Barton v. Rex-Oil Co.

• Decision Date: 01 December 1924
• Docket Number: No. 3079.,3079.
• Parties: BARTON et al. v. REX-OIL CO., Inc.
• Court: U.S. Court of Appeals — Third Circuit

40 ALR 424, 2 F.2d 402 (1924)

BARTON et al. v. REX-OIL CO., Inc.

No. 3079.

Circuit Court of Appeals, Third Circuit.

October 21, 1924.

Rehearing Denied December 1, 1924.

Edward S. Rogers and Allen M. Reed, both of Chicago, Ill., and Edward A. Lawrence, of Pittsburgh, Pa., for appellants.

Edgar T. Brandenburg and J. F. Brandenburg, both of Washington, D. C., and Edgar W. McCallister, of Pittsburgh, Pa. (E. W. Bradford, of Washington, D. C., of counsel), for appellee.

Before WOOLLEY and DAVIS, Circuit Judges, and RELLSTAB, District Judge.

WOOLLEY, Circuit Judge.

Speaking of the parties as they stand on the record, this suit was brought by bill in equity filed by a firm trading as Barton Manufacturing Company against the Rex-Oil Company, a corporation, to restrain infringement of their registered trade-mark "Dyanshine," applied to shoe polish, by the use of the name "Dye and Shine" applied to similar goods, and for relief against unfair competition. From a decree dismissing the bill for want of equity, the complainants appealed.

These two questions are involved: First, whether the word "Dyanshine," a corruption of the words "dye and shine," describing the characteristics of a manufactured product, is the subject of a valid trade-mark registration under section 5 of the Federal Trade-Mark Act of February 20, 1905, as amended by Act Jan. 8, 1913, 37 Stat. 649 (Comp. St. § 9490); and second, whether the word, though originally descriptive and therefore incapable of exclusive appropriation, had acquired a secondary meaning and thereafter had been unfairly used by the respondent in trade competition.

Before stating the facts we shall briefly review the law which we regard as applicable to these questions.

The Federal Trade-Mark Act authorizing the registration of trade-marks provides:

"That no mark which consists * * * merely in words or devices which are descriptive of the goods with which they are used, or of the character or quality of such goods * * * shall be registered under the terms of this act."

This is the statutory law. The general law dealing not with registered trade-marks but with trade-marks which through use have acquired a secondary meaning, was reviewed by this court and applied in Apollo Bros. v. Perkins, 207 F. 530, 125 C. C. A. 192. Substituting the descriptive name here in question for the geographical name there in issue, this court held substantially as follows: It is essential that a trade-mark possess two characteristics: That either in meaning or association the mark point distinctively to the origin or ownership of the commercial article, and that it be of such a nature as to permit of an exclusive appropriation by one person. Nims on Unfair Business Competition, § 2. But a descriptive name, though not originally capable of exclusive appropriation, may, by use and association with a commodity, obtain a secondary signification denoting that goods bearing it come from one source, and thus a superior right to its use may be acquired by the person who first adopted it. Inasmuch as no absolute ownership in or exclusive right to use such name as a trade-mark is vested in anyone, the rights obtained by the first user are not infringed by the mere use of such mark by a competitor, even though such use be in association with competing goods. If this were the whole law of the subject the matter would be easy. But just here arises another body of law, that of unfair competition. The law governing trade-marks is but a branch of the law regulating trade competition. The policy of this law is to foster, not to hamper, competition and it permits a monopoly in the use of a trade-mark only when it has become the absolute and exclusive property of the first user — good against the world. A merely descriptive name can never become such property, Warner & Co. v. Lilly & Co., 265 U. S. 526, 44 S. Ct. 615, 68 L. Ed. 1161; and the utmost the first user of such a name after it has acquired a secondary meaning can insist upon is that no one shall use it against him in an unfair way. Accordingly, the second user becomes an infringer only when he makes an unfair use of the mark. Not any competition, but only unfair competition on the part of such user is actionable. Canal Co. v. Clark, 13 Wall. (80 U. S.) 311, 324, 20 L. Ed. 581; Columbia Mills v. Alcorn, 150 U. S. 464, 14 S. Ct. 151, 37 L. Ed. 1144; Elgin Watch Co. v. Ill. Watch Co., 179 U. S. 665, 21 S. Ct. 270, 45 L. Ed. 365.

A technical trade-mark being treated as property, infringement thereof carries with it the presumption of fraud; but where no exclusive right to the use of a trade-mark exists, fraud — unfair competition — in the use of the mark by another must be proved, Elgin Watch Co. v. Ill. Watch Co., supra; Siegert v. Gandolfi, 149 F. 100, 79 C. C. A. 142; and when proved, the utmost that the courts can do for the relief of the first user is to enjoin not the use of the trade-mark but the unfair method of its use. Thus it appears that while the first selection of a descriptive name which later has acquired a secondary meaning does not carry with it an exclusive right to its use, yet the first user has a right to be protected against one who subsequently so uses the name as to deceive the public and thereby take his trade from him; and in affording him this protection the later comer, when using the name, will be required to distinguish his goods and enlighten the trading public. American Waltham Watch Co. v. U. S. Watch Co., 173 Mass. 85, 53 N. E. 141, 43 L. R. A. 826, 73 Am. St. Rep. 263. In this way the courts preserve to the first user his superior right to the mark and, what is more important, guard the public. Warner & Co. v. Lilly & Co., 265 U. S. 526, 44 S. Ct. 615, 68 L. Ed. 1161; Computing Scale Co. v. Standard Computing Scale Co., 118 F. 965, 967, 55 C. C. A. 459; Photoplay Pub. Co. v. La Verne Pub. Co. (C. C. A.) 269 F. 730.

Applying this law to the facts of the case, we think it will not be necessary to review in this opinion the extended argument on the question of the validity of the trade-mark registration but that in announcing our judgment it will be enough to say that the word "Dyanshine" is merely descriptive of the characteristics of the product, Ungles-Hoggette Mfg. Co. v. Farmers', etc., Co., 233 F. 116, 146 C. C. A. 308; and therefore this word, a collection of several words misspelled, Standard Paint Co. v. Trinidad Asphalt Mfg. Co., 220 U. S. 446, 31 S. Ct. 456, 55 L. Ed. 536, is not a subject-matter of a valid trade-mark. We are in accord with the finding of the learned trial court that the registration is invalid.

The next question is that of unfair competition, its first aspect being whether on the facts the complainants' trade-name "Dyanshine" has acquired a secondary meaning wherein its descriptive quality has become merged in a newly acquired and therefore secondary quality which identifies the product in the mind of the public as that of the complainants' manufacture.

The facts disclose that the complainants' business is one of many commercial romances developed by the war. Warren D. Barton, a small dealer in leather goods at Waco, Texas, guite accidentally discovered in a chemical preparation the dual qualities of dyeing and shining leather. After a series of experiments, he conceived a formula (still held secret) for the manufacture of the preparation and, making a small quantity, he peddled it at Camp MacArthur nearby. He called it "Dyanshine," a misspelling of words descriptive of its qualities. It kept soldiers' puttees and trappings in excellent condition and immediately became popular. At first Barton's supply was limited to available bottles of varied sizes and colors purchased at local stores and junk shops. Almost immediately the demand outran the supply. This was due to several circumstances. There was a large number of troops at Camp MacArthur. Officers ordered their men to use the preparation and men and officers moving to camps in other parts of the country wrote back for more of it, until, later, the Government included it in orders for troop equipment.

The story of the beginning of this business is similar to that of the well-known Bull Durham smoking tobacco, told in Blackwell v. Dibrell, 3 Fed. Cas. 549; 3 Hughes, 151. There the popularity of the tobacco was due to Sherman's and Johnston's armies passing through the district in North Carolina where the tobacco was grown and preying upon the tobacco houses, and its notoriety was due to the soldiers, after disbandment of the armies, writing from all parts of the country for more of it.

Barton formed a partnership with sufficient capital to handle this suddenly grown up business. A brief chronicle of its expansion discloses that there was no record of sales in 1918 and the early part of 1919, but beginning in 1919, the firm sold 1,198,600 bottles; in 1920, 3,371,320 bottles; in 1921, 3,964,784 bottles and in 1922 (to October 1...