Coats v. Merrick Thread Co

• Decision Date: 10 May 1893
• Docket Number: No. 261,261
• Citation: 37 L.Ed. 847,149 U.S. 562,13 S.Ct. 966
• Parties: COATS et al. v. MERRICK THREAD CO. et al
• Court: U.S. Supreme Court

149 U.S. 562

13 S.Ct. 966

37 L.Ed. 847

COATS et al.

v MERRICK THREAD CO. et al.

No. 261.

May 10, 1893.

Statement by Mr. Justice BROWN:

This was a bill in equity by the firm of J. & P. Coats, of Paisley, Scotland, to enjoin the defendants, the Merrick Thread Company, a Massachusetts corporation, and Herbert F. Palmer, its managing agent in New York, from infringing plaintiffs' trade-mark, and unfairly competing with them, by simulating certain labels and symbols used by the plaintiffs upon the ends of wooden spools upon which sewing thread is wound.

The bill set forth, in substance, that plaintiffs had, since 1830, been engaged in the manufacture and sale of sewing threads on spools, and since the year 1840 the thread made by them had been, and still was, sold largely in the United States; that since about the year 1869 said firm had also been engaged in the manufacture of thread at Pawtucket, in the state of Rhode Island; that their business was very large and valuable, and their thread was well known to the trade as 'J. & P. Coats' thread;' that all the thread manufactured by plaintiffs, which is wound on spools of 200-yard lengths, had been and still was composed of six separate strands twisted together, known as 'Six-Cord Thread,' and was designated upon their labels and wrappers as 'Best Six Cord.' That about the year 1842 the name 'J. & P. Coats,' with the quantity reeled on each spool, and the words 'Best Six Cord,' with a designating number, were placed upon circular black and gilt label upon the end of every spool, and had always been one of the designating trade-marks of the plaintiffs in the United States; that in 1869 they adopted the idea of embossing upon the natural wood, and upon the outer edge of the heads of the spools, numerals corresponding with those upon the paper labels pasted upon the center of said spool heads, the object of such embossing being to show the number of the thread in case the paper label showing such number should be defaced or removed, and also to give a distinctive appearance to the plaintiffs' spools, and to indicate the origin and manufacture of the thread. The bill further averred that on the 9th of February, 1875, plaintiffs registered as a trade-mark at the patent office the central label of paper, and the peripheral band of natural wood, embossed with an ornamental design of crossed lines and central stars, with intermediate spaces, in which were embossed numerals corresponding to those in the center of the label.

The bill further charged the defendant the Merrick Thread Company with being the manufacturer of both the three-cord thread, a thread of inferior grade,—and also of six-cord thread, on spools in length of 200 yards; that for the three-cord thread the defendant used paper labels wholly unlike, in color or design, to any labels used by the plaintiffs, but that in selling, in competition with the plaintiffs, the six-cord thread, it used labels upon the spools made in colorable imitation of the plaintiffs', and intended as a counterfeit of their designs and trade-mark, the object being to so imitate the general appearance of plaintiffs' thread that the same may pass into the hands of tailors, illiterate men, and others buying at retail, and using sewing thread, as the genuine thread of plaintiffs.

In their answer the defendants denied the material allegations of the bill, and that the marks, embossment, and labels used by the Merrick Thread Company were a simulation or infringement upon the plaintiff's labels and trade-marks, but, upon the contrary, averred that they had endeavored to mark their goods so that no one could mistake their origin, and that their labels were so different from those of the plaintiffs and other manufacturers that they were plainly distingushable from them by ordinary purchasers. They further averred that the use of embossing the number of the spool thread on the wood of the spool head around the paper label was on April 5, 1870, patented as a design to one Hezekiah Conant, which patent had long since expired, and alleged that since such expiration the defendants had the free right to use such design, including any paper label which was not in and by itself an infringement of any lawful trade-mark of the plaintiffs.

On a hearing in the court below upon pleadings and proofs, the bill was dismissed (36 Fed. Rep. 324) on the ground that defendants were not shown to have made an unlawful use of the plaintiffs' labels. Plaintiffs thereupon appealed to this court.

Frederic H. Betts, for appellants.

W. C. Witter and W. H. Kenyon, for appellees.

Mr. Justice BROWN, after stating the facts in the following language, delivered the opinion of the court.

The gravamen of the plaintiffs' bill is contained in the allegation that the defendants have been gulity of an unlawful and unfair competition in business, in that they have been infringing the rights of plaintiffs in and to certain marks, symbols, and labels, by selling in competition with the plaintiffs a spool thread of 'six cords' put up on spools of 200 yards length, which thread is not manufactured by these plaintiffs, but is put upon the market and sold among retailers and customers, as well in the city of New York as in other and distant parts of the United States, as and for the thread of the plaintiffs, by reason of the labels, marks, and devices upon the spools whereon the said thread is wound.

It will be observed in this connection that no complaint is made of the conduct of the defendans with respect to any other thread than that of six cords, put up in spools of 200 yards in length, notwithstanding that both plaintiffs and defendants have been long engaged in the manufacture of thread of several different sizes and lengths. Nor is it alleged that defendants have used any other means of imposing their thread upon the public as that of the plaintiffs, except by the imitation of their device upon one end of the spool. The dissimilarity between the labels on the other end of the spool is so great that it is not, and could not be, claimed that any intent to imitate existed.

It is admitted, however, that six-cord spool cotton is the thread most largely used for domestic consumption, and, put up on spools of 200 yards length, in numbers from 8 to 100, is best known and purchased by the great mass of consumers, and that it is as manufactureres of this description of thread that the plaintiffs are, and have for a long time been, known throughout the country.

The controversy between the two parties, then, is reduced to the single question whether, comparing the two designs upon the main or upper end of the spool, there is such resemblance as to indicate an intent on the part of defendants to put off their thread upon the public as that of the plaintiffs, and thus to trade upon their reputation. There can be no question of the soundness of the plaintiffs' proposition that, irrespective of the technical question of trade-mark, the defendants have no right to dress their goods up in such manner as to deceive an intending purchaser, and induce him to believe he is buying those of the plaintiffs. Rival manufacturers may lawfully compete for the patronage of the public in the quality and price of their goods, in the beauty and tastefulness of their inclosing packages, in the extent of their advertising, and in the employment of agents, but they have no right, by imitative devices, to beguile the public into buying their wares under the impression they are buying those of their rivals. Perry v. Truefitt, 6 Beav. 66; Croft v. Day, 7 Beav. 84; Lee v. Haley, L. R. 5 Ch. App. 155; Wotherspoon v. Currie, L. R. 5 H. L. 508; Johnston v. Ewing, L. R. 7 App. Cas. 219; Thompson v. Montgomery, 41 Ch. Div. 35; Taylor v. Carpenter, 2 Sandf. Ch. 603; Manufacturing Co. v. Spear, 2 Sandf. 599; McLean v. Fleming, 96 U. S. 245; Boardman v. Meriden Britannia Co., 35 Conn. 402; Gilman v. Hunnewell, 122 Mass. 139.

For the better understanding of the question in this case, the respective devices of the plaintiffs and defendants are here given in juxtaposition:

It will be seen that in both devices there is a paper label, circular in form, much smaller than the head of the spool, containing, in black letters upon a gilt ground, the name of the manufacturer, the number of the thread, and the words 'Best Six Cord,' arranged in circular form to correspond with the shape of the label. Around this label, in each case, is a peripheral border of natural wood, having the number of the thread embossed upon such periphery. The differences are less conspicuous than the general resemblance between the two. At the same time, they are such as could not fail to impress themselves upon a person who examined them with a view to ascertain who was the real manufacturer of the thread. Plaintiffs' label contains the words 'J. & P. Coats, Best Six Cord,' in a gilt band around the border, and, in the center, the symbol '200 Yds,' and the number of the thread. Defendants' label contains the words 'Merrick Thread Co.,' and the number of their thread in the gilt band upon the border, and, in the center, the words 'Best Six Cord,' inclosing a star. The periphery of defendants' spool is also embossed with four stars, instead of the loops of the plaintiffs, as well as the number of the thread.

As bearing upon the question of fraudulent intent, the history of these labels is pertinent. Since 1830, plaintiffs have been engaged in the manufacture of thread at Paisley, Scotland, in the name of J. & P. Coats. About 1840, their thread was first put upon the market in this country, and for more than 25 years past they have been manufacturing...