2. Same.-Threatening, on the part of a corporation engaged in the manufacture and sale of invert sugar sirup, to institute suits against competitors and customers of competitors for alleged infringement of the processes claimed in letters patent held by it, such threats not being made in good faith, intending to bring such suits, but for the purpose of injuring such competitors and of intimidating them, their agents, customers, and prospective customers, held to constitute an unfair method of competition. (Nulomoline Co., 1 F. T. C. 400.) 3. Against customers of competitors.—Endeavoring to coerce, on the part of a manufacturer of gummed-tape-moistening machines, also dealing in gummed sealing tape for use in such machines, competitors' customers into ceasing to purchase gummed sealing tape from them and into purchasing the same exclusively from the maker of such threats, by threatening to institute and prosecute against. them suits for the infringement of certain patents claimed to be owned by it, such threats not being made in good faith with intent to sue, but for the purpose of injuring competitors by intimidating, coercing, and driving away their competitors, held to constitute unfair methods of competition. (National Binding Machine Co., 1 F. T. C. 44.) 4. Same. Interfering with a competitor's customers, on the part of a manufacturer of devices used by printers to produce ruled lines for tabulation, by threatening to sue them for infringement of certain patents claimed to be owned by it, such threats not being in good faith for the purpose of protecting the manufacturer's rights under said patents, held to constitute an unfair method of competition. (Chicago Linotabler Co., 1 F. T. C. 110.) 5. Same. An agent of a corporation engaged in the manufacture and sale of portable conveying machinery represented to customers and prospective customers of the corporation's competitors, without such corporation's knowledge, that the corporation would or was about to institute legal proceedings for infringement of its letters patent by portable conveying machinery manufactured and sold by competitor, held to constitute an unfair method of competition. (Brown Portable Conveying Machinery Co., 2 F. T. C. 143.) 6. Against a prospective competitor.-A corporation engaged in the manufacture and sale of invert sugar sirup notified a prospective competitor that was contemplating the manufacture of invert sugar commercially that if it did so an action would be brought against it, such threats being so vague and indistinct as not to disclose whose alleged rights would be invaded, with the result that such prospective competitor abandoned his preparations and plans to engage in the manufacture of invert sugar, held to constitute an unfair method of competition. (Nulo moline Co., 1 F. T. C. 400.) THREATS OF INFRINGEMENT SUIT NOT MADE IN GOOD FAITH BRINGS ONE WITHIN THE LAW OF UNFAIR COMPETITION. A court of equity has jurisdiction to restrain an attempted intimidation by one issuing circulars threatening to bring suits for infringements against persons dealing in the competitor's patented article, the bill charging, and the proofs showing, that the charges of infringement were not made in good faith, but with malicious intent to injure complainant's business. (Emack v. Kane et al., 34 Fed. 46.) In a case where the complainant and defendant were competing manufacturers of individual cigar pouches made of paper, in sheets, and were the only manufacturers of the same in the United States, and where both manufactured under patents, and the defendant for more than five years, through its salesmen, continuously represented to purchasers of such articles that the complainant was infringing its patents and threatened suits against users of complainant's product, causing customers to refuse to give him orders and also to cancel orders, resulting in serious injury to his trade, the court, in delivering its opinion, said: "Undoubtedly one claiming that his patent is being infringed should take steps to advise the public of his rights as provided by statute; provided, however, that it is made to appear that under pretence of so doing he is pursuing a course which is calculated to unnecessarily injure another's business, and with the plain intention of so doing, his conduct will be deemed malicious, and he brings himself within the rule of law obtaining in cases of unfair competition in trade." (Racine Paper Goods Co. v. Dittgen, 171 Fed. 631.) "A defendant who, after claiming that complainant was manufacturing articles infringing its patent, and being requested to bring suit to determine the question, instead of doing so, persistently and for nearly two years continued to send threatening letters and circulars to complainant's customers and persons who might become customers, but without bringing suit against any, is chargeable with bad faith and unfair business methods, which entitle complainant to an injunction." (Syllabus.) (Electric Renovator Mfg. Co. v. Vacuum Cleaner Co. et al., 189 Fed. 754 and 1023.) "While the owner of a patent may lawfully warn others against infringement, and, by means of circulars or letters distributed among agents and customers of a manufacturer of goods claimed to infringe, give notice of his rights, as he understands them, and of his intention to enforce them by suits, when done in good faith, the sending of such notices and circulars in bad faith, and without any intention of bringing the suits therein threatened, but solely for the purpose of destroying the business of such manufacturer, constitutes a fraudulent invasion of property rights, against which the party injured is entitled to relief in equity by injunc tion." (Syllabus.) (A. B. Farquhar Co. v. National Harrow Co., 102 Fed. 714.) (See also Adriance, Platt & Co. v. National Harrow Co. et al., 121 Fed. 827; Atlas Underwear Co. v. Cooper Underwear Co., 210 Fed. 347.) In a case where the owner of an unadjudicated patent had brought suit against a rival manufacturer to enjoin infringements of such patent and to recover profits and damages on account of the manufacture and sale, etc., the court said: "Other suits may be brought against vendees or users, if that be done in good faith, for the sole purpose of protecting the rights of the complainant. But if, before any adjudication, the patentee shall bring a multiplicity of suits for the purpose of harassing and annoying a rival manufacturer, for the purpose of subjecting him to burdensome expense, and to destroy his business by exciting terror among his customers, it would seem that there must reside somewhere the power to intervene and protect the defendant against such a crusade until the validity of the patents already challenged may be established in the courts. Instances are not wanting where patentees make illicit use of the courts as instrumentalities of oppression; bring a mul tiplicity of suits, purposely scattered through the circuits, not for the honest purpose of securing an adjudication in support of the patent, but to crush a rival manufacturer by creating a stampede among his customers, alarming them by circulars breathing threats of prosecution, denouncing the product of the rival concern as an infringing device, at the same time taking no step to bring any of the numerous suits to final hearing." (Commercial Acetylene Co. v. Avery Portable Co., 152 Fed. 645.) The circulation with intent to destroy the business of another of "false, injurious, malicious, scandalous, threatening, and intimidating statements," in advance of the adjudication of a suit brought for the alleged infringement of patent, entitles complainant to equitable relief if the facts are sustained. (Lewin et al. v. Welsbach Light Co. et al., 81 Fed. 904.) (See also Welsbach Light Co. v. American Lamp Co., 99 Fed. 501.) The intimidation or attempted intimidation of competitors, their customers, or prospective customers of competitors, by threats of suit for patent infringement where such threats are not made in good faith, or where there is no basis for maintaining such suit, and otherwise, has been condemned by decrees issued in the following cases: United States v. National Cash Register Co., 315 (consent decree); United States v. American Thread Co., 450 (consent decree); United States v. Bowser & Co., 587 (consent decree); U. S. v. National Wholesale Jewelers Assn. standing pendency of suits against alleged infringing manufacturers." (Syllabus.) (United Electric Co. v. Creamery Package Mfg. Co. et al., 203 Fed. 53.) "It is within the rights of a complainant, who has commenced suit for infringement of a trade-mark and for unfair competition, to issue circulars to the trade stating such facts and its claimed rights, where such circulars are sent in good faith and the claims made are fairly within the scope of the bill, and their issuance will not be enjoined on petition of the defendant, on mere denials of the allegations of the bill in the advance of a hearing or the taking of any evidence upon the issues of fact joined." (Syllabus.) Warren Featherbone Co. v. Landauer et al., 151 Fed. 130. "Notices of claims of infringement given by the owner of a patent to customers of a manufacturer of a similar article, or even threats of suit, if in good faith, are within its rights and not actionable as facts of unfair competition." (Syllabus.) Clip Bar Mfg. Co. v. Steel Protected Concrete Co., 209 Fed. 74; affirmed 213 Fed. 223. INTENT ΤΟ FAIRLY WARN CUSTOMERS AND NOT TO INTIMIDATE THEM IS THE TEST. An injunction was denied to the defendant in a suit pending for the infringement of a patent, said injunction to restrain complainant from sending circulars to defendant's customers giving notice of the suit and warning them against contributory infringement, where the state ments made in such circulars were true and there was no evidence of bad faith. (Mitchell v. International Tailoring Co., 169 Fed. 145.) et al., 509 (consent decee); U. S. v. Central West Publishing Co. et al. (consent decree); U. S. v. New Departure Mfg. Co., 359 (consent decree) (204 Fed. 107); U. S. v. Keystone Watch Case Co. et al., "One who without unreasonable delay 329 (consent decree) (218 Fed. 502).begins suit against a manufacturer for inDecrees and Judgments in Federal Anti-fringement will not be enjoined, in the trust Cases. absence of any showing of intention not to press the suit, from notifying such manufacturer's customers, in a temperate, courteous form, of his claim of infringement, and that he intends to enforce his rights against users as well as manufacturers." (Syllabus.) (New York Filter Co. v. Schwarzalder et al., 58 Fed. 577.) "Contracts between defendant, a manufacturer of automobile horns under patents owned by it, and trade journals for advertising, authorized defendant to cancel them if advertisements of products which in its judgment infringed its patents were published. In a suit prosecuted by it with reasonable promptness against a third party it obtained a decree sustaining its patents and giving their claims a broad construction. It then notified such journals that the publication of advertisements of the 'following infringing instruments,' naming plaintiff's among others, would subject the contract to cancellation, and a few days thereafter it brought suit against plaintiff for infringement. Held, that there was nothing unfair in the giving of such notice, as plaintiff could not complain of such contract, and, while defendant could not cancel the contract unless it acted in good faith, there was nothing to indicate bad faith, as it is not bad faith for the owner of a patent to wait until the decision in a test case before prosecuting other infringers." (Syllabus.) (H. W. Johns-Manville Co. v. Lovell-McConnell Mfg. Co., 212 Fed. 923.) (See also: Virtue v. Creamery Package Co., 179 Fed. 115, affirmed in 227 U. S. 8; United Electrical Co. v. Creamery Mfg. Co., 203 Fed. 53; U. S. v. Patterson, 205 Fed. 299.) II. THREATS TO WITHDRAW PATRONAGE. [See Boycotting.] 7. Against brokers and manufacturers' agents.-Coercion, persuasion, boycott, and threats of boycott on the part of jobbers, to prevent certain brokers from selling to a competing corporation and to prevent said corporation from purchasing from manufacturers and manufacturers' agents, held, under the circumstances set forth, to constitute unfair methods of competition. (Western Sugar Refinery et al., 2 F. T. C. 151.) 8. Against producers and exchanges.-Inducing, on the part of a corporation engaged in the business of exhibiting, leasing, licensing, booking, and dealing in moving-picture films generally, producers and exchanges to cease supplying competitors with films by means of threats that unless they do so it would withdraw its patronage, held to constitute an unfair method of competition. (Stanley Booking Corporation, 1 F. T. C. 212.) LICENSE AGREEMENTS. [See Tying or exclusive contracts or leases.] METHODS OF DOING BUSINESS. [See Advertising falsely and misleadingly.] MISBRANDING. [See also Adulteration; Advertising falsely and misleadingly; Misrepresentation and I. Nature of goods, 1-6. II. Quality of goods, 7-11. III. Origin of goods, 12-14. passing off.] 1. NATURE OF GOODS. 1. Simulating name of genuine article.-Application, by a manufacturer of a floss or thread containing no genuine silk, of the word "Cilk" to the same and use thereof in labeling, advertising, and selling it, with the result that purchasers were misled into believing the goods composed entirely of silk, and that competitors making genuine silk goods were injured, though no intention of the manufacturer to cause deception was shown, held to constitute an unfair method of competition. (Circle Cilk Co. (Clarence N. Yagle et al.), 1 F. T. C. 13.) 2. Mislabeling imitation goods.-Application, by a manufacturer of a textile product containing no genuine silk, of the words "Silk" or "Silks," "Kapock silk" or "Kapock silks," "Sun-fast silk" and "Tubfast silk" thereto, and use thereof in labeling, advertising, and selling the same, with the result that purchasers were misled into believing the goods made entirely of silk, and competitors making genuine silk goods were injured, although no intention on the part of the manufacturer to cause deception was shown, held, under the circumstances set forth, to constitute an unfair method of competition. (A. Theo. Abbott & Co., 1 F. T. C. 16.) 3. Same.-Application by a concern engaged in the manufacture and sale of a cotton fabric, the trade-mark of which included the word "Sol" but not the word "Satin," the words "Sol satin," without any other descriptive words indicating the nature of the fabric or the raw materials of which it was made, with a tendency thereby to mislead the public into believing that the fabric in question was either made wholly or partly of silk, held, under the circumstances set forth, to constitute an unfair method of competition. (S. M. Hexter & Co., 2 F. T. C. 41.) 4. Same. An individual engaged in the sale of collars composed chiefly of celluloid, with center layer of cotton fabric, adopted and used the terms "spongeable linen" to describe said collars, and advertised, held out, and sold the same as "spongeable linen," held that such labeling, advertising, and sale constituted an unfair method of competition. (E. I. Firks, doing business under the firm name and style of Spongeable Linen Collar Co., 2 F. T. C. 212.) 5. Labeling adulterated goods as pure.-A corporation engaged in the manufacture and sale of knit underwear, in competition with manufacturers and importers of underwear composed wholly of wool, and also with manufacturers and importers of underwear composed partly of cotton, who very carefully branded and labeled their underwear with reference to composition or failed to brand and label the same at all in that respect, branded, labeled, advertised, and sold certain lines of its underwear not composed wholly of wool, but fabric |