G. Heileman Brewing Co. v. Independent Brewing Co.

• Decision Date: 06 November 1911
• Citation: 191 F. 489
• Parties: G. HEILEMAN BREWING CO. v. INDEPENDENT BREWING CO.
• Court: U.S. Court of Appeals — Ninth Circuit

191 F. 489

G. HEILEMAN BREWING CO. v. INDEPENDENT BREWING CO.

United States Court of Appeals, Ninth Circuit.

November 6, 1911

The complaint sets forth, in effect, omitting the formal parts that complainant has for more than eight years preceding the commencement of the suit manufactured at La Crosse, in the state of Wisconsin, a certain high quality of beer which it has marked and designated by the use of a label, which said label has been employed for the purpose of identifying the true and genuine product of the complainant and the quality of the goods bearing such mark. A copy of the label is annexed to the complaint and marked 'Exhibit A.'

It is further alleged, upon information and belief, that, prior to the adoption of the label and mark by complainant, it had not been used by others to designate the same or a similar kind of goods; that the same was original with complainant, and does now and always has designated the true and genuine manufacture of complainant, except for the use thereof by defendant in manner as alleged; that upon application and compliance with the statutes, rules, and regulations pertaining to the registration of trade-marks, complainant obtained from the United States Patent Office a certificate of registration of its said label, bearing date June 25 1907, and numbered 63,492, a certified copy being annexed to the complaint.

The mark of complainant used for designating beer is described as consisting 'essentially of a conventional or typical Dutch or German scene with an inn and table surrounded by drinkers and with a subterranean or underlying passage recess, or room showing vats, barrels, or other receptacles such as are ordinarily employed for storing beer, together with a scene of a cooper or coopers making or working upon the building of a barrel or butt,' which, it is alleged was original with complainant, and has been used exclusively by complainant for designating the beer of its manufacture for the period designated, namely, since about January 1, 1902, except its wrongful use by defendant, which use has been by continuously and uninterruptedly applying the same directly to bottles or other receptacles containing beer of complainant's manufacture, and which said beer has been shipped, transported, and sold in interstate commerce between the state of Wisconsin and many other states of the United States.

The complainant further shows that it has expended large sums of money and a great amount of labor in perfecting, advertising, and exploiting its said beer, to the end that the quality of said beer shall and has become known to the public; that the public, by reason of such excellence of quality and by such exploiting has come to know the beer, the manufacture of complainant, as and for a high grade and quality of beer, and to know that said beer is designated by the mark and label attached to the complaint, and the same is purchase and designated by the purchasing public by the mark and label aforesaid; that complainant is now and always has been since about the said 1st day of January, 1902, the sole and exclusive owner of the said mark and label, and is now entitled to the sole and exclusive use of the same in the designation of its product.

It is then further shown that 'with full knowledge in the premises and of the reputation of your orator's beer and of the demand existing for the same and in the use and meaning of your orator's said mark and label consisting of the Dutch or German drinking scene with the subterranean room or passage containing barrels or butts as indicating and identifying the quality, origin, and genuineness of your orator's beer, the defendant, the Independent Brewing Company, of Seattle, in the county of King and state of Washington, the corporation as aforesaid, meaning and intending to divert and secure to itself such portions of the good will of your orator's business in manufacturing and selling beer and to destroy for its own profits by unlawful means the reputation of and demand for your orator's beer wholly without your orator's consent and against its repeated protests, has manufactured and sold beer of a quality different from and inferior to your orator's beer in this district and elsewhere, and has used upon such beer in connection with the sale of the same your orator's trade-mark in so nearly the exact form and configuration as employed by your orator as to deceive purchasers into believing that the beer the manufacture of the defendant was and is the beer manufactured by your orator, and to confuse and defraud the public into purchasing the defendant's beer believing it to be the beer of your orator. ' A copy of the mark and label employed and used by the defendant is also attached to and made a part of the complaint, being marked 'Exhibit C.'

The complaint further shows that the defendant employs the said label exemplified by Exhibit C in the same manner as complainant employs the label exemplified by Exhibit A upon the pure and genuine manufacture of complainant, by attaching the said label directly to the bottles containing the beer and manufacture of defendant. 'That the bottles to which said labels of your orator as exemplified by Exhibit A and the infringing label and mark as exemplified by Exhibit C are cylindrical in form and of such proportion that the labels exemplified by Exhibits A and C, when so attached to bottles as aforesaid, are not visible in their entirety, but only in sections, and that certain sections of the label exemplified by Exhibit C more nearly resemble corresponding sections of your orator's label exemplified by Exhibit A than as is the case with other sections. ' That the defendant (this on information and belief) 'has sold beer not manufactured by or for your orator bearing the said fraudulent trade-mark and label among the several states of the United States, and has without your orator's consent reproduced, counterfeited, copied, and plainly obviously imitated your orator's said trade-mark and label to you to unlawfully interfere with and divert your orator's business and the profits therefrom to its own use and behoof, and that the public has been and continues to be misled, and that the beer the manufacture of the defendant has been and continues to be sold as and for the true and genuine beer of your orator's manufacture for many years known and in demand as hereinbefore set forth, and that the use by the defendant of the said infringing mark of your orator and of his peculiar configuration displayed thereon has the effect of enabling and promoting the impairment of the reputation of and the demand for your orator's beer, and the fraudulent and unlawful sale and substitution of the defendant's beer as and for the beer of your orator's manufacture to your orator's great loss and injury and to the great loss and injury of the public. ' This is followed by appropriate allegations respecting the value of the good will of complainant's business and the value of its right to the exclusive use of said trade-mark, and the amount of injury it sustains annually by reason of defendant's infringement of its said trade-mark, together with a prayer for an accounting and injunctive relief.

The demurrer assigns as reasons therefor the following:

'(1) That said bill does not state facts sufficient to constitute a cause of action in favor of the complaint.

'(2) That there appears no equity in the bill.

'(3) That it appeareth by complainant's showing in said bill that it is not entitled to the relief prayed for, nor to any other form of relief, against the defendant.

'(4) That it appeareth by said bill that complainant's claim of right to relief is based upon the fraud of complainant itself, and other fraud, and such bill should be dismissed.'

G. Ward Kemp, E. T. Fenwick, and L. L. Morrill, for appellant.

R. S. Jones, for appellee.

Before GILBERT and ROSS, Circuit Judges, and WOLVERTON, District judge.

WOLVERTON District Judge (after stating the facts as above).

The appellee insists at the outset that the bill of complaint states a cause of suit for the infringement of a trade-mark only, and not at all for unfair competition in trade. In this we think counsel is in error. A suit for unfair competition may be maintained where there is no lawful trade-mark involved, which consists essentially in palming the goods of one manufacturer or vendor off for the goods of another. This is a fraud not only upon the manufacturer whose goods are assimilated and replaced in the market, but upon the general public as well, which does not get what it supposes it is bargaining for. For the fraud thus perpetrated, the individual or the manufacturer, as the case may be, has his or its cause of suit to prevent the recurrence of the imposition, and for such damages as may have been sustained on account of it. Lawrence Mfg. Co. v. Tennessee Mfg Co., 138 U.S. 537, 11 Sup.Ct. 396, 34 L.Ed. 997; Elgin Nat. Watch Co. v. Illinois Watch Co., 179 U.S. 665, 21 Sup.Ct. 270, 45 L.Ed. 365; Draper v. Skerrett (C.C.) 116 F. 206. A fortiori a suit may be maintained for unfair competition when the infringement of a trade-mark is resorted to as a means of accomplishing the purpose. As is said in the books, 'Trade-mark infringment is but one form of unfair competition. ' Hopkins on Trade-Marks, 44. In such a case it is altogether appropriate that the party claiming to be injured should conjoin allegations of infringement with averments of unfair competition. Indeed, he could not well state his case otherwise. There can be no objection, therefore, to joining the two causes of suit in one complaint, and it is true also that he might succeed in one cause alone and fail in the other. By fair intendment the complaint in the present...