Bulte v. Igleheart Bros.

137 F. 492, 70 C.C.A. 76, 1905 U.S. App. LEXIS 4569

• Court: Court of Appeals for the Seventh Circuit
• Decided: April 11, 1905
• Docket: No. 1,078
• Status: Published

Opinion

JENKINS, Circuit Judge

(after stating the facts as above). We might properly dismiss this appeal for the nonjoinder therein of Herman J. Meyer, co-complainant with August J. Bulte. The supplemental bill asserts the transfer by Meyer of all his interest in the business of Meyer & Bulte, and that Bulte is the sole party interested in the subject-matter. The master finds that Meyer still retains an interest in this suit, and the record of the transfer contains this provision:

“In view of the litigation now pending on the White Swan brand, it is specially agreed that Herman J. Meyer will assume half the cost and expense of carrying on this suit, or others that may follow, to their final end; and damages granted by the court in our favor or against us to be assumed in equal proportions by Herman J. Meyer and August J. Bulte.”

This is far from showing a transfer of Meyer’s interest in this litigation. He was a necessary co-complainant with Bulte. No order of the court was .at any time passed dismissing Meyer as a co-complainant. He was party on the record to the proceedings, and, there being no petition for an order of severance in the taking of an appeal, we would be justified in dismissing it. Loveless v. Ransom, 46 C. C. A. 515, 107 Fed. 626. The question, however, was not raised at the bar, and we pass it with the suggestion of danger flowing from inattention to correctness in practice.

The original bill charges that Philip Land originated the brand in question. The date of such origin is stated to be the year 1865. The complainants’ right to the trade-mark is derived from Philip Land and his successors in the business. It is the only claim of right stated in the original bill. The title asserted is to “the good will and tráde-mark rights hereinafter specified”; but this is coupled with an allegation that they now conduct and carry oh the ""business of their predecessors, and are vested with all their rights, ■including the good will, trade-mark, brands, trade-names, etc. Prior to 1897 the complainants were located in the city of St. Louis, and thereafter moved their offices to Clinton and to Kansas City. The Sweet Springs Milling Company, the ultimate successors of Philip Land in his business at Brownsville (now Sweet Springs), are still located at that place, operating the mill property and the business' formerly conducted- by Land. The transfer of title of November 7, 1892, recites that Land “was the original appropriator of a trade-mark for flour, breadstuff, etc., embodying the pictorial representation of a White Swan upon water, as specifically set .forth and described in the trade-mark No. 11,147, and registered in the firm name of Land & Swaggard as proprietors, on the 29th •day of April, 1884, and used continually in business by them since 1875”; then, pursuing the various transfers of the business down to the Sweet Springs Milling Company, recites that Meyer & Bulte “are desirous of acquiring the exclusive ownership, right, title, and use of said brand or trade-mark for said class of merchandise”; then, in the granting clause, the vendors sell, assign, and transfer to the firm of Meyer & Bulte “all ‘their right, title, and interest to the said brand and trade-mark.” The milling business of the grantors is not transferred, nor is any interest therein passed to Meyer & Bulte. It is simply the transfer of the trade-mark, "independently of the business in which, as it is claimed, the trademark Originated and was used. The question, then, arises: Is there such right of property in a trade-mark, when dissociated from the business in which it is employed, that such right can be transferred to another, and he be clothed with the exclusive right to its use at another place, in another business having no connection with the business in which the mark was originally employed, but in connection with the same class of manufacture? The function of a trade-mark is to distinguish the products of a' manufacturer or the objects of commerce; to point out distinctively the origin or ownership of the article to which it is affixed; that is to say, it must of itself or by association indicate the origin or ownership of the article. A trade-mark or trade-name is of no virtue in and of itself. It becomes of value only through use, and because by use it is an assurance to purchasers of the excellence of the article to which it is affixed as manufactured by the one whose name appears as the producer. The fanciful or arbitrary trade-mark, by association with the name of the producer, becomes, therefore, valuable, because it is a sign and symbol to the purchaser, an assurance to him of the genuineness of the article and of its manufacture by the proprietor of the trade-mark or trade-name. Dissociated from such manufacture, it is not an assurance of genuineness. "When used by another, its use works a fraud upon the purchaser. . A trade-mark is analogous to the good will of a business. Whoever heard of a good will being sold to one while the original owner continues the business as before? The good will is inseparable from the business itself. So, likewise, is a trade-mark or trade-name that gives assurance to a purchaser that the article upon which is stamped the trade-mark or trade-name is the genuine production of the manufacturer to whom the trade-name or trademark points by association as the maker of the article. Therefore it is that it is a necessary qualification to the assignability of a trade-mark that there goes with it the transfer of the business and good will of the owner of the symbol. Cotton v. Gillard, 44 L. J. Ch. 90; Croft v. Day, 7 Beav. 84; Robertson v. Quiddington, 28 Beav. 529; Singer Manufacturing Company v. Long, 8 App. Cases, 17; Gegg v. Bassett, 3 Ont. L. Rep. 263; Kidd v. Johnson, 100 U. S. 620, 25 L. Ed. 769; Brown Chemical Company v. Meyer, 139 U. S. 540, 11 Sup. Ct. 625, 35 L. Ed. 247; Chadwick v. Covell, 151 Mass. 190, 23 N. E. 1068, 6 L. R. A. 839, 21 Am. St. Rep. 442; Congress, etc., Spring Company v. High Rock Congress Spring Company, 45 N. Y. 302, 6 Am. Rep. 82. There is here no pretense of the transfer to Meyer & Bulte of the business of the originators of this trade-mark, or of their successors in business. They have continued up to this time the manufacture of flour as before. It was a bald attempt to sell the trade-mark disassociated from the business in which it had been used, and in which it had acquired its value by association with the manufacture of flour by the originator and his successors. It was subsequently used by the complainants at another place, and upon their own manufactures. To uphold such a transfer would be to ignore the fundamental office of a trade-mark, would be to disregard its purpose and object, would be to sanction a fraud upon the public purchasing the article. We are of opinion, therefore, that the complainants acquired no title to this trade-mark under the transfer from Land and his successors in business.

It is equally clear that, if the title could be upheld, the complainants would not be entitled to equitable relief, because of their omission to state the fact of transfer in connection with its use. Leather Cloth Company, Limited, v. The American Leather Cloth Company, Limited, 4 De G. J. & S. 137, 11 House of Lords’ Cases, 523 ; Manhattan Medicine Company v. Wood, 108 U. S. 218, 223, 2 Sup. Ct. 436, 27 L. Ed. 706; Pillsbury v. Pillsbury-Washburn Flour Mills Company, 12 C. C. A. 432, 64 Fed. 841. In the case in the Supreme Court it is said, page 223 of 108 U. S., page 439 of 2 Sup. Ct. (27 L. Ed. 706):

“The object of the trade-mark being to indicate, by its meaning or association, the origin or ownership of the article, it would seem that when a right to its use is transferred to others, either by act of the original manufacturer or by operation of law, the fact of transfer should be stated in connection with its use; otherwise a deception would be practiced upon the public, and the very fraud accomplished to prevent which courts of equity interfere to protect the exclusive right of the original manufacturer. If one affix to goods of his own manufacture signs or marks which indicate that they are the manufacture of others, he is deceiving the public and attempting to pass upon them goods as possessing a quality and merit which another’s skill has given to similar articles, and which his own manufacture does not possess in the estimation of purchasers.”

For the reasons assigned the complainants can rightfully claim nothing under the assignment to them of this trade-mark.

By an amendment to the bill they assert that “early in the year 1880 they originated the brand hereinafter mentioned, to wit, picture of a white swan, together with the words ‘White Swan’ in a manner entirely independent of any of their said predecessors, and have continuously used the same in business up to and including the date of filing the bill of complaint herein.” Under this amendment they claim the right to priority and exclusiveness of use. The amendment certainly puts the complainants in a peculiar position. In their original bill they assert that Land originated the trade-mark or brand in the year 1865, and the brand is described as a circular label having thereon a circle within which is a smaller circle, and within the smaller circle is a pictorial representation of a lake or body of water upon whose bosom is a white swan, and above this picture of the swan is the name of the manufacturers, beneath the picture of the swan are the words “White Swan,” the name of the manufacturers, and the name of the location of the manufacturers’ milling plant, and at the top of the label are the figures “196.” It will be observed that in the amendment the only description of the trade-mark claimed to be originated by them is that it is the picture of a white swan arranged in a manner entirely independent of any of their predecessors. The design, within the terms of the allegation, would seem to go only to the matter of arrangement of parts, not to original appropriation of symbols. The trade-name “White Swan” is appropriated, and the picture of the bird upon the water is also appropriated. These are the two salient objects which catch the eye of the purchaser. The matter of arrangement of them is subordinate, and probably immaterial, not justifying appropriation of symbols belonging to another. So that the allegation of the amendment is nothing more than a confession that in the yeár 1880 they pirated the mark and brand which by prior use belonged to Land or his successors, and without justification invaded their rights and infringed their trademark.

But leaving out of view the assertions of the original bill, and construing the language of the amendment as broadly as possible in the interest of the complainants, in what plight are they left with reference to this trade-mark? We have given careful scrutiny to the great volume of evidence contained in this record, and we think the master’s conclusions of fact well supported. Leaving out of consideration all doubtful evidence, it appears that the name “White Swan,” but without the picture of a swan, was used in Western New York and in the country around St. Catharines, in Canada, as early as the year 1867, and continuously up to 1872 or 1873, when the witness testifying to the fact moved west from that country. It also satisfactorily appears that the firm of Eckhart & Swan, .in the year 18H4l, sold flour with the brand “White Swan” and the picture of a swan floating or swimming on water. The history of this use is fully set forth in the third paragraph of the master’s finding, and is here quoted in full as expressive of our own views upon the testimony.

“Prior to 1876 persons engaged in the flour, milling business or flour commission business in New York, Illinois, Missouri, Iowa, Texas, and Canada used upon barrels, bags, or sacks containing flour, as a brand or descriptive badge or mark, the single word ‘Swan’ or the word ‘Swan’ joined with other words, making the combination ‘White Swan,’ ‘Swan Lake,’ or ‘Swans Down.*' Early in the year 1874 a flour commission firm in the city of Chicago, Illinois, placed upon its flour barrels by a stencil the picture of a swan (bird) floating or swimming on water. The name of the Chicago firm was Eckhart & Swan. This ‘Swan’ brand of flour was never its leading brand, but it used that brand from 1874 down to 1901, both in its wholesale flour commission business, which it conducted up to 1884, and in its flour milling business, which it engaged in in the year 1884, and which it continued until the partnership sold its property and business to a corporation of the name of Eckhart & Swan Milling Company, and that corporation used that brand down to 1901. Down to 1878 said Eckhart & Swan used said Swan brand containing the bird picture upon flour sold by them. Subsequently, and down to a time after the filing of the bill of complaint herein, the partnership and its above-named successor corporation used the same brand upon flour purchased from the firm or corporation; that is to say, before 1878 they used the Swan brand upon flour in advance of the sales by that brand, and after the first of the year 1878 they used the Swan brand upon flour when they were asked to do so by their patrons.”

It would serve no useful purpose to discuss at length the testimony in this case. It clearly and certainly appears that prior to the appropriation of the trade-mark containing the words “White Swan” and the picture of a swan floating upon water by the complainants in 1880, and for at least 15 years prior thereto, the words “White Swan” had been quite generally used, and the picture of a swan floating upon water had been adopted and used by at least two firms, Eckhart & Swan and Land and his successors. So that there can be no justification for the pretension that the complainants originated this brand. They undoubtedly changed the arrangements of the marks and the picture, but that gave them no right to the exclusive use of the picture or the marks or the name as a trade-mark.

This conclusion brings us to the consideration of the question of unfair trade—whether the defendants have disguised their goods, so imitating the marks of the complainants, that they are liable to be palmed off upon the public as and for the goods of the complainants. We cannot doubt that the words “White Swan” had for many years been quite generally used as a brand of flour. We need not consider the question whether that term has come to indicate the quality of flour rather than point to its origin. But that name and the names “Swan Lake” and “Swans Down” and other like terms had for many years been quite generally employed as a brand for flour. The defendants’ brand is “Swans Down.” Both brands are circular in form—a form quite common in respect to brands of flour. The outer circle of each is in blue, but of different design; that of the defendants being a representation of heads of wheat, that of the complainants a fancy border. The principal background of the outer circle of the complainants’ brand is dark red, with the words “Patent Process” in the center and on either side of the inner circle in white letters upon blue; the complainants’ name being printed in white upon the red background above the inner circle, and the words “White Swan” in white below the inner circle. Above the entire circle is printed, “48' lbs. Flour” in blue letters upon white background. In the inner circle, is the picture of a swan facing the left, floating upon water, the background being purple, and above the swan the word “Roller” in white letters. Below the entire picture are the words “White Swan” “Best Patent.” The defendants’ outer circle has a background of pink or rose color, the space above and below the inner circle being occupied by the names in white, “Igleheart Brothers. Roller Patent. Evansville, Indiana,” and picture of two small swans facing in opposite directions. There are two inner circles, the outer one of which is of blue background with the words “Swans Down” in white letters, a name employed by them as a trade-mark as early as 1879. The inner one has a greenish background representing foliage, a fence in white, and a swan floating upon water, facing to .the right. Below the entire circle is printed in blue, “48 lbs. Iglehart’s Swans Down.”

Starting with the predicate that the defendants had no exclusive right either to the name “White Swan” or to the picture of a swan, we perceive, upon a comparison of these brands, nothing to indicate a design to confuse, and nothing that would be apt to deceive a purchaser using the ordinary care of purchasers into mistaking the one for the other. As before remarked, the term “White Swan” and the picture of a white swan floating upon water are the salient features of the trade-mark asserted. These are things which catch the eye and abide in the memory. A certain similarity in form and contour may be observable, but that is common to innumerable brands of flour. In some respects an acute observer using extraordinary inspection might discern features common to both. So he could in any two brands of flour. But flour is purchased, by the retailer at least, by the name of the brand, or of the symbol which indicates by association the origin or manufacture. As, therefore, the complainants had no exclusive right to the symbol or to the name, and as not a single instance of imposition or mistake is shown, we are satisfied that the conclusion of the master is correct that the dissimilarity between the brands is such that an ordinary retail purchaser of flour would not be misled.

At the hearing upon the master’s report, as indicated by the testimony, an application was made for permission to file an amended bill, which permission was refused. This is asserted for error. The contention cannot be sustained. The matter of amendment rests largely, if not wholly, in the discretion of the trial court. Any abuse of that discretion must be made plain to authorize an appellate court to.inquire into the matter (United States v. Atherton, 102 U. S. 372, 375, 26 L. Ed. 213), and especially so where the cause has advanced to a hearing (Neale v. Neale, 9 Wall. 1, 9, 19 L. Ed. 590). The presumption is that the ruling of the court below was. correct..-.An abuse of the discretion must be clear. The record here exhibits neither the ground upon which the application was made nor the amendment which is proposed, so that we are wholly at a loss to judge concerning the exercise of discretion.

The decree is affirmed.