Illinois Watch-Case Co. v. Elgin Nat. Watch Co.

• Decision Date: 06 June 1899
• Docket Number: 525.
• Citation: 94 F. 667
• Parties: ILLINOIS WATCH-CASE CO. et al. v. ELGIN NAT. WATCH CO.
• Court: U.S. Court of Appeals — Seventh Circuit

94 F. 667

ILLINOIS WATCH-CASE CO. et al. v. ELGIN NAT. WATCH CO.

No. 525.

United States Court of Appeals, Seventh Circuit.

June 6, 1899

Thomas A. Banning and Ephraim Banning, for appellants.

Lysander Hill, for appellee.

The appellee, the Elgin National Watch Company, filed its bill in equity in the court below, setting forth that it was a corporation organized under the laws of the state of Illinois, and having its principal place of business at Elgin, and its office at Chicago, in that state; that the defendant, the Illinois Watch-Case Company, is a corporation created and organized under the laws of the state; that the other defendants named were citizens of the state of Illinois, and were, respectively, the defendant Duncan president, treasurer, and superintendent, and the defendant Abrahams, secretary, of the Illinois Watch-Case Company; that prior to April 11, 1868, the complainant engaged in manufacturing watches at Elgin, then a small town containing no other manufactory of watches or watch cases; that the complainant built up a large business in such manufacture that the watches and watch movements so made by complainant have become known all over the world, and have been largely sold and used both in the United States of America and in foreign countries; that before that date the complainant had adopted and word 'Elgin' as a trade-mark for its watches and watch movements, which word was marked upon the watches and watch movements, both those which entered into commerce in this country and those exported to and sold in foreign countries, and that the complainant's watches became known all over the world as Elgin watches, which word declared their origin and source as a product of the complainant's manufacture, and they became known for those of all other watches by the distinguishing word or trade-mark 'Elgin,' which word, at the time of its adoption, had been appropriated by no other person, firm, or corporation as a trade-mark or designation of goods; that this trade-mark the complainant caused to be registered on the 19th day of July, 1892, under the act of congress relating to the registration of trade-marks, approved March 3, 1881 (21 Stat. 502); that the defendants have infringed upon the rights of the complainant by engraving or otherwise affixing the word 'Elgin' to watch cases made and sold by them; that such watch cases are adapted to receiving watch movements of different construction from those made by the complainant; that inferior watch movements are liable to be, and often are, incased in them, and, when so incased, the entire watch, including both movement and case, appears upon the market with the word 'Elgin' upon it, thereby leading the public to believe that such watch, as an entirety, was made by the complainant, and enabling parties unlawfully using the word 'Elgin' to profit by the great reputation of the complainant, to palm off other and inferior goods as the goods made by the complainant, to injure the reputation of the complainant as a watchmaker, and to deprive it of a portion of the business and patronage which it would otherwise receive from the public. The prayer of the bill is for an injunction to restrain defendants 'from directly or indirectly making or selling any watch case or watch cases marked with your orator's said trade-mark, and from using your orator's said trade-mark in any way upon watches or watch cases, or in the defendant's printed advertisements, circulars, labels, or on boxes or packages in which the said watch cases are put up or exposed for sale. ' A demurrer interposed to this bill being overruled, defendants answered, denying the legality of the registration of the trade-mark, denying the right of the complainant to the exclusive use of the word as a trade-mark, asserting that they had never manufactured or sold, or offered for sale, watches or watch movements, but that they manufactured at Elgin watch cases only, and that the complainant had never manufactured or sold watch cases with the word 'Elgin' upon them; that the business of the two corporations are distinct and separate, the one from the other, and that, whenever the defendant company had used the name 'Elgin,' it had usually, if not invariably, been done in connection with some other word, as 'Elgin Giant,' or 'Elgin Commander,' or 'Elgin' or 'Elgin Tiger,' or some other word used in combination with the word 'Elgin' or 'Elgin, Illinois'; that the company has seldom, if at all, used the word 'Elgin' alone or separately as registered by the complainant upon goods exported to foreign nations or used in foreign commerce, but only in domestic commerce, and to inform the public of the place where the watch cases of the defendant company were manufactured; that such watches were sold upon a guaranty running for a number of years, so that it became necessary to inform purchasers of the city where the defendant company was carrying on its business, that purchasers might be able to find the company in case it became necessary to call upon it to make good its guaranty; that the term 'Elgin' is a geographical name, indicating the name of a prominent manufacturing city, and that any manufacturer of watches, watch movements, or watch cases is at liberty to locate or carry on his business thereat, and that the name may not be appropriated by any single manufacturing person, firm, or corporation, but is open, as a common right, to the use of any person carrying on business at that city. To this answer there was a general replication, and, upon proofs taken, the parties proceeded to a hearing. By leave of the court at or immediately after the hearing and before decree, the complainant amended its bill, alleging that the watch cases so manufactured and marked by the defendants in violation of the complainant's right 'are intended by the defendants to be sold in foreign countries, and are in fact exported to and sold in foreign countries.' A decree passed for the complainant that the use of the word 'Elgin,' whether alone or in connection with other words, was a violation and infringement of the complainant's exclusive rights in the premises, and that an injunction issue restraining the use of the word 'Elgin' alone or in connection with other words or devices upon watches or watch cases, or upon packages containing watches or watch cases, going into commerce with foreign nations or with the Indian tribes, in such a way as to be liable to cause purchasers or others to mistake said watches or watch movements incased in such watch cases for watches or watch movements manufactured by the complainant. The opinion of the court below is reported. Elgin Nat. Watch Co. v. Illinois watch-case Co., 89 F. 487.

Before WOODS and JENKINS, Circuit Judges, and BUNN, District Judge.

JENKINS Circuit Judge, upon this statement of the case, .

It was ruled in Trade-Mark Cases, 100 U.S. 82, that the act of congress approved August 14, 1876 (19 Stat. 141), was void for want of constitutional authority, but the court expressly left the question undecided 'whether the trade-mark bears such a relation to commerce, in general terms, as to bring it within congressional control when used and applied to the classes of commerce which fall within that control. ' That the congress had no power, under the commerce clause of the constitution, to regulate the subject, was ruled by the circuit court of the United States for the Eastern district of Wisconsin in Leidersdorf v. Flint, 8 Bliss, 327, Fed.Cas.No. 8,219. This is the only direct adjudication upon that question. Following the decision of the supreme court in the Trade-Mark Cases, the congress of the United States enacted the present law (Act March 3, 1881; 21 Stat. 502), limiting its operations to trade-marks used in commerce with foreign nations or with the Indian tribes. There has been no ruling upon the constitutionality of this act, and it need only be said that its validity is fairly doubtful.

The appellee, the complainant below, by its bill assets and seeks to maintain its right to the use of the word 'Elgin' as a trade-mark, claiming that right as one arising under federal law. It is, of course, clear that this bill cannot be sustained, all of the parties to it bring citizens of the same state, unless its right can be sustained as one arising under the laws of the United States. The statute does not define what shall constitute a trade-mark. To...