N.K. Fairbank Co. v. Luckel, King & Cake Soap Co.

• Decision Date: 07 May 1900
• Docket Number: 504.
• Citation: 102 F. 327
• Parties: N. K. FAIRBANK CO. v. LUCKEL, KING & CAKE SOAP CO.
• Court: U.S. Court of Appeals — Ninth Circuit

102 F. 327

N. K. FAIRBANK CO. v. LUCKEL, KING & CAKE SOAP CO.

No. 504.

United States Court of Appeals, Ninth Circuit.

May 7, 1900

Cake &amp Cake, for appellee.

Before GILBERT and ROSS, Circuit Judges, and HAWLEY, District Judge.

HAWLEY District Judge.

This is a suit in equity. It was instituted to restrain the infringement of the trade-mark or trade-name 'Gold Dust,' used to designate a washing powder manufactured and sold on the market by appellant. The alleged infringement consists of the use of the name 'Gold Drop' to designate a washing powder manufactured and sold by appellee. The circuit court held that appellant was not entitled to the relief prayed for, dismissed its bill, and rendered a decree in favor of respondent (88 F. 694), from which the present appeal is taken.

The bill, after alleging complainant's use, appropriation and right to the trade-mark or trade-name of 'Gold Dust' to identify its washing or soap powder since the year 1887, avers that respondent, since the 1st day of July 1897, with full knowledge of complainant's rights in the premises, 'wholly without your orator's consent intending to injure and defraud your orator, and to divert to itself the business and profits connected with the sale of 'Gold Dust' washing powder which of right belong to your orator, has knowingly and fraudulently made use, in connection with the manufacture and sale of a washing or soap powder by said defendant manufactured, of the words or designation 'Gold Drop,' and has caused washing or soap powder by it, the said defendant, manufactured, to be offered and sold as 'Gold Dust' washing powder, and as and for the washing powder of your orator's manufacture, and continues so to do, notwithstanding your orator's protest in the premises, in violation of your orator's rights aforesaid, and contrary to equity, to your orator's great loss and injury actually sustained'; that the acts of the respondent are unlawful, and 'tend to cause the washing or soap powder of the defendant, put up as aforesaid, to be mistaken for your orator's 'Gold Dust' washing powder, and to be substituted therefor by unscrupulous persons, and because, all and singular, they enable and promote an unfair competition, and a false and fraudulent sale of the defendant's washing powder, as and for your orator's 'Gold Dust' washing powder, to your orator's great loss and injury,' and 'constitutes a fraudulent, inequitable, and unfair competition in business, and a trespass upon, and violation of, the good will of your orator's business, connected with the manufacture and sale of its 'Gold Dust' washing powder, against which your orator is equitably entitled to be protected, and which fraudulent, inequitable, and unfair competition and trespass upon your orator's good will it prays may be prevented and restrained according to the course of equity,' etc. The answer denies having committed any wrongful, illegal, or fraudulent acts, or any acts, in violation of complainant's rights in the premises, and for a separate answer alleges:

'That on or about July, 1894, defendant began to manufacture a certain washing compound or soap powder, and that on or about said time defendant offered said soap powder for sale in the market, and has continued so to do, without interruption, ever since; that defendant placed upon said package of washing compound aforesaid the name or designation 'Gold Drop,' and wrapped the said package in paper of an entirely different color and character from that of the plaintiff, the general effect of which said wrapper was such that the packages of plaintiff and defendant might easily be distinguished, and in truth the defendant avers that there are no common features whatever between the packages of plaintiff and defendant, but that said packages cannot be mistaken one for another; * * * that said soap powder, the package in which the same was sold, the wrapper thereon, designation 'Gold Drop,' figures, color, and general effect of said package was produced, and said powder sold with said wrapper as aforesaid, without any intention to enter into unfair competition with the plaintiff, or to violate any of the rights of the plaintiff whatever; and the defendant avers that the said name 'Gold Drop' on said package, the color, the lettering, and the general effect of said package, does not in any manner whatever violate any of the rights of the plaintiff, or infringe upon the word or name or designation 'Gold Dust,' nor the package in which said plaintiff puts up its said washing compound or soap powder under the name 'Gold Dust."

There is no substantial conflict in the evidence produced at the trial. The questions as to priority of use, and expenditure and popularization of the washing powder under the name of 'Gold Dust,' by appellant, are undisputed.

Jasper G. Gilkinson, the secretary of the N. K. Fairbank Company, testified that:

'Ever since the introduction of 'Gold Dust,' in the year 1887, the N. K. Fairbank Company has used every possible means to familiarize the public with the words 'Gold Dust,' and to increase its sale. They have advertised extensively in newspapers, have issued hangers, cut-outs, etc., and in every way they have endeavored to draw the attention of the public to the name of the goods. They have expended during the period after its first adoption, in 1887, more than a million of dollars in advertising, and hundreds of thousands of dollars for traveling salesmen.'

The testimony shows that respondent at the time it commenced the manufacture of its washing powder 'Gold Drop' was well aware of the existence of complainant's 'Gold Dust,' and that it had been extensively and expensively advertised in Oregon as well as in other states; that in 1897 respondent sent a letter to Rowland Cox, counsel for complainant, which reads as follows:

'Portland, Oregon, Sept. 23, 1897.

'Mr. Rowland Cox., New York, N.Y.-- Dear Sir: Replying to your letter of the seventeenth inst., we inclose the face of our label, which we think is sufficient answer, being at once seen to be the most strikingly distinctive washing powder label in the market. We might add that the name commended itself to us from the fact that it is familiar to the people of this great prune-growing region as the name of a popular prune or plum known as the 'Gold Drop Prune,' as will be seen by referring to any Northwest nursery catalogue.

'Very truly yours,

Luckel, King & Cake Soap Co., 'Chas. W. Cottel, Secretary.'

Mr. Luckel, the president of the respondent, in reply to the question, 'How did you come to choose the name 'Gold Drop'? ' answered as follows: 'Our secretary, Mr. Cottel, had a whole lot of names; that is, we were going to get up a washing powder, and he wrote out from twenty-five to thirty, I should judge, on a small piece of paper,-- different names,-- and this was one of them; and he preferred a different name, and Mr. King and I thought that this would be the best, on account of it being short,-- good for advertising, and easy to remember.'

It also appears from the testimony that the packages of the respondent's 'Gold Drop' were sold to retail dealers at a less price than the complainant's 'Gold Dust,' and that both were sold to purchasers at the same price; that at four different stores in Portland two witnesses at different times asked for 'Gold Dust' and were given 'Gold Drop' without any explanation; and that the bills were in three instances marked as 'G. Dust.' There was testimony on behalf of respondent to the effect that its 'Gold Drop' was sold by it without any fraudulent or other intention to palm off or sell the same upon the reputation acquired for the soap under the name of 'Gold Dust,' and that respondent took especial pains to avoid any imitation of complainant's labels.

Upon these general facts, without entering into details, we pass to the legal questions involved herein. It is assigned as error that 'the court erred in adjudging and decreeing that the name 'Gold Drop' used by the defendant does not infringe upon the trade-mark and trade-name 'Gold Dust' of this complainant, and does not deceive the trade and consumers to the detriment of complainant,' and that the court erred in refusing to enter a decree in favor of complainant enjoining respondent from the commission of certain acts as prayed for in the bill of complaint. In many of the decided cases it has been held that the respondent ought not to be held liable for the imposition or fraud of the merchants or shopkeepers or their assistants in palming off upon the innocent public his goods as those of another. As an abstract proposition, this may be conceded to be correct; but it falls far short of being the only view of the case. The controlling question is whether or not the respondent has 'knowingly put into the hands of the retail dealer the means of deceiving the ultimate purchasers. ' N. K. Fairbank Co. v. R. W. Bell Mfg. Co., 23 C.C.A. 554, 77 F. 869, 878, and authorities there cited; New England Awl & Needle Co. v. Marlboro Awl & Needle Co. (Mass.) 46 N.E. 386; Von Mumm v. Frash (C.C.) 56 F. 830, 838. The fact that 'Gold Drop' was sold to retail dealers for a less price furnished an incentive and inducement to retail dealers to dispose of 'Gold Drop' instead of 'Gold Dust,' as they thereby gained a greater profit for themselves.

The law is well settled that in suits of this character the intention of the respondent in adopting the style of package, or choosing a name for a similar product, is to a certain extent immaterial. It is not essential to the right of complainant to an injunction to show absolute fraud or willful intent on the part of the respondent. Upon familiar principles, it will be presumed that the respondent contemplated the natural...