Pinaud, Inc. v. Huebschman

• Decision Date: 30 January 1928
• Docket Number: No. 2966.,2966.
• Citation: 27 F.2d 531
• Parties: PINAUD, Inc., v. HUEBSCHMAN.
• Court: U.S. District Court — Eastern District of New York

27 F.2d 531 (1928)

PINAUD, Inc., v. HUEBSCHMAN.

No. 2966.

District Court, E. D. New York.

January 30, 1928.

Hoguet & Neary, of New York City (Daniel L. Morris, of New York City, of counsel), for plaintiff.

Davies, Auerbach & Cornell, of New York City (Marion Butler and Alexander J. Feild, both of New York City, of counsel), for defendant.

INCH, District Judge.

Plaintiff complains that defendant has unlawfully appropriated and infringed certain trade-marks of plaintiff's, and also alleges that an unfair competition is being carried on by defendant, to plaintiff's injury.

Both the plaintiff and the defendant are residents of the same state, to wit, state of New York. This being undisputed, the defendant at the outset, and also at the end, of plaintiff's case, moved to dismiss the cause of action for unfair competition.

While it has been stated that the "common law of trade-marks is but * * * the broader law of unfair competition" (see Hanover Milling Co. v. Metcalf, 240 U. S. 413, 36 S. Ct. 360, 60 L. Ed. 713), yet the distinction between the statutory law of trade-marks, so far as what may be termed a trade-mark suit and one for unfair competition is concerned, in regard to jurisdiction, is very important. A few of the many cases as to this distinction may be briefly considered.

Luyties v. Hollendeer (C. C.) 30 F. 632. The word "Kaiser" applied to mineral water. Wallace, J. (1878): "Both parties are citizens of this state, and for that reason this court can entertain jurisdiction only upon the theory that the complainants have a valid trade-mark in the word registered, pursuant to the Act of Congress of March 3, 1881, and no relief can be granted because of any unlawful competition in trade by the defendants with the complainants. The question, therefore, is whether the complainants have the exclusive right to appropriate the word `Kaiser' as a trade-mark for natural mineral water." The bill was dismissed.

"It is probably true that, where a federal question is involved, the court is justified in adjudicating upon all questions growing out of the transaction involved." Coxe, J., Goldstein v. Whelan (C. C.) 62 F. 124. This was a case showing an invalid trade-mark, but a clear case of unfair competition. Jurisdiction was denied.

"Complainant seeks to rely upon other facts than the mere use by defendants of their own firm initials, `B. & S.' He points out similarities in the form, size, and color of the drops, in the arrangement of the package, in the text and style of the directions for use, and other details tending, as he claims, to show an intent to deceive the purchasing public. It is apparent from the opinion of the judge who heard the case in the Circuit Court that it was these similarities which induced him to grant the motion for preliminary injunction. But these matters are immaterial to the question presented in this suit for the determination of a federal court. The complainant and defendants are all citizens of the same state. The federal court can take jurisdiction, therefore, only of the question whether the registered trade-mark declared upon has been infringed, and that trade-mark solely for the two letters `S. B.,' without any designation of style or type, position on the cover, or association with other elements of dress or decoration." Burt v. Smith, 71 F. 161, page 163 (C. C. A. 2). (Italics mine.)

"Unfair competition is distinguishable from the infringement of a trade-mark in this: That it does not involve necessarily the question of the exclusive right of another to the use of the name, symbol, or device. A word may be purely generic or descriptive, and so not capable of becoming an arbitrary trade-mark, and yet there may be an unfair use of such word or symbol which will constitute unfair competition." Cole Co. v. American Co., 130 F. 703, page 705 (C. C. A. 7th).

"Unfair trade, we have seen, was referred to, and it was discussed also by the Circuit Court of Appeals, but it put it aside as an element of decision, because the court was, as it said, `without jurisdiction to grant relief,' as the right of the Elgin Watch Company arose under the act of Congress, and was limited by the act to recovery of damages for the wrongful use of a trade-mark, or to a remedy according to the course of equity, `to enjoin the wrongful use of said trademark used in foreign commerce or commerce with the Indian tribes.' The remedy in equity for fraud, it was said, existed before the statute and was not given by it, and that the federal court would have no jurisdiction of it except between citizens of different states. Illinois Watch Case Co. v. Elgin Nat. Bank 94 F. 667, 671." Standard Paint Co. v. Trinidad Asph. Co., 220 U. S. 446, page 458, 31 S. Ct. 456, 459 (55 L. Ed. 536).

"The question presented by this litigation is therefore this: To what measure of relief is one entitled who owns as a valid trade-mark a word which before registration under the statute he could not protect at law, without invoking the doctrine of unfair competition? It is to be regretted that sharp distinction was ever drawn between that trespass on property rights called trade-mark infringement, and the exactly similar trespass commonly spoken of as unfair competition, but, since the distinction has not only become well known, but been made a basis for limiting jurisdiction, it is necessary here to find infringement of trade-mark according to strict rules, if complainant is to be entitled to any relief.

"Trade-mark infringement is the use by defendant for trading purposes, and in connection with goods of the kind as to which complainant's exclusive right exists, of a mark identical with complainant's, or colorably resembling it. The wrongful imitation need not be exact or perfect, but may be limited or partial. McLean v. Fleming, 96 U. S. 245, 24 L. Ed. 828; Saxlehner v. Eisner, etc., Co., 179 U. S. 19, 21 Sup. Ct. 7, 45 L. Ed. 60." Thaddeus Davids Co. v. Davids (C. C.) 190 F. 285, pages 286, 287. (Italics mine.)

"Plaintiff argues, however, that there is another reason for retaining the bill. He has in good faith charged infringement. Over that charge this court has jurisdiction, and it should proceed to pass on all the questions involved. If, after hearing all the evidence, it is satisfied that, while the defendant has not infringed the trade-mark, he has unfairly competed, it should give complete relief by enjoining the further prosecution of such unfair competition. This contention rests upon a confusion between the consequences of limitations upon the powers of courts of equity as such, and the restrictions imposed upon the jurisdiction of the federal courts, whether of law or of equity, by the Constitution and Statutes of the United States.

"A court of equity, whose jurisdiction has been invoked to give relief which only such court is competent to furnish, may sometimes, after it has heard the whole case, be of opinion that justice and right can be best done by confining the relief given to something which might have been obtained from a court of law. Such relief the chancellor may award, although if the bill originally had sought that, and nothing more, he must have declined jurisdiction. But a federal court cannot decide a controversy to which the judicial power of the United States does not extend merely because plaintiff has mistakenly assumed that some federal right of his has been infringed. A plaintiff cannot in the federal courts secure redress for unfair competition by a citizen of the same state merely by alleging that such defendant has infringed a registered trade-mark, when in point of fact no such infringement has taken place, and in that respect it is immaterial whether the allegation was made in good or bad faith." Sprigg v. Fisher (D. C.) 222 F. 964, pages 966, 967. (Italics mine.)

"The complainant includes a charge of unfair trading. Since the parties are not citizens of different states, that part of the bill was correctly dismissed without prejudice."

"The trade-marks thus registered are valid, they have been infringed, and complainant is entitled to the relief accorded to him by section 16 of the act of 1905 15 USCA § 96." Planten v. Gedney, 224 F. 382, page 386 (C. C. A. 2d). (Italics mine.)

"In an infringement suit where a defendant is a citizen of the same state as complainant and the court has jurisdiction only because of the nature of the suit, it is without jurisdiction to adjudicate a counterclaim for unfair competition, set up by such defendant in his answer." U. S. Bolt Co. v. Kroncke Co., 234 F. 868 (C. C. A. 7th).

Where a patent was found infringed and there was also a cause of action for unfair competition, although the parties were both residents of another state, the court did entertain charges of unfair competition on the ground that such facts were simply aggravations of the infringement. Ludwigs v. Payson Mfg. Co. (C. C. A.) 206 F. 64.

"While the authorities are not uniform, we have held that, where a patent has been held valid and infringed, the unfair competition feature arising out of that infringement may be included in an accounting for profits and damages, although the parties are citizens of the same district. K-W Ignition Co. v. Temco Co., 156 C. C. A. 286, 243 F. 588, 591. The court below, having found both patents valid and infringed, had jurisdiction to consider the question of unfair competition as directly incident thereto; we think jurisdiction still exists with respect to the sash rail patent which we have held valid and infringed. But as to defendant's sash rail construction, considering it now independently and not as a part of a complete window front structure, we think it not the subject of damages for unfair competition; that is, of damages beyond those resulting from the mere fact of infringement, and because of the apparent lack of unnecessary and intentional imitation of plaintiff's design." 250 F. 239. "For we think the logical theory on which ...