Handel Co. v. Jefferson Glass Co.

• Decision Date: 01 May 1920
• Parties: HANDEL CO. v. JEFFERSON GLASS CO. et al.
• Court: U.S. Court of Appeals — Fourth Circuit

265 F. 286

HANDEL CO. v. JEFFERSON GLASS CO. et al.

United States District Court, N.D. West Virginia.

May 1, 1920

H. E Dunlap, of Wheeling, W. Va., and Dodson & Roe, of New York City, for complainant.

J. M Ritz and John A. Howard, both of Wheeling, W. Va., and Duell Warfield & Duell, of New York City, for defendants.

DAYTON District Judge.

The plaintiff has instituted this suit for infringement of United States patent, No. 979,664, issued December 27, 1910, coupled with a charge of unfair competition. Both of the corporation defendants have answered, fully traversing the allegations of the bills. The subject-matter of the controversy relates to the manufacture and sale of lamp shade holders. The defendant the Jefferson Glass Company, in its separate answer specifically and positively denies that it is--

'engaged in the use, manufacture, or sale of said shade holders, such as described in plaintiff's bill of complaint, or any shade holders whatever. It is engaged in the business of manufacturing and sale of glass. Respondent does not use, sell, or manufacture any shade holders whatever, nor have any of its officers or agents used, sold, or manufactured any shade holders whatever, and respondent is in no way interested or engaged in the manufacture and sale of any shade holders whatsoever, and has not in any way infringed on the plaintiff's patent.'

The only positive evidence adduced to refute this denial is the admitted fact that its codefendant, the Jefferson Company, buys from the Glass Company 'the plain crystal or opal blank (shade) as it comes from the mold,' which it takes in its unfinished state, finishes, decorates, and fits to the lamp unit which it sells. There is, and can be, no contention that plaintiff's patent covers the manufacture and sale of lamp shades. Its object is confined solely to the holder of such shades. The specification of the patent itself is sufficient to settle that. It says:

'The object of our invention is to produce a holder for lamp shades and the like, having features of novelty and advantage.'

It inevitably follows that for a glass company to manufacture the plain crystal or opal blank as it comes from the mold in no way infringes the plaintiff's patent right, unless it be shown that it does so in direct collusion and interest with another for the purpose of adjusting to such shade the patented holder and selling it, so adjusted, as a finished product. I have carefully considered the statement of witness Netting that Austin, the manager of the Jefferson Company, told him that he had left the Handel Company with the idea of going into the lamp business with other gentlemen who were interested in the Jefferson Glass Company, but that the new company was to go under the name of the Jefferson Company, and they were to make high-class lamps, and were to operate simply as a selling agent for the Jefferson Glass Company.

This may be perfectly true. He may have contemplated making just such an arrangement and combination, but it does not follow that he was able to, or did in fact, make them. It may be true that gentlemen interested in the Glass Company are interested in the Jefferson Company, but that fact alone cannot be held sufficient to fix liability upon the corporation itself. Witness Carr states Austin told him, when he showed him their line of goods in the Jefferson Hotel, St. Louis, 'about two years ago,' that--

'The Jefferson Company was a new concern, which had been formed to sell the product of the Jefferson Glass Company and that anything I would buy from the Jefferson Company would be the product of the Jefferson Glass Company.'

This cannot be held sufficient to bind the Glass Company for two reasons: First, because Austin is not shown to be connected in any capacity with the Glass Company and for any false representation of his it could not be bound; second, because the statement, reasonably construed, may be held to have meant that the material used in the manufacture of the glass shades in blank was to be that of the Glass Company, which is admitted to be true. As to the statements of the 'drummer,' or traveling salesman, Brunn, it cannot, we think, be held that his position was such as to warrant holding the Glass Company responsible, without some proof of his being authorized to make them by some responsible officer of that company. The recklessness of statements made by 'drummers' in order to secure orders is too well known.

In opposition to all this inferential testimony stands out the positive denial in the answer of the Glass Company, and the positive testimony of Austin that the only connection between the two companies is that the Jefferson Company purchases, in due course of trade, from the Glass Company, only the plain crystal or opal shade blank, which was and could not be in any way covered by patent, because of the long and general use of lamp shades. It follows that this cause must be dismissed as to the Glass Company.

Nor am I impressed with the very serious and earnest contention of complainant's counsel that the facts of this case disclose a 'most abominable case of unfair competition. ' Manufacturers have three distinct methods, under our laws, whereby they may protect their peculiar trade articles from being manufactured and sold by others: First, as to some such articles, by securing a patent; and, second, as to others, by securing a trade-mark monopoly; and, third, by resort to equity to secure its injunction against unfair competition. The resort to the last is decidedly less effective that the other two; for, as said by Chief Justice Fuller, in Lawrence Mfg. Co. v. Tennessee Mfg. Co., 138 U.S. 551, 11 Sup.Ct. 402, 34 L.Ed. 997, 'the deceitful representation or perfidious dealing must be made out or be clearly inferable from the circumstances. ' The same distinguished jurist, speaking for the Supreme Court, has said in Howe Scale Co. v. Wyckoff, etc., 198 U.S. 140, 25 Sup.Ct. 614, 49 L.Ed. 972, 'the essence of the wrong in unfair competition consists in the sale of the goods of one manufacturer or vendor for those of another, and, if the defendant so conducts its business as not to palm off its goods as those of complainant, the action fails. ' He cites Mr. Justice Strong's statement in Canal Co. v. Clark, 13 Wall. 311, 20 L.Ed. 581, that 'purchasers may be mistaken, but they are not deceived by false representations, and equity will not enjoin against telling the truth'; Mr. Justice Clifford's in McLean v. Fleming, 96 U.S. 245, 24 L.Ed. 828, that 'a court of equity will not interfere, when ordinary attention by the purchaser of the article would enable him at once to discriminate the one from the other'; Mr. Justice Jackson's in Columbia Mill Co. v. Alcorn, 150 U.S. 460, 14 Sup.Ct. 151, 37 L.Ed. 1144, that 'even in the case of a valid trade-mark, the similarity of brands must be such as to mislead the ordinary observer'; and also cites Coats v. Merrick Thread Co., 149 U.S. 562, 13 Sup.Ct. 966, 37 L.Ed. 847, and Liggett & Myers Tobacco Co. v. Finzer, 128 U.S. 182, 9 Sup.Ct. 60, 32 L.Ed. 395.

Resort to this action is not to be encouraged, for several reasons; among others, because the remedy it seeks, if applied, is not limited in time, as in the cases of patents and trade-marks, and because all legitimate and lawful competition is not only permissible, but extremely desirable, and entitled to be encouraged to the last limit. The public is vitally interested in seeing that no monopoly be acquired by any one in the manufacture and sale of articles of necessity, or even luxury, that is calculated to increase the selling price thereof. On the contrary, the man who can produce a better quality of a given article and sell it at a lesser price than it has been selling for theretofore in the market, is entitled to the highest commendation. Circuit Judge Sanborn, of the Eighth circuit, in Wrisley v. Iowa Soap Co., 122 F. 796, 59 C.C.A. 54, has so clearly stated the law that such statement leaves little, or nothing more to be said:

'Every manufacturer and vendor has the undoubted right to sell the goods he makes or owns to the public, to his own customers, and to the customers of his competitors if he can, at lower prices and on better terms than those furnished by them, and by these and by all fair means to divert their trade to himself, even though his activity and enterprise may destroy the business of his rivals. The only intention the law condemns is the purpose of a manufacturer or vendor to palm off his own goods as those of his competitor, and the only acts from which such an intention may be lawfully inferred are those whose natural and probable effect is to perpetrate such a fraud. The line of demarcation between acts indicative of a lawful and of an unlawful intent here runs wide and clear between those which would not and those which would be likely to induce the common purchaser, when exercising ordinary care, to buy the article of the vendor as the product or property of his competitor. The duty is imposed upon every manufacturer or vendor to so distinguish the article he makes or the goods he sells from those of his rival that neither its name nor its dress will probably deceive the public or mislead the common buyer. He is not, however, required to insure to the negligent or the indifferent a knowledge of the manufacture or the ownership of the articles he presents. His competitor has no better right to a monopoly of the trade of the careless and indifferent than he has, and any rule of law which would insure it to either would foster a competition as unfair and unjust as that promoted by the sale of the goods of one manufacturer as those of another. One who so names and dresses his product that a purchaser who exercises

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