Scriven v. North

• Decision Date: 15 November 1904
• Docket Number: 526.
• Citation: 134 F. 366
• Parties: SCRIVEN et al. v. NORTH et al.
• Court: U.S. Court of Appeals — Fourth Circuit

134 F. 366

SCRIVEN et al. v. NORTH et al.

No. 526.

United States Court of Appeals, Fourth Circuit.

November 15, 1904

Edgar H. Gans and W. Calvin Chesnut, for appellees.

Before GOFF, Circuit Judge, and BRAWLEY and PURNELL, District Judges.

BRAWLEY District Judge.

The bill of complaint charged the defendants with the infringement of two patents for certain improvements in undergarments, and asked for an injunction and an accounting. It also charged the infringement of certain trade-marks or trade-names, and asked an injunction restraining the same and damages resulting therefrom. It charged, also, unfair competition in trade in making and stamping the garments in question, alleged to be infringements of the patents. It charged, also, unfair competition in trade in using a box of peculiar style.

The decree of the court below was: (1) That the defendants had not infringed the letters patent, or either of them, and directed that the bill, in so far as it relates to each and both, be dismissed. (2) That complainants had no valid trade-mark, and that defendants had not infringed any rights of complainants in so far as related to the alleged trade-mark, and directed that the bill be dismissed. (3) That defendants had not infringed or violated any rights of complainants in the manufacture and sale of said garments by the defendants. (4) It held that the defendants had put up and offered for sale the drawers made by them in boxes made in imitation of those adopted by the complainants; that the imitation was intentional and for the purpose of unfair competition, to enable the defendants' goods to be deceptively substituted for complainants' goods; and therefore enjoined and restrained the defendants from selling their garments in boxes resembling or imitating complainants' boxes, and decreed that the complainants recover the damages which defendants had caused by their unlawful and unfair competition, and referred it to a master to take an account of defendants' said profits and to make an assessment of damages sustained by complainants by reason of such unlawful and unfair competition in trade-- the decree closing in these words:

'The matter of costs is reserved for final consideration by the court on the coming in of the master's report and the final decree.' The complainants appeal from all of that part of the decree which orders the bill of complaint to be dismissed, and we are met on the threshold by a motion to dismiss the appeal on the ground that the decree was not a final decree. The act establishing this court provides that it shall 'exercise appellate jurisdiction to review final decisions in Circuit Courts. ' It has been held that the phrase 'final decisions' is equivalent to the words 'final judgments and decrees' in the act governing appeals to the Supreme Court. Act Feb. 18, 1895, c. 96, 28 Stat. 666 amended the original act, so as to allow appeals in certain cases from interlocutory decrees, where an injunction shall be granted, continued, refused, or dissolved; but by act June 6, 1900, c. 803, 31 Stat. 660 (U.S. Comp. St. 1901, p. 550) section 7 of the act of March 3, 1891 (26 Stat. 828, c. 517) was amended by omitting the provisions for appeals in cases where an injunction is refused or dissolved, restoring the original phraseology, without mentioning Act Feb. 18, 1895. As our jurisdiction is not invoked under the last-mentioned act, we assume that it is conceded that Act June 6, 1900, repeals by implication this amendment, and that an appeal does not lie from an interlocutory decree denying an injunction. We have, then, to determine whether the decree appealed from is a final decree.

By its terms it is not, because the court reserves the question of costs for the coming in of the master's report and the final decree; but whether it is appealable is a question which must be determined by this court upon a consideration of what was done by the lower court in essence, and not by the name given to it. The complainants had four separate and distinct causes of action: (1) Infringement of patents; (2) infringement of trade-marks; (3) unfair competition in the manufacture and sale of undergarments; (4) unfair competition as to the use of the box. As to the three first mentioned, the decree in its essence and in terms is final. The injunction prayed for is refused, and the bill is dismissed. As to the fourth cause of action, the bill is retained and an account ordered to be taken. Each is a severable matter from the other subjects of controversy, and the accounting as to the unfair competition in the matter of the boxes does not affect the finality of the decree as to the three other distinct and separate causes of action.

The general rule as to what constitutes a final decree is well settled. It must go far terminate the litigation between the parties on the merits that in case of affirmance nothing would remain to be done but to execute the judgment or decree; and the reason for the rule is that thereby a multiplicity of appeals in the same case is prevented, and the case will not be heard by piecemeal. There are some exceptions to his rule, among the earliest of which is Forgay v. Conrad 6 How. 201, 12 L.Ed. 404, which is generally treated as exceptional. The object of the bill in that case was to set aside sundry deeds for lands and slaves, and for an account. The court declared the deeds to be fraudulent and void, directed the property to be delivered up to complainant, and that the master take an account of the profits. It was held that the decree was appealable, although Chief Justice Taney said: 'Undoubtedly it is not final in the strict technical sense of that term.' The opinion in that case went largely upon the ground that the decree not only decided the title to the property in dispute, but awarded execution. The reason for the exception seems to exist here. The complainants assert property in certain patents. That property is the exclusive right to use it and for a limited period, and the decree dismissing the complaint annuls the patents and deprives complainants of their rights in the patents, and in the trade-marks, which they claim as property. That loss may be irreparable, for a material part of that period during which they may be entitled to exclusive use is gone and cannot be regained.

There is another consideration proper to be taken, and that is that if the appeal is delayed until the coming in of the master's report as to the boxes, and this court should decide that the complainant was entitled to the other relief asked for, there would have to be a new accounting, while if the court grants the relief now the master can proceed with it coincidently with that already ordered. Upon the whole, we have determined not to dismiss the appeal.

The testimony shows that in the year 1884 Jeremiah A. Scriven, manufacturer of underwear, began the manufacture of a new style of men's drawers, the body portion of which was of white jeans, with longitudinal insertions of elastic knitted fabric inside and outside of the legs and at the back. Until that times drawers were all made of a uniform color, and in order to make his garments distinctive Scriven had the body portion of his garments made white and the elastic insertions yellow or buff. The selection of this buff color was deliberate and for the purpose of making it conspicuous and different from other similar garments. He gave these drawers the name of 'Elastic Seam,' and the distinguishing number, '50,' both the words and the number being stamped upon the drawers. These drawers were first manufactured under Brown's patent of 1881, of which Scriven seems to have become the owner about that time. Subsequently Scriven obtained letters patent Nos. 378,465, February 28, 1888, and 472,555, April 12, 1892. The business which was established by him in 1884 was continued by a firm of which he was a partner until 1891, when the complainant corporation, of which Scriven is president, was formed and took over the business, and the two patents in suit were transferred to the corporation. The business was successful, and the uniformity and excellence of the product, which came to be known and sold as the 'Scriven Drawers,' gave them a valuable reputation in the market, and the trade in them reached large proportions, extending throughout the United States. At the expiration of the Brown patent in the autumn of 1898, the defendants and a number of manufacturers began to manufacture and to put upon the market a type of drawers similar to Scriven's. The drawers manufactured by the defendants are inferior in quality to Scriven's and were sold much cheaper. Before the alleged infringement began Scriven's elastic seam drawers sold at $8.50 a dozen. The defendant's No. 50 drawers were sold at $3.75 a dozen, and their No. 57 at $4.25 a dozen, to jobbers. The bill of complaint was filed March 26, 1901, and charged infringement of patents, infringement of trade-marks, and unfair competition.

We will consider the question of trade-marks and of unfair competition together, for they both rest upon the same principle, which is that no man has a right to pass off his goods upon the public as and for the goods of another, or, as Mr. Justice Strong says, in Canal Company v. Clark, 13 Wall. 311, 20 L. ed.. 581, considering a trade-mark case:

'The essence of the wrong consists in the sale of the goods of one manufacturer or vendor as those of another.'

The defendant North testifies that under professional advice, as the Brown patent of June, 1881, had expired by limitation, he commenced in 1899 the manufacture of 'what is now known as our Garland No. 57 jean drawer. This drawer is the exact counterpart of Mr. Scriven's No. 50 drawer'; and again he says:

'When I commenced

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