Auto Acetylene Light Co. v. Prest-O-Lite Co., Inc.

• Decision Date: 04 May 1920
• Docket Number: 3354.
• Citation: 264 F. 810
• Parties: AUTO ACETYLENE LIGHT CO. et al. v. PREST-O-LITE CO., Inc.
• Court: U.S. Court of Appeals — Sixth Circuit

264 F. 810

AUTO ACETYLENE LIGHT CO. et al. v. PREST-O-LITE CO., Inc.

No. 3354.

United States Court of Appeals, Sixth Circuit.

May 4, 1920

W. S Thurstin, Jr., of Toledo, Ohio, for appellants.

Frank S. Lewis, of Toledo, Ohio, and Keyes Winter, of New York City, for appellee.

Before KNAPPEN, DENISON, and DONAHUE, Circuit Judges.

KNAPPEN Circuit Judge.

The Prest-O-Lite Company, Incorporated, a manufacturer and distributor of acetylene gas for lighting automobiles and other vehicles, brought suit to restrain alleged unfair competition and infringement of trade-mark by defendants; the corporate defendant being a rival manufacturer and distributor of acetylene gas doing business at Toledo, Ohio and the individual defendant being the president and general manager of the corporate defendant. Complainant stores its gas in portable steel cylinders lined with asbestos, which absorbs a quantity of acetone, which in turn is saturated with acetylene gas introduced under pressure; the outflow for consumption being valve-controlled. The entire package so filled by complainant with its gas is sold to the consumer in the first instance. Complainant's trade-mark for its dissolved acetylene contained in these cylinders was registered June 30, 1906. When the gas is consumed, the tank is, under complainant's long-established system, accepted at any one of its numerous agencies or depots throughout the United States in exchange for a package fully charged by complainant, on payment of a small fraction of the original price of the filled package. Complainant's container is copper- or nickelplated, and bears a distinctive label, in rectangular form, which includes complainant's trade-mark and the notice appearing below (all plated upon the surface of the container), which we print in the margin. ^[1]

The gist of the charge against defendants is that they are recharging Prest-O-Lite containers with acetylene gas of defendant's manufacture, and passing the same off as Prest-O-Lite product. The final decree below enjoined defendants from refilling Prest-O-Lite tanks with any material and from dealing in such tanks refilled by others than complainant without in all cases removing or obliterating complainant's trade-mark, and from passing off such refilled tanks as Prest-O-Lite gas tanks, exchanges or refills.

Right to relief has been sustained in several cases brought by the immediate predecessor of the present plaintiff, not only by this court, but in other courts, upon proof of facts such as are charged against these defendants. Prest-O-Lite Co. v Davis (C.C.A. 6) 215 F. 349, 131 C.C.A. 491; Fransioli v. Prest-O-Lite Co. (C.C.A. 6) 234 F. 63, 148 C.C.A. 79; Searchlight Co. v. Prest-O-Lite Co. (C.C.A. 7) 215 F. 692, 131 C.C.A. 626; Prest-O-Lite Co. v. Heiden (C.C.A. 8) 219 F. 845, 135 C.C.A. 515, L.R.A. 1915F, 945. In accordance with these authorities, complainant was entitled to relief here, provided unfair competition is proven, and unless the defense of former adjudication hereafter considered is sustained.

The essence of the wrong complained of consists in the palming off of defendants' acetylene gas for complainant's Prest-O-Lite gas. Standard Co. v. Trinidad Co., 220 U.S. 446, 461; 31 Sup.Ct. 456, 55 L.Ed. 536; Samson Works v. Puritan Mills (C.C.A. 6) 211 F. 603, 608, 128 C.C.A. 203, L.R.A. 1915F, 1107. There was presented to the District Court abundant testimony supporting this charge. The testimony of numerous witnesses directly tended to establish the existence of a practice among defendant's dealers of exchanging for empty Prest-O-Lite tanks put out by complainant tanks of the latter's manufacture, bearing its trade-mark and label, but refilled with defendant's gas, and without indicating to the customer the fact of the substitution except so far as information thereof might be conveyed by the printed paper label attached to the tank, stating that it was charged with acetylene gas made and compressed by defendant company, and that the gas therein contained was not represented to be the same as that with which the tank was originally filled. Many witnesses, however, testified to accepting defendant's gas refills in the belief that they were filled by the Prest-O-Lite Company; that they would not otherwise have accepted them; that they wanted Prest-O-Lite gas; that they knew nothing of defendant's gas, and did not want it; and that they either did not notice or did not read the label. In fact, defendant Young testified that--

'The only evidence we give the purchaser, and the only evidence, so far as I know, that the purchaser has, that the tank is not filled by the Prest-O-Lite Company, is the label on the tank, this * * * label of ours.'

The testimony, considered as a whole, which included the securing of two dealers who had been handling the Prest-O-Lite product, amply establishes the existence of actual and substantial deception of the public; and while defendants would not be liable for the frauds of their dealers, provided the same were not encouraged by defendants, and had the latter done their full legal duty in providing and toward enforcing measures to prevent such deception (Winterton Gum Co. v. Auto-Sales Gum Co. (C.C.A. 6) 211 F. 612, 617, 128 C.C.A. 212), the instant case does not fall within that rule.

Defendants' contention that customers need not have been deceived, had they taken note of the differences disclosed to their senses in the appearance between the Prest-O-Lite package filled by complainant and such package filled by defendant, is answered by the truism that the imitation need not be such as to mislead the careful and discriminating purchaser; it is enough that it misleads the ordinary and casual buyer. Coca-Cola Co. v. Gay-Ola Co. (C.C.A. 6) 200 F. 720, 723, 119 C.C.A. 164. Indeed, there is abundant proof of actual deception in this regard of customers presumed to have at least, if not more than, average intelligence and alertness. There was also substantial testimony of the inferiority of defendant's gas, causing injury, not only directly to the customer so deceived, but entailing additional loss and expense to complainant in connection with the refilling and repairing of the tanks when returned to it in the regular course of business. That competition of that nature is unfair and is of a quality entitling complainant to relief is clear.

The decree appealed from forbids defendants to refill Prest-O-Lite tanks without replating or enameling the outer surface thereof, 'so that the name of the Prest-O-Lite Company and the words 'Prest-O-Lite' and all complainant's labels shall be obliterated to the complete extent that either plating or enameling can be made to so obliterate, and such obliteration by plating or enameling shall not be dispensed with, no matter how such name and trade-mark or labels appear, whether plated, etched, or otherwise, and in addition thereto plating or stamping on the outer surface of the tank in legible and permanent form a notice that such tank has been refilled or recharged by defendants or their agents. ' These requirements are assailed as exceeding the court's authority and as amounting to legislation.

The propriety of the requirement in question has been carefully considered, not only by this court, but by the Circuit Court of Appeals of the Seventh Circuit, and has been by each of those courts sustained.

The court below, indeed, merely followed the former decisions of this court. See the Fransioli Case, supra, 234 Fed.at page 64, 148 C.C.A. 80, where the final order as made in both that case and the Davis Case is stated. In the Davis Case the 'obliteration' had been by a paper label; in the Fransioli Case by painting over the former label. In the Searchlight Case (C.C.A. 7) the so-called 'obliteration' condemned by that court was the same as that employed by defendants here, viz. a paper label shellacked. In the instant case there is evidence that a shellacked label came off in the course of washing the car. In the Heiden Case (C.C.A. 8) the decision, so far as it went, is in harmony with the Davis, Fransioli and Searchlight decisions. We see no reason to depart from our former holdings on this question.

The facts respecting the alleged former adjudication are these In 1909 plaintiff's predecessor brought suit in equity in the Northern district of Ohio, Eastern division, against the corporate defendant herein, to restrain alleged unfair competition through exchanging for empty Prest-O-Lite tanks containers of that kind refilled with Auto Acetylene...