President Suspender Co. v. Macwilliam

• Decision Date: 10 January 1916
• Citation: 233 F. 433
• Parties: PRESIDENT SUSPENDER CO. v. MACWILLIAM.
• Court: U.S. District Court — Southern District of New York

233 F. 433

PRESIDENT SUSPENDER CO. v. MACWILLIAM.

United States District Court, S.D. New York.

January 10, 1916

W. P Preble, of New York City, for defendant.

HOUGH District Judge.

Plaintiff is a corporation which prior to 1914 was known as the C. A Edgarton Manufacturing Company. It has for many years been engaged in the manufacture and sale of suspenders and garters, and possibly other similar articles. Its corporate existence has been continuous, and it will hereafter be called the 'President Company.'

Plaintiff's position, summarily stated, is that as the owner of the patent in suit it uses the invention thereof in the manufacture of what it calls and sells as 'President Suspenders'; that it has an established trade-mark in the name 'President' as applied to suspenders as evidenced by registration and established by long user in connection with its business; and that defendant has lately begun to manufacture and offer for sale a suspender of his own make which he calls by the trade-name 'President,' dresses or prepares for sale in a manner similar to that long employed by plaintiff, and embodies in his style of suspender the invention of the Adams patent.

It is conclusively proven, and indeed almost admitted, that the alleged infringing article (Macwilliam's suspender) is in all material respects substantially a copy of what defendant has made for at least 14 years.

This litigation grows out of an agreement made between plaintiff and defendant on October 1, 1898, a piece of legal draughtsmanship good enough to withstand criticism under almost any circumstances, yet not drawn with sufficient foreknowledge of the unexampled pecuniary success that lay before the humble invention of a pair of cord back suspenders.

The parties to this litigation and to that contract are (in a very true sense) here quarreling over the business unexpectedly created by the aforesaid patent and remaining to be fought over upon the expiration thereof.

For some time prior to 1898, Macwilliam was engaged in business in St. Paul, Minn. On August 16, 1898, there was issued to him patent No. 609,286 for a pair of suspenders. It was proven that even in a small way Macwilliam could make this patented suspender and profitably sell it at 50 cents. By October 1, 1898, he could be fairly said to have an established but small business in this patented article. The patent itself was said at bar to have been the subject of some litigation in which success attended the patentee. If this is true, it was not of sufficient importance to give rise to any reported case. See Shepard's Digest of Contested Patents. On the date last mentioned, Macwilliam granted to the President Company a license, exclusive (except as to the state of Minnesota, wherein he had previously made other arrangements with a firm mentioned in the contract) 'to manufacture and sell within the United States, to the end of the term for which said letters patent were granted suspenders containing said patented improvements,' subject to certain conditions of which the material ones are as follows:

(a) That Macwilliam should turn over and transfer to the President Company 'the good will of his present business of manufacturing and selling said suspenders within the United States, and all orders he now has or may hereafter take within the United States, for the said suspenders.'

(b) That Macwilliam will not manufacture or sell suspenders containing said improvements within the United States during the term of said license.

(c) That the President Company should pay Macwilliam a royalty of 25 cents for each dozen pairs of suspenders containing said patented improvement and sold by it, which royalty, however, should not be less than $300 for the first quarter year of the life of the license, and should never thereafter be less than $2,000 per annum.

After the execution of this agreement, Macwilliam closed out his business in St. Paul, shipped to plaintiff his stock in trade, and thereafter and until the expiration of the patent took no part in and exercised no supervision over the business of making suspenders. By agreements, the nature of which is not shown in this litigation, he contributed toward a very extensive advertising campaign on behalf of his suspender, for which he had prior to the grant of his patent devised and used the arbitrary name 'President'; and he had also at the same early period habitually put a paper band bearing the colors of the American flag around the web of each pair of his suspenders.

This name and distinctive dressing furnished material for advertising efforts toward which for approximately one-half of the life of the patent Macwilliam contributed two-sevenths and plaintiff five-sevenths.

The expense of advertising was very large, but as a result thereof, and not at all in my opinion as the result of any peculiar merit in Macwilliam's invention, the business of selling President suspenders enlarged in volume and expanded geographically, until this article of dress has been sold all over the world, and at the rate of 25 cents royalty per dozen pairs Macwilliam has received over and above all his contributions to advertising about half a million dollars.

It is admitted that, not having the benefit of legal advice, the President Company in the early days of its license agreement with Macwilliam conceived the idea that Macwilliam and not themselves should protect by registration the word 'President' as a trade-mark. Accordingly, and apparently at the instigation and suggestion of the plaintiff, Macwilliam registered the word 'President' as a trade-mark for suspenders on May 16, 1899 (No. 32,965).

As the years passed, as business and profits increased and the termination of the patent began to be thought of, plaintiff (evidently under advice of counsel) conceived the idea that it had come to be the owner of the word 'President' as a trade-mark applicable to suspenders, and it in turn registered the same word for the same purpose on February 4, 1913 (No. 90,103).

The President Company has always done business at Shirley, Mass. It manufactured and long had manufactured suspenders of other kinds beside the President, and for some years past and probably as early as 1909 plaintiff began to associate the word 'Shirley' with the word 'President' in its advertising matter and on boxes and wrappings surrounding its product. It even put the legend (though this was probably at a somewhat later date), 'The Shirley President,' upon the tricolored paper band which surrounded, and always has surrounded, a part of the webbing of the President suspender.

I believe the fact to be that, as the expiration of the patent loomed near, p...