Charles E. Hires Co. v. Consumers' Co.

• Citation: 100 F. 809
• Decision Date: 22 March 1900
• Docket Number: 645.
• Parties: CHARLES E. HIRES CO. v. CONSUMERS' CO.
• Court: U.S. Court of Appeals — Seventh Circuit

100 F. 809

CHARLES E. HIRES CO. v. CONSUMERS' CO.

No. 645.

United States Court of Appeals, Seventh Circuit.

March 22, 1900

The appellant, the Charles E. Hires Company (the complainant below), brought its bill to restrain an alleged unfair competition in trade by the appellee (the defendant below). Upon an application for a preliminary injunction the facts disclosed are thus succinctly and accurately stated by the counsel for the appellant:

'The Charles E. Hires Company, complainant, is a Pennsylvania corporation engaged in the manufacture and marketing of root beer in various forms. The Consumers' Company is an Illinois corporation originally manufacturing distilled waters and soda, and more recently ginger ale, birch beer root beer, and other effervescent beverages. The predecessor of complainant inaugurated the manufacture and marketing of root beer in 1877 by putting on the market a dry preparation known as 'Hires' Improved Root-Beer Package,' from which root beer was obtained by a simple process. To this was added in the ensuing year a preparation known as 'Hires' Root-Beer Extract,' from which, by the addition of water and yeast, root beer was easily made, ready for consumption. In 1890 the complainant corporation succeeded to the entire business and rights of Charles E. Hires, and continued the manufacture of the root-beer package and the root-beer extract. In 1895 complainant added to its former products carbonated root beer put up in bottles ready for consumption. In each instance the complainant or its predecessor was the pioneer introducer of the article, and at the time complainant began the manufacture and sale of carbonated root beer there was no similar preparation on the market. A new, peculiar and distinctive form of bottle was adopted for the new beverage, cylindrical in form, with high shoulders and short neck. Corks wired and covered with tin foil were originally employed as stoppers. The labels at first were three in number; consisting of a band label around the bottle neck; a small, round, gilt intermediate label; and a larger label near the bottom of the bottle. After about a year of use the small intermediate label was changed to the form of a shield, and some slight modifications made in the neck label; and in 1896 complainant began the substitution of tin capsules or crown stoppers for the ordinary corks and during the season of 1896 a complete change in this particular was effectuated. The intermediate label, which was at first a round gilt disk, and subsequently a shield, bore the direction: 'Keep this bottle on its side in a cool place. Sparkling. The genuine has the signature of the Charles E. Hires Co.' But, it having been found that the use of the tin capsules obviated the necessity of this method of preservation, the admonition was unnecessary, and the intermediate label was in 1897 wholly discontinued upon the bottles; but advertisements which reproduced bottles showing this label continued in use, and are still employed. Complainant has largely advertised its carbonated root beer. The advertisements are chiefly in the form of fancy cards, booklets, and hangers, which, in the majority of instances, exhibit a reproduction of the bottle and labels; but, as in many instances the reproductions are small, the peculiarities of the label are not decipherable, and the distinctive style of the bottle is the chief feature, and most conspicuously noticeable. The beverage proved a popular one, and a large market was soon created. The public calls for it by the name of 'Hires' Root Beer,' and identifies it both by the shape of the bottle, and by the general appearance of the labels; but the shape or style of the bottle is the principal method of identification by the purchaser at retail. After complainant's beverage had become well established upon the market, the defendant began the manufacture of various effervescent beverages, including ginger ale, birch beer, and root beer. It at first adopted a form of bottle for these three beverages very distinct, in size, shape and form, from the bottle employed by complainant, and also adopted labels widely different in size, color, and general get-up. Defendant's bottles for these three beverages were identical in shape, size, position, and the letter press thereon, save the necessary difference in name, and a separate color in the labels. The labels for all these articles had pale-green backgrounds, but the colors of the lettering and label margins differed, so that root beer, ginger ale, and birch beer could be distinguished; the letter press and margin colors being red for root beer, light brown for ginger ale, and brown for birch beer. At the beginning of 1897, the season following a similar change by complainant, the defendant also adopted the tin capsule or crown stopper for bottles containing all its beverages, but continued the use of the original bottles and labels until the season of 1899. At this time defendant, without any reason except an asserted desire to increase the capacity of its root-beer bottles, abandoned for root beer the form of the bottle theretofore used by it for birch beer, ginger ale, and root beer, and adopted for root beer alone a bottle precisely identical with that which had been used by the complainant from the commencement. Defendant also changed the size, shape, color, and position of its root-beer labels so as to approximate those of complainant's.'

The complainant prayed an injunction:

'That the said defendant, its officers, agents, servants, and employes, may be enjoined and restrained, at first during the pendency of this suit, and afterwards perpetually, from manufacturing, putting up, selling, advertising, offering or announcing for sale, or supplying, root beer, or any similar preparation, manufacture, or beverage, in bottles and under labels substantially identical with or like the said bottles and labels of your orator employed for that purpose, or substantially identical with or like the bottles and labels now employed by the defendant for that purpose, or in bottles or under labels which are calculated to deceive purchasers and consumers into the belief that the beverage is the product of your orator, or which will enable others to substitute, sell, or palm off the said beverage of the defendant as and for the beverage of your orator.' Upon the hearing of the motion the court below handed down the following opinion:

'On the motion for an injunction I am not disposed to consider the shape of the bottle as a controlling means of deceiving the public; but the changes made by the defendant in the style of its labels, and the marked similarity thereof to the ordinary observer to the labels used by complainant, when taken in connection with the shape of the bottle, certainly furnish grounds for the belief that the defendant's actions in the premises were with a view of causing its product to be mistaken for, and sold in lieu of, complainant's. Unless, therefore, defendant so materially alters its present labels within the next ten days, in color, shape, and style, that its bottles, when adorned by such labels, shall present to the ordinary observer a marked and distinct difference in appearance from

...