Goldsmith Silver Co. v. Savage

229 F. 623, 144 C.C.A. 33, 1915 U.S. App. LEXIS 1586

• Court: Court of Appeals for the First Circuit
• Decided: December 10, 1915
• Docket: No. 1120
• Status: Published

Opinions

BINGHAM, Circuit Judge.

This is a proceeding in equity, brought by the complainant, appellant, against the defendant, in which it alleges and claims (1) that it is the owner of a trade-mark in the numerals “108,” as adopted and used by it with reference to a certain cigar, which it manufactures and puts upon the market, and that the defendant has infringed its right by employing the numerals “208” on a cigar which he manufactures and puts upon the market; and (2) if it is not entitled to an exclusive right in the numerals “108” as a trademark, that by the adoption of them and their use through a series of years in connection with the sale of a certain cigar it has established a trade therein, and that the defendant, by putting upon the market his cigar numbered “208,” is guilty of unfair competition.

By agreement of the parties the case was sent to a special master under an order of the court, with directions “to take the testimony and report the findings of fact and conclusions of law to the court, with all convenient speed, subject to exceptions according to the usual course of chancery practice.” Having heard the parties, the master made his report, in which he found in substance (1) that the complainant’s predecessors in title adopted die numerals “108” to denote the origin and source of manufacture of a certain cigar that it manufactured, which mark the complainant and its predecessors have continued to use in connection with the manufacture and sale of said cigar for more than 20 years, but ruled that the complainant had no exclusive right to the use of such numerals, in that they would not constitute a valid trade-mark .when not associated with some name or device to characterize and distinguish them. Having thus disposed of this question, he’proceeded.to consider whether the business, which the.complainant had'búilt tip by The "use of the numerals “108” in connection with its cigar, had been unlawfully interfered with by the defendant.

With reference to this subject, he states that one question is whether the" natural and probable tendency and effect of the conduct of the defendant in his sale of the cigar marked “208” was such as to deceive the public, só as to pass off his goods for' those of the complainant. He then 'finds, that,.the. box containing the cigars, manufactured and sold by the defendant, when-compared with the box containing the cigars manufactured and sold by the complainant, presented no such resemblance as would cause deception on account of similarity; that 'the shape, size, and general appearance of the boxes were very dissimilar, and that the labels upon them were entirely different; that the'numerals occupied different places on the respective boxes, and were so different in size as to present no real similarity to the eye; that,.while, the size of the cigars was practically the same, there were a million other make’s of like size; and that the complainant’s cigar was branded “108” while the defendant’s was not. He summarizes his finding as follows:

“From a comparison, therefore, of the cigars and boxes, including labels, general appearance, and make-up, I find that there would be little or no possibility of a dealer thinking that they were the cigars manufactured and sold by complainant.”

As to the contention that the defendant, by manufacturing his cigars and selling them under the numerals “208,” put into the hands of retail dealers the means of deceiving the ultimate consumer by substituting cigars of his brand for those of the complainant’s brand, he ruled that:

“To warrant the issuing of an injunction, either actual or probable deception and confusion must be shown, and that mere possibility of deception was not enough."

After setting forth and analyzing the evidence bearing on this question, and showing that the complainant’s and defendant’s cigars are of the same size, shape, and color, and that there are. numerous other cigars on the market of like size, shape, and-color, he finds that the parties sent by the complainant to purchase cigars from retail dealers, and who testified in the case, were not deceived, and that the boxes were so marked and the marks on the boxes containing defendant’s cigars were so open to observation that there was no likelihood of purchasers being deceived; that there is no uniform rule followed by retail dealers in the display of the boxes, but that generally their covers are torn off or bent back and put under the boxes, so that only the boxes themselves are seen in the cigar cáse; that if an unscrupulous retail dealer, who did not have the “108” cigar, wished to palm off on the purchaser a different one, he could do this as well by substituting any other cigar of the same shape and size, of which there were many on the market; and that to take cigars from a box marked “208” would assist him very little in accomplishing his purpose.

He then considers the evidence bearing upon the question of the purpose and intention of the defendant in adopting the universal Londres shape and size of cigar for his cigar, with the numerals “208” upon the box, and concludes, inasmuch as the boxes were dissimilar, and the size, shape, and color of the cigars were the same as many others on the market, that in the adoption of the numerals “208” the defendant did not intend to encroach upon the complainant’s trade by deceiving the public, and that this conclusion was not overcome by the fact that the defendant had at one time handled the complainant’s cigar as a jobber in practically the same territory in which he later sold the cigars marked “208.”

The report having been filed, the complainant excepted to the following findings of fact and conclusions of law of the master:

“First. That the master finds as a matter of law that the numerals T08’ as used by your petitioner are not the subject of a trade-mark.

“Second. That the master finds that the petitioner is not entitled to an injunction on account of an infringement of the defendant on the alleged trademark.

“Third. That the master finds that the petitioner has not established his case of unfair competition on the part of the defendant as will entitle him to an injunction as prayed for.

“Fourth. That the master finds that the petitioner is not entitled to an accounting for damages.”

There was a general exception to the report as against the law, the evidence, and the weight of the evidence.

In the District Court the findings and 'rulings of the master were sustained, and a decree was entered affirming the same. From this decree an appeal was taken to this court, and the errors assigned were that the District Court erred: (1) “In finding that the name ‘208,’ as used by the defendant in connection with the defendant’s sale of his cigars, was not an infringement upon the complainant’s trade-mark rights to use the name ‘108’ as used by it”; and (2) “in finding that the use by the defendant of the name ‘208’ in connection with the sale of his cigars was not unfairly competing against the complainant in the complainant’s use of the name ‘108’ in connection with its sale of cigars.” The third, fourth, fifth, sixth, and eighth assignments were mere subdivisions of assignments 1 and 2. -The seventh was that the court erred “in not finding from all the evidence that the conduct of the defendant in placing upon the market his ‘208’ cigars was for the fraudulent purpose of unfairly competing with the complainant.” The ninth, tenth, and eleventh assignments were general.

[1, 2] The report of the master was filed February 3, 1914, and the opinion of the District Court dismissing the bill was filed March 16, 1914. On March 15, 1915, the depositions of certain witnesses, whose testimony purports to have been taken in the case, were filed in the District Court. The record contains no stipulation that these depositions embrace all the evidence presented before the master, and the order of the court sending the case to the master contained no direction to him to report the evidence. Under these circumstances the evidence contained in the depositions cannot properly be considered by us for the purpose of determining whether the findings of fact by the master are correct or otherwise. “The true rule upon this subject is that the-master’s finding of facts upon the evidence taken by him cannot be impeached, in the absence from the record of the certificate, or other competent proof, either that the evidence presented is the entire evidence taken by him, or that it contains all the evidence which was before him relative to the specific finding or findings challenged.” While it would be presumed, in the absence of countervailing proof, in case the order to the master had contained a direction to report the evidence, and on filing his report he had accompanied it therewith, that he had faithfully discharged his duty and returned all the evidence, no such presumption can be indulged in this case, for the order to the. master contained no such direction, and the record does not disclose that the evidence was returned by the master. Guarantee Gold, Bond Doan & Savings Co. v. Edwards et al., 164 Fed. 809, 811, 90 C. C. A. 585, and cases there cited.

The complainant has argued his case as though the finding and ruling of the master — that the numerals “108,” as used by the complainant, were not a valid trade-mark — had been assigned by him as error. The record discloses that an exception of this kind was taken to the master’s report, but that it was not assigned-as error on this appeal. .The question, therefore, is not before us, and we are not required to pass upon it. Whether naked muñerais may constitute a valid trade-mark has never been determined. The cases, however, are not without expressions of opinion upon the subject, some viewing the matter from one standpoint and some from another, and text-writers have entertained equally divergent views.

[3, 4] But if we assume that the complainant has a valid trademark in the naked numerals “108,” it does not follow that it is entitled to the- relief asked, unless the finding that the defendant is not guilty of infringement cannot be sustained. Whether the complainant’s action proceeds upon the ground of infringement of a trade-mark or upon the ground of unfair competition, there is one element common to both rights which it is essential for it to establish, and that is that the dress of the alleged infringing or competing article is so similar to the one competed with that it is probable the purchasing public, while in the exercise of reasonable care, will be deceived and led to purchase the competing article for that of the complainant with consequent injury to his trade. In the case of infringement of a technical trade-mark the intention of the infringer is immaterial, as the essence of the wrong lies in the injury to a property right; while in the case of unfair competition the intention is material, to establish fraud on the part of the defendant in the use of the imitative device to beguile the public into buying his goods as those of his rival. In the former case fraud, if material, is presumed; while in the latter the complainant must prove a fraudulent intent, or show facts and circumstances from which it may reasonably be inferred. In either case, however, it must be shown that the dress or device employed by the defendant is such that it has deceived, or is calculated to deceive, ordinary purchasers buying with usual care, and that they have purchased or will probably purchase the goods of the defendant under the mistaken belief that they are those of the plaintiff, to the serious damage of the latter. McLean v. Fleming, 96 U. S. 245, 24 L. Ed. 828; Regis v. Jaynes, 185 Mass. 458, 460, 70 N. E. 480; Paul on TradeMarks, §§ 196, 280.

[5] As heretofore pointed out, the master has found in favor of the defendant on the last proposition, and the court below has affirmed the finding. Findings so made are not to be lightly disregarded, and this is especially true where, as here, it appears that the case was sent to the master under an agreement of the parties that he should hear the evidence and report his findings of fact and conclusions of law thereon. In Kimberly v. Arms, 129 U. S. 512, 9 Sup. Ct. 355, 32 L. Ed. 764, the order sending the case to the master read as follows:

“By consent and request of all the parties heroin, it is ordered by the court that Hon. R. D. H. bo and is hereby appointed a special master heroin to hear the evidence and decide all the issues between the parties and make his report to this court, separately stating his findings of law and fact, together with all the evidence introduced before him, which evidence shall thereby become part of the report, which report shall be subject to like exceptions as other reports of masters.”

This order differed in no respect from the one under consideration,, except that it directed the master to report the evidence introduced before him and make it a part of his report. In determining the effect to be given to findings of a master under such a reference, Mr. Justice Field said:

“A reference by consent of parties of an entire case, for the determination of all its issues, though not strictly a submission of the controversy to arbitration — a proceeding which is governed by special rules — is a submission of the controversy to a tribunal of the parties’ own selection, to be governed in its conduct by the ordinary rules applicable to the administration of justice in tribunals established by law. Its 'findings, like those of an independent tribunal, are to be taken as presumptively correct, subject, indeed, to be reviewed under the reservation contained in the consent and order of the court, when there has been manifest error in the consideration given to the evidence, or in the application of the law, but not otherwise. * * * To disregard the findings and treat the report as a mere presentation of the testimony is to defeat, as we conceive, the purpose of the reference and disregard the express stipulation of the parties. We are therefore constrained to hold that the learned court below failed to give to the findings of the master the weight to which they were entitled, and that they should have been treated as so far correct and binding as not to be disturbed, unless clearly in conflict with the weight of the evidence upon which they were made.”

In Davis v. Schwartz, 155 U. S. 631, 15 Sup. Ct. 237, 39 L. Ed. 289, the order of reference to the master, as in Kimberly v. Arms, was by consent of the parties to hear the case and report his findings and conclusions of law, but it did not contain a reservation of the right to review his findings, and it was there held that, under such án order, the findings of fact by the master were conclusive, if there was any evidence upon which they could be made. In the opinion of Mr. Justice Brown, it was said:

“As the case was referred by the court to a master to report, not the evidence merely, but the facts of the case, and his conclusions of law thereon, we think that his finding, so far as it involves questions of fact, is attended by a presumption of correctness similar to that in the case of a finding by a referee, the' special verdict of a jury, the findings of a Circuit Court in a case tried by the court under Rev. Stat. § 649, or in an admiralty cause appealed to this court. In neither of these cases is the finding absolutely conclusive, as if there be no testimony tending to support it; but so far as it depends upon conflicting testimony, or upon the credibility of witnesses, or so far as there is any testimony consistent with the finding, it must be treated as unassailable.”

And again he says:

“As there is nothing to show that the findings of fact were unsupported by the evidence, we think they must be treated as conclusive.”

The views of the Supreme Court, as expressed in the above cases, have been recognized and followed in the various circuits. See Connor v. United States, 214 Fed. 522, 131 C. C. A. 68; Hattiesburg Dumber Co. v. Herrick, 212 Fed. 834, 842, 843, 129 C. C. A. 288; Guarantee Gold Bond Doan & Savings Co. v. Edwards, 164 Fed. 809, 811, 90 C. C. A. 585.

We have carefully examined the.report of the master with reference to his finding of fact upon the question material to both grounds of complaint and the exhibits particularly relating thereto, and are of the opinion that the proofs show that the master was right, rather than that he was clearly wrong.

The decree of the District Court is affirmed, with costs to the appellee.