Q-Tips, Inc. v. Johnson & Johnson

• Court: U.S. District Court — District of New Jersey
• Citation: Q-Tips, Inc. v. Johnson & Johnson, 95 USPQ 250, 109 F. Supp. 657 (D. N.J. 1951)
• Decision Date: 04 September 1951
• Docket Number: No. C-10415 and C-284-49.,C-10415 and C-284-49.
• Parties: Q-TIPS, INC. v. JOHNSON & JOHNSON (two cases).

109 F. Supp. 657

Q-TIPS, INC. v. JOHNSON & JOHNSON (two cases).

Nos. C-10415 and C-284-49.

United States District Court D. New Jersey.

September 4, 1951.

Young, Shanley, Foehl & Fisher, Newark, N. J. (Pennie, Edmonds, Morton & Barrows, by W. B. Morton, Jr., New York City, of counsel), for plaintiff.

Kenneth Perry, New York City (Stewart W. Richards and Arnold S. Worfolk, New York City, of counsel), for defendant.

FORMAN, Chief Judge.

Two suits were instituted by Q-Tips, Inc., a New York corporation, against Johnson & Johnson, a New Jersey corporation. In its first complaint (Civil Action 10415) Q-Tips alleged, among other things, that United States Letters Patent No. 1,921,604 were issued to it for apparatus for manufacturing medical swabs on August 8, 1933¹ since which time it has been the owner of the patent and that Johnson & Johnson infringed its patent by making, selling and using swab making apparatus embodying its invention. It demanded an injunction and damages.

Johnson & Johnson's answer to the complaint denied the validity and infringement of the patent. In addition it alleged that Q-Tips, Inc. was disqualified to assert the patent against it because it had misused it by attempting to secure an unlawful monopoly in the sale of unpatented swabs produced by the apparatus, beyond the scope of the monopoly contemplated by the grant of the patent.

Johnson & Johnson incorporated in its answer a counterclaim against Q-Tips alleging that it had attempted unlawfully to restrain trade and commerce and to secure for itself an unlawful monopoly of the business of selling cotton tipped swabs in the markets of the United States. It demanded that the complaint be dismissed; that Q-Tips' patent be adjudged invalid and not infringed, and that an injunction issue restraining it from prosecuting any claim for infringement of the patent or from doing other enumerated acts involving Johnson & Johnson or its privies and that it pay treble damages.

In its second suit (Civil Action 284-49) Q-Tips, Inc. brought action under the United States trade-mark laws and alleged as a first cause of action, among other things, that since prior to January 1, 1926 it had engaged in the "manufacture and sale of swabs for use as medical applicators, in baby care, for cosmetic purposes and many other uses." The swabs consisted of sanitary absorbent cotton attached to one or both ends of small sticks of wood and are packaged and sold under the trade mark "Q-Tips", for which a certificate of registration had been issued on July 9, 1934 under serial no. 309256 and that Johnson & Johnson subsequent to November of 1948 has infringed upon its trade-mark rights by using in commerce the name "Cotton-Tips" in connection with the sale of swabs for the same purposes as those of Q-Tips, Inc., and in competition therewith.

For a second count Q-Tips complained that Johnson & Johnson by its use of the name "Cotton Tips" and the appearance of its product caused confusion, upon the part of the buying public and unfairly competes with its product to its injury.

Q-Tips prayed for an injunction to restrain Johnson & Johnson from using the name "Cotton Tips"; from infringing upon its trade name "Q-Tips"; from unfairly competing with it in the use of the name, "Cotton Tips" or in any other name having the dominant word "tips" in it or in using a package having the dress and appearance of its package and from continuing its campaign of "wilful and malicious dilution of the distinctiveness and value of plaintiff's trade mark by using and inducing others to use the word `tips' as a term generically descriptive of swabs or applicators." It also sought an accounting of profits.

Subsequent to the filing of the original complaint Q-Tips, Inc. filed an amended and supplementary complaint incorporating the first two counts as originally filed, and adding a third cause of action in which it alleged that Johnson & Johnson had formulated a plan or scheme, wilfully and maliciously, to destroy the value of the plaintiff's trade mark "Q-Tips" in furtherance of which it embarked upon a campaign to create for the word "tips" a new meaning which it had never thereto had, namely, swab or applicator. It alleged that Johnson & Johnson designed to cause the word "tips" to become accepted as the principal generic term for the article described, thus diluting the value and distinctiveness of plaintiff's trade mark "Q-Tips". It prayed for damages (compensatory and punitive) on account of the infringement and a judgment that the damages should be trebled.

Johnson & Johnson filed an answer to the amended and supplemental complaint in which it denied the validity and infringement of the trade mark "Q-Tips" or that by the use of the words "Cotton Tips" or the appearance of its packages it has unfairly competed with Q-Tips, Inc., and sought to create for the word "tips" a new meaning designed to dilute or destroy the value and distinctiveness of the trade mark of Q-Tips, Inc. It averred that its use of the words "Cotton" and "tips" individually or together in the form of "Cotton Tips" is a use other than as a trade-mark, of a term or device which is descriptive of and used fairly and in good faith only to describe to users a product manufactured and sold by it which consisted "of a small stick of which one or both tips are provided with absorbent cotton." It sets up many affirmative defenses to the amended and supplemental complaint and adds a counter-claim similar to that filed in its answer in the patent suit on the grounds that Q-Tips, Inc. has unlawfully attempted to restrain trade and commerce to secure under its trade-mark an unlawful monopoly in the manufacturing and selling of the product in interstate commerce in the markets of the United States. Relief by way of injunction and damages akin to those in the patent and civil suit are demanded.

On a pretrial conference held in both cases they were consolidated for the purpose of trial and numerous exhibits were introduced by the plaintiff.

Meanwhile Johnson & Johnson has moved for a summary judgment in its favor in each suit.

In the Patent Case (C-10415)

the defendant insists that is entitled to a summary judgment dismissing the complaint of plaintiff for infringement on the ground that no genuine issue exists as to any material fact advanced in the defenses submitted and that the summary judgment must be entered as a matter of law.

The motion is grounded on defendant's Eighth Defense, which is as follows:

"1. Defendant, on information and belief, avers that plaintiff is not in the business of manufacturing and selling machines covered by Patent No. 1,921,604, but for many years has been and now is engaged in the business of manufacturing and selling cotton-tipped swabs of the type said machine is designed to produce.

"2. The cotton-tipped swabs referred to in Paragraph 1 of this Eighth Defense are an unpatented article of commerce.

"3. Plaintiff has granted to others licenses which, since prior to the filing of the complaint herein, have been and now are in effect, to use swab making machinery embodying the alleged inventions of Patent No. 1,921,604, in which licenses plaintiff, contrary to public policy and in violation of the public interest, has limited either the use of the licensed machines to the manufacture by the licensee of unpatented swabs having a cotton tip at one end only of the stick, or the number of unpatented swabs that may be manufactured by the licensee where the licensee is permitted to manufacture swabs with cotton tips at both ends of the stick. Plaintiff thereby has attempted to secure unto itself an unlawful monopoly in the sale of such unpatented swabs beyond the scope of such monopoly contemplated by the grant of said patent. Plaintiff thus has misused said patent and is disqualified to assert it against defendant."

To support the motion the defendant submitted, subject to Rule 35 of the Federal Rules of Civil Procedure, 28 U.S.C. the pleadings and proceedings theretofore had in the cause, the exhibits in evidence, particularly the license agreements (D-36 and D-37) and admissions made by the plaintiff.

The defendant contends that thereby the following facts are demonstrated:

"1. The Bunnell patent in suit is directed to a machine for the manufacture of double tipped cotton tips of the type represented by defendant's exhibits D-4, D-9 and D-15, and of single tipped cotton tipped applicators of the type represented by defendant's exhibit D-21.

"2. The double tipped cotton tips represented by said exhibits D-4, D-9 and D-15 are an unpatented article of commerce.

"3. Except for those manufactured and sold by defendant, plaintiff has control of the production of all unpatented double tipped cotton tips manufactured and sold in the United States.

"4. Plaintiff, in order to promote and maintain a limited monopoly in the manufacture and sale of unpatented double tipped cotton tips, has granted licenses under its machine patent in which limitations have been imposed

a. In the case of one license, that to Swab Manufacturing Corporation, limiting the number of unpatented double tipped cotton tips that may be produced; and

b. In the case of another license, that to Splain & Lloyd, limiting the use of the licensed machines to manufacture only single tipped cotton tipped applicators."

The defendant's contention is that the plaintiff is guilty of unclean hands by controlling the use of its patent in such fashion as to promote the unlawful monopoly in the manufacture and sale of unpatented double tipped cotton swabs, the product produced by the patented machinery. Therefore the right to relief for infringement, if infringement exists, should be denied the plaintiff pursuant to the doctrine enunciated in Morton Salt Co. v. Suppiger, 314 U.S. 488, 492-493, 62 S.Ct. 402, 86 L.Ed. 363 and Mercoid Corp. v. Mid-Continent Investment Co., 320 U.S. 661, 64 S.Ct. 268, 88 L.Ed. 376.

Assuming the facts to...