Wolf Bros. & Co. v. Hamilton-Brown Shoe Co., 3,758.

• Court: United States Courts of Appeals. United States Court of Appeals (8th Circuit)
• Citation: 206 F. 611
• Decision Date: 20 May 1913
• Parties: WOLF BROS. & CO. v. HAMILTON-BROWN SHOE CO. [1]
• Docket Number: 3,758.

206 F. 611

WOLF BROS. & CO.
v.
HAMILTON-BROWN SHOE CO. ^[1]

No. 3,758.

United States Court of Appeals, Eighth Circuit.

May 20, 1913

[206 F. 612]

Simeon M. Johnson and Lawrence Maxwell, both of Cincinnati, Ohio (Percy Werner, of St. Louis, Mo., on the brief), for appellant.

H. S. Priest, Paul Bakewell, and Luke E. Hart, all of St. Louis, Mo., for appellee.

Before HOOK and SMITH, Circuit Judges, and VAN VALKENBURGH, District judge.

VAN VALKENBURGH, District Judge.

Appellant Wolf Bros. & Co., complainant below, is a corporation engaged in the manufacture of women's shoes at Cincinnati, Ohio. Appellee is a corporation and a large manufacturer and jobber of shoes at St. Louis, Mo. Appellant and its predecessors manufactured and sold a woman's shoe which it called 'The American Girl.' This name was registered as a trade-mark. Some years later the appellee adopted and registered as a trade-mark the term 'American Lady,' and manufactured, advertised, and sold women's shoes under that name. January 29, 1906, appellant filed its bill charging the appellee with infringing its said [206 F. 613] trade-mark 'The American Girl,' and with unfair trade by the use of the name 'American Lady,' together with certain catch-phrases and numerals theretofore adopted and used by appellant, and praying an injunction and accounting. Proofs were taken, and upon the hearing the Circuit Court dismissed appellant's bill, and the case was brought to this court on appeal.

Upon consideration thereof this court held that the term 'The American Girl' was not the subject of valid trade-mark, but that the record did disclose conduct on the part of appellee amounting to unfair competition in trade. Accordingly the decree was reversed, with directions to the Circuit Court to enter a decree 'enjoining the defendant from using the name 'American Lady,' as applied to its shoes for women, when not accompanied with other matter clearly indicating that such shoes are of its own manufacture, and therefore not of complainant's, and from using in connection with such name, as applied to its shoes for women, the numerals mentioned or the catch-phrase 'With the character of the woman,' or any other phrase in simulation of the phrase 'A shoe as good as its name"'; also granting an accounting, which was limited to the time since the commencement of the suit. The opinion of this court is found in 165 F. 413, 91 C.C.A. 363. The facts upon which it was based are stated therein, and will not be unnecessarily repeated here.

Pursuant to the direction of this court, the Circuit Court on November 15, 1909, entered the following decree:

'The defendant, Hamilton-Brown Shoe Company, its servants agents, officers, and employes, are perpetually enjoined from using the name 'The American Lady,' as applied to its shoes for women, when not accompanied with other matter clearly indicating that such shoes are of its own manufacture, and therefore not of the manufacture of the plaintiff, Wolf Bros. & Co., and from using in connection with such name, as applied to its shoes for women, the numerals 403, 404, 407, 408, or 397, or the catch-phrase 'With the character of the woman' or any other phrase in simulation of the phrase 'A shoe as good as its name.' The costs up to and including the entry of this decree are adjudged against the defendant, and execution therefor is awarded. This case is referred to H H. Denison, Esq., as master, upon the evidence already taken in this case, and the exhibits in evidence in this case, and such further evidence as may be offered before the master by the parties to this action, to ascertain and report the damages, since the commencement of this suit which the plaintiff has suffered, and the profits, since the commencement of this suit, for which the defendant may be liable, said accounting of damages and profits to be limited to shoes sold by the defendant since the filing of the bill in this case, and which were marked with the name 'The American Lady,' and not accompanied with any other matter clearly indicating that such shoes were of the manufacture of the Hamilton-Brown Shoe Company.'

Extended proofs were taken before the master. In his report he finds that during the period to which the accounting was limited appellee sold American Lady shoes, which, because of differences in marking, are divided into three classes:

Class 1. 974,016 pairs of shoes which bore no impression or distinguishing mark, except the words 'American Lady' stamped upon the sole with a metal die. The profits upon these were found to be $254,401.72. [206 F. 614]

Class 2. 961,607 pairs of shoes marked as follows: The words 'Hamilton-Brown Shoe Company' in belt form, with the words 'American Lady' in the center, stamped upon the sole of each shoe, and in the top facing no mark, except, perhaps, in some cases, the name of a retail dealer in the facing of one shoe. The profits upon these to appellee were found to be $190,909.83.

Class 3. 593,872 pairs of shoes marked as follows: Upon the sole the same stamping as in class 2, and in the top facing of one shoe the name 'American Lady' and the words 'Hamilton-Brown Shoe Company' in belt form surrounding the word 'Makers.' The profits upon these to appellee were found to be $132,740.77.

The master recommended that a judgment be entered in favor of appellant in the sum of the profits accruing from the first two classes, aggregating $445,311.55. For the profits accruing from the third class he held that appellant was not entitled to recover under the opinion of this court and the decree entered in accordance therewith. Both parties filed numerous exceptions. Upon hearing below the court overruled complainant's exceptions, sustained defendant's exceptions, adjudged a recovery of $1 nominal damages against defendant, and taxed the costs against complainant.

The contentions of appellant are: First, that a decree should have been rendered in its favor upon the first two classes of shoes sold, as recommended by the master; second, that that decree should have included the profits upon the third class of American Lady shoes sold, which was denied by the master; third, that the master erred in allowing too large credits to the expense of producing and selling the American Lady shoes, whereby appellee's net profits were improperly diminished.

Defendant, appellee, contends: First, that four elements must be made manifest in appellant's case before it can be entitled to recover, a failure of proof in any one of which constituent grounds must result in a failure in judgment: (a) A design to defraud; (b) the adoption of means reasonably calculated to make the design effective; (c) that the design and means were effective; (d) reasonably certain injury to complainant-- material damage. Second, that a different rule in the assessment of damages prevails in cases of unfair competition from that obtaining in those involving strict trade-mark; that in the latter a property right is taken, and the infringer must respond for the profits upon, all goods sold through an unauthorized use of the mark; that in the former it must be shown that actual damages have accrued from loss of profits diverted. Third, that in this case the name 'American Lady,' as applied to the shoes sold, was actually accompanied with other matter clearly indicating that such shoes were of defendant's own manufacture, and therefore not of complainant's. Fourth, that the master adopted an erroneous method of computing the items of expense for which appellee should have received credit in the manufacture and sale of American Lady shoes, whereby the net profits arrived at were unduly increased. These contentions will be considered in their order. [206 F. 615]

1. With respect to elements 'a' and 'b,' this court, in directing an accounting on the former appeal, found that there was a design to defraud and that the means adopted were reasonably calculated to make that design effective. It found that appellant was first in the field with the words 'The American Girl' adopted as a trade-name to designate its shoes; that in connection with this name it used the catch-phrase, 'A shoe as good as its name,' and in its catalogue certain numerals to designate different styles of such shoes; that thereafter the appellee adopted the trade-name 'American Lady' and the catch-phrases, 'The shoe deserves its name,' and 'With the character of the woman,' as also the identical numerals used by appellant; that later appellant adopted an additional numeral, 397, and directly thereafter appellee went back and adopted the same numeral. The court further found that the words 'The American Girl' and 'American Lady' are so similar as to cause confusion, and that such confusion had resulted; that all this was done by appellee with knowledge that it was following appellant, and that such acts were not consistent with innocence and good faith; further, that appellee acted with notice and knowledge of the infringement through correspondence; hence an injunction and accounting was granted as heretofore stated. This court at that time had before it evidence showing that the name 'American Lady' was adopted by the appellee at an assembly of its traveling salesmen and resulted from suggestions made by them. These salesmen came from the same territory in which appellant's shoes were most largely sold. The original suggestion came from a salesman who traveled in Texas; another Texas salesman and one from Arkansas were also present. It was disclosed in the testimony that the largest sale of The American Girl shoes was among the negroes and illiterate whites in the South; also that in this very territory actual confusion, which worked greatly to the disadvantage of appellant, existed among purchasers. The adjudication made was upon the merits, and should be reopened, if at all, only upon convincing evidence that the original...