Sartor v. Schaden

• Decision Date: 23 November 1904
• Citation: 125 Iowa 696,101 N.W. 511
• Parties: SARTOR v. SCHADEN.
• Court: Iowa Supreme Court

125 Iowa 696

101 N.W. 511

SARTOR

v.SCHADEN.

Supreme Court of Iowa.

Nov. 23, 1904.

Appeal from District Court, Polk County; James A. Howe, Judge.

Suit in equity to enjoin defendant from using a trade-mark or trade-name adopted by plaintiff for a brand of cigars manufactured and sold by him in the city of Des Moines and immediate vicinity. The trial court granted the relief asked, and defendant appeals. Affirmed.Henry H. Griffiths and S. C. Sweet, for appellant.

Orwig & Lane, for appellee.

DEEMER, C. J.

The original petition counted upon a registered trade-mark adopted by plaintiff for his cigars, being the word “She” in large letters, which was pasted upon the inside lid of cigar boxes containing cigars manufactured by plaintiff. This was amended by claiming that plaintiff had adopted the word as a trade-name, under which he had built up a large demand for his goods, and that defendant was guilty of unfair competition or trade in adopting the same name or label, not only with intent to deceive the public, but for the purpose of securing the trade theretofore established by the plaintiff. A great many defenses were interposed, to some of which we shall refer during the course of this opinion. The case was tried on an agreed statement of facts and some exhibits introduced by the parties, and a decree for plaintiff was rendered as prayed. From this agreed statement and the exhibits we extract the following, which are deemed material to a proper decision of the case: Plaintiff did not coin the word “She.” The label used by him bearing this name was designed by a printing concern in the state of New York in the year 1893, and was sold by it as a stock label from that time down to the time of the trial of this case. In the year 1894 plaintiff purchased a number of these labels, which he placed upon cigar boxes containing cigars made by him, and sold them to retail dealers doing business in Des Moines and a few surrounding towns. He made his cigars from selected stock, expended large sums of money in advertising this brand of cigars, and established a good trade therein. In 1900 plaintiff discontinued the use of the label made by the New York firm, and procured a somewhat different design, but bearing the same talismanic word “She,” from a printing house doing business in Wisconsin. These labels he used in the same manner as the original stock label. Defendant is not a manufacturer, but a wholesaler in cigars, whose territory covers Des Moines and vicinity, as well as some other towns and cities not reached by the plaintiff. In the year 1902 he purchased from the New York printshop some of the stock “She” labels, and directed a manufacturer at Davenport to make some cigars for him which should be placed in boxes bearing this “She” label; and these cigars so manfactured for him, and others manufactured by others for him, bearing the stock label above described, were sold by him in the territory where plaintiff had established this trade, and to dealers to whom plaintiff had previously sold. Many buyers of cigars handled by defendant under the stock label “She” purchased them believing that they had been manufactured by the plaintiff, and some of these persons complained to the plaintiff of the quality of the cigars so purchased. Defendant sold his cigars at a less price than plaintiff sold the same brand for, and, for one reason or another, did a considerable and increasing business in this brand of cigars. Defendant never expressly stated that the cigars he was handling were made by plaintiff, but he sold to the same dealers who had theretofore purchased plaintiff's goods, and evidently intended to take advantage of the reputation gained by plaintiff for his product. It is also admitted that cigars were sold at various places in Iowa bearing a “She” label from the year 1886 down to the present. Some of these were the identical stock labels first used by the plaintiff, but others bore the name of the maker in addition to the word “She”; and still others contained pictures of reclining human forms, and the name of the manufacturer. But at the time plaintiff adopted the label no one was selling cigars in the territory in which he did business bearing the “She” label, nor did they until about the year 1902, when one Smith commenced the use thereof, as also did the defendant. Plaintiff did not know of the use of the “She” label prior to the time he adopted it, and believed himself to be the only cigar maker or dealer in the state using a label bearing the word “She” as an essential feature. During the year 1899 he became advised that others in the state were contemplating the use of the same, and he caused the label he had been using to be registered as a trade-mark with the Secretary of State, under our state law. The printers of the label did not consent to this registration, however. It was the custom of these printers not to sell labels to competing cigar manufacturers or dealers in the same locality at the same time. These labels were never copyrighted by the printers, but no one else has ever printed or sold the identical stock label printed by them.

These are all the material facts, and we now come to the law of the case.

Plaintiff has abandoned all claim to a right to the exclusive use of the “She” label on account of his having registered the same as a trade-mark; hence we shall not have occasion to consider the law on that subject, except incidentally.

The case must turn primarily upon the doctrines applicable to that practically new branch of the law known as “unfair trade.” These rules, while new, are nevertheless well settled, and easily stated abstractly. Difficulty only arises in making application thereof to concrete cases. There is a well-marked distinction between what is known as the “infringement of a trade-mark” and “unfair competition.” A trade-mark is an arbitrary, distinctive name, symbol, or device, to indicate or authenticate the origin of the product to which it is attached. And an infringement thereof consists in the use of the genuine upon substituted goods, or an exact copy or reproduction of the genuine, or in the use of an imitation in which the difference is colorable only, and the resemblance avails to mislead, so that the goods to which the spurious trade-mark is affixed are likely to be mistaken for the genuine product; and this is upon the ground that the trade-mark adopted by one is the exclusive property of its proprietor, and such use of the genuine or of such imitation of it is an invasion of his right of property. Consequently in infringement cases we have all sorts of questions regarding what names and devices may be exclusively appropriated, whether or not they have been dedicated to the public or abandoned by the holder, and many other intricate and puzzling problems which are not as yet fully settled. But aside from the law of trade-marks, courts will protect trade-names or reputations, although not registered or properly selected as trademarks, on the broad ground of enforcing justice and protecting one in the fruits of his toil. This is all bottomed on the principle of common business integrity, and proceeds on the theory that, while the primary and common use of a word or phrase may not be exclusively appropriated, there may be a secondary meaning or construction which will belong to the person who has developed it. In this secondary meaning there may be a property right. Scheuer v. Muller, 74 Fed. 225, 20 C. C. A. 161, and excellent note; Hygeia Dist. Co. v. Hygeia Co., 70 Conn. 516, 40 Atl. 534;Walter Baker & Co. v. Sanders, 80 Fed. 889, 26 C. C. A. 220;American Waltham Co. v. U. S. Watch Co., 173 Mass. 85, 53 N. E. 141, 43 L. R. A. 826, 73 Am. St. Rep. 263. Consequently unfair competition is distinguished from trade-mark cases in this: that it does not involve necessarily the question of the exclusive right of another to use the name, symbol, or device. A word may not be capable of becoming an arbitrary trade-mark, and yet there may be an unfair use of the word which will constitute unfair trade. The whole doctrine is based upon the theory of protection to the public whose rights are infringed or jeopardized by confusion of goods produced by unfair methods of trade, as well as upon the right of the complainant to enjoy the good will of a trade built up through his efforts, and sought to be taken from him by unfair methods. Whether or not such facts are shown as to bring a particular case within these rules depends upon the testimony in each particular case in which the issue arises, and if it appear that such confusion has been or is likely to be produced, that there have been actual sales of one product for the other, that there have been actual mistakes of one or the other, or if there be such similarity of the two brands as that one may readily be mistaken for the other, a case is made out. Fairbank Co. v. Luckel, King & Cake Soap...