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make were labeled "A. W. Faber," when they bore the name "Faber" at all. About 1895 or 1896 the word "Faber" was introduced by defendant into price lists, etc., of rubber goods. Instead of "A. W. Faber's Rubber Goods," we have "Faber's Rubber Goods." These rubber goods were made by C. Roberts & Co. for A. W. Faber and for Eberhard Faber. It was after or at about the time the defendant became a partner in the firm of C. Roberts & Co. that he made this change. The defendant, while agent for A. W. Faber, claimed that the word "Faber" was the very essence of the designation of A. W. Faber's goods. About the year 1895 or 1896 the defendant commenced to apply the name "Faber" alone to his goods.
In March, 1898, a contract or agreement was made as follows: "Between the firm A. W. Faber, represented by Baroness Ottilie von Faber in Stein, as proprietress, and the firm Eberhard Faber, represented by Mr. Lothar W. Faber, in as partner, the following agreement was made to-day.
"Par. 1. The firm of Eberhard Faber is indebted to the firm A. W. Faber, as a result of the business relation formerly subsisting between them in the total sum of $200,000, subject to interest at 4%. For this amount a mortgage has been recorded in the name of Baron Lothar von Faber, the late owner of the firm A. W. Faber, on the property Nos. 541, 543, 545 and 547 Pearl Street, New York; and by agreement of February 26th, 1894, the firm of Eberhard Faber has undertaken to reduce this mortgage to $100,000, and to repay during the years 1896, 1897 and 1898, respectively, one-third part of these $100,000. The interests accruing out of the above $200,000 were paid by the firm of Eberhard Faber down to the end of the year 1897. But the payments agreed upon on account of capital have remained in default, and the firm of A. W. Faber has, therefore, brought suit against the firm of Eberhard Faber to enforce the payment of the twothirds remaining due and payable for the years 1896 and 1897.
"Par. 2. Baron Lothar von Faber being deceased and having been succeeded by his widow, Ottilie von Faber, as heir; and said Pearl Street property, referred to in paragraph 1, having likewise passed in the meanwhile to Mrs. Jenny Faber, mother of the former proprietors; it is hereby agreed that a new mortgage is to be executed to Baroness Ottilie von Faber in the amount of $200,000, for the term of three years, during which time the mortgagee shall have no right to call for payment of the principal debt, which is to bear interest at 4% and be secured on the property in Pearl Street above described. To render this possible, measures are to be taken exactly in accordance with proposals already made and communicated during the last year by Messrs. Fred W. & Alfred E. Hinrichs on behalf of the firm of A. W. Faber to the firm of Eberhard Faber-i. e., the property at present standing in the name of Mrs. Jenny Faber is to be transferred temporarily to her son Lothar W. Faber, in order that he, jointly and severally with Mr. John Eberhard Faber, execute a new bond, which is to accompany the mortgage newly to be executed by Mr. Lothar W. Faber. As soon as this bond, which is to be given by both partners of the firm of Eberhard Faber, shall have been executed, the title in the property is to be retransferred to Mrs. Jenny Faber.
"Par. 3. This agreement, as laid down in paragraph 2, is to be performed within four months from the date of this instrument. For the same period of time, of four months, the firm of A. W. Faber agrees to desist from further proceeding in the suit brought against the firm of Eberhard Faber.
"Par. 4. As soon as Baroness Ottilie von Faber shall have come into the possession of the new properly executed mortgage deed, and into pos. session of the bond described in paragraph 2, she will withdraw completely the suit brought against the firm of Eberhard Faber, and the provisions inserted into the Contract of February 26th, 1894, regarding the repayment of $100,000, shall then be considered as canceled.
"Par. 5. The firm of Eberhard Faber binds itself to stamp all manufactures connected with lead pencils traceable to its establishment, not without first name, or at least with the initials of the first name, and under all circumstances to avoid anything which could tend to confusion as to the manufactures of the two firms.
"This agreement shall have full validity only after Mr. John Eberhard Faber, as copartner of the firm of Eberhard Faber, shall have added his signature here below.
"Stein and New York, March 16th, 1898.
A. W. Faber. "Lothar W. Faber. "Eberhard Faber."
Under this agreement, the defendant should have labeled his pencils, etc., either "J. E. Faber," or with his full name, “J. Eberhard Faber," or "John E. Faber." This is evidently the letter and spirit of the agreement. The purpose was to sufficiently separate the designations, and there is a wide difference, on such a question as is presented in this case, between "J. E. Faber" and "E. Faber." March 16, 1898, the signs on defendant's factory at Greenpoint were "Faber's Pencil Co." The complainant protested, but defendant did not change the signs until about the time the bill of complaint herein. was filed. As late as September, 1900, the defendant's pencils were being sold, even at Calcutta, Asia, marked, "Faber Pencil Co., U. S. A." In short, the defendant violated both the letter and spirit of the agreement. Owing largely, if not entirely, to these acts of the defendant, communications intended for the one house would go to the other, and vice versa. If either has the right to use the name "Faber" alone, in designating pencils and kindred goods, that right belongs to the complainant. The house of A. W. Faber was so old and so well established and so well known, and its goods were so popular and reliable, that, in the estimation of the public and of the trade, "Faber pencils," etc., and "Faber Pencil Co.," conveyed to them the idea of A. W. Faber's pencils, etc. The name "E. Faber" does not sufficiently distinguish the defendant's goods from the complainants' to prevent confusion with the public and the trade, and the result has been, is, and will be, as stated, that the trade and users of pencils, etc., purchase and use defendant's goods when intending to purchase and use the complainants'. This fact is well known to the defendant, and such result was and is intended by him, and is the natural result of his conduct and business methods.
There is a great mass of evidence in this case, to which the court has given careful attention. Some five days were given to the argument, and this court has given the briefs of counsel a careful reading and careful consideration, with the above result as to the salient facts.
The question is, what remedy, if any, can this court give the complainant? It seems plain that the defendant ought to be restrained and enjoined from using the name "E. Faber," alone, in making, advertising and designating his goods, so far as they compete with those of the complainants. The complainants use the name "A. W. Faber." The defendant should use the name "J. E. Faber," or "J. Eberhard Faber," or "Eberhard Faber," as he may elect. Both are carrying on the business of manufacturing lead pencils
and the other goods mentioned. They are in competition. Such competition should be fair. Neither has the right to monopolize the name "Faber," or resort to unfair methods, resulting in confusion or injury to the business of the other, of the character mentioned. Many other transactions and occurrences might be mentioned, demonstrating the facts found as above stated, but it is unnecessary to enter into details.
It is not assumed that the defendant, as an original proposition, may not put his pencils in packages to suit himself, or use such colored wrappers and labels as he pleases, or number the grades as he sees fit; but when this is done by him in imitation of the goods of the house of A. W. Faber, for the purpose of injuring the business of that house, and supplanting their pencils, etc., by his own, and leading the purchasing and consuming public and the trade to think they are still purchasing and using the goods of A. W. Faber, a different question is presented. The father of the defendant, when acting as sole agent for the United States for his uncle, the complainant house, took out for himself, and registered as his own, the trademark "A. W. Faber," but subsequently assigned it to the Baron Lothar von Faber, then the house of which the complainant is the Subsequently the defendant applied in his own behalf for the trade-mark "A. W. Faber." This is mentioned as bearing on the intent of defendant. Defendant admits he did not know of the taking out of such trade-mark and its assignment.
The defendant urges that the complainant has acquiesced in the acts of the defendant, especially in his use, etc., of the names "E. Faber," "Faber Pencil Company," etc., and that the complainant's laches should bar the granting of injunctive relief. The court does not agree with this contention. The complainant has been constantly objecting when these acts of defendant have become known to it. Negotiations have been had, changes made, etc., but defendant has failed to comply with just demands-even with the terms of his own written agreement. The complainant, at last, was compelled to resort to the courts. No undue haste was shown to precipitate a family litigation, and the court holds that there has been, under the circumstances, no laches. There are cases where resort to the courts should be speedy, and others where a resort to litigation should be the last remedy resorted to.
Actions to restrain unfair competition in trade, it is said, are based essentially upon fraud. That fraud must be proved. It cannot be inferred from unimportant similarities not calculated to mislead the purchaser. That the action may be maintained where it appears that the defendant is destroying or attempting to destroy an honest business by dishonest means. That the gravamen of the action is a fraudulent purpose on the part of the defendant to represent to the public that the plaintiff's business is his business, and by fraudulent misstatements to deprive the plaintiff of profits which he would otherwise receive. Per Cox, J., Second Circuit, October term, 1902 (Kipling v. G. P. Putnam's Sons, 120 Fed. 631). The court cites Lawrence Manufacturing Company v. Tennessee Manufacturing Company, 138 U. S. 537-549, 11 Sup. Ct. 396, 34 L. Ed. 997.
In Globe-Wernicke Co. v. Brown & Besly, 121 Fed. 90, the court (C. C. A., Seventh Circuit) held, "The imitation of complainant's box letter files, by defendant, by the use of the same names, emblems, and colors, in such manner as to deceive purchasers as to their origin (that is, their true maker," constitutes unfair competition, which entitled the complainant to an injunction. Headnote I is as follows:
"Complainant for many years made and sold box letter files under the names of 'Leader' and 'Eureka' files. The names were printed on the back of each file, and also on an emblem on the first of the index sheets inside. Complainant's name did not appear on the files, but they became thoroughly well known to the trade by the names, make-up, and markings as the product of its factory, and attained a large sale. Subsequently defendant placed on the market files which copied those of complainant in names, emblems, colors, size, and style of type and general make-up, so exactly that it would mislead the ordinary consumer, and have nothing thereon to indicate the maker. Held, that such action constituted unfair competition, and entitled complainant to an injunction restraining defendant from the use of such imitations, including the names and emblems, without regard to whether or not they constituted trade-marks."
See, also, Hires Co. v. Consumers' Co., 41 C. C. A. 71, 100 Fed. 809; Sterling Remedy Co. v. Spermine Medical Co., 50 C. C. A. 657, 112 Fed. 1000.
In Globe-Wernicke Co. v. Brown et al. (C. C.) 121 Fed. 185, held, that the word, "elastic," under the evidence, had been used by the plaintiff for such a length of time as to have acquired a secondary meaning in the trade and with the general public, as identifying its sectional bookcases, and similar articles of its manufacture, and to entitle it to protection against the use of such word in connection with the goods of other manufacturers, even if not valid as a technical trade-mark.
In Bissell Chilled Plow Works v. T. M. Bissell Plow Co. (C. C. A., D. Mich.) 121 Fed. 357, held, that "the right to relief in an action for unfair competition in trade is not dependent upon an actual fraudulent intent, where the conduct of defendant was such as would naturally deceive the public as to the origin of the goods, and where it is shown that such deception actually resulted." A person is ordinarily held to intend the consequences of his acts, when he understands his acts, and they are deliberate, especially; and, if such acts by a business. competitor are calculated to deceive the trade, the public, and the user, and to palm off the goods or manufactures of such person for those of his competitor, and such is the actual result, and such person refuses to cease such conduct, the legitimate conclusion is that he intended and intends to cheat and defraud not only the competitor, but the trade, the general public, and the users and consumers. Such acts, persisted in, constitute fraud.
In the case last cited (121 Fed. 357) the first headnote is as follows:
"Complainant corporation was organized in 1881 under the name of "The South Bend Pulp Company,' and engaged in business at South Bend, Ind., in the manufacture of wood pulp, and also in the manufacture and sale of plows. Its largest stockholder, who was president and general manager, was T. M. Bissell, who had been in the manufacture of plows for some years, and was the holder of patents for improved methods of making the same, which he transferred to the corporation. Its plow business was separate, and
was always conducted under the department name of "The Bissell Chilled Plow Works,' and all of its plows were marked with the name 'Bissell,' in connection with other designations, and became known to the trade by such name. The making of plows was or became its principal business, and in 1891, with the consent of Bissell, its name was changed, through statutory proceedings in the court, to "The Bissell Chilled Plow Works,' and it continued its business from that time under such name. About that time, Bissell, having sold a part of his stock, retired from the management, and he thereafter organized a corporation under the name of "The T. M. Bissell Plow Company,' which engaged in the manufacture and sale of plows in South Bend, making substantially the same plows as complainant, and marking them with the name 'Bissell.' After a year or so Bissell died, and the business of such corporation was discontinued. Subsequently certain of defendants residing at Eaton Rapids, Mich., purchased a part of the stock, patterns, etc., of the corporation, taking an assignment of the right to use its corporate name, and organized the defendant corporation under the same name which engaged in making plows at Eaton Rapids. Circulars were issued, stating the removal of the company from South Bend, and containing pictures of Bissell, and referring to him as 'the inventor of chilled plows, once made in South Bend, Indiana, now only by the T. M. Bissell Plow Co., Eaton Rapids, Mich.' Its plows were also all marked with the name "T. M. Bissell,' and were similar in design and appearance to those of complainant. The original Bissell patent for chilling was owned, and the process used, by complainant, which also held shop rights for the use of later patents, some of which were afterward owned and used by defendant. No one by the name of Bissell, or connected with the prior Indiana corporation of the same name, had any connection with defendant. There was evidence that retail purchasers in many cases did not know the difference between the two makes, and would accept either as a Bissell plow. Held, that the second Indiana corporation had no right to use the name 'Bissell' as it did, either in its corporate name or as a mark on its product, as against complainant, which had acquired the prior right, and that defendant obtained no right by the attempted assignment; that the action of defendant in the use made of the name in both respects constituted unfair competition."
In Walter Baker & Co. v. Sanders, 80 Fed. 889, 26 C. C. A. 220, held:
"One entering into competition with another person of the same name, who has an old, established business, is bound to distinguish his goods from those of the latter so as to prevent confusion." Also: "When, by long use, the words 'Baker's Chocolate' had come to mean, in the minds of the public, complainant's goods, held, that a subsequent maker of chocolate, with the same name, was not entitled to use that name, whether with his given name or its initials, in such manner as to announce that the goods he sells are 'Baker's Chocolate.'"
This rule seems to be just and equitable. While ordinarily every man has the right to use his own name as he pleases, still he has no right to use it in such a way as to deceive the public or the trading or business world, or in such a manner as to purposely injure the business of his competitor of the same name by disposing of his own wares as the manufactures of this business rival. Especially is this true when such business competitor has the older business, and the first long-established use of the name.
In Elgin National Watch Co. v. Illinois Watch Case Co., 179 U. S. 665, 21 Sup. Ct. 270, 45 L. Ed. 365, the Supreme Court held: "Words which are merely descriptive of the place where an article is manufactured cannot be monopolized as a trade-mark, and this is true of the word 'Elgin,' as in controversy in this case. Where such word has acquired a secondary signification in connection with its use, protection from