William Wrigley, Jr., Co. v. LP Larson, Jr., Co., 488.

• Decision Date: 14 March 1925
• Docket Number: No. 488.,488.
• Citation: 5 F.2d 731
• Parties: WILLIAM WRIGLEY, JR., CO. v. L. P. LARSON, JR., CO.
• Court: U.S. District Court — Northern District of Illinois

5 F.2d 731 (1925)

WILLIAM WRIGLEY, JR., CO. v.L. P. LARSON, JR., CO.

No. 488.

District Court, N. D. Illinois, E. D.

March 14, 1925.

Isaac H. Mayer and Wallace R. Lane, both of Chicago, Ill., for plaintiff.

Charles H. Aldrich, George I. Haight, and Frank F. Reed, all of Chicago, Ill., for defendant.

WILKERSON, District Judge.

This case is now before the court on exceptions to the master's report on an accounting.It has been in the Circuit Court of Appeals twice (253 F. 914, 166 C. C. A. 14;275 F. 535), and the disposition of the questions now presented requires an examination of those proceedings to determine what has been laid down as the law of this case to be here followed.

The parties are corporations.The plaintiff, and defendant to the counterclaim, will be referred to here as Wrigley Company; the defendant, and counterclaimant, will be referred to as Larson Company.In 1911 Wrigley Company brought suit against Larson Company, charging unfair competition and infringement of trade-mark.It alleged that in 1894 it originated the distinguishing name "Spearmint" in connection with chewing gum products, adopted a novel form of trade dress for its spearmint product, and thereafter extensively advertised the name and dress.It charged that Larson Company had placed on the market under the tradename "Peptomint" a product with a flagrant and fraudulent imitation of the spearmint trade dress, and that as a matter of fact the purchasing public made no distinguishment between spearmint and peptomint.The bill was verified, and upon the showing made Wrigley Company obtained a temporary injunction, restraining Larson Company from using the label against which complaint was made, or any similar label.This injunction continued in force until the entry of the final decree dismissing the bill.

While the injunction against peptomint was in force, Larson Company brought out its wintermint package and originated the wrappers and color scheme.Wrigley Company in 1914 put on the market its doublemint package, and on June 15, 1915, brought its second suit against Larson Company, the one out of which this accounting proceeding arises.The bill contains substantially the same averments as the first bill with reference to the adoption and use of the distinguishing name "Spearmint," and sets out the granting of the temporary injunction in that case.It further alleges that about July 1, 1914, Wrigley Company placed upon the market a peppermint flavored chewing gum product, and desiring to distinguish that product by name from all similar flavored chewing gum products then upon the market, adopted and used the trade name or mark of "Doublemint."The bill then states:

"The said defendant first began the sale of its wintermint product subsequent to the time the said doublemint product of your orator came upon the market, and said defendant had never marketed or sold chewing gum in cartons, counter bands, or wrappers in the trade dress of wintermint gum, herein in evidence, prior to the introduction of your orator's doublemint product, and that the said defendant has simulated the style of lettering, peculiar markings, form of carton, form of wrapping, and general color scheme, thereby producing and giving to its style of package, counter band, and wrappers the peculiar visual appearance of both your orator's spearmint and doublemint products, and either of them, and which through long years of usage and great expenditures of money, in advertising, have become the predominating means of designating your orator's well-known spearmint and doublemint products; your orator further averring upon information and belief that a certain number of dealers in chewing gum, both the wholesale jobber and the retail dealer, can be found who have purchased the said packages of chewing gum known as wintermint from the defendant, for the purpose of palming off the defendant's goods upon the public as the goods of your orator, and that these defendants have found, as a matter of fact, that the purchasing public makes no distinguishment between the two packages, and that the wintermint gum product of this defendant can be palmed off on the public and trade generally as either the product spearmint or the product doublemint of your orator."

Larson Company in its answer charged that one Pulver, and not Wrigley Company, was the originator of the spearmint package, that the injunction in the first case was obtained by false testimony, and that Larson Company had been oppressed by Wrigley Company by means of deception willfully and fraudulently practiced upon the court.As to the doublemint package, Larson Company's answer accepted the averment of the bill as to identity, the allegation being as follows:

"This defendant admits that the purchasing public makes no distinguishment between the packages of doublemint as manufactured and sold by complainant, and the wintermint gum product of this defendant, and that the complainant is able to and does palm off upon the public and trade generally its product doublemint as the wintermint of this defendant."

Larson Company charged, however, that wintermint was brought out by it before Wrigley Company had brought out doublemint; that Wrigley Company had brought out doublemint for the purpose of undermining Larson Company's established and growing trade in wintermint; and in its counterclaim sought affirmative relief on that basis.

The cases were consolidated for trial in the District Court.The decrees were against Wrigley Company on both of its bills, and in the second case the decree was likewise against Larson Company on its counterclaim.In the Circuit Court of Appeals the decrees against Wrigley Company were affirmed.Speaking of Wrigley Company's claims, based upon the assertion that it was the originator of the spearmint package, the court said: "Wrigley's oppression of his opponent, and his attempt to deceive the court, were ample grounds for refusing him relief in equity."

As to the doublemint package the Circuit Court of Appeals held that the evidence proved with certainty that wintermint was seven months older than doublemint.Upon the issue of confusion the court pointed out that in support of the counterclaim no proof was made of actual confusion, and that with nothing but the packages before them the court would be inclined to concur in the finding of the District Court.The court then said:

"But the record contains also Wrigley's averment in his bill that confusion had arisen.There was no proof to support that averment and Larson's parallel averment.But Larson's counsel may have relied upon the stipulation of fact in bill and counterclaim to save hunting up and bringing in witnesses of wrongful sales.Furthermore, Wrigley and another interested with him gave testimony as experts in the gum business that confusion was likely to result from the similarities; and so there is a basis for at least the possibility that Wrigley's averment of fact and his expert opinion may be true, and that Larson's diminished sales came from Wrigley's simulation of the `wintermint' package.In such a situation, the rule, in our judgment, is this: In a real and legitimate controversy, a party should be left within the knot of his averments in pleadings and admissions in testimony, unless the court can find an absolute demonstration from other evidence in the case, or from facts within judicial notice, like the laws of physics, etc., that under no circumstances could the averments and admissions be true.This is in analogy to the rule respecting the sustaining of a demurrer to a bill for infringement of a patent on account of the invalidity of the patent on its face."

That portion of the decree dismissing Larson Company's counterclaim, therefore, was reversed, and the case remanded to the District Court, with direction to enter an injunction and order an accounting.Upon the filing of the mandate, an interlocutory decree for injunction and accounting was entered on October 14, 1918.The cause was referred to the master, "to take an account of all the gains and profits of William Wrigley, Jr., Company to it accruing or arising from the manufacture and sale of its doublemint gum in the dress hereinbefore enjoined, from its first sale on July 28, 1914, to the date of the entry of this decree, and such further time, not exceeding 90 days, as may be necessary to comply with this decree, and until compliance therewith."

The decree further provides for the employment of accountants to examine Wrigley Company's books and papers, "to ascertain the profits, if any accruing to said company from the sale of doublemint, as contradistinguished from the other brands of gum made by said company during the period, making proportionate deductions for overhead, advertising, and other proper expenditures."

During the progress of the accounting before the master, Wrigley Company contended that the decree for an accounting extended only to territory in which Larson Company had carried on its trade, or in which it had the ability and intention to extend it.Wrigley Company claimed the right to examine the officers and books of Larson Company in support of this contention, and was sustained by the master.Larson Company finally refused to submit to further examination, and the question was brought before the District Court by certificate, and the ruling of the master was there upheld.From that order of the District Court an appeal was taken to the Circuit Court of Appeals.A petition also was filed in the Circuit Court of Appeals for a writ of mandamus to require the District Court to control the action of the master.

The Circuit Court of Appeals reversed the ruling of the District Court and awarded the writ.275 F. 535.The court said: "Inasmuch as the decree specifically directs the master to take an account of all of Wrigley Company's gains and profits from the manufacture and sale of doublemint gum, and submits no...