Pillsbury v. Pillsbury-Washburn Flour Mills Co.

• Decision Date: 27 November 1894
• Docket Number: 193.
• Citation: 64 F. 841
• Parties: PILLSBURY et al. v. PILLSBURY-WASHBURN FLOUR MILLS CO., Limited.
• Court: U.S. Court of Appeals — Seventh Circuit

64 F. 841

PILLSBURY et al. v. PILLSBURY-WASHBURN FLOUR MILLS CO., Limited.

No. 193.

United States Court of Appeals, Seventh Circuit.

November 27, 1894

This is an appeal from the order of the court below passed on the 2d day of July, 1894, granting a writ of injunction, and the question is upon the validity of the restraints thereby imposed.

The bill filed by the appellee charges that the firm of Charles A. Pillsbury & Co. had for many years been engaged in the business of manufacturing, putting up, shipping, and selling flour and operating certain flour mills in the city of Minneapolis; that their flour had, by reason of its high and uniform grade and excellence of manufacture, acquired a great reputation, and was known and sold throughout the continents of American and Europe; that in 1872 the firm adopted a trade-name or brand for identifying their high grade of wheat flour, which consisted of a certain device of the words 'Pillsbury's Best,' which words and device were printed, branded, and marked upon the packages, sacks, and barrels of flour, of which brand the following is a facsimile:

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The words 'Pillsbury's XXXX, Minneapolis, Minn.' were printed in blue ink, and the word 'Best' in red ink in large letters, having a position centrally across the head of the barrel or across the sack. That the flour, in the sale of which such trade-name was used, was flour manufactured at their mills from spring wheat of a very high grade or quality, the flour being manufactured by the 'patent' process, which consists in subjecting the grain to the operation of successive rollers, whereby the external portions of the kernels of the grain are disintegrated removed, and carried away successively, so as to leave the interior or core of the grain, containing the gluten, for disintegration last, the process being the first remove the husk of the grain, which is made into bran, shorts, and screenings, and then the exterior coatings of starch inside the hulls or husks, which are made into a cheap grade of flour, and finally to entirely and separately disintegrate the interior or gluten of the wheat and make it into a flour comprising from 45 to 50 per cent. of gluten and the balance starch. This last-named flour is known as the 'patent process' flour, and is of a high grade and quality highly nutritious, produces a white and fine quality of bread, and commands a high price. It was in connection with this quality of flour that the firm used the trade name and mark described, as a means of identifying the origin and manufacture of the flour by them.

By means of extensive advertising, and of the excellent quality of their product, their flour became extensively known in connection with such trade-name, and was commonly called in the trade 'Pillsbury's Best' and 'Pillsbury's Best XXXX' flour, and was ordered and sold under those names, which became substantive terms in connection with the word 'Pillsbury,' identifying the brand of flour manufactured, sold, and advertised by that firm.

In 1889 the appellee, complainant below, was incorporated, and succeeded to the business of the firm of Charles A. Pillsbury & Co., and by purchase became the owner of the property, mills, machinery, trade-marks, trade-names, etc., theretofore used by the firm in their business, which it thereafter continued and now successfully prosecutes. The members of the firm of Charles A. Pillsbury & Co. became largely interested as shareholders in the corporation, and Mr. Charles A. Pillsbury, who had personal supervision of, and who had built up and established and conducted the business of, the former firm, immediately became, continued to be, and is now managing director of the corporation, and conducts, controls, and regulates its business to the same extent and in the same manner as he conducted, controlled, and regulated the business of Charles A. Pillsbury & Co. The corporation has continued to use the same trade-name and brand upon its product that were used by the old firm, and prior to this suit placed upon the sacks containing its flour so manufactured and identified by the trade-names mentioned the words 'Pillsbury-Washburn Flour Mills Company, Ltd., Successors to,' above the monogram 'C.A.P. & Co.,' that had been used by the firm of Charles A. Pillsbury & Co. upon their packages of flour.

The bill further charges that in 1893 L. F. Pillsbury, one of the appellants, then residing in the village of La Grange, Cook, county, Ill., who has never been engaged in the business of milling or manufacture of flour, fraudulently conceived the plan and idea of using, allowing, and selling the use of his name, 'Pillsbury,' and of selling flour with a simulated trade-name that would deceive and fraudulently induce the public to purchase his flour as the flour of the appellee, and pursuant thereto began to sell flour and feed in this suburban village of La Grange, and for a few months carried on a small retail business thereat, purchasing flour, which he put into sacks branded with the trade-name or trade-mark, a facsimile of which is as follows:

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-- The words 'L. F. Pillsbury XXXX,' 'patent,' 'Minnesota,' being printed in blue ink, and the word 'Best' in red ink, and in large letters.

It is charged that the flour, which he purchased from various dealers, was of inferior grade to the product of the appellee so known and identified by its trade-name, and that he fraudulently used that name upon the sacks with the design and intent of deceiving the public into the belief that the flour so sold by him was the product of the mills of the appellee; that he was a man without capital, had no mill, and was never the owner or proprietor of or interested in any mill for the manufacture of flour, and that his plan was simply a false and fraudulent scheme to impose upon the public, and to palm off his flour as the flour manufactured by the appellee; that in the beginning of the year 1894 L. F. Pillsbury ceased to do business at La Grange, and entered into a contract with the appellant Ephraim Hewitt, who was a wholesale dealer in flour in the city of Chicago, whereby, for a certain royalty or commission upon sales, L. F. Pillsbury permits Hewitt to use his false and simulated brand and trade-name upon barrels and sacks of flour which Hewitt may have for sale, not of the appellee's manufacture, but purchased from various mills and millers, some of which are not located in the state of Minnesota, and which flour is of a quality and grade inferior to that of the appellee; that the appellants extensively advertise and sell flour under the names of 'L. F. Pillsbury's Best,' 'Pillsbury's Best XXXX,' and have entered into contracts with wholesale and retail dealers in flour by which they are selling spurious flour put up in sacks and barrels bearing the simulated brand, and delivered with the understanding that the purchaser shall resell the same as the true and genuine flour manufactured by appellee, and that such dealers have succeeded in and are now selling false and spurious flour as the genuine 'Pillsbury's Best' or 'Pillsbury's Best XXXX' flour manufactured by appellee, and, because of its inferior quality, at a less price than the appellee can afford to sell its product.

The answer of the appellants, so far as it relates to their transactions, asserts that L. F. Pillsbury was engaged in buying and selling flour at La Grange for some time prior to the 15th of November, 1893, but for what length of time prior to that date it does not state; that while so engaged he invented a brand or trade-name of which a facsimile has been exhibited, and built up a considerable trade in his brand of flour; that being in want of the necessary capital to conduct the business, and believing that the city of Chicago would be a much more desirable point at which to handle flour than the village of La Grange, at that date he entered into an agreement with his co-defendant, Hewitt, to enter into the business of buying and selling flour, and that thereafter they continued to sell flour put up in sacks, barrels, and packages with the brand thereon of which the facsimile is above given. They deny that the agreement is a scheme or device to interfere with any trade-mark or brand of the business of complainant, but 'aver and charge the fact to be true that they are advised that they had the right to make the agreement, and put up and handle flour as aforesaid ' They deny that they have offered for sale or sold an article of flour in imitation of the flour of complainant to deceive customers or to injure the complainant, and allege that they 'have always stated and made known to their customers that said flour so handled by them under said brand is not the flour of said complainant, but is a flour put up under said brand by themselves, manufactured from Minnesota wheat, and that said flour, in their judgment, is equal to, if not superior to, that sold by 'Pillsbury-Washburn Flour Mills Company, Limited.' They assert that no person can be deceived by their brand into the belief that it is the flour of complainant; that the brand used by them is so dissimilar to the brand used by said complainant that it will arrest the attention of the most casual observer; that the formation of the letters in the word 'Best' are different, and 'that the general arrangement of said brand is so dissimilar from that of the complainant that the most casual observer can readily see there is no similarity between the devices used by these defendants and the said complainant. ' They further assert that one side of the sacks used by them is entirely plain, while both sides of the sacks used by the appellee are covered with words, letters, and brands. They assert their right to deal thus in flour...