Atlas Underwear Co. v. Cooper Underwear Co.

• Decision Date: 03 December 1913
• Citation: 210 F. 347
• Parties: ATLAS UNDERWEAR CO. v. COOPER UNDERWEAR CO.
• Court: U.S. District Court — Eastern District of Wisconsin

210 F. 347

ATLAS UNDERWEAR CO. v. COOPER UNDERWEAR CO.

United States District Court, E.D. Wisconsin.

December 3, 1913

The case comes before the court upon a motion for a preliminary injunction. The complainant is a corporation located at Piqua, Ohio, and manufactures underwear, particularly of the type commonly known as union suits. Its product is averred to be of high quality, received with general favor in the trade throughout the United States, and as a consequence thereof the complainant enjoys a high reputation, and has established a profitable business. The defendant is a competitor, located at Kenosha, Wis. It has also made a specialty of the manufacture and sale of the style of underwear known as union suits.

The bill charges that the defendant has endeavored by unlawful and malicious means and representations to injure the complainant's business and reputation, to drive it from the field of manufacture as a competitor, by circulating letters addressed and mailed to the customers and agents of the complainant, maliciously and untruthfully informing them that the union suits of complainant's manufacture which are or may be handled or used by such customers of agents are infringements upon letters patent owned or controlled by the defendant; that, to further such unlawful and unfair policy the defendant has circulated letters and notices intended to reach, and which have actually reached, complainant's customers and agents, maliciously and falsely stating that the defendants expected to enjoin under Canadian letters patent No. 148,011 the manufacture of such garments as the 'Atlas' (being one of the complainant's styles of underwear) in this country. That by like letters and circulars, the customers of complainant, and complainant, are maliciously threatened with infringement litigation, by reason of the alleged infringement by complainant's said underwear, of the subject-matter of an application for United States letters patent; the purpose of such threat being to obtain exclusive rights under letters patent before issue thereof.

The defendant, to further carry out its policy of maliciously injuring the complainant and its trade, has advertised in trade publications of general circulation in the trade, and among the agents and customers of the complainant, wherein false and malicious advertisements have been published directed against the product of manufacturers, including the complainant, and containing misleading statements and innuendo respecting the course pursued by the United States government in summarily dealing with infringers of patent rights. That such articles are published under circumstances and are given circulation, which necessarily convey an impression that the defendant has particular reference to the product of the complainant and to the complainant's agents and customers, and that such agents and customers to construe them. That defendant has, by printed words and illustrations, and with intent to injure and ruin the lawful business of complainant, sought to and has intimidated the trade, and especially the complainant's customers and agents.

To further carry out its attempt, the defendant on November 18 1912, threatened the complainant with a suit for infringement of letters patent No. 973,200, issued October 18, 1910, in and by reason of complainant's manufacture and sale of its said product. That the complainant on November 23, 1912 denied alleged infringement. That thereupon the defendant, by circulation of letters and notices addressed and mailed to the customers and agents of the complainant, reiterated the charge that all closed crotch garments not bearing the words and figures 'Patented October 18, 1910' (which mark is not borne by the closed crotch garment made and sold by complainant) are infringements upon the defendant's product, and has repeatedly continued to do so up to the time of the filing of the bill, but has not instituted any suit against complainant nor nay agent or customer thereof. Hence it is charged, that the threats of suit, and charges of infringement made against complainant, its customers and agents, were and are not made in good faith, nor with any intention of instituting suit.

The defendant by its answer challenges the right of complainant to proceed in equity to obtain relief because of the acts charged to have been committed by the defendant. The allegations respecting the attempts to break up and destroy the underwear business of complainant, to drive it from the field of manufacture of closed crotch union suits; the circulation among customers and agents of the complainant of letters addressed and mailed to the customers, whereby defendant maliciously or untruthfully informed customers and agents of complainant that union suits of complainant's manufacture are infringements of letters patent owned or controlled by the defendant; the circulation of letters and notices intended to reach the knowledge of complainant's customers, and by which the defendant maliciously and falsely stated that defendant expects to enjoin under Canadian letters patent No. 148,011, the manufacture of garments such as 'Atlas' (complainant's trade designation of its garments); and, generally, all of the allegations of the bill respecting the malicious and unlawful conduct of the defendant in the respects detailed in the bill-- are severally and expressly denied.

The parties respectively offered voluminous affidavits in support of and in opposition to the motion. The facts developed through such affidavits and accompanying exhibits will be referred to in the opinion.

Duell, Warfield & Duell, of New York City, for complainant.

Offield, Towle, Graves & Offield, of Chicago, Ill., and Lines, Spooner, Ellis & Quarles, of Milwaukee, Wis., for defendant.

GEIGER, District Judge (after stating the facts as above).

There are two questions presented upon this motion: First, whether the defendant has been guilty of conduct which, if directed against the complainant, is tortious, and of such a character that a court of equity will take cognizance thereof and give injunctive relief; secondly, whether the facts sufficiently disclose an attack by the defendant upon the plaintiff, so that the latter can invoke the jurisdiction for the purpose of the relief which a court of equity can give.

The first of these questions involves the consideration of the facts to determine the applicability of settled principles frequently recognized in this circuit, and particularly in the cases of Commercial Acetylene Co. v. Avery (C.C.) 152 F. 642; Warren Featherbone Co. v. Landauer (C.C.) 151 F. 130; Emack v. Kane (C.C.) 34 F. 46; Dittgen v. Racine Paper Goods Co. (C.C.) 164 F. 85; United Electric Co. v. Creamery Package Mfg. Co. (D.C.) 203 F. 53.

These cases, while all recognizing the elementary principle that a patentee has a right to protect his interest under a patent by notifying the world in general, or any person in particular, of his rights-- cautioning against infringement thereof-- recognize and enforce with equal vigor the principle that a patentee cannot, under cover of his patent and his incidental rights, harass and annoy his competitors, seek to destroy their trade, and thereby accomplish results legitimately to be accomplished through the orderly processes of infringement suits. He may not terrorize the trade by calling attention to his rights, and seek to enforce such rights through a succession of threats which he never attempts to effectuate. Does the complainant show that the defendant has pursued a policy which calls for recognition and enforcement of this latter principle? It is my judgment that it does.

It may be noted preliminarily to the manufacture and sale of the style of underwear known as union suits, and more particularly the 'closed crotch' garment, has developed with great rapidity in the past few years; that while there are different types and styles, the demand for the garment has been enormous, taxing the capacity of manufacturers to meet it. The defendant claims that, under a patent owned, it originated a type of garment so greatly superior to anything previously produced that it instantly commanded favor, and, being placed upon the market, resulted in attempted appropriation by many other manufacturers. Upon the hearing its attitude approached that of charging, broadly, wholesale piracy. The complainant, on the other hand-- and it seems to be representative of many other competitors of the defendant-- as stoutly insists noninfringement. The warfare which has thus arisen in the trade has been spirited, ill tempered, and, as appears from trade publications and affidavits presented, carried on unceasingly; so that, without doubt, the trade, so far as it includes dealers and retailers, has been in a state of alarm and panic, no one apparently knowing what, if any, immunity there was in purchasing any type of underwear claimed to be covered by letters patent. In this situation the defendant has insisted that it was the possessor of a pioneer patent; that by virtue thereof its rights were unquestioned and were perfectly clear, and it has, through repeated circulars, called attention to its claim respecting the pioneer character of its patent, and has pointed out to the whole trade the dire consequences which must ensue from the purchase by any one, without its license, of underwear not bearing the date of its patent. In view of the widespread infringement, according to the view of the defendant, and particularly in view of the rapid development which confessedly has taken place in the last two years, it would seem that the duty rested peculiarly upon the defendant promptly to assert its right by instituting suits to restrain wrongful infringement of its patent,...