Northwestern Knitting Co. v. Garon
| Decision Date | 04 November 1910 |
| Docket Number | 16,582 - (19) |
| Citation | 128 N.W. 288,112 Minn. 321 |
| Parties | NORTHWESTERN KNITTING COMPANY v. ISRAEL GARON |
| Court | Minnesota Supreme Court |
Action in the district court for St. Louis county to restrain defendant from using the name "Northwestern Knitting Mill" or any other name that is a colorable imitation of plaintiff's corporate name; from doing any act tending to cause the public to believe it is dealing with plaintiff when it is in fact dealing with defendant; from selling any knit goods manufactured by him as manufactured by plaintiff, and for an accounting. The answer admitted that for seven years defendant had been doing business under the name of "Northwestern Knitting Mill," but alleged he knew nothing of plaintiff's existence until the spring of 1908; denied that any confusion had ever occurred between the names Northwestern Knitting Mill and Northwestern Knitting Company and denied that he had ever diverted any of the established business of plaintiff. The case was tried before Ensign, J., who made findings of fact, the substance of which is stated in the opinion, and as conclusion of law ordered judgment in favor of defendant. From an order denying plaintiff's motion for a new trial, it appealed. Reversed and new trial granted.
Right to use trade-name -- presumption of fraud -- injunction.
Plaintiff was incorporated in 1887 under the name of "Northwestern Knitting Company," and has since been engaged in an extensive business of knitting articles of underwear and disposing of the same to dealers throughout the United States, conducting all its business under its corporate name at the city of Minneapolis. About fifteen years after the establishment of plaintiff's business, defendant opened a factory at Duluth for the manufacture of knit sweaters and a heavy article of knit underwear, adopting the name "Northwestern Knitting Mill." He did not know of the existence of plaintiff at the time, and plaintiff did not learn of his presence in the same field for several years but, immediately upon learning that defendant was operating under the particular name, plaintiff gave notice of its prior adoption of the same and demanded that defendant discontinue its use. This he refused to do, and insists upon the right to use the same. It is held that:
1. By its prior adoption of the name, and its continued use for a long series of years, plaintiff acquired trade-name rights therein, and is entitled to protection under the doctrine of unfair competition.
2. Defendant's use of the name is likely to cause confusion in the trade, deceive the public, and to substantially prejudice the rights of plaintiff.
3. Though defendant adopted the name in ignorance of plaintiff and without any intention of diverting its trade, his continuance in its use after notice of plaintiff's prior rights is presumptively fraudulent.
4. Fraud is presumed in such case, and need not be affirmatively shown.
5. The product of the parties is of the same general class.
A. C. Paul, for appellant.
Baldwin, Baldwin & Dancer, for respondent.
Action in equity to restrain and enjoin defendant from using in the conduct of his business the name "Northwestern Knitting Mill," on the ground of prior appropriation of the name by plaintiff. Defendant had judgment, and plaintiff appealed from an order denying a new trial.
The facts are fully stated in the findings of the trial court, substantially as follows: The plaintiff, Northwestern Knitting Company, is a corporation organized in 1887, under the laws of the state of Minnesota, having its principal place of business at Minneapolis, in said state. Its business since its incorporation has been the manufacture and sale of knit underwear of some twenty different varieties, all sold under the company's trade-mark "Munsing;" that trade-mark having been adopted by the company about seventeen years ago, and having been registered under the acts of congress and the statutes of Minnesota. The company has never manufactured sweaters, and does not manufacture any so-called lumbermen's underwear. Plaintiff's underwear is sold in every state and territory of the United States, and it employs between six hundred and seven hundred operatives in its factory. All its business of every nature is transacted under the corporate name, "Northwestern Knitting Company," which name is put upon the boxes and packages in which its goods are packed and appears as well upon its letterheads and upon all of its stationery and advertising material. The company sells to retailers only, and to many of the dealers in Duluth, Superior, and the range towns of Minnesota. Its traveling men have for many years past visited Duluth and the towns in its vicinity once or twice a year, selling plaintiff's goods. The value of the goods thus sold in Duluth and vicinity has averaged for some years past from $3,500 to $5,000 per year.
The defendant, Israel Garon, about seven years ago started in business under the name of "Northwestern Knitting Mill," at Duluth, Minnesota, making only sweaters, first by hand and afterwards by machinery. Thereafter he took in a partner, and the firm did business under the name of "Northwestern Knitting Mill Company" for a time. About three years ago the partnership was dissolved, and since that time defendant has continued in business under the name of "Northwestern Knitting Mill." During a part of said three years defendant manufactured one number of underwear, a heavy lumbermen's underwear, and is still engaged in selling off such of said underwear as remains in stock, although he has not manufactured it for some time last past. His sole business is now the manufacture and sale of sweaters. During the last three years he has manufactured and sold about $60,000 worth of his goods, $30,000 worth in the last year.
Neither plaintiff nor defendant ever heard of each other prior to the spring of 1908. The underwear manufactured by plaintiff, and the underwear and sweaters manufactured by defendant, were all made on knitting machines by a knitting process. Defendant has sold his underwear, and now sells his sweaters, to many of the leading retailers of Duluth, Superior, and the Minnesota range towns. He has expended considerable sums of money in advertising his business and for stationery and labels bearing the name "Northwestern Knitting Mill." The court also found that defendant adopted the name "Northwestern Knitting Mill" in ignorance of the existence of plaintiff corporation, and without any intent to acquire any of plaintiff's business or profit by its name or reputation, and he has acquired none of such business, and has not profited by said name or reputation.
1. There is no substantial difference between plaintiff's corporate name, "Northwestern Knitting Company," and that adopted by defendant, "Northwestern Knitting Mill" (Sheffield-King Milling Co. v. Sheffield Mill & Elev. Co., 105 Minn. 315, 117 N.W. 447, 127 Am. St. 574; Celluloid Mnfg. Co. v. Cellonite Mnfg. Co. (C.C.) 32 F. 94; Atlas v. Atlas, 138 Iowa 228, 112 N.W. 232, 15 L.R.A. (N.S.) 625, 128 Am. St. 189; Sterling v. Sterling, 59 N.J.Eq. 394, 46 A. 199), and the questions presented are (1) whether, on the facts stated, plaintiff is entitled to protection in the use of the name; and, if so, (2) whether defendant infringes upon its rights and may be restrained.
2. There is a marked distinction in the law between a trade-mark and a trade-name, though the rights of parties concerned are governed and controlled in a general way by the same equitable rules and principles. A trade-mark is defined as a distinctive name, word, emblem, or device indicating the origin or proprietorship of a particular article of trade or commerce. A trade-name is a word or phrase by which a business or enterprise, or specific articles of merchandise from a specific source, are known to the public, and when applied to merchandise is generic or descriptive, and hence not susceptible of appropriation as a trade-mark. Hopkins, Trade-Marks, §§ 2, et seq.
The trade-mark is protected by courts of equity on the theory of an absolute property right in the holder, and without reference to questions of fraud or damage, while fraud or damage, express or implied, is essential to entitle the holder to protection in the use of a trade-name. Paul, Trade-Marks, 160. In the case at bar plaintiff claims only such rights as attach under the law to a rightfully appropriated trade-name.
3. We have no particular difficulty in according to plaintiff the relief demanded. Plaintiff was incorporated under the particular name, and for over twenty years had carried on its business thereunder. It advertises as the "Northwestern Knitting Company," delivers its product to the trade under that name, and has established an extensive and profitable business. While the name is geographical and descriptive, plaintiff clearly has, under our decisions, as well as under decisions of other courts, trade-name rights, and is entitled to protection therein under the doctrine of unfair competition. Rickard v. Caton College Co., 88 Minn. 242, 92 N.W. 958; Nesne v. Sundet, 93 Minn. 299, 101 N.W. 490, 106 Am. St. 439; Howe Scale Co. v. Wyckoff, Seamans & Benedict, 198 U.S. 118, 25 S.Ct. 609, 49 L.Ed. 972; Newby v. Oregon Central Ry. Co., Fed. Cas. No. 10,144.
4. The trial court found that defendant adopted the name in good faith, and in ignorance of the prior appropriation thereof by plaintiff, and without any intent to acquire any of plaintiff's business or to profit by its name or reputation, and, further, that he has acquired none of plaintiff's business. It is the contention of defendant that in face of these facts plaintiff is not entitled to relief. We are unable to concur in this...
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