A. Bourjois & Co., Inc. v. Katzel

• Decision Date: 08 June 1921
• Docket Number: 252.
• Citation: 275 F. 539
• Parties: A. BOURJOIS & CO., Inc., v. KATZEL. [a1]
• Court: U.S. Court of Appeals — Second Circuit

275 F. 539

A. BOURJOIS & CO., Inc., v. KATZEL. ^[a1]

No. 252.

United States Court of Appeals, Second Circuit.

June 8, 1921

On Petition for Rehearing June 30, 1921.

Hough Circuit Judge, dissenting.

Before WARD, HOUGH, and MANTON, Circuit Judges.

WARD Circuit Judge.

In July, 1913, the plaintiff, a corporation of the state of New York, bought the business and good will in the United States of A. Bourjois & Cie., E. Wertheimer & Cie., Successeurs, a French firm which had since 1879 sold in the United States a face powder manufactured by it in France described as 'Java.' The French firm registered in the United States Patent Office the trade-mark 'Java' in 1888 the trade-mark 'A. Bourjois & Cie.' in 1908, and the word 'Java' on the top and side of its box in 1912. The plaintiff in 1916, 1918, and 1919 registered three other trade-marks used by the French firm for face powder. Under all these trade-marks the plaintiff imports in bulk the face powder manufactured by the French firm, and packs and sells it here in boxes.

The defendant conducts a retail pharmacy in New York City, and sells in New York, New Jersey, and other states the same genuine face powder manufactured by the French firm, imported by her in its original boxes, on which are printed its trade-marks and labels. The only difference between the trade-mark and labels of A. Bourjois & Co., Inc., and A Bourjois & Cie., E. Wertheimer & Cie., Successeurs, is that the powder sold by the defendant is called Poudre de Riz de Java, as the plaintiff called it until 1916, when it altered the name to Poudre Java, and that on the bottom of the plaintiff's boxes is printed 'Trade-Mark Reg. U.S. Pat. Off. Made in France-- Packed in the U.S.A. by A. Bourjois & Co., Inc., of N.Y., Succ'rs in the U.S. to A. Bourjois & Cie. and E. Wertheimer & Cie.'

The plaintiff filed this bill on the ground of infringement of its registered trade-marks, praying that the defendant be enjoined both provisionally and finally from selling the French firm's face powder under the trade-mark 'Java' or the trade-mark 'Bourjois,' or under any of the plaintiff's registered trade-marks and for an accounting. The District Judge granted the motion for a preliminary injunction, and the defendant appeals from that order.

It is to be noticed in the first place that, the residence and citizenship of both parties being in the state of New York, no question of unfair competition is involved, and indeed there is no evidence of any such competition.

The assignment from A. Bourjois & Cie., E. Wertheimer & Cie., Successeurs, to A. Bourjois & Co., Inc., is not produced, but we assume for the purposes of this case that the plaintiff is entitled to the French firm's trade-marks under Menendez v. Holt, 128 U.S. 514, 9 Sup.Ct. 143, 32 L.Ed. 526, and Wertheimer v. Batcheller (C.C.) 185 F. 850, and that it would be a breach of the French firm's obligations to sell its face powder in this country. Le Page v. Russia Cement Co., 51 F. 941, 2 C.C.A. 555, 17 L.R.A. 354.

We set on one side all authorities cited by the plaintiff arising out of sales under the same trade-marks of two different competitive articles manufactured by different persons, such as Hanover Milling Co. v. Metcalf, 240 U.S. 403, 36 Sup.Ct. 357, 60 L.Ed. 713; Scandinavia Co. v. Asbestos Co., 257 F. 937, 169 C.C.A. 87, because it is quite clear that the defendant could not sell face powder manufactured by her or by any other person than A. Bourjois & Cie. under these trade-marks. But the article sold by the plaintiff and covered by its registered trade-marks is the face powder actually manufactured by the French firm, imported in bulk and packed here by the plaintiff, which is the precise article imported by the defendant in the French firm's original boxes and sold here. The question is whether the defendant has not the right to sell this article under the trade-marks which truly indicate its origin. We think she has. The question has been so decided in three cases in this circuit, Apollinaris Co. v. Scherer (C.C.) 27 F. 18; Russian Cement Co. v. Frauenhar, 133 F. 518, 66 C.C.A. 500; and Gretsch v. Schoening, 238 F. 780, 151 C.C.A. 630.

In the Apollinaris Case Saxlehner, owner of the Hunyadi Janos spring in Hungary, gave to the Apollinaris Company the exclusive right to sell the water under the trade-mark 'Hunyadi Janos' in Great Britain and the United States. The Apollinaris Company registered the name and the label as trade-marks in the United States Patent Office. Scherer applied to Saxlehner to sell him the water for importation into the United States, which Saxlehner refused to do, telling him of the Apollinaris Company's exclusive rights. Thereafter Scherer purchased the water from other parties in Germany, imported it into the United States, and sold it under the name Hunyadi Janos and with the same label as the Apollinaris Company's with one immaterial variation. Judge Wallace said:

'The complainant established an agency for the sale of the water in this country, but, as it now asserts, is unable to maintain its own prices for the article because the defendant purchases the water in Germany from persons to whom it has been sold by Saxlehner, imports it, and sells it here at lower prices. It is shown that the defendant purchases the water in bottles under the label adopted by Saxlehner containing the cautionary notice, and that he does this after having applied to Saxlehner to sell him the water and been refused and informed by Saxlehner of the complainant's rights.

'The bill of complaint proceeds in part upon the theory that the defendant is infringing the complainant's trade-mark in the name and label applied to the water, but all the averments in this behalf may be disregarded as irrelevant to the real question in the case. No doubt is entertained that the name when applied to the water is a valid trade-mark, and that the complainant should be protected against the unauthorized use of the trade-mark by another. The complainant would be entitled to this protection entirely irrespective of the registration of its trade-mark in the patent office. The same observations apply to the use of the label. The complainant has a common-law right to the name and the label as a trade-mark by which its mineral waters are identified; and as the necessary diversity of citizenship exists between the parties to confer jurisdiction upon this court, the only effect of registration is to afford and perpetuate the evidence of the complainant's title. But the defendant is selling the genuine water, and therefore the trade-mark is not infringed. There is no exclusive right to the use of a name or symbol or emblematic device except to denote the authenticity of the article with which it has become identified by association. The name has no office except to vouch for the genuineness of the thing which it distinguishes from all counterfeits; and until it is sought to be used as a false token to denote that the product or commodity to which it is applied is the product or commodity which it properly authenticates, the law of trade-mark cannot be invoked.

'The real question in the case is whether the defendant is unlawfully interfering with any exclusive right of the complainant to control the sale of the water in the territory ceded to the complainant for that purpose by Saxlehner. It is manifest that the acts of the defendant tend to deprive the complainant of the substantial advantages which it expected to obtain from the privilege transferred to it by Saxlehner. It can no longer maintain its own prices for the mineral water or hold out the inducements it formerly could to the agents it has selected to introduce the article to the patronage of the public, and build up a trade. It can no longer protect itself as efficiently against the chances of a spurious article being palmed off upon the public as its own. It is therefore measurably deprived by the acts of the defendant of the profits and benefits which it contemplated when it purchased from Saxlehner the exclusive right of importing the water into this country and selling it here. If the complainant could acquire an exclusive right to sell the water here the case would be plain. If it could not it still remains to consider whether the defendant has violated any duty which the law recognizes in his relations to the transactions. There would seem to be no doubt that the agreement between Saxlehner and the complainant was a valid one. He had the right to dispose of his property in the product of his spring as he saw fit, and it is not apparent how the transfer of a part of his exclusive right to vend the water by which a territorial division in its enjoyment was created, can be deemed obnoxious to any principle of public policy as tending to create a monopoly or an unlawful restraint of trade. If Saxlehner were now endeavoring to compete with the complainant in the sale of the water in the ceded territory, his conduct would furnish a ground for equitable jurisdiction and the remedy of an injunction because of the inadequacy of a remedy at law, Bisp. Eq. 463. It is equally clear that if the defendant were co-operating with Saxlehner collusively to violate the complainant's right to the exclusive sale of the water he also would be restrained. In such a case the foundation of equitable redress would be the breach of covenant on the part of Saxlehner, and the defendant when acting in aid would be identified with Saxlehmer and amenable to the remedy as though he were Saxlehner himself. But it is important to bear in mind that the case would become for equitable cognizance, and the remedy of an injunction merely upon the

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