E. T. Fraim Lock Co. v. Shimer

• Decision Date: 20 July 1910
• Docket Number: 188-1909
• Citation: 43 Pa.Super. 221
• Parties: E. T. Fraim Lock Company v. Shimer, Appellant
• Court: Pennsylvania Superior Court

43 Pa.Super. 221

E. T. Fraim Lock Company v. Shimer, Appellant

No. 188-1909

Superior Court of Pennsylvania

July 20, 1910

Argued December 10, 1909 [Syllabus Matter] [Syllabus Matter] [Syllabus Matter] [Syllabus Matter] [Syllabus Matter] [Syllabus Matter] [Syllabus Matter] [Syllabus Matter] [Syllabus Matter] [Syllabus Matter] [Syllabus Matter]

Appeal by defendant, from decree of C.P. Northampton Co.-1909, No. 4, on bill in equity in case of E. T. Fraim Lock Company v. Milton J. Shimer, trading as William Shimer & Company.

Bill in equity for an injunction.

Scott, P. J., filed the following opinion:

The plaintiff corporation claims property in a trade-mark by prior adoption against the defendant and by registration on November 6, 1907, in the office of the secretary of the commonwealth, under the provisions of the Act of assembly of June 20, 1901, P. L. 582. Some facts are stated in the answers to requests, separately filed. These are additional.

The design or emblem is the keystone symbol of the commonwealth, slightly raised, over the keyhole which divides it of a small ordinary padlock such as is usually sold in commerce. The lock manufactured by the defendant is similar in size, shape and design, with the same emblem, cast in the same manner. Both are exactly alike in general appearance, but the plaintiff's is a little finer in finish. There are no letters or words of any kind on either.

The plaintiff company and its predecessors, whose rights it owns, have manufactured different patterns of locks in various designs, with the keystone emblem, since 1879. The defendant and his predecessors, in whose firms he has been a member since 1875, have manufactured continuously from that date certain small articles of hardware, such as sadirons, polishing irons, and others specified in the findings, with the same unlettered and otherwise unmarked symbol stamped upon them. They began to manufacture locks in 1887, but without any symbol. The padlocks in question were not made by the plaintiff until 1900, nor by the defendant until January, 1906. Each party was without knowledge of the other's manufacture. In the summer of 1906, the plaintiff's president, who lives at Lancaster, __ Pa. __, learned of goods upon the market similar to its own, but did not ascertain that the defendant, who lives at Freemansburg, in Northampton county, was manufacturing them until 1908. He then caused notice to be served upon the defendant to desist from the alleged infringement. The latter, who thus first obtained knowledge of the plaintiff's goods, stopped the manufacture by advice of counsel, and withdrew his locks from the market. From January, 1906, until August, 1908, the defendant sold 242 2/3 gross of said locks upon which the profit was $ 359.14. The plaintiff's sales of these locks in 1905 were 4,872 dozen; in 1906 they were 4,127 dozen; 830 dozen in 1907; 1,020 dozen in 1908. His profit was twenty-three cents per dozen.

I cannot find that the diminution in plaintiff's sales for 1907-1908 measures the damages which he sustained. In the absence of other conditions by which they would probably be affected, it might perhaps be legally sufficient for the conclusion if the loss were no greater than the profit at his own price would be upon the amount of defendant's sales: Shaw & Co. v. Pilling & Son, 175 Pa. 78. But when we regard the universal business depression of all kinds during that period, and still existing, it is inadmissible. There is no other evidence.

OPINION AND DISCUSSION.

The penalty clause of the act of 1901 was declared to be constitutional in Bergner & Engel Co. v. Koenig, 30 Pa.Super. 618, but otherwise the statute has not been before the appellate court for interpretation. Reference will, however, be made to another case yet unreported, in which its specific terms were not drawn into the controversy.

Upon making and filing certain affidavits by the applicant the secretary of state is authorized to issue a certificate, which " shall in all suits and prosecutions under this act be sufficient proof of the adoption of such label, trade-mark," etc. But it is no more. The secretary is a ministerial, not a judicial officer, and his certificate upon ex parte proofs without hearing could not divest the jurisdiction of the courts to determine the validity of the act of appropriation or the character of the symbol as a lawful trade-mark. One who had already, before the statute was passed, acquired title to or property in a trade name which became a valuable asset, or even afterwards, and before such registration does not forfeit it to some recent business rival who may wish to use it and applies for registry. But the act itself points out a method of retention if a prior owner has omitted the registration, and the courts always for either contestant may upon bill supervise this action. As a trade-mark is property, if the statute was intended to be conclusive and does upon its face effectuate this purpose, it is in contravention of the bill of rights and of the fourteenth amendment to the federal constitution. Recording acts may postpone but do not create titles. An act of assembly which operates retro-spectively to take the property of John Doe and give it to Richard Roe, is prohibited by the fundamental law: Palairet's Appeal, 67 Pa. 479. The statute, however, does not purport to be so intended. The certificate is declared to be proof of adoption only, without reference to time, and prohibits infringement subsequent to registration, until or less the registry is revoked upon proof before the secretary of state that there has been a prior adoption of the mark. In neither particular is his action judicial nor beyond ultimate determination by the courts. But unless the remedy for revocation given by the statute be invoked it is not subject to collateral attack.

The original acts of congress providing for registration were declared to be unconstitutional because they were a regulation of domestic commerce: Trade-mark Cases, 100 U.S. 82. Then followed the Act of March 3, 1881, 7 F. Stat. Ann. 329. This defined registration as prima facie evidence of ownership only and all existing rights were in terms expressly reserved. A bill by the registering party under it may be dismissed because the name registered is not a lawful trade-mark: Elgin Nat. Watch Co. v. Illinois Watch Co., 179 U.S. 665 (21 S.Ct. 270); Leschen & Sons Rope Co. v. Broderick & Bascom Rope Co., 201 U.S. 166 (26 S.Ct. 425). One person may be registered owner, and another the actual owner of the mark: Sarrazin v. Cigar, etc., Co., 93 F. 624, 628. Under this statute an injunction will not issue upon the certificate of registration from the Patent Office. It is not a judicial act: Leschen & Sons Rope Co. v. Broderick & Bascom Rope Co., 123 F. 149 (aff'd 201 U.S. 166). Nor does it give title, if none existed independently: Edison v. Thomas A. Edison, Jr., Chem. Co., 128 F. 1013. But the Pennsylvania act expressly authorizes an injunction and assessment of damages for its violation, upon exhibition of an unrevoked certificate. The act of 1901 was designed for something, and within the limits of constitutional legislation that effect must be given to it.

Now it is clear enough that after the date of the statute the defendant here, before the adoption of any mark of his own, was bound to inquire in the registration office, and would be answerable by constructive notice thereof for infringement of any mark then shown to have been registered. He adopted the mark in January, 1906, but without registration on his own part, as he might have done, and the plaintiff's registry was not made until November 7, 1907. He received actual notice from the plaintiff and his first knowledge of the similar symbol in August, 1908, whereupon he ceased the manufacture and withdrew his locks from the market. Does he under these circumstances, by unintentional violation of the statute, incur its penalties? A chancellor is never easily moved to penalize an innocent party against whom relief is sought.

In Brennan v. Emery-Bird-Thayer Dry-Goods Co., 99 F. 971, it was held under the act of congress, that if there had been innocent infringement, but stopped under actual notice, an injunction bill would not be entertained, because there was no threatened injury. It was said, however, these facts must appear in the pleadings, while in the present case there is in the answer a general denial of the plaintiff's rights, and no assertion or suggestion that the manufacture may not be continued.

The statute is mandatory. " The court in addition to the penalty shall award," etc. It must at least, as in all other such cases, receive a strict construction, and exact compliance be shown with all its terms. " The fine or penalty" is to be inflicted irrespective of the fact that the plaintiff in any case may have suffered no actual damages at all, or be unable to prove they have resulted from the acts of a defendant. If the certificate is to be taken as proof of the plaintiff's adoption of the mark, it does not, therefore, extend beyond the date of registry. If the statute protects the owner of a trade-mark by requiring the world to take notice of the registry, it also protects the alleged infringer of his rights to the extent that he is not bound to inquire beyond the record which he makes for himself. In any event no profits made by defendant would be recoverable, nor damages if they had been established, except from the date of registration to August, 1908. They are expressly limited to unlawful sales made afterwards. The statute is penal in character. The court is to impose a fine of $ 200, forfeit defendant's profits, beside award actual damages. Whether the two last items correctly represent the...