Falk v. American West Indies Trading Co.

• Decision Date: 21 February 1905
• Citation: 73 N.E. 239,180 N.Y. 445
• Parties: FALK et al. v. AMERICAN WEST INDIES TRADING CO.
• Court: New York Court of Appeals Court of Appeals

180 N.Y. 445

73 N.E. 239

FALK et al.

v.AMERICAN WEST INDIES TRADING CO.

Court of Appeals of New York.

Feb. 21, 1905.

Appeal from Supreme Court, Appellate Division, First Department.

Action by Mortimer Falk and others against the American West Indies Trading Company. From a judgment of the Appellate Division (85 N. Y. Supp. 1130,90 App. Div. 606) dismissing an appeal from an order confirming the report of a referee and affirming a final judgment for plaintiffs, defendant appeals. Reversed.

Cullen, C. J., and Bartlett and Werner, JJ., dissent.

Antonio Knauth and Isaac M. Aron, for appellant.

S. K. Lichtenstein and Morris S. Wise for respondents.

O'BRIEN, J.

The plaintiffs have recovered a judgment against the defendant, enjoining it from the use of a trade-mark claimed to be their property, and for damages in the sum of $10,000 for infringement and the wrongful use by the defendant of the trade-mark in question. It appears from the pleadings and findings of the trial court that about the year 1871 a partnership firm known as Lichtenstein Bros. & Co., engaged in the manufacture and sale of cigars, adopted and made use of the words ‘El Falcon’ as a trade-mark to designate a particular brand of cigars. This firm afterwards, and about the year 1886, was merged in a corporation of the same name, which took over the assets of the firm and succeeded to the good will of the business. The corporation continued in the business of manufacturing and selling cigars, and in the use of the trade-mark, until the 31st of October, 1898, when it went out of business. On that day it executed and delivered to the plaintiffs an instrument in writing which purported to assign and set over to them the trade-mark in question, with the labels and devices that had been used with the same. The plaintiffs thereupon, assuming to have succeeded to all the rights of their assignor, continued the use of the trade-mark at its manufactory at Key West, in Florida. The defendant is a New Jersey corporation, but engaged in the manufacture and sale of cigars at Caguas, Porto Rico, with an office in New York. It appears that the manager of the corporation at that place, whose name is Gregorio Lopez y Falco, adopted his own name as a trade-mark for a brand of cigars that are now known in the trade as the ‘El Falco.’ There is no similarity at all between the labels on the two trade-marks, but there is a similarity in the names. No fraud, however, is alleged or claimed, and no fraud or intent to deceive the public was found by the learned trial court. The judgment in this case is to the effect that the trade-mark so adopted by the defendant is an infringement upon the rights of the plaintiffs, and hence the injunction and award of damages.

The controlling question in this case is with respect to the plaintiffs' title, or exclusive right to the use of the trade-mark, for an infringement of which they procured the injunction and recovered the damages. It does not appear, and is not claimed, that anything was assigned to the plaintiffs except the naked right to use the trade-mark and labels. No business or good will was transferred to the plaintiffs by the instrument, and they did not succeed, by operation of law or otherwise, to the business in which the trade-mark had been used and to which it was attached. They were simply authorized to use the trade-mark in their own business established at another place. The use of the trade-mark by the plaintiffs denoted to the public that they were making and selling the Lichtenstein cigar, and that it was not applied to a cigar manufactured by other parties at any other place. The questionis whether, under these circumstances, the plaintiffs had any right to maintain this action. A trade-mark is not a piece of property that passes from hand to hand by assignment separate from the business of the owner of the trade-mark, or of the article which it may serve to distinguish. Generally, it passes only with the business and good will of which it is an inseparable part. The rule in this respect is well stated in a recent work of great merit on that branch of the law with which we are now concerned. ‘As a mere abstract right, having no reference to any particular person or property, a trade-mark cannot pass by assignment or descend to a man's legal representatives. The reason for this is that, as an abstract right, apart from the business in which it is used, a trade-mark has no existence. To permit a trade-mark to be transferred apart from the business in which it is used would be productive of fraud upon the public. * * * The mere sale of a trade-mark apart from the article to which it is affixed confers no right of ownership, because no one can claim the right to sell his goods as goods manufactured by another.’ Paul on Trade Marks, §§ 116, 117, 144. The learned author, in the notes to the three sections referred to, has collected the leading cases on the subject, and it will be seen, upon an examination of those authorities, that they amply support the propositions contained in the text. Some of the...