Rathbone, Sard & Co. v. Champion Steel Range Co.

• Decision Date: 11 July 1911
• Docket Number: 2,116.
• Citation: 189 F. 26
• Parties: RATHBONE, SARD & CO. v. CHAMPION STEEL RANGE CO.
• Court: U.S. Court of Appeals — Sixth Circuit

189 F. 26

RATHBONE, SARD & CO. v. CHAMPION STEEL RANGE CO.

No. 2,116.

United States Court of Appeals, Sixth Circuit.

July 11, 1911

C. J Sawyer, M. B. Philipp, and J. J. Kennedy, for appellant.

D. C Westenhaver and E. J. Hart, for appellee.

Before SEVERENS and KNAPPEN, Circuit Judges, and EVANS, District Judge.

KNAPPEN Circuit Judge.

The appellant filed its bill of complaint against appellee alleging unfair competition by the latter in the manufacture and sale of a certain type of natural-gas heater. The bill prayed for a permanent injunction against such manufacture and sale, and asked for certain special relief incidental to the general relief asked. Upon a final hearing on pleadings and proofs, the Circuit Court made a decree dismissing the bill, from which decree this appeal is taken.

The important facts are these:

Complainant is one of the largest and longest established manufacturers of stoves, ranges, and heaters (both coal burning and wood burning) in the United States. It has been in business since the year 1830. Its factories are now at Albany, N.Y., and Aurora, Ill. In the year 1835 it registered the 'Acorn' as its trade-mark and has used the same ever since upon its product, unless in the case of a few cheap stoves. Its product enjoys an excellent popularity, being known to the public generally under the name of the 'Acorn.' About the year 1900, with the development of natural gas in the territory hereafter mentioned, several stove manufacturers began making natural-gas ranges and heaters. This natural gas territory included western New York, western Pennsylvania, Ohio, West Virginia, and parts of Indiana, Oklahoma, Kansas, Missouri, and possibly some other territory. In 1903 the complainant began making natural-gas ranges. It made no natural-gas heaters until 1905. At that time there were upon the market and in use substantially two types of natural-gas heaters of the better class, one having a rounding and the other a tubular drum. In 1904 there was put out by another manufacturer a heater known as the 'Reliable.' In 1905 complainant prepared designs for a natural-gas heater called the 'Solar Acorn.' The appearance of complainant's 'Solar Acorn' differs, generally speaking, from that of the 'Reliable' only in certain features of ornamentation the shape, style, base, foot-rail, fire pot, reflector, drum, and top being substantially the same (except as hereafter stated), as well as the broad, general plan of ornamentation. Complainant made the ornamentation at the top of its 'Solar Acorn' more elaborate than in the case of the 'Reliable,' apparently substituted a white for a black finishing rim above the drum, adopted a different design of ornamental pieces on the side of the drum, which were brought well forward, the ornamentation above the reflector being carried a little higher, and the foot rail and base ornamentation made somewhat more elaborate.

We do not intimate that complainant actually used the 'Reliable' as a copy, or that it adopted features of ornamentation belonging peculiarly to that heater. The fact and extent of similarity are all that are material here. The 'Solar Acorn,' as exhibited in advertising cut and as manufactured, had in all cases the device of the acorn upon the scroll work above the reflector and upon the corners of the base constituting the legs, and the words 'Solar Acorn' prominently upon the foot rail, the name of the manufacturer being shown upon the back side of the stove. Complainant sells its product only to dealers, not directly reaching the ultimate purchaser and user. The territory covered by its sales is divided by the Ohio river into the eastern and the western territory, respectively, headquarters for the former being at Albany and for the latter at Aurora. The method and extent of its advertising of the heater in question, and of its attempts to bring the same to the attention of the public prior to the defendant's coming into the market, are these: In September, 1905, it issued from 2,000 to 2,500 leaflets which it distributed in approximately equal amounts through the Albany and Aurora headquarters, these leaflets being sent to dealers only, except as a very few were given to traveling salesmen, who did not call upon the user or consumer, but only upon the dealer. The latter distributed the leaflets only by handing them out to customers calling at the store, or by leaving them upon the counter accessible to customers. In February, 1906, 1,500 circulars were issued, and before April 1st of that year 2,000 catalogues. These circulars and catalogues seem to have been distributed in substantially the same way as the leaflets. In each of these three classes of literature the Solar Acorn was shown and advertised. Complainant has never advertised this heater in the newspapers, trade journals, or magazines. In December, 1905, complainant shipped 12 of these heaters to dealers in Ohio, and in the following January two more. As a general rule but one stove was sent to each dealer, the same being apparently intended to be used as a sample. From February 1, 1906, to August 1, 1906, three more deliveries were made to dealers in Ohio. In January, 1906, four were sent to dealers in Missouri and Kansas, no more being delivered previous to August of that year. In the Eastern territory deliveries were begun in November, 1905. It is not definitely shown, so far as appears by references in briefs of counsel, that more than two stoves were actually delivered to dealers in that territory in 1905. The testimony of the extent of sales to dealers during that year is not explicit, but we infer that at least 11 were so sold. Our attention is not called in briefs of counsel or in argument to any evidence of sales of complainant's heaters to actual users prior to defendant's adoption of its heater and the putting of the same upon the market.

The defendant is a general stove manufacturer at Cleveland, Ohio, having been engaged in business under its present name, either as a firm or as a corporation, since 1893. It has apparently a good business standing and does a large business, although we assume less extensive than complainant's. It has used the name 'Champion' as its trade-mark continuously since that organization, except during the first few months. Soon after complainant began such manufacture and delivery to dealers of its 'Solar Acorn,' the defendant brought out a natural-gas heater called the 'Champion.' In so doing it copied complainant's cut, except that it removed the acorn device from the reflector and base of the stove and put the word 'Champion- ' prominently upon the foot rail, and placed its own name upon the back of the stove in the same location where complainant puts its name upon its stove. Its patterns were prepared directly by the use of parts of one of complainant's 'Solar Acorns,' the changes referred to as made in the cut being also made in the patterns and in the stove as manufactured, except that as actually put put out the letter 'C' appeared conspicuously upon the reflector in place of complainant's acorn. Defendant has invariably manufactured the heater in the dress stated, excepted that in the case of heaters manufactured for three special dealers, who desired distinctive names, the words 'Iron City,' 'Crown,' or 'Comfort,' were placed upon the foot rails of the respective stoves, in each case, however, the letter 'C' being prominently shown in the scrollwork of the reflector, complainant's trade-mark and trade-name being likewise absent, and defendant's name being upon the back of the stove in the usual place therefor. The defendant completed its heater and put the same upon the market in February, 1906, publicly exhibiting the same at the Ohio Hardware Dealers' Convention at Canton, Ohio, the latter part of that month. It got out for that convention 20,000 descriptive circulars (five times as many as complainant had issued up to that time) advertising its heaters, part of which circulars were distributed at the convention, the remainder being sent out through the mail to other dealers and salesmen. Complainant had no exhibit of natural-gas heaters at the Canton convention, but had a representative thereat. Defendant exhibited this stove at the Ohio state and county fairs during the year 1906. 'Right after the convention or at the convention' defendant's salesmen took orders for its heater, and immediately thereafter salesmen were sent out through the territory, deliveries being begun in July, 1906, the record showing that but a small proportion of the deliveries in the natural-gas heater trade are made in any year between January and July. Following the Hardware Dealers' Convention in February, 1906, and throughout that year, new circulars and advertising matter to the number of many thousand copies were circulated by defendant, which has since carried on its advertising in trade papers, catalogues, circulars, and to some extent in local newspapers, its advertising having been much more extensive than that of complainant. The complainant's sales in Ohio increased in 1906, dropping off after that time. In Kansas and Missouri, sales increased during 1907 over 1906. In the eastern territory sales increased through 1907, dropping off after that year. The evidence indicates that this falling off of sales of complainant's heater is due in large part to defendant's active competition. This suit was begun in January, 1909.

The late Judge Tayler, who heard this case in the Circuit Court, in the course of his opinion dismissing the bill, said:

'It is perfectly apparent that these are the salient and influencing facts in this case: That late in 1905 the complainant brought out this 'Solar Acorn' stove in controversy, having previously advertised it by

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