Avery v. Meikle

• Decision Date: 26 March 1887
• Citation: 3 S.W. 609,85 Ky. 435
• Parties: AVERY and others v. MEIKLE and others.
• Court: Kentucky Court of Appeals

3 S.W. 609

85 Ky. 435

AVERY and others v. MEIKLE and others.

Court of Appeals of Kentucky.

March 26, 1887

Appeal from the Louisville law and equity court.

Muir &amp Heyman, John Mason Brown, Hargis & Eastin, and W. O. & J. L Dodd, for appellants.

Jas. S Pirtle, Wm. Lindsay, and Geo. M. Davie, for appellees.

PRYOR C.J.

The original action was instituted in the court below by the present appellants, and an injunction obtained restraining the appellees from the use of appellants' trade-mark upon certain plows, and to prevent them, the appellees, from selling their plows as the plows of the appellants. The chancellor below having denied the relief, his judgment was reversed, this court upon the hearing holding that, while the appellees had not used the trade-mark proper of the appellants, they had so arranged and placed the letters and numerals used by the appellants on their plows, (the plows of the appellees,) and with the same coloring and staining had so imitated their manufacture, as to cause their plows to be taken and sold as those made by the appellants, and that an intentional violation of the latter's right of property was in this way made to deceive the public, and to enable the appellees to use their manufactures as that of the Averys the appellants. This court said: "By skillful combination of legal particles taken one at a time, and in the aggregate leaving the mere trade-mark untouched, they have so combined its force and effect as to destroy its office and real efficiency to distinguish appellants' plows from all others." 81 Ky. 113. The right of the appellants to an injunction was finally determined, and the case remanded for further proceedings.

On the return of the case to the lower court, the appellants asked for a reference to the commissioner, with directions to hear proof, and state an account of damages between the parties, by reason of the wrongful acts of the appellees; that the appellees be compelled to state the number of plows that had been thus simulated by them that were sold, and the profits made on the sales; and that they be compelled to produce their books, etc. The court declined to make such an order, and, the case having been transferred to the law and equity court, that court refused to instruct the commissioner to report what profits the defendants (appellees) had made, but held that, as the infringement of the property right had been committed by other means than the appropriation of the trade-mark itself, it was essential in equity as well as at law to show the fraudulent intent, and therefore the profits made by the appellees should not be the measure of damages, but the actual injury sustained by the appellants. Under this view of the law, as held by the chancellor and followed by the commissioner, the appellants were only entitled to recover when the proof showed that the plows of Meikle & Co. had been actually sold as the plows of the Averys; and, there being a failure in that respect, the damages were merely nominal, and no recovery except for nominal damages was allowed. The appellants maintain, as this court had determined, that the simulation was intentional, the wrongful appropriation of this property right of the appellants was consummated when these plows were sold by the appellees or their agents, and the profits realized constituted the criterion of damages in equity when no special damage was alleged or claimed by the appellants; while, on the other hand, the appellees insist that it was a mere tort, and the injury is limited to cases where the appellees have, in selling their plows, represented them in fact to be the plows of Avery. This is the real and only issue involved on the appeal.

We do not understand that in order to constitute a violation of the right of property in a trade-mark, that it is necessary that the trade-mark itself should be imitated; but when the simulation in every other respect is so made as to destroy the efficacy of the trade-mark, and to deceive and induce others to believe that the manufactured article is that of the real owner of the trade-mark, it then becomes as much a violation of the right of property as if the trademark itself had been appropriated. Such was the decision in this case on the former appeal, and the intention on the part of the appellees in violating this right of the appellants was then finally determined. The fraudulent intent with which the simulation was made having been already adjudged, it is not necessary, on the return of the case to the lower court, for the commissioner, under an order of reference, to hear, or the appellants to offer, proof on that subject, but a simple reference to the commissioner to state an account of profits upon proof adduced, which, when correctly ascertained, would give to the appellants all the relief to which they were entitled. In compliance with this order, the commissioner could call on the appellees to disclose the number of plows sold and the profits made, or appellants could establish the profits, if any, in some other mode. To require the appellants to show an actual fraudulent representation made by the appellees to those who purchased their plows would be impracticable, and result in permitting the wrong-doer to appropriate the property of another to his own use without rendering an account, as he would scarcely say to the purchaser: "These plows I am selling were made by the Averys." The law makes this representation for him when he has imitated the manufactured article that he is selling so as to destroy the trade-mark, and enable him to sell it as the product of another. While the profits made by the wrong-doer are not in a technical legal sense to be termed damages, still the text-books, as well as some of the reported cases, in fixing the measure of damages in a court of equity in a case like this, say that the plaintiff is entitled to the profits. But not so at law; he may there recover more, or he may recover less, than the profits realized. The fraud does not prevent a recovery of the profits in equity, as the plaintiff may not ask for more, or be satisfied with less. Mr. Upton, in his book on Trade-marks, in discussing the rights of the plaintiff in a case like this, says: "It is a violation of the right of property in a trade-mark, which, upon the principles established as the basis of the protection which the law extends to such property, will be suppressed by the extraordinary powers of a court of equity, and its fruits intercepted and restored." Page 214. An example is given in this work of a case analogous in almost every feature to the one before us, where, to use the language of the author, "an elaborate simulation had been made, not to communicate the truth, but to escape the penalty of a falsehood."

In appropriating this trade-mark by such a close imitation as to render it difficult for an ordinary observer to distinguish the one plow from the other, and then disposing of the plows to the public, the appellees, according to a well-settled rule of equity, have applied the profits to their own use that justly belonged to the appellants, and it is not necessary to inquire, nor will the chancellor stop to inquire, whether or not the appellants could have sold their plows to the same parties. The trade-mark is their property; the manufacture, the result of their skill; and when one undertakes, by coloring, painting, and so arranging his manufacture as enables him to virtually destroy the trade-mark of another, and to sell his own as the product of the skill of the real inventor, it is as much a violation of the right of property in the trade-mark as if the mark itself had been used. The appellants' trade-mark is a Maltese cross, with the name or letters "Avery" distributed in its arms and center. It is not pretended that this trade-mark appeared on the plows made and sold by the appellees, but the simulation in every other respect is complete, and, as was heretofore decided, made with the intent to invade the right of property in the trade-mark of the appellants. If so, the appellants are entitled to an account of profits. It has, in effect, destroyed the trade-mark, and enabled one to sell his plows as the manufacture of the other.

This is not an action for damages by the Averys against Meikle & Co. by reason of the latter selling their plows as the plows of the Averys. If so, the ordinary rule in regard to the measure of damages resulting from the tort would apply. It is an action in equity to restrain the appellees from the use of appellants' trade-mark, and from making and selling plows which, by certain devices and colorable imitation, have been made to represent the plows of Avery &...