Hunyadi Janos Corp. v. Stoeger

5 F.2d 506, 1925 U.S. Dist. LEXIS 1040

• Court: District Court, S.D. New York
• Decided: March 24, 1925
• Status: Published

Opinion

BONDY, District Judge.

This is a suit to restrain the infringement of trade-marks registered in the Patent Office of the United States, which were seized and transferred to plaintiff’s assignor by the Alien Property Custodian, acting under the Trading with the Enemy Act (Comp. St. 1918, Comp. St. Ann. Supp. 1919, §§ 3115y2a-3115y2;j).

Prior to the war between the United States and Austria-Hungary, Andreas Sax-lehner and his successors bottled, and sold throughout the United States and elsewhere, under the name of Hunyadi Janos, mineral water from wells in the neighborhood of Budapest owned by them. They used in the United States a label bearing their trademark “Hunyadi Janos” and a picture of the head of a knight.

In the course of time Andreas Saxlehner registered the trade-mark “Hunyadi Janos” in the Patent Office of the United States, and he and his successors maintained in the United States a place of business from which they distributed to buyers in the United States and other countries their mineral waters and also pills, which were manufactured for them in the United States and sold by them under their trade-mark “Hunyadi Janos.”

When war was declared between the United States and Austria-Hungary, this business of importing and selling mineral water in the United States was being conducted in the name of Andreas Saxlehner at 130 Fulton street, in New York City. Goods were shipped and bills rendered from there and payments were received there.

On December 21, 1918, the Alien Property Custodian of the United States, acting under the provisions of the Trading with the Enemy Act, demanded and seized the business of the firm of Andreas Saxlehner, all its tangible and intangible assets, trademarks, trade-names, and good will as the property of an alien enemy resident in Budapest, Hungary.

On December 24, 1918, the Alien Property Custodian filed a copy of the demand and notice of the seizure of the property in the office of the Commissioner of Patents, and sold as a going concern the business theretofore conducted under the trade-name of An-dreas Saxlehner, at 130 Pulton street, New York, and elsewhere in the United States, including its office furniture, fixtures, pills, labels, good will, trade-names, and trademarks to the Partola Manufacturing Company, which on May 19, 1919, transferred the same to the plaintiff, a corporation existing under the laws of the state of New York.

The defendant, a citizen of New York, now imports mineral water bottled by the firm of Andreas Saxlehner in Hungary, and sells this water under the name of “Hun-yadi Janos” and “Andreas Saxlehner” in bottles which bear labels similar in every de* tail to those above described.

The plaintiff asks that the defendant be enjoined from importing and selling any bitter water under the name of Hunyadi Jan-os, or the name Andreas Saxlehner, or under any colorable imitation of plaintiff’s label, and from doing anything which may tend to destroy or impair the rights, trademarks, property, or good will seized by the Alien Property Custodian.

In Bourjois & Co., Inc., v. Katzel, 275 F. 539, the Circuit Court of Appeals held that the importation and sale in the United States by a third person of a face powder made in Prance, bearing the trade-mark under which it is sold in Prance and also in this country, is not an infringement of the American trade-mark on the same imported powder, acquired by an American from the Preneh manufacturer, even assuming that it would be a breach of its obligation, if the Preneh manufacturer sold the powder in this country under that mark. The court held that because the third person bought the face powder in Prance and herself imported it into this country and sold it in the boxes in which she purchased the powder, she did not infringe the American trade-mark.

Following that decision, the Circuit Court of Appeals affirmed an order denying the application of the complainant in the suit under consideration for a • preliminary, injunction against the defendant, and in so doing the Circuit Court said: “If we assume for the purposes of the argument that the plaintiff obtained a good title to the business in this country of the firm of Andreas Saxlehner in Hungary and owns -here the trade-marks claimed, nevertheless as the defendant purchased the water in Europe and it is the genuine Hunyadi Janos water, and he is offering it to the trade in the same form in which he imported it and the labels were affixed to it by the firm of Andreas Saxlehner in Budapest we see no distinction in principle between this ease and the Bourjois Case.” Hunyadi Janos Corporation v. Stoe-ger, 285 P. 861.

Subsequently the United States Supreme Court reversed the decision of the Circuit Court of Appeals in the Bourjois Case, and held that the fact that the powder was the genuine product of the French concern, and that it was contained in boxes of the Preneh concern, bearing its trade-mark, did not give the defendant the right to sell the powder in such boxes in the United States after the French concern had sold to the complainant its trade-marks, business, and good will in the United States. Bourjois & Company v. Katzel, 260 U. S. 689, 43 S. Ct. 244, 26 A. L. R. 567.

As was pointed out by the Circuit Court of Appeals on the application for a preliminary injunction in this suit,' it did not deem it necessary to inquire whether the plaintiff acquired legal title to the trade-marks through the sale by the Alien Property Custodian, because assuming it had the legal title, the defendant could import and sell an article made in a foreign country and bearing the trade-mark under which it is sold in that country, and also in this country, without infringing the American trade-mark on the same imported article.

The Trading with the Enemy Act of Oct. 6, 1917, § -7, subsee. (c), as amended by Act of November 4,1918, ch. 201, § 1 (Comp. St. Ann. Supp. 1919, § 3115%d), provides that if the President shall so require, any property, including patents, copyrights, trademarks, and rights and claims of every character and description belonging to an enemy or ally of an enemy not holding a license granted by the President, which the President after investigation shall determine so belongs, may be seized by the Alien Property Custodian, and that any requirement made pursuant to the act, or a duly certified copy thereof, may be filed, registered, or recorded in the proper office for the filing, registering, or recording of conveyances, transfers, or assignments of patents, copyrights, or trade-marks, or any rights therein, and if so filed, registered, or recorded, shall impart the 'same notice and have the same force and effect as a duly executed conveyance, transfer, or assignment to the Alien Property Custodian so filed, registered, or recorded.

The defendant contends that the trademarks were inseparable,, from the product of the natural springs "or wells in Hungary, and therefore could not be conveyed without the wells to which they were appurtenant, and that therefore they could not be seized and transferred hy the Alien Property Custodian, and that the sale by him effected at most a transfer of the tangible property in the New York selling office and of the right to dispose of the merchandise there on hand under trade-marks appurtenant thereto.

The plaintiff contends that the Alien Property Custodian seized the business and the good will of the business carried on in the United States, and that the trade-marks and trade-names were appurtenant to the business carried on in the United States.

In its opinion on the application for a preliminary injunction herein the Circuit Court of Appeals said: “If the firm of Andreas Saxlehner in Hungary had transferred along with its trade-mark its American business exclusively to the New York firm and had thereafter undertaken to compete with the latter by exporting its water to the United States for sale here, its conduct would have afforded a ground for equitable jurisdiction. See Appollinaris Co. v. Scherer (C. C.) 27 F. 18, 20; A. Bourjois & Co. v. Katzel (C. C. A.) 275 F. 539, 542.”

The seizure of the American business of Andreas Saxlehner by the Alien Property Custodian and its transfer by him did have the same legal effect as if Saxlehner had transferred his American business with its good will and trade-marks exclusively to the New York firm, or its assignor.

In Koppel v. Orenstein (C. C. A.) 289 F. 446, Judge Mantón said:

“It was the apparent intention of Congress to sell enemy property as fully as the owner thereof could sell. This was deemed necessary as a war measure. In the case of a going concern, which owned the good will or trade-marks, it was clearly intended that these concerns should he kept going in order to engage in manufacturing or other enterprises which might he needed for the welfare of our country during this period; and it had the other purpose of crippling’the enemy to the extent of preventing the enemy from enjoying its property or its profits during such period. Likewise, it was the intention of Congress that the American citizen, who was authorized to purchase at public sale, should, if the terms of sale so provided, be able to buy and enjoy his purchase as a going concern, thereby obtaining all, that the German proprietorship consisted of at the time of sale. The language of the Trading with the > Enemy Act clearly embraces this power of' sale. To permit of the sale of the physical property only would have deprived the purchaser in* the instant ease of the great value of the good will of the German corporation, which had made its business and its growth during the preceding years. The conveyance by th,e bill of sale as referred to, conveyed ‘the business as a going concern and the good will,’ together with ‘all registered and unregistered trademarks * * * trade-names and the like,’ and ‘all privileges, franchises, and rights of every kind,’ owned hy the German corporation and its subsidiaries in the United States. We think this conveyed to the purchaser the exclusive right to .carry on the business in the United States, with the right of protection of a court of equity from interference by the German corporation; for, if the present interference be permitted, what was conveyed would in time be destroyed. The sale was as complete as if it were a voluntary conveyance of its interests in the United States by the German corporation. It is not the ease of a sale in invitum of the good will and business. Assuming a voluntary sale of its good will and business had been made hy the German corporation, would it have been at liberty later to impair the good will by seeking the customers of the buyer and carrying on business, using substantially the same trade-name and trade symbol as they had theretofore used? We think not.”

In the Bourjois Case the United States Supreme Court expressly refers to the fact that the labels have come to be understood by the public here as meaning goods coming from the plaintiff who bought the powder in bulk and repacked it in the United States.

In the Koppel Case the product sold hy an alien enemy in the United States, and seized by the Alien Property Custodian, was manufactured, in factories in the United States. The trade-mark affixed to the product, although the trade-mark of an alien, indicated a product coming from a factory in the United States.

In the case under consideration, the evidence that the names Saxlehner and Hunyadi Janos were associated in the United States with a business carried on in New York, rather than with a mineral water having its origin in Hungary, is not very satisfactory. It seems, however, sufficient has been proved to establish that the aliens carried on the business of importing and selling Hunyadi Janos water, and of manufacturing and selling Hunyadi Janos pills, in the United States extensively enough to create good will in connection with their business in tbe United States, and tbat a sale of tbeir business, its good will, and its trade-marks did transfer tbe trade-marks, not as appurtenant to tbe wells, but as appurtenant to tbe business carried on in America and sold by tbe Alien Property Custodian.

Tbe Circuit Court of Appeals seems to have been of tbat opinion when it stated tbat if tbe firm of Andreas Saxlehner bad transferred along witb its trade-marks its American business exclusively to tbe New York firm, and bad thereafter undertaken to compete witb tbe latter by exporting its waters to tbe United States for sale here, it would bave afforded ground for equitable jurisdiction.

Tbe defendant contends tbat tbe bill should be dismissed because tbe trade-mark has been used witb a design of deceiving tbe public in tbe purchase of merchandise. Trade-Mark Statute, § 21 (Comp. St. § 9506).

Tbe fact tbat tbe plaintiff is doing business under tbe name of Hunyadi Janos Corporation, and tbat tbe plaintiff on a label announces tbat it is the owner of tbe firm of Andreas Saxlehner, does not justify defendant’s contention that tbe plaintiff thereby represents itself as tbe owner of tbe wells or as identified witb tbe firm of Andreas Saxlehner. This is so in view.of tbe fact tbat Andreas Saxlehner and his successors, besides selling mineral water, also manufactured in tbe United States and sold, under tbe name of Hunyadi Janos, pills made of chemicals, none of which was derived from Hunyadi Janos water, and in view of tbe fact tbat plaintiff affixed to tbe bottles containing tbe Hunyadi water sold by it a notice tbat in tbe United States the trade-mark Hunyadi Janos is tbe property of and may be used only in connection witb tbe business formerly carried on at 130 Fulton street, New York, by Andreas Saxlehner, which business plaintiff now owns, and any person selling mineral water in tbe United States under tbe name Hunyadi Janos, which does not bear this neck label, shall be prosecuted to tbe full extent of the law.

Tbe facts do not convince tbe court tbat the mark, or tbe name Hunyadi Janos Corporation has been used by tbe plaintiff with a design of deceiving tbe public in tbe purchase of tbe water. See Jacobs v. Beecham, 221 U. S. 263, 273, 31 S. Ct. 555, 55 L. Ed. 729.

Tbe infringement of plaintiff’s trademark, therefore, must be enjoined.