Theodore Rectanus Co. v. United Drug Co.

• Decision Date: 20 July 1915
• Docket Number: 2551.
• Parties: THEODORE RECTANUS CO. v. UNITED DRUG CO.
• Court: U.S. Court of Appeals — Sixth Circuit

226 F. 545

THEODORE RECTANUS CO. v. UNITED DRUG CO.

No. 2551.

United States Court of Appeals, Sixth Circuit.

July 20, 1915

On Petition for Rehearing, November 2, 1915. [Copyrighted Material Omitted]

About 1877, Mrs. Regis, living in Haverhill, Mass., compounded a medicine which she considered useful for dyspepsia and some other disorders, and as a distinguishing name therefor she devised or adopted the word 'Rex.' She used this word in window signs, and marked it upon the boxes and packages put on the market, and it is not to be doubted that the word became her trade-mark. Under the name of 'E. M. Regis &amp Co.,' she continued the business, although in rather a small way. In 1898 she registered the word as a trade-mark under the laws of Massachusetts, and in 1900 procured registration in the United States Patent Office. In 1904 her exclusive right to the mark was adjudicated, by the Supreme Judicial Court of Massachusetts, in a suit which she had brought against the United Drug Company, a Massachusetts corporation, which was managing a chain of drug stores throughout the country known as the 'Rexall Stores' and selling 'Rexall' remedies. Regis v Jaynes, 185 Mass. 458, 70 N.E. 480. She also established her priority in the mark as against the United Drug Company in a contested proceeding in the United States Patent Office. Thereupon the United Drug Company purchased and has since carried on her business, and purchased also in that connection the right to the trade-mark. In 1912 the United Drug Company filed in the court below its bill of complaint against the Rectanus Company of Louisville, and some of its officers, all citizens of Kentucky, alleging infringement of this trade-mark by the sale at Louisville of a medicine advertised and marked as the 'Rex Blood Purifier.' On final hearing, a decree was rendered for the United Drug Company, and the Rectanus Company appeals.

C. B. Blakey, of Louisville, Ky., for appellant.

L. A. Janney, of Boston, Mass., and Alexis C. Angell, of Detroit, Mich., for appellee.

Before KNAPPEN and DENISON, Circuit Judges, and SATER, District Judge.

DENISON Circuit Judge (after stating the facts as above).

1. It is not denied that, in the Massachusetts litigation against Jaynes and the United Drug Co., Mrs. Regis' claim to the trade-mark was earnestly contested and that every available defense was presented. The opinion of the Supreme Judicial Court of Massachusetts and the testimony in the present record alike impel us to the conclusion that her claim of prior right is thoroughly established, and that before 1880 she had so adopted and so used the word that her title thereto as a trade-mark-- and with all the incidents of a common-law trade-mark-- was perfected.

The difficulties in this case arise from the fact that Theodore Rectanus, the business predecessor of the defendant corporation, undoubtedly adopted and used the same word as a trade-mark upon a medicinal compound. He began this use about 1883, and it is safe to say that, as early as 1885, he had used the mark so considerably in Louisville that-- save for Mrs. Regis' prior adoption-- it clearly would have become his rightfully exclusive trade-mark. This adoption by Rectanus was in good faith, and its use was continued without intermission by him and his corporate successor, and without challenge of any kind from any one, from before 1885 until 1912-- a period of at least 27 years. The real problem in this case is how these conflicting rights and their dependent equities shall be respectively treated.

2. The defendant contends that there is no infringement, because the Regis article has always been put up in pill or tablet form, and was originally, and until after the Rectanus rights had been initiated, labeled and advertised only as a dyspepsia cure, while the Rectanus article has always been put up in bottles and liquid form and called a blood purifier. To this contention the plaintiff replies that, both articles being intended to have medicinal effect through the stomach and digestive organs, with similar ultimate result, they are 'of the same descriptive properties,' and that, therefore, a trade-mark, valid for one, must extend to the other. In view of the result otherwise reached, it becomes unnecessary to pass upon these contentions, and for the purposes of this opinion we assume that such infringement exists as requires us to consider the further questions.

3. The validity of the trade-mark is attacked, because it is said that the article is useless or harmful, and that putting it on the market as a remedy is fraudulent. The proofs do not sustain this contention. It has as its basis an element which was once commonly prescribed for some digestive troubles, and which is still prescribed by some physicians. The expert witnesses agree that it may do some good along the line of its advertised benefits, and there seems to be no substantial reason to think that it will be injurious, unless it is taken in too great quantities. If the fact that an excessive amount is harmful were to condemn an article as fraudulent, many useful remedies would suffer.

4. The District Judge thus clearly stated the final difficulty:

'In our broadly extended country, the separate and independent use of these two trade-marks ran along contemporaneously in widely separated localities, without either of the parties most interested knowing what the other was doing, until comparatively a few months before this action was brought. The judgment in this case, we think, must necessarily work a hardship upon one or the other of the parties, and possibly upon both.'

The demand of the Drug Company for an injunction against Rectanus rests upon the proposition that a trade-mark right once acquired is exclusive, and extends at least throughout all places subject to the laws of the United States. This is a proposition often expressed in one form or another and formulated in the text-books. Hopkins on Trademarks, Secs. 10, 13. District Judge Baker, in Church v. Russ (C.C.) 99 F. 276, 279, said:

'It is commonly said that there is a right of property in a technical trade-mark, and an infringement is spoken of as a violation of a property right. Whether this view be correct or not is quite immaterial, because it is universally agreed that some of the rights which are incident to property do inhere in a technical trade-mark.'

In Lawrence v. Tennessee Co., 138 U.S. 537, page 548, 11 Sup.Ct. 396, page 401 (34 L.Ed. 997), the Supreme Court said:

'The jurisdiction to restrain the use of a trade-mark rests upon the ground of the plaintiff's property in it, and of the defendant's unlawful use thereof.'

Based upon this theory of a property or equivalent right perfected by adoption, or by adoption and use, it may follow logically enough that a later appropriator is a trespasser, and should be suppressed, even though, at the time of the later appropriation, the prior claimant of the mark had not extended his trade into the defendant's territory. That there had been no actual conflict of trade, and so no present injury, is not of itself a sufficient answer to the claimant's demand, because by defendant's conduct there is a threat or certainty of future injury to the naturally increasing trade and custom of the plaintiff. There can be no fixed standard of this normal expansion, and we are not called upon to declare any standard for other cases. It is clear that there may be instances where the plaintiff's delay to carry his trade into a particular territory has been so inconsistent with the ordinary conduct of business as to amount practically to an abandonment or disclaimer of that territory; and if in such case it has come about that with the express or implied knowledge of plaintiff another has occupied the territory in ignorance of any claim of prior right, and so has been misled into a large expenditure in building up a business, we have not merely that laches which make a court hesitate to enforce the prior right, but that estoppel which forbids such enforcement. Even at law, the statutes of adverse possession recognize that plaintiff, with good title to an estate, may lose the right to recover that part of it which he permits an adverse claimant to occupy for too long a time; and there are many familiar instances where courts of equity are moved by the principles of laches or of estoppel to deny specific relief to one whose general or original title is broadly good.

We must classify this case as one of those to which we have just referred. Conceding to Mrs. Regis and her successor the broad or the prima facie original exclusive right to the mark, and conceding, without deciding, that no particular standard of diligence should be enforced against them in the matter of expanding their trade over the country, we find much more than lack of diligence; we find complete indifference. If we take the year 1900 for comparison, we see that, for more than 15 years, Rectanus had been using the mark in his own trade, had expended probably several thousand dollars in making the mark well known, and had established a considerable, although local, business in Louisville and vicinity. His excursions outside of that local field are too inconsiderable to have importance. Although an active druggist, familiar with the literature of the trade, he had never heard of Mrs. Regis' remedy or of her trade-mark. On the other hand, during more than 20 years after the adoption of the mark, Regis & Co. had then done nothing whatever to make it known outside of the New England states, save sporadic sales in territory practically adjacent to those states. So far as Kentucky was concerned, they sent no salesmen there and did no advertising whatever intended to reach that territory. The...