Prest-O-Lite Co. v. Bournonville

• Decision Date: 12 March 1915
• Citation: 260 F. 442
• Parties: PREST-O-LITE CO. v. BOURNONVILLE et ux.
• Court: U.S. District Court — District of New Jersey

260 F. 442

PREST-O-LITE CO. v. BOURNONVILLE et ux.

United States District Court, D. New Jersey.

March 12, 1915

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

HAIGHT District Judge.

The defendants seek to have modified that part of the interlocutory decree, entered herein on November 11, 1914 which adjudged that the complainant recover from the defendants all of the profits, gains, and advantages which the latter had derived from the sale of gas cylinders or tanks bearing the trade-mark 'Prest-O-Lite,' and containing any other material than that prepared and placed therein by the complainant. It is urged that the defendants should respond only for the damages suffered by the complainant, because the basis of the decree was not an infringement of a technical trade-mark, but unfair competition on the part of the defendants. In support of this contention, the recent decision of the Circuit Court of Appeals of the Third Circuit in P. E. Sharpless Co. v Lawrence, 213 F. 423, 130 C.C.A. 59, is relied upon.

At the time the interlocutory decree was settled and signed, no objection was made on behalf of the defendants to an accounting for profits; it apparently being assumed that such was entirely proper, if the acts of the defendants warranted the injunction ordered by the decree. Subsequently the before-mentioned opinion of the Circuit Court of Appeals came to the attention of counsel for the defendant, and then this motion was made.

Defendants' contention, that the decree was made on the theory of unfair competition, is unquestionably correct. As the acts complained of constituted, in the judgment of the court unfair competition, it was not considered necessary to determine whether the complainant's trade-mark, 'Prest-O-Lite' was valid, and whether the defendants' acts were an infringement of it, especially as counsel for the defendant, at the argument, relied entirely upon the authorities cited in the memorandum heretofore filed in this matter. Although this trade-mark had been registered in the Patent Office, it was quite clear that the remedies provided in the Trade-Mark Act of Feb. 20, 1905 (33 Stat. 724, c. 592, Sec. 16 et seq. (Comp. St. Sec. 9501 et seq.)), were not available to the complainant in this suit, because there was no evidence of the use by the defendants of the registered trade-mark in commerce among the several states, or with a foreign nation, or with the Indian tribes.

Whatever may be the rule in other circuits regarding the liability of a wrongdoer to account for profits, in strictly unfair competition cases, as distinguished from cases of infringement of technical trade-marks (see Wolf Bros. v. Hamilton-Brown Shoe Co., 206 F. 611, 616, 124 C.C.A. 409, certiorari allowed by Supreme Court 231 U.S. 756, 34 Sup.Ct. 323, 58 L.Ed. 468, and cases there cited), and whatever may have been heretofore considered to be the rule in this circuit (see Rowley v. Rowley, 193 F. 390, 113 C.C.A. 386), it is now settled, so far as this circuit is concerned (Sharpless Co. v. Lawrence, supra), that the injured party is not entitled as of right to recover profits in cases of strictly unfair competition, but that in such cases courts of equity 'may, upon what seems to them sufficient grounds, include in their decrees an accounting of profits as well as an award of damages. ' As to what are considered sufficient grounds. I think, quite clearly appears from the remarks of Judge Gray in the case last cited (213 F. 426, 130 C.C.A. 62), viz.:

'It is true, however, as contended by the plaintiffs below, that courts of equity, in granting injunctive relief in cases of unfair competition, have sometimes decreed that the plaintiffs should recover of defendant, not only damages, but the profits, gains, and advantages that have accrued to the defendant by reason of his unfair competition. Such an enlargement of the scope of the decree is generally made on the ground that the unfair competition is adjudged to have been willful and fraudulent, and the recovery of profits in such cases is a punitive addition to the ordinary decree of compensatory damages.'

It thus appears that profits are allowed, as a punishment for illegal acts. The evidence in the case at bar is quite meager, but I cannot find from it that the acts of the defendant were of such a character as to warrant the imposition of a punishment, other than which follows from compensating the complainant for the losses which it has sustained. It is however, entirely well settled that, so far as an infringement of a technical trade-mark is concerned, the owner thereof is...