Morgenstern Chemical Co. v. GD SEARLE & COMPANY

• Decision Date: 03 April 1957
• Docket Number: Civ. A. No. 263-56.
• Citation: 150 F. Supp. 726
• Parties: MORGENSTERN CHEMICAL COMPANY Inc., Plaintiff, v. G. D. SEARLE & COMPANY, Defendant.
• Court: U.S. District Court — District of New Jersey

150 F. Supp. 726

MORGENSTERN CHEMICAL COMPANY Inc., Plaintiff, v. G. D. SEARLE & COMPANY, Defendant.

Civ. A. No. 263-56.

United States District Court D. New Jersey.

April 3, 1957.

Chazin & Chazin, Jersey City, N. J., by Copal Mintz, New York City, for plaintiff.

Shanley & Fisher, by Frederick B. Lacey, Donald A. Robinson, Newark, N. J., and Howard P. Robinson, Chicago, Ill., for defendant.

WORTENDYKE, District Judge.

There is diversity of citizenship between the parties to this action and the minimum jurisdictional requirement exists. The Court has jurisdiction of the parties.

The plaintiff, a corporation of the State of New York, is seeking an injunction, together with an accounting of profits and counsel fee, to restrain further use by the defendant, a corporation of the State of Illinois, of the name Mictine, which the defendant has adopted for one of its products. Plaintiff alleges such a similarity in spelling, sound and suggestiveness to the name Micturin, which the plaintiff had previously adopted for one of its products, as to render likely confusion of the products of the respective parties in the minds of purchasers thereof. The action is not for infringement of a registered trade mark or trade name under the Lanham Act, 15 U.S.C.A. § 1051 et seq. Plaintiff claims to have coined and thereby to have acquired a property right in the name which it adopted for its product, and charges unfair competition or unfair trade practice on the part of the defendant in adopting a name for its product of such similarity as to be confusing to those persons, specifically physicians and pharmacists, having occasion to prescribe and dispense the pharmaceutical products of the respective parties designated by the allegedly similar names. A brief review of the evidence will point up the questions, the resolution of which the Court is called upon to make.

The plaintiff was incorporated in November 1939, and Alexander V. Morgenstern has been continuously its president and in general managerial control of its business throughout its existence, except for a period between 1948 and 1950 when he retired from that office. During this interim Mr. Morgenstern remained as consultant while the business was being conducted by his two sons. The sole place of business of the plaintiff is located in Mt. Vernon, New York, to which it moved from New York City in July, 1953. Plaintiff corporation acquired from Morgenstern the right to use the business name of Physicians Drug Company, under which the plaintiff marketed its products, including that involved in this litigation.

During late 1949 or early 1950, while Mr. Morgenstern's two sons were operating plaintiff's business, the father devised a formula for a urinary tract antiseptic embodied in the form of enteric tablets, to be taken by mouth. For these tablets he conceived and adopted the name "Micturin" which he felt to be suggestive of miction (urination) and micturition (the passage of urine); each of which is derived from the Latin micturire, meaning to urinate.

The plaintiff undertook the promotion and marketing of these urinary antiseptic tablets under the name which had been conceived by Mr. Morgenstern. The latter composed the labelling and promotional literature, cleared the product with the United States Food and Drug Administration, and planned and directed, in behalf of the plaintiff, the promotional and marketing procedures. These procedures began with a circular letter, dated March 22, 1950, addressed to 102 wholesale druggists located in various places throughout the United States, which was followed by unsolicited shipments, on consignment, of a dozen or two of boxes of the product, invoiced to each of the consignees. Another promotional procedure pursued by Mr. Morgenstern involved the use of so-called "return" post cards bearing the names of some of the plaintiff's products, with places on the "return" card, opposite the name of each product, for the insertion of a check or cross mark to indicate the interest of the addressee in the particular product. These cards were mailed to some 102,000 physicians in various localities in the United States. Two samples of this tablet, enclosed in an envelope bearing printed information about the product, together with a card bearing advertising text relative thereto, all composed by Mr. Morgenstern, were mailed to those physicians who indicated an interest in the product by use of this return post card.

Commencing with the year 1951 plaintiff caused its product to be listed, under the name "Micturin", in the Blue Book and in the Red Book, both annual catalogues of proprietary pharmaceuticals widely circulated among the drug trade.

Plaintiff's product was sold in lots of 50 tablets, each lot packaged in a square cardboard box bearing a label reading as follows: "50 Micturin Tablets — Each Tablet Contains: Methenamine — 3-½ gr. Aminophyllin — ½gr. Hyoscyamin alk. — 1/400 gr. Caution: To be dispensed only by or on the prescription of a physician, according to directions. Literature available to physicians on request. If the urine is alkaline, an `acidifier' (sodium or ammonium biphosphate) should be taken. Distributed by Physicians Drug Company, New York 14, New York." These boxes were advertised for sale at the retail price of $2 per box, or $16 for a dozen boxes.

The Micturin tablets, circular in shape, pink in color, and glossy surfaced, were actually manufactured for the plaintiff by Strong Cobb Company, Inc., of Cleveland, Ohio, and later by The Arner Co., Inc., of Buffalo, New York, in accordance with Mr. Morgenstern's formula. The plaintiff boxed and labelled the tablets and distributed them under the name of Physicians Drug Company. There appears on the tablet no name, mark or symbol to indicate its source or proprietorship.

Plaintiff's advertising material relates that the tablets are indicated for disinfection of the urinary tract, control of inflammation and pain, evacuation of stagnant urine and relaxation of sphincter spasm in genito-urinary cases involving micturition trouble (nephritis, pyelitis, urethritis, cystitis and prostatitis). The same cards point out that, by means of the enteric coating, the tablets are protected from attack by gastric hydrochloric acid so as to permit development of full therapeutic activity in the urinary organs. The distributor suggests that Micturin tablets are preferable to the toxic antiseptics (which may exert undesirable side-effects) for prolonged administration in "catarrhs" of the bladder and urethra in both sexes. The advertising further claims that these tablets are valuable "in mild infectious processes common in elderly persons, and for prophylaxis when catheterization is required."

Although Mr. Morgenstern testified that plaintiff was supplied with 213,900 tablets by the Strong Cobb Company and 209,500 tablets by The Arner Company, — these two quantities constituting all of the tablets produced for the plaintiff, — the witness tells us that no record was kept of how many tablets were actually sold. He explains that many of plaintiff's sales records have been lost or destroyed. He recalls that when each shipment was made the invoice was entered in the sales ledger, duly posted, and on receipt of payment the amount due was credited, whereupon the retained copies of the invoices were destroyed. "Copies of some of these orders, however, which had been retained, were marked in evidence, but are not reliable indications of the aggregate total or frequency of sales, because incomplete. However, for the years 1955 and 1956 plaintiff produced all of its invoices, which were marked in evidence, showing total sales of $83.92 and $58.37 for each of those years respectively. Conceding that his estimates for the years preceding 1955 were mere guesses, Mr. Morgenstern testified that for the year 1950 plaintiff's gross sales ranged between $2,000. and $2,500.; for 1951 between $2,000. and $3,000.; for 1952, $3,000; for 1953 between $2,000. and $2,500.; for 1954 between $1,800. and $2,000. He admitted" that plaintiff abandoned promotion of the sale of Micturin tablets in March or April 1953, with the intention of waiting until the medical profession might indicate a trend of aversion from the use of antibiotics and sulphanimides which are presently completely monopolizing the field in which he claimed Micturin was indicated. In this immediate connection, plaintiff produced no evidence tending to induce the expectation that the use of these popularly called "wonder drugs" was likely to diminish in the foreseeable future. On the other hand, competent medical testimony adduced by the defendant satisfies me that the use of these now universally recognized therapeutic agents is progressively expanding rather than diminishing.

The defendant is a large manufacturer of ethical pharmaceutical specialties, employing some 900 persons, one-third of whom are engaged in research. Its products are sold in 50 or 60 countries of the world. Its main plant is in Chicago, Illinois, and it operates other plants in Lyndhurst, New Jersey, San Francisco, California, Toronto, Canada and London, England. It sells only to wholesale druggists, but its promotion is through the medical profession as well. None of its advertising is directed to laymen.

Through its research activities the defendant originated and developed a brand of amino-metramide. For this product defendant sought an appropriate name and invited suggestions from certain of its employees for that purpose. From the suggestions so offered, the name Mictine was adopted, but only after the following events had transpired.

"Defendant first thought of the name Mictine the latter part of June or July, 1954. At that time, it consulted various publications and a card index to determine the availability and registerability of the name as a trademark. Among such publications was the Red Book above referred to. Defendant noted therein the...