

The goods were marked exactly as the plaintiff intended them to be marked in order that it, the plaintiff, might sell these German-made bottles in this country as its own output. But as the contract had been rescinded by the Export Company on January 27, 1921, and, as...

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