Anheuser-Busch v. Cohen, 1381.

• Decision Date: 13 January 1930
• Docket Number: No. 1381.,1381.
• Citation: 37 F.2d 393
• Parties: ANHEUSER-BUSCH, Inc., v. COHEN et al.
• Court: U.S. District Court — District of Maryland

37 F.2d 393 (1930)

ANHEUSER-BUSCH, Inc., v. COHEN et al.

No. 1381.

District Court, D. Maryland.

January 13, 1930.

Paul Bakewell, of St. Louis, Mo., and Barton, Wilmer, Ambler & Barton, of Baltimore, Md., for plaintiff.

Isaac Lobe Straus, of Baltimore, Md., for defendants.

WILLIAM C. COLEMAN, District Judge.

The questions here presented involve trade-mark infringement and unfair competition. The bill of complaint, summarized briefly, charges that the defendants are infringing the trade-mark rights of the plaintiff and are guilty of unfair competition, in that they are using the name "Budd-Wise" on labels used on syrup made and distributed by them, claimed to contain pure barley malt syrup, plain and malt hop, and also on a malt syrup, plain and hop-flavored, in simulation and in fraud of the plaintiff's trade-mark name "Budweiser," which the plaintiff alleges it is using throughout the United States, including the city of Baltimore, on its barley malt syrup, and which it alleges it and its predecessors in business have used continuously on their various malt products since 1876. There is a prayer for injunctive relief, and for an accounting of profits and damages by reason of the alleged infringement and unfair competition.

The bill of complaint is eleven pages in length, and the answer, exclusive of numerous exhibits, is twenty-six, with respect to the major portions of which plaintiff has filed a motion under the twenty-first equity rule (28 USCA § 723) to strike out, on the ground that the various matters contained in the portions of the answer specifically set forth in the motion are redundant, impertinent, and scandalous. Summarized, the allegations of the answer against which the motion is directed may be stated as four separate contentions, as follows:

First, that heretofore (that is, prior to 1920, when the National Prohibition Act became effective), the sole and only product which the plaintiff and its predecessor manufactured, sold, and distributed under the trade-name "Budweiser" was intoxicating lager beer. Second, that after the effective date of the National Prohibition Act the plaintiff applied itself to the production and sale of barley malt syrup and hop-flavored barley malt syrup, which is to be distinguished from malt sugar syrup, which the defendants manufacture and distribute; that under the name "Budweiser," which is pre-eminently and notoriously an intoxicating beer name, plaintiff's product is sold and known, and is intended by plaintiff to be sold primarily for the manufacture of intoxicating home-brew beer, in violation of section 18, title 2, of the National Prohibition Act (27 USCA § 30); and that it is unfit for the legitimate uses of bread baking and the making of malted milk and candy, for which legitimate uses defendants' product is manufactured and sold. Third, that plaintiff's registered trade-mark No. 180,378, referred to in the bill of complaint, is not for a malt syrup, but for a malt sugar syrup; that plaintiff's later trade-mark No. 203,128, referred to in the answer, is for a barley malt syrup; and that plaintiff is guilty of practicing a fraud and deception upon the court in not pleading in its bill the last-named registered trade-mark. Fourth, and lastly, that these registered trade-marks, No. 180,378 and No. 203,128, of the plaintiff were not granted until February 26, 1921, and September 8, 1925, respectively; that plaintiff's use of the trade-mark "Budweiser" on its barley malt syrup and hop-flavored barley malt syrup did not antedate the years 1921 and 1925, respectively, whereas defendants have been using the name "Budd-Wise" on such products of their own since 1918; and that on March 1, 1921, a copyright for defendants' label "Budd-Wise Brand" was obtained from the Commissioner of Patents by a previous owner of said label, who assigned it to the defendants.

Plaintiff's position must be judged by the facts as they were when this suit was commenced, not by the facts of a different condition at an earlier time. Coca-Cola Co. v. Koke Co., 254 U. S. 143, 41 S. Ct. 113, 65 L. Ed. 189. Thus there can be no doubt that the first contention, which relates to what plaintiff did prior to 1920, and also so much of the second contention as relates to plaintiff's past conduct, except that which was reasonably proximate to the commencement of this proceeding, are irrelevant, and therefore "impertinent," within the meaning of that word as used in equity rule 21. Harrison v. Perea, 168 U. S. 311, 18 S. Ct. 129, 42 L. Ed. 478.

Turning to the remaining part of the second contention, namely, that plaintiff, at the time the bill of complaint was filed, was deliberately and intentionally selling its product primarily for the manufacture of intoxicating home-brew beer in violation of the National Prohibition Act, and that its product is not fit, as is defendants' product, for legitimate uses, the court also concludes that this contention is irrelevant to the present controversy. Section 21 of the Trade-Mark Act (15 USCA § 101) provides that "no action or suit shall be maintained under the provisions of this subdivision of this chapter in any case when the trade-mark is used in unlawful business, or upon any article injurious in itself. * * *." The court construes this provision of the statute as being nothing more than a statement of a long-established equitable principle. Nor has the court been referred to any cases which place a broader or different construction upon this language. In other words, the effect of this provision of the law is to be determined by the interpretation which courts of equity have given to the defense of illegal conduct on the part of a plaintiff, when invoked by a defendant under circumstances similar to those existing in the present case. In short, unlawful conduct of the plaintiff is, for the purposes of this proceeding, a collateral issue and furnishes no ground for defense.

Unlawful use of a trade-mark can give no license to the general public to infringe that trade-mark, regardless of whether the infringement be in connection with legitimate or unlawful trade. If the plaintiff is in fact violating the criminal law, he can be punished in the proper forum. Unless and until such violation is established, the question is not properly to be considered in a proceeding of this kind. The restriction on actions for infringement, contained in the provision of the statute above quoted, is intended to be confined to such cases where the unlawfulness of the plaintiff's business is an established fact. Merely the charge by defendants that plaintiff is engaged primarily, or even exclusively, in an illegal enterprise, and that its product is unfit for lawful use, cannot alter the situation. Board of Trade of the City of Chicago v. L. A. Kinsey Co. (C. C. A.) 130 F. 507, 69 L. R. A. 59.

The same equitable doctrine is applicable to patents, and, as was said by Judge Sanborn, in United States Fire Escape Counterbalance Co. v. Joseph Halsted Co. (D. C.) 195 F. 295, at page 297: "By the great weight of federal authority, the infringer of a patent cannot justify his acts by attacking complainant as a trust or unlawful combination. This is simply saying, `You're another.' Complainant may be an obnoxious combination, but that does not excuse defendant from appropriating its property. Such a doctrine would justify stealing stolen goods from the thief, or despoiling any real or supposed trust of all its holdings." See, also, Mills v. Industry Novelty Co. (D. C.) 230 F....