CLAYTON ACT. I. SECTION 2. [See Price control; Price discrimination; Price fixing; Resale prices.] II. SECTION 3. [See Tying or exclusive contracts or leases; Rebates.] III. SECTION 7. 1. Control of competitor's business and elimination of competition through stock control.-A corporation enjoying a monopoly in the manufacture and sale of pig aluminum and aluminum ingot, and also engaged through its subsidiaries in the manufacture and sale of sheet aluminum and products manufactured of aluminum, entered into and carried out an agreement with one of its chief competitors in the manufacture and sale of sheet aluminum, for the formation of a new corporation (the directors of which when formed, it controlled) to take over and operate said competitor's aluminum rolling mill, it to take two-thirds of its outstanding stock. This device successfully aimed at the acquisition of the control of the said rolling mill and its products without direct acquisition of stock in said competing corporation and equivalent thereto in effect, and a device which— (a) Eliminated actual competition between it and its competitor in the manufacture and sale of sheet aluminum and aluminum cooking utensils; (b) Prevented the new company from becoming its competitor in the manufacture and sale of sheet aluminum; (c) Gave it complete monopoly in the production of certain much used and important sizes of sheet aluminum manufactured in the United States and tended to give it complete monopoly of all the sizes of sheet aluminum manufactured in the United States; and (d) Was followed by the disappearance of a market in the United States for the sale of ingot or pig aluminum to aluminum rolling mills; held that the acquisition and continued ownership of such stock, under the circumstances set forth, constituted a violation of section 7 of the Clayton Act. (Aluminum Co. of America, 3 F. T. C. 302.) COMBINATION IN VIOLATION OF SECTION 7. Acquisition by a fishing company of the stock of 25 wholesale fish corporations and thereafter conducting the business so that competition between them ceased, held to be a violation of section 7, Clayton Act, and a combination that should be dissolved. (U. S. v. New England Fish Exchange, 258 Fed. 732.) Acquisition by a fishing company of the stock of 8 wholesale fresh-fish corporations and eliminating competition between them, held to be in violation of section 7 of the Clayton Act, and a com bination that should be dissolved. (U. S. v. New England Fish Exchange, 258 Fed. 732.) CASE NOT WITHIN THE PROVISIONS. A New Jersey corporation owned a controlling interest in the stock of an Ohio corporation engaged in the manufacture of tools, etc., and sold the product of the Ohio company, which was in fact its subsidiary. In delivering the opinion in this case Judge Sater said: "Nor does the ownership by the plaintiff of a majority of the defendant company's stock substantially or otherwise lessen competition between them (if they can at all be said to compete), or restrain commerce, or create a monopoly in any line thereof. SECTION 7 ASSUMED NOT INTENDED TO BE See Hyams v. Calumet & Hecla Mining Co., 221 Fed. 529, 537. COERCION. [See also Boycott; Conspiracy; Cutting off supplies; Intimidation; Tying or exclusive contracts or leases.] 1. License agreement requiring users of competing machines to use licensor's supplies exclusively.-Exacting, signing, and entering into "license agreements" with owners and users of competing tapemoistening machines, whereby such owners were permitted to continue the use thereof only upon the condition that they purchase their supply of gummed sealing tape exclusively from the "licensor," the owner of a patented gummed-tape moistening machine, held, under the circumstances set forth, to constitute an unfair method of competition. (National Binding Machine Co., 1 F. T. C. 44.) 2. Threats to cut off supplies.-Inducing, on the part of a corporation engaged in the business of exhibiting, leasing, licensing, booking, and dealing in moving-picture films generally, independent exhibitors to book through it by means of threats that unless they did so, their supply of films would be cut off, held, under the circumstances set forth, to constitute an unfair method of competition. (Stanley Booking Corporation, 1 F. T. C. 212.) fining Co., 433 (234 Fed. 964).-Decrees and Judgments in Federal Anti Trust Cases. Threatening customers of competitors | et al., 359; U. S. v. Corn Products Rethat they would start a competing business unless said competitors' customers patronized those making the threat has been condemned by decree in the following cases: U. S. v. Central West Pub. Co. (See also Rice v. Standard Oil Co., 135 Fed. 464.) COMBINATION ORDERS. [See Advertising falsely and misleadingly; misrepresentation.] COMBINATIONS. [See Conspiracy.] COMMERCIAL BRIBERY. [See Bribery and Subsidizing business.] COMMISSIONS-SECRET. [See Bribery and Subsidizing business.] CONFIDENTIAL INFORMATION-BETRAYAL OF. [See Trade secrets.] CONFUSION. See also Appropriation; Misbranding; Passing off; Simulation; Unfair competition. USING OR SIMULATING COMPETITOR'S FIRM NAME. 1. Using same firm name as competitor.-An Illinois corporation located at Chicago had engaged for some years in the manufacture and sale of electric appliances, and widely advertised its products throughout the country with the result that its corporate name had become well known to the general public; a Kansas corporation of identical name located at Burlington, Kans., engaged in the manufacture of such electric appliances belts, insoles, and other similar devises, failed, in using its name in advertisements, pamphlets, booklets, etc., and on certain of its appliances, to indicate also the place of manufacture, with the result that in some instances the general public was misled into believing said corporation to be the Illinois 'concern, held, that such conduct, under the circumstances set forth, constituted an unfair method of competition. (The Electric Appliance Co. of Burlington, Kans., 2 F. T. C. 335.) 2. Same. The adoption by another, subsequently engaging in a similar business, of a name already in use by a corporation engaged in the manufacture of gum paper known as "sealing tape," with resulting confusion in mails and remittances, held to constitute an unfair method of competition. (H. Norwood Ewing, doing business under the firm name of Liberty Paper Co., 3 F. T. C. 13.) 3. Simulation of firm name of competitor.-A partnership engaged in the business of cementing and sewing together used secondhand tires adopted the name "Goodwear Tire & Tube Co." as a trade name, with full knowledge of the fact that the Goodyear Tire & Rubber Co. was then and had been for a number of years engaged in the business of manufacturing and selling new automobile tires and tubes and had by means of extensive advertising familiarized the public with its name and the quality of its products; the effect of the adoption by said partnership of a similar name being to cause confusion on the part of the purchasing public, held that such course of conduct constituted an unfair method of competition. (Sophia Cohn, Samuel Chazanoff, and B. Counselbaum, copartners doing business under the firm name and style of The Goodwear Tire & Tube Co., 2 F. T. C. 216.) 4. Same. A firm dealing in automobile supplies, parts, and accessories knowingly adopted and used a firm name (Auto Surplus Stock Co.) so similar to one already in use by a competitor (Surplus Auto Supply Co.) that it resulted in confusion on the part of customers and the public as to the identity of the respective firms, held that the adoption and use of a similar firm name constituted an unfair method of competition. (Genevieve Symonds, sole trader under the name and style, Auto Surplus Stock Co., 1 F. T. C. 424.) 5. Same. A corporation engaged for years in the manufacture and sale of storage batteries for automobile ignition and lighting purposes, first as "The Universal Storage Battery Co." and afterwards as "The Universal Battery Co." acquired an extensive good will in the use of the word "universal" as applied to such storage. batteries; thereafter two competitors, representing chiefly the same interests, adopted the names, respectively, of "Universal Battery Service Co." and "Universal Battery Service Co. (Inc.)," with the result that the public was misled into the belief that their batteries were those of the older corporation; held that such simulation of name constituted unfair methods of competition. (James S. Schafer, trading under the name and style of The Universal Battery Service Co. and Universal Battery Service Co. (Inc.), 2 F. T. C. 95.) 6. Same. The subsequent adoption by another engaged in a similar business of the name "Franklin Knitting Mills," when the name "Franklin Knitting Mills, of New York," was already in use by a competitor, with the tendency and effect of misleading and deceiving the purchasing public, held to constitute under the circumstances set forth an unfair method of competition. (Adolph Broddie and Louis Braude, doing business as Franklin Knitting Mills, 3 F. T. C. 144.) SIMULATION OF FIRM NAME WITH RE SULTANT CONFUSION, UNFAIR. Complainant had for many years made and sold oils and lubricants under the name "Keystone Lubricating Company," using the symbol of the keystone in an arch as a trademark, thereby causing its products to be widely known by the name "Keystone." Defendants began to put upon the market inferior oils, using a similar keystone symbol, together with the trade name "Keystone Oil Company," with the result of misleading purchasers, held that even if "keystone" was held to be taken as a geographical term, unfair competition was shown. (Buzby v. Davis, 150 Fed. 275.) Where complainant had adopted the trade name "Keystone Lubricating Com pany" and the symbol of a keystone of an arch as its trade-mark, the word "keystone" being used in connection with its products, it was held that the use of the word "keystone" by the defendant in its corporate name, "Keystone Oil & Manufacturing Company," misled the public, resulted in confusion, and should be enjoined. (Bużby v. Keystone Oil & Manufacturing Co., 206 Fed. 136.) The decree in the foregoing case was reversed on appeal with orders for an injunctional decree. The court said: "The testimony, however, clearly discloses three instances of deceptive representations or conduct on the part of agents of the appellant, whereby the appellant's goods appear to have been palmed off on purchasers as the appellee's 'Keystone grease,' and in view of such evidence we are of the opinion that cause appears for relief against such impositions, by requiring the appellant to inscribe upon each of its packages of lubricant offered for sale a notation, in effect, that the product is not that of 'Keystone Lubricating Company' of Philadelphia.” (Keystone Oil Mfg. Co. v. Buzby, 219 Fed. 473.) PRACTICE DESIGNED TO CONFUSE-PARTICULAR CASES. Where complainant had long manufactured stoves and ranges with white enamel lining on the inside of the doors, which feature distinguished these stoves to the eye from all others, and they were often called "white enamel stoves, it was held that the defendant had no right to use similar white lining for the inside of the doors of his stoves with intent to lead the public to suppose his goods to be those of complainant." (Syllabus.) (Bucks Stove & Range Co. v. Kiechle, 76 Fed. 758.) Defendant, whose name became so identified with his goods as to give it a secondary meaning, conveyed his business, together with boxes, labels, and good Iwill and the use of his name to another, said name being a prominent feature of the advertising on packages in which goods were sold. He afterwards organized a new company to sell and did sell the same line of goods in packages marked with the statement that none were genuine without his full signature. The court held that while he "did not by his conveyance deprive himself of the right to use his name in the business of the new company, he was not entitled to use the name 'Guth' on the packages or labels of its goods either alone or in connection with other words." (Guth Chocolate Co. v. Guth, 215 Fed. 750; affirmed in 224 Fed. 932.) It is an infraction of the right of another to use a device or symbol which by its resemblance to a device or symbol that has become the established trade-mark of that other is liable to deceive the public and lead to the use of an article manufactured by the latter, believing it to be that of the former. (Van Zile v. Nomb Mfg. Co., 228 Fed. 829.) "A corporation has not the right to use the name of one of its incorporators for the purpose of unfair competition with an older dealer, where it is likely to do him injury, and it will not be permitted to use that name if it is the name by which the older article is usually called or described." (Syllabus.) (J. & P. Coats (Ltd.) v. John Coates Thread Co., 135 Fed. 177.) RIGHT TO USE OWN NAME. "Whatever confusion to the public and injury to complainants results from a lawful use by defendants of their own name in open, fair, and legitimate competition must be suffered; defendants only being responsible for the abuse of their right and for any unlawful use of the name and acts of unfair competition. "A surname is not the subject matter of a valid technical trade-mark, since it can not be a clear distinguishing mark on goods, but by appropriation and actual exclusive use it may, in the course of time, come to denote the product of a particular person, factory, or business, and acquire a secondary signification which, when established, may be the subject matter of an exclusive right. "Ordinarily, when a proper name has acquired a secondary signification which is entitled to protection as a trade name, the relative rights of the parties may be adjusted by compelling those who may use the name in its primary sense to |