2. GOOD WILL A TOPIC OF WIDE SIGNIFICANCE.

Good Will Defined.-The subject of good will may properly be defined so broadly as to include the right of the individual to the patronage flowing out of his enterprise, skill and approved methods in commerce.

Government Offers Monopoly to Induce Disclosure.-Where a person has developed something new, the State, by its patent and copyright laws, offers an inducement for the disclosure of his invention or writing; and grants him exclusive rights therein for a limited number of years, upon condition that his contribution to progress shall become public property at the end of that period. Usually that offer is accepted; and the limited monopolies pertaining to patents and copyrights are conditions which flow from such grants. Sometimes the proffer of the governme.it is ineffectual, and the inventor prefers to keep his own counsels and to put his confidence in the loyalty of his employees or the difficulty of duplicating his discovery; and in those instances his product is made under a secret process. Perhaps the most notable example of this retention of inventor's rights is seen in the manufacture of powdered metal by Sir Henry Bessemer, under a method never disclosed. This reticence is said to be due to a sense of inadequacy of reward from patents involving disclosures of discoveries connected with the manufacture of steel; and thus society is in danger of losing the benefit which would ultimately follow if the secret were divulged in exchange for conventional patent-rights.

Attacks on Originator's Rights Considered.-Good will in business, as we have seen, is protected by grants in various forms, in conformity to the rights of the individual applicant; and while the subject is not necessarily confined to traders' rights which are recognized and confirmed by statutes, our attention will be directed mostly to such rights and to the efforts to destroy or impair the patronage and profits resulting therefrom

3. UNFAIR TRADE METHODS.

Unfair Trading Includes Unfair Copying.-The genesis of the term "unfair methods of competition in commerce," contained in Section 5 of the Federal Trade Commission Act, and Section II of the Clayton Law, is found in the desire to unduly benefit by

the labor of others,-a desire not limited to any period or clime. The term "unfair trading," or "unfair competition," is recognized in Great Britain under the words, "passing off"; in France the language is "concurrence deloyale"; while in Germany the term employed is, "unlauter Wettbewerb." It was a known practice in the Middle Ages, and we find a decree of the council of Nuremberg in the year 1512, providing:

"Whereas, a certain foreigner, who sells engravings under the council chamber, has, among others, certain ones bearing the signatures of Albrecht Dürer, therefore, it is ordered that he shall obliterate all such signatures, and keep no more such engravings in future, and if he shall neglect so to do, he shall be brought before the council of fraud."

Ancient Penalty Severe.-As early as the thirteenth century, copying of trade-marks was made a felony in France and elsewhere; and during that period the Elector Palatine hanged innkeepers who sold spurious wines labelled Rudesheimer.

Law of Infringement a Slow Development.-In England the courts were slow to recognize private rights in trade names and trade-marks. Lord Hardwicke in 1742, refused to enjoin a trader from using a mark previously appropriated by another trader, and it was not until a century later, in 1842, that Lord Langdale laid down the correct rule in a suit to restrain the use of an imitative label. He said:

"I think the principle on which the courts both of law and of equity proceed, in granting relief and protection in cases of this sort, is very well understood. A man is not to sell his own goods under the pretence that they are the goods of another man; he cannot be permitted to practice such a deception, nor to use the means that contribute to that end. He cannot, therefore, be allowed to use names, marks, letters, or other indicia, by which he may induce purchasers to believe that the goods which he is selling are the manufacture of another person. I own it does not seem to me that a man can acquire a property merely in a name or mark; but whether he has or not a property in the name or mark, I have no doubt that another person has not a right to use that name or mark for the purpose of

deception, and in order to attract to himself that course of trade, or that custom which, without that improper act, would have flowed to the person who first used, or was alone in the habit of using, the particular name or mark.”1 The question turned upon the right to employ the mellifluent title, "Medicated Mexican Balm," and the case is interesting because Lord Langdale was in advance of his times; and while the application was denied upon the ground that petitioner had made a false statement of fact in respect to the origin of the formula, the true basis on which such relief will be granted in a proper case, is clearly and correctly set forth. The establishment of the general rule that no one has a right to pass off his wares as the goods of another, involved much labor by the courts; and it was not finally so determined until 1896.

Trade Protection in United States.-In the United States the question of trade protection was also receiving consideration during the same period. In 1791, Samuel Breck, of Boston, petitioned Congress for permission to designate and mark his sailcloth by a registered trade-mark. The petition was referred to Jefferson, at that time Secretary of State; and in his report he said favorable action would, in his opinion

"contribute to fidelity in the execution of manufacturing, to secure to every manufacturer an exclusive right to some mark on its wares, proper to itself.

"That this should be done by general laws, extending equal rights to every case to which the authority of Congress should be competent."

Long Delay Required.-The nation, however, was obliged to wait seventy-nine years for the partial fulfilment of this recommendation; and it was not until 1905, that really adequate provisions were made effective. In New York a law against "fraud in the use of false stamps and labels," was enacted in 1845, and in the interval between that year and 1866, similar laws were provided in Connecticut (1847), Pennsylvania (1847), Massachusetts (1850), Ohio (1859), Iowa (1860), Michigan (1863), Oregon (1864), Nevada (1865), Kansas, Maine and Missouri (1866). All these statutes looked to the protection of the public against

1 Perry v. Truefitt, 6 Beav. 66, citing with approval Pidding v. How, 8 Sim. 477 (1837).

adulterated and spurious goods, however, rather than to the acknowledgment and safeguarding of individual rights resulting from excellence in quality and established reputation in trade. It is only since 1890, that cases in the United States based upon trade-marks and kindred rights have been at all numerous. Up to and including 1870, only sixty-two such cases appear in the reports.

General Requisites for Protection.-Advertising has injected value into many of these badges of origin and proprietorship, and the very natural desire to reap the full benefits from expensive campaigns of publicity has led to repeated appeals to courts for the establishment and protection of the resultant property rights. It should be noted that where the complainant is shown to be guilty of similar acts, he for like reasons is barred from redress.

Since the public in selecting between competitive articles or commodities is usually influenced by one of four factors, viz: the person who manufactures it, the place where it is made, the material of which it is composed, and the purpose it is intended to accomplish, it may be stated generally that assertions as to any of these four elements of trading are material, and if false, will disqualify the guilty party from obtaining redress or protection in courts of equity.

A favorite method of unfair trading has consisted of singling out one competitor and cutting prices as to him, while maintaining the regular price elsewhere in the trade. Probably a rule that cutting must be general, would obviate this difficulty. Another unfair practice consists in buying a few special articles with a fixed price and drawing the intending purchasers by this attraction, and then selling them something else at a less price.

In view of the endless variety and ceaseless procession of cases which are constantly arising in the conflict between unfair trading and the provisions and doctrines of the statutes and the common law, it will be advisable to forego dwelling longer upon the generalities of this contest between restrictive laws and commercial cunning, and to devote our immediate attention to specific instances of unfair methods of business dealings in their relation to trade-marks and trade names.

4. DECEPTIVE WORDS AND EMBLEMS.

Misuse of Names of Places.-This abuse of language is difficult to combat, for it would seem at first sight that if Smith es

tablished a cannery of shrimp at Barataria Bay and styled his wares, "Barataria Shrimp," Jones would have an equal right to locate on an adjoining site and to employ a similar name-a title which would appear to be honestly descriptive and naturally appurtenant to such proprietorship. No doubt there are very numerous instances and indeed, whole classes of situations where no legal right to redress would exist although the confusion and disarrangement or even loss of trade would amount to a considerable element of damage. Thus, a store-keeper might lawfully open an adjoining store dealing in goods identical with those of a liberal advertiser, and so long as no effort was made to counterfeit the name or to mislead the public as to their identity, no legal damage could be shown, although trade was diverted and lower prices (because of the saving in advertising expenditures) were offered to customers.

Long Use Pre-empts Name.-Reverting to our first example, however, the rights of the first comer as to name and distinctive marks, are recognized when seasoned and established in the public mind. This privilege is an incident to fair trade and of course, crowds out the opposite contention, relegating it to the region of practices constituting "unfair competition." A celebrated American case consisted in an application to restrain a rival concern from employing the word "Waltham" as a trade name for watches. The competitor was actually located in that city and its wares were produced there; nevertheless Justice Holmes (now of the United States Supreme Court) issued an injunctive orderqualified, however, by the right of the defendant to continue such designation, if coupled therewith there appeared the explanatory statement, "not manufactured by the original Waltham Watch Company."

This action on the part of the Supreme Court of Massachusetts was based upon the theory that the name "Waltham" watches had come to have a meaning that stood for style and quality, rather than place of origin; and that the latter significance had become a matter of minor importance. The learned Justice approaches and deals with the subject convincingly:

we think that now it is pretty well settled that the plaintiff, merely on the strength of having been first in the field, may put later comers to the trouble of taking such reasonable precautions as are commercially