Kellogg Co v. National Biscuit Co

• Decision Date: 14 November 1938
• Docket Number: 56,Nos. 2,s. 2
• Citation: 39 USPQ 296,305 U.S. 111,83 L.Ed. 73,59 S.Ct. 109
• Parties: KELLOGG CO. v. NATIONAL BISCUIT CO
• Court: U.S. Supreme Court

305 U.S. 111

59 S.Ct. 109

83 L.Ed. 73

KELLOGG CO.

v NATIONAL BISCUIT CO.

Nos. 2, 56.

Argued Oct. 10, 1938.

Decided Nov. 14, 1938.

Rehearing Denied Dec. 12, 1938.

See 305 U.S. 674, 59 S.Ct. 246, 83 L.Ed. —-.

[Syllabus from pages 111-113 intentionally omitted] Messrs. Thomas D. Thacher and W. H. Crichton Clarke, both of New York City, for petitioner.

Mr. David A. Reed, of Pittsburgh, Pa., for respondent.

Mr. Justice BRANDEIS delivered the opinion of the Court.

This suit was brought in the federal court for Delaware¹ by National Biscuit Company against Kellogg Company to enjoin alleged unfair competition by the manufacture and sale of the breakfast food commonly known as shredded wheat. The competition was alleged to be unfair mainly because Kellogg Company uses, like the plaintiff, the name shredded wheat and, like the plaintiff, produces its biscuit in pillow-shaped form.

Shredded wheat is a product composed of whole wheat which has been boiled, partially dried, then drawn or pressed out into thin shreds and baked. The shredded wheat biscuit generally known is pillow-shaped in form. It was introduced in 1893 by Henry D. Perky, of Colo- rado; and he was connected until his death in 1908 with companies formed to make and market the article. Commercial success was not attained until the Natural Food Company built, in 1901, a large factory at Niagara Falls, New York. In 1908, its corporate name was changed to 'The Shredded Wheat Company'; and in 1930 its business and goodwill were acquired by National Biscuit Company.

Kellogg Company has been in the business of manufacturing breakfast food cereals since its organization in 1905. For a period commencing in 1912 and ending in 1919 it made a product whose form was somewhat like the product in question, but whose manufacture was different, the wheat being reduced to a dough before being pressed into shreds. For a short period in 1922 it manufactured the article in question. In 1927, it resumed manufacturing the product. In 1928, the plaintiff sued for alleged unfair competition two dealers in Kellogg shredded wheat biscuits. That suit was discontinued by stipulation in 1930. On June 11, 1932, the present suit was brought. Much evidence was introduced; but the determinative facts are relatively few; and as to most of these there is no conflict.

In 1935, the District Court dismissed the bill. It found that the name 'Shredded Wheat' is a term describing alike the product of the plaintiff and of the defendant; and that no passing off or deception had been shown. It held that upon the expiration of the Perky patent No. 548,086 issued October 15, 1895, the name of the patented article passed into the public domain. In 1936, the Circuit Court of Appeals affirmed that decree. Upon rehearing, it vacated, in 1937, its own decree and reversed that of the District Court, with direction 'to enter a decree enjoining the defendant from the use of the name 'Shredded Wheat' as its trade-name and from advertising or offering for sale its product in the form and shape of plaintiff's biscuit in violation of its trade-mark; and with further directions to order an accounting for damages and profits.' In its opinion the court described the trade-mark as 'consisting of a dish, containing two biscuits submerged in milk'. 3 Cir., 91 F.2d 150, 152, 155. We denied Kellogg Company's petition for a writ of certiorari, 302 U.S. 733, 58 S.Ct. 120, 82 L.Ed. 567, and denied rehearing 302 U.S. 777, 58 S.Ct. 139, 82 L.Ed. 601.

On January 5, 1938, the District Court entered its mandate in the exact language of the order of the Circuit Court of Appeals, and issued a permanent injunction. Shortly thereafter National Biscuit Company petitioned the Circuit Court of Appeals to recall its mandate 'for purposes of clarification.' It alleged that Kellogg Company was insisting, contrary to the court's intention, that the effect to the mandate and writ of injunction was to forbid it from selling its product only when the trade name 'Shredded Wheat' is applied to a biscuit in the form and shape of the plaintiff's biscuit and is accompanied by a representation of a dish with biscuits in in; and that it was not enjoined from making its biscuit in the form and shape of the plaintiff's biscuit, nor from calling it 'Shredded Wheat,' unless at the same time it uses upon its cartons plaintiff's trade-mark consisting of a dish with two biscuits in it. On May 5, 1938, the Circuit Court of Appeals granted the petition for clarification and directed the District Court to enter a decree enjoining Kellogg Company (3 Cir., 96 F.2d 873):

'(1) from the use of the name 'Shredded Wheat' as its trade name, (2) from advertising or offering for sale its product in the form and shape of plaintiff's biscuit, and (3) from doing either.'

Kellogg Company then filed a petition for a writ of certiorari to review the decree as so clarified, and also sought reconsideration of our denial of its petition for certiorari to review the decree as entered in its original form. In support of these petitions it called to our attention the decision of the British Privy Council in Canadian Shredded Wheat Co., Ltd., v. Kellogg Company of Canada, Ltd., 55 R.P.C. 125, rendered after our denial of the petition for certiorari earlier in the term. We granted both petitions for certiorari.² 304 U.S. 586, 58 S.Ct. 1052, 82 L.Ed. 1547.

The plaintiff concedes that it does not possess the exclusive right to make shredded wheat. But it claims the exclusive right to the trade name 'Shredded Wheat' and the exclusive right to make shredded wheat biscuits pillow-shaped. It charges that the defendant, by using the name and shape, and otherwise, is passing off, or enabling others to pass off, Kellogg goods for those of the plaintiff. Kellogg Company denies that the plaintiff is entitled to the exclusive use of the name or of the pillow-shape; denies any passing off; asserts that it has used every reasonable effort to distinguish its produce from that of the plaintiff; and contends that in honestly competing for a part of the market for shredded wheat it is exercising the common right freely to manufacturer and sell an article of commerce unprotected by patent.

First. The plaintiff has no exclusive right to the use of the term 'Shredded Wheat' as a trade name. For that is the generic term of the article, which describes it with a fair degree of accuracy; and is the term by which the biscuit in pillow-shaped form is generally known by the public. Since the term is generic, the original maker of the product acquired no exclusive right to use it. As Kellogg Company had the right to make the article, it had, also, the right to use the term by which the public knows it. Compare Saxlehner v. Wagner, 216 U.S. 375, 30 S.Ct. 298, 54 L.Ed. 525; Holzapfel's Compositions Co. v. Rahtjen's American Composition Co., 183 U.S. 1, 22 S.Ct. 6, 46 L.Ed. 49. Ever since 1894 the article has been known to the public as shredded wheat. For many years, there was no attempt to use the term 'Shredded Wheat' as a trade-mark. When in 1905 plaintiff's predecessor, Natural Food Company, applied for registration of the words 'Shredded Whole Wheat' as a trade-mark under the so-called 'ten year clause' of the Act of February 20, 1905, c. 592, sec. 5, 33 Stat. 725, 15 U.S.C.A. § 85, William E. Williams gave notice of opposition. Upon the hearing it appeared that Williams had, as early as 1894, built a machine for making shredded wheat, and that he made and sold its product as 'Shredded Whole Wheat'. The Commissioner of Patents refused registration. The Court of Appeals of the District of Columbia affirmed his decision, holding that 'these words accurately and aptly describe an article of food which * * * has been produced for more than ten years * * *.' Natural Food Co. v. Williams, 30 App.D.C. 348.³

Moreover, the name 'Shredded Wheat', as well as the product, the process and the machinery employed in making it, has been dedicated to the public. The basic patent for the product and for the process of making it, and many other patents for special machinery to be used in making the article, issued to Perky. In those patents the term 'shredded' is repeatedly used as descriptive of the product. The basic patent expired October 15, 1912; the others soon after. Since during the life of the patents 'Shredded Wheat' was the general designation of the patented product, there passed to the public upon the expiration of the patent, not only the right to make the article as it was made during the patent period, but also the right to apply thereto the name by which it had become known. As was said in Singer Mfg. Co. v. June Mfg. Co., 163 U.S. 169, 185, 16 S.Ct. 1002, 1008, 41 L.Ed. 118:

'It equally follows from the cessation of the monopoly and the falling of the patented device into the domain of things public that along with the public ownership of the device there must also necessarily pass to the public the generic designation of the thing which has arisen during the monopoly. * * *

'To say otherwise would be to hold that, although the public had acquired the device covered by the patent, yet the owner of the patent or the manufacturer of the patented thing had retained the designated name which was essentially necessary to vest the public with the full enjoyment of that which had become theirs by the disappearance of the monopoly.'

It is contended that the plaintiff has the exclusive right to the name 'Shredded Wheat', because those words acquired the 'secondary meaning' of shredded wheat made at Niagara Falls by the plaintiff's predecessor. There is no basis here for applying the doctrine of secondary meaning. The evidence shows only that due to the long period in which the plaintiff or its predecessor was the only manufacturer of the product, many people have come to associate the product, and as a consequence the name by which the product is generally known, with the plaintiff's factory...