Lapointe Machine Tool Co. v. J. N. Lapointe Co.

99 A. 348, 115 Me. 472, 1916 Me. LEXIS 103
CourtSupreme Judicial Court of Maine
DecidedDecember 18, 1916
StatusPublished
Cited by16 cases

This text of 99 A. 348 (Lapointe Machine Tool Co. v. J. N. Lapointe Co.) is published on Counsel Stack Legal Research, covering Supreme Judicial Court of Maine primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Lapointe Machine Tool Co. v. J. N. Lapointe Co., 99 A. 348, 115 Me. 472, 1916 Me. LEXIS 103 (Me. 1916).

Opinion

Cornish, J.

This bill in equity is brought by the Lapointe Machine Tool Company of Hudson, Massachusetts, against the J. N. Lapointe Company of New London, Connecticut, both corporations having been organized under the laws of this State, to enjoin [475]*475the defendant from using the name “Lapointe” in any way in connection with its corporate name or its products, and also asking for damages for loss of profits. The cause is before this court on report, a temporary injunction having been issued by the sitting Justice. The essential facts may be outlined as follows:

Both the plaintiff and defendant companies are manufacturers of what is known in the mechanic arts as broaching tools and broaching machines. A broaching tool, or a broach, as it is sometimes called, is made from a solid bar of steel in which teeth are cut, each succeeding tooth being a little longer than the preceding. A broaching machine is operated by either pushing or pulling a broach through an internal section of metal changing its contour or outline. The cutting of a key way is a simple illustration. Broaching tools and machines of various designs have been known to the trade for many years.

In 1896 Joseph N. Lapointe, then an employe of the Pratt and Whitney Company of Hartford, Connecticut, after many experiments originated a system of broaching which was a marked improvement on the methods then in use. This improvement in the broaching tool consisted in making the cutter teeth an integral part of the bar instead of having separate teeth attached to the bar. He also designed and built a broaching machine of a new model adapted to do the work by this new system. Some of the older machines then in use were upright. The Crompton and Knowles type which he had been using in the Pratt and Whitney shop was of the horizontal type but with a rack and pinion drive. The machine originated by Lapointe was also of the horizontal type but with a nut and screw drive. This increased the power, and the new system combining both the machine and the improved tools enhanced the production and enlarged the scope of the work.

On March 3, 1902, J. N. Lapointe caused the plaintiff company to be incorporated for the purpose of manufacturing among other products these new broaching machines and broaches. He gave to it the name of the Lapointe Machine Tool Company. On March 15, 1902, he conveyed to the corporation all his patent rights, whether issued or pending, and all his right, title and interest in his patterns, drawings and designs in return for stock in the company. He himself became a director and the president and general [476]*476manager. He was the head of both the manufacturing and the business departments and was the ruling spirit in the company.

This corporation began business in a small way on Heretord street, Boston, Mass., with only three or four employes. As it had meagre capital, it, at first, did a general jobbing business and, later, manufactured portable reamers and taps. At the end of eighteen months larger quarters were secured on Atlantic avenue. In 1903 it manufactured and sold its first broaching machine. In 1906- the company moved to Hudson, Mass., where it erected a plant and has ever since remained. Its trade increased after the removal to Hudson and with the advent and development of the automobile business, beginning about 1900, the use of these machines was multiplied. Frank J. Lapointe, the plaintiff’s son, early entered into the service of the company. He was made a foreman and later had practically one-half of the manufacturing at the Hudson plant under his charge. He was a skilled machinist.

In the summer of 1911, one Hall, who had been a stockholder and the treasurer for several years, but who was himself actively engaged in the insurance business in Boston, acquired the stock control of the corporation. Friction ensued and both J. N. and Frank J. Lapointe were, as they claimed, practically forced out of the company.

On July 17, 1911, immediately after severing his connection, J. N. Lapointe organized the defendant corporation, gave it his full name and began the manufacture of broaching machines and tools at Marlboro, Mass. The company remained there about eighteen months and in the early part of 1913 moved to New London, Connecticut, where a new plant had been constructed and where it has ever since been carrying on a growing business. Frank J. Lapointe entered the new concern with his father. Another son, Ralph R. Lapointe, was engaged by the plaintiff as a mechanical engineer after the withdrawal of his father and brother and is still in its employ.

This brief statement of facts makes an adequate outline for the discussion of the issues in this case. The plaintiff and defendant have been engaged in lively competition since 1912 when the new company started in active business. The plaintiff contends that this competition has been unfair on the part of the defendant, and [477]*477on December 11, 1915, brought this bill in equity to protect its rights by enjoining the defendant from the use of the name “Lapointe,” and to recover damages for loss of profits. The decision of this case does not involve in"any degree the question of trade marks nor the rights which pertain to patented articles. The sole issue, around which all the subsidiary and collateral issues cluster, is that of unfair competition. This is a question of fact to be determined in accordance with certain well recognized and clearly defined rules of law.

It should be stated at the outset that the nature of this form of action is such that the courts require clear and convincing proof of the plaintiff’s claim. In a sense the remedy that is sought invades the realm of private enterprise and private rights, and it is only when the necessity and the justice of such invasion are made clear that the court in equity will interfere. As was said by the Federal Court, in denying an injunction in a very recent case:

“When a plaintiff provisionally stands upon grounds independent of the scope of his patent and goes to the proposition of unfair competition in trade, he prevails, if he prevails at all, under the general doctrines of equity; and when an injunction is sought, which operates as restraint in the mercantile field, it is a principle of equity based upon considerations of caution, that to justify an injunction the case must be unmistakably clear and beyond question.” Marshall Field & Co. v. Kelley Co., 233 Fed., 265 (1916).

Stated broadly, monopoly in trade is frowned upon, while free competition is. favored by the law. There is, of course, one exception to this rule, namely patent and copyright legislation which is designed to promote invention and literary achievement. But unless a commodity is governed by these exceptional rights competition is to be desired and encouraged.

Competition, however, is of two kinds, fair and unfair, and unfair competition may be subdivided into the ethically unfair and the legally unfair. Courts have to do only with the last named. Many acts among keen business rivals which might offend the golden rule do not violate the legal rule.

Hence it is that unfair competition, as a legal term, has acquired a well defined meaning. Its definition is found in varied forms [478]*478throughout the decisions, several of which are collated in Nims on Unfair Business Competition, sec. 14; but the underlying element in all is that no person shall be permitted to palm off his own goods or products as the goods or products of another.

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Bluebook (online)
99 A. 348, 115 Me. 472, 1916 Me. LEXIS 103, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lapointe-machine-tool-co-v-j-n-lapointe-co-me-1916.