Hurn v. Oursler

• Decision Date: 17 April 1933
• Docket Number: No. 565,565
• Citation: 289 U.S. 238,53 S.Ct. 586,77 L.Ed. 1148
• Parties: HURN et al. v. OURSLER et al
• Court: U.S. Supreme Court

289 U.S. 238

53 S.Ct. 586

77 L.Ed. 1148

HURN et al.

v OURSLER et al.

No. 565.

Argued and Submitted Feb. 17, 1933.

Decided April 17, 1933.

Mrssrs. Joseph Lorenz and Louis W. McKernan, both of New York City, for petitioners.

Mr. Alan S. Hays, of New York City, for respondent Oursler.

Mr. Benjamin Pepper, of New York City, for respondents Lewis & Harris.

Mrs. Emily Holt, of New York City, for respondent Brentano.

Mr. Justice SUTHERLAND delivered the opinion of the Court.

Petitioners brought this suit to enjoin respondents from publicly producing, presenting, or performing a play called 'The Spider,' on the ground that it infringed a copyrighted play of petitioners, called 'The Evil Hour.' There was also a prayer for damages and an accounting. The bill, as amended, alleged that 'The Evil Hour' had been composed by petitioners and duly copyrighted under the laws of the United States; that the play thereafter was revised, but the revision was uncopyrighted; that the play, both in its copyrighted and its revised uncopyrighted form, was submitted to certain of the respondents, who considered and discussed its production; that the feature of the play consisted in the representation of a spiritualistic seance on the stage, with the audience taking part therein; that respondents were the owners of 'The Spider,' also copyrighted, but as originally produced containing no representation of a spiritualistic seance of any kind; that respondents, instead of producing petitioners' play, altered their own by incorporating therein the idea of a spiritualistic seance on the stage, and also certain incidental 'business and effects' and certain portions of 'The Evil Hour'; that their action in that respect was a violation of the copyright laws of the United States, and also constituted 'unfair business practices and unfair competition against the (petitioners).' The parties are citizens of the same state.

The trial court, considering the claim of infringement on the merits, found that 'The Spider' did not infringe in any way 'The Evil Hour,' in contravention of the copyright law of the United States, and concluded that in view thereof, the court was without jurisdiction to entertain the allegations in so far as they were based upon claims other than for a violation of the copyright law. A decree followed dismissing the bill. The Circuit Court of Appeals affirmed upon the authority of cases cited. 61 F.(2d) 1031.

It is apparent from the language of the trial court that the claim of unfair competition in respect of the copyrighted play, as well as in respect of the uncopyrighted version, was rejected, not on the merits, but for lack of jurisdiction. In that view the decree of the court was assailed and defended here.

One. We consider the question first from the standpoint of the copyrighted play. While, as presently will appear, the claim of unfair competition is without merit and the dismissal must stand in any event, it is important that, if the determination of the court was put upon the wrong ground, we should so declare, that it may not be followed as a precedent.

The unfair competition in respect of the copyrighted play, according to the allegations, results from the same acts which constitute the infringement and is inseparable therefrom. The court below proceeded upon the theory that the allegations of the bill in respect of infringement presented a substantial federal question. Certainly, the question is not plainly unsubstantial; and the jurisdiction of the federal court was rightly upheld. Disposal of the infringement, therefore, on the merits was proper; and the precise question for determination is whether the claim of unfair competition was properly dismissed for lack of jurisdiction, or, likewise, should have been considered and disposed of on the merits.

A multitude of cases in the lower federal courts have dealt with the question in its various phases and have reached different conclusions. The opinions present a great variety of views and of differences. We shall not undertake to review these cases. A few out of many are mentioned in the footnote¹ as illustrative of the confusion and as indicating the importance of attempting to formulate some rule on the subject. And to that end we first direct attention to certain decisions of this court which seem most nearly in point.

In Stark Bros. Nurseries & Orchards Co. v. Stark, 255 U.S. 50, 41 S.Ct. 221, 65 L.Ed. 496, suit was brought for infringement of a trade-mark and unfair competition. The Circuit Court of Appeals limited damages to the date when notice was given of the registered mark, and refused to allow damages for earlier injuries. This court point out that the suit was for infringement of a registered trade-mark, not simply of a trade-mark, and that this was the scope of the federal jurisdiction. Agreeing with the lower court that the cause of action for the earlier damages lay outside the federal jurisdiction, this court assumed, though without deciding, that plaintiff 'could recover for unfair competition that was inseparable from the statutory wrong, but it court not reach back and recover for earlier injuries to rights derived from a different source.'

In that view, so far as the unfair competition alleged was thus inseparable from the statutory wrong, it would seem that a failure to establish the infringement would not have deprived the federal court of jurisdiction of the claim of unfair competition, but would have left that matter to be disposed of upon the merits. And that is the effect of the decision of this court in Moore v. New York Cotton Exchange, 270 U.S. 593, 607—610, 46 S.Ct. 367, 70 L.Ed. 750, 45 A.L.R. 1370. In that case federal jurisdiction was invoked under the federal anti-trust laws. The answer set up a counterclaim nonfederal in character, but arising out of the same transaction. This court held that, although the allegations of the bill were insufficient to make a case under the federal law, they were not plainly unsubstantial so as to deprive the federal court of jurisdiction, and sustained a dismissal of the bill on the merits and not for the want of jurisdiction. Nevertheless, we held, under Equity Rule 30 (28 USCA § 723), that the counterclaim was so much a part of the case sought to be stated in the bill that the dismissal of the latter on the merits did not deprive the court of jurisdiction to dispose of the former on the merits. We think the question there and the one here, in principle, cannot be distinguished. That a statement of the particular counterclaim there was required by the rule is not material, since the federal jurisdiction can neither be extended nor abridged by a rule of court.

As early as Osborn v. Bank of U.S., 9 Wheat. 738, 823, 6 L.Ed. 204, Chief Justice Marshall, speaking for the court, said:

'We think, then that when a question to which the judicial power of the Union is extended by the constitution, forms an ingredient of the original cause, it is in the power of congress to give the circuit courts jurisdiction of that cause, although other questions of fact or of law may be involved in it.'

In Siler v. Louisville & Nashville R. Co., 213 U.S. 175, 191, 29 S.Ct. 451, 455, 53 L.Ed. 753, the bill sought to enjoin the enforcement of an order made by the Railroad Commission of Kentucky fixing intrastate rates of transportation upon the railroad of the company. The validity of the order was assailed on the ground that the Kentucky statute under which the commission assumed to act was violative of the Federal Constitution in several particulars, and upon the further ground that such order was unauthorized by the state statute. This court held that the Circuit Court, having acquired jurisdiction by reason of the federal questions involved, 'had the right to decide all the questions in the case, even though it decided the Federal questions adversely to the party raising them, or even if it omitted to decide them at all, but decided the case on local or state questions only.'

Lincoln Gas & Electric Light Co. v. Lincoln, 250 U.S. 256, 39 S.Ct. 454, 63 L.Ed. 968, involved, among other things, the validity of an ordinance assessing an annual occupation tax upon gas companies in the city. The ordinance was attacked on the ground that it violated the due process and equal protection clauses of the Fourteenth Amendment, and also upon grounds of state law. The federal District Court held that the ordinance violated the Constitution of Nebraska, and upon that ground granted a permanent injunction against its enforcement. This court, in disposing of the appeal, said (page 264 of 250 U.S., 39 S.Ct. 454, 456): '* * * If the bill presented a substantial controversy under the Constitution of the United States, and the requisite amount was involved, the jurisdiction extended to the determination of all questions, including questions of state law, and irrespective of the disposition made of the federal questions.'

These decisions are illustrative of many cases where the rule has been stated and restated in substantially the same way. See Louisville & Nash. R. Co. v. Garrett, 231 U.S. 298, 303, 34 S.Ct. 48, 58 L.Ed. 229; Ohio Tax Cases, 232 U.S. 576, 586, 587, 34 S.Ct. 372, 58 L.Ed. 737; Greene v. Louisville & Interurban R. Co., 244 U.S. 499, 508, 37 S.Ct. 673, 61 L.Ed. 1280, Ann.Cas.1917E, 88; Louisville & Nash. R. Co. v. Greene, 244 U.S. 522, 527, 37 S.Ct. 683, 61 L.Ed. 1291, Ann. Cas. 1917E, 97; Davis v. Wallace, 257 U.S. 478, 482, 42 S.Ct. 164, 66 L.Ed. 325; Sterling v. Constantin, 287 U.S. 378, 393, 394, 53 S.Ct. 190, 77 L.Ed. 375.

Leschen & Sons Rope Co. v. Broderick & Bascom Rope Co., 201 U.S. 166, 26 S.Ct. 425, 50 L.Ed. 710, is said to establish a different doctrine. In that case the plaintiff alleged that it owned a duly registered trade-mark which had been infringed by defendant. Upon demurrer the bill was dismissed on the ground that it disclosed that the trade-mark was not a lawful and valid...