Smith Dixon Co. v. Stevens

59 A. 401, 100 Md. 110, 1904 Md. LEXIS 124

• Court: Court of Appeals of Maryland
• Decided: December 1, 1904
• Status: Published

Opinion

Boyd, J.,

delivered the opinion of the Court.

This is an appeal from an order granting a preliminary injunction against the appellant at the instance of the appellee. The bill alleges that the plaintiff has been engaged for many years in Baltimore in the business of making paper bags, a sample of which is filed as an exhibit, and to further promote and extend the sale of the same he adopted the cut or print which appears on the exhibit. It further alleges that these paper bags were very largely sold to persons engaged in the business of selling teas, coffees and sugars and, among others, to the C. D. Kenny Co., doing business in Baltimore, that the plaintiff derived a large income from the sale of the same and, for the further protection of his rights in said label or form of advertisement, he in pursuance of the Act of Assembly, 1892; ch. 357, had it registered with the Secretary of State, a copy of which, together with the certificate of the Secretary, is filed as an exhibit. It then charges that the appellant company has for sometime past been selling paper bags manufactured by it to the C. D. Kenny Company, a sample of which is filed as an exhibit, and which contains an imitation of the plaintiff’s said form of advertisement, and prays for an injunction against the defendant and for other relief, which will hereinafter be more particularly mentioned.

The Court passed an order “that the wilt of injunction issue as prayed,” provided a bond be given as therein directed, and gave the defendant the usual leave to move for a rescission of the order and dissolution of the injunction. From that order this appeal was taken, after the defendant had filed its answer. Under our decisions we are not at liberty to consider the an swer, but must be governed entirely by the bill and exhibits filed with it.

By agreement of solicitors fac similes of the paper bags and of the registered label, filed as exhibits, were produced at the hearing in this Court instead of copying them in the record. We will direct a fac simile of the label registered with the Secretary of the State to be inserted in the report of the case, in order that it may be more easily understood. On the paper bags of the plaintiff, is printed in red ink, this registered label, excepting there is no blank space, but there are the letters.and words “C. D. Kenny Co.” in place of the blank. Above this device there is m capital letters and figures “Established 1870,” and just beneath it “60 Stores.” There are beneath that a red heart on which there is printed “Paper Bag Workers,

Union Made, Union A. F. of L,” to the right of that a round Stevens

red imprint on which are printed “Made in 4 Balto., and still Sandow,”

to the right of that is Trades Council Union Label, with the figures 14, which we presume is the number of the Council. On the paper bag of the defendant is a large device like that of the plaintiffs, with the word “Established 1870” above and “60 Stores’’ below. Then still below that is the Union Label

The Product Of

with figures 20, which separates the words

Union Label,

and below that is a figure in red which we understand to be the number of pounds the bag holds.

The appellee contends that he is entitled to relief, either under the common law or under the Act of 1892, Without meaning to question the right of a Court of equity to grant one entitled to it the writ of injunction to protect a trade mark as the right existed in this State prior to the Act of 1892, it is clear that the injunction granted was based on that Act'alone. We are not called upon, on this appeal, to determine whether an injunction could issue on this bill under the powers of a Court of equity, as they existed with reference to trade marks prior to the passage of this Act, but only whether the injunction that has already been issued was proper. The fourth paragraph of the bill is as follows: “Your orator further shows that offenders against the said Act cannot only be proceeded against criminally, but the remedy of an injunction is expressly given to anyone whose rights are invaded by the piracy of said form of advertisement, and accordingly he prays for the writ of injunction against the said Smith, Dixon & Co., restraining it from using said imitation of said form of advertisement, or any counterfeit of the same, and that it may be ordered to surrender up to the Clerk of this Court all such imitation forms of advertisement they may have on hand for destruction by said Clerk, and pay the costs of this proceeding, together with such reasonable attorney’s fee as the Court may allow, and pay all the damages which your orator has suffered by reason thereof, and for such other and further relief as his case requires and may be just.” The bill therefore not only, after referring to the Act, accordingly prays for the injunction, etc., but every form of relief provided for in section 4 of the Act, is specifically prayed for (unless perhaps it be the profits therein mentioned), and no other relief is prayed for, excepting such as may be obtained under the prayer for general relief. It would seem therefore to be clear, without making other references to it, that the bill must be limited to relief under that statute alone and the order for a preliminary injunction must be held to have been so intended.

We have found some difficulty in considering the question from the manner in which the bill is drawn. It is not altogether clear that it does not ask for a mandatory injunction, ordering the defendant to surrender to the Clerk the forms of advertisement it has on hand for destruction by him. The statute has that provision at the end of section 4, and when read in its proper place it can be seen that such order can only be passed after a hearing, but in the bill the prayer for that is placed next to that for the writ of injunction restraining the use of said form of advertisement. The order of the Court is that the writ of injunction “issue as prayed,” but we will assume that it was not intended to direct the issue of the mandatory injunction before hearing. The writ is not in the record, as it doubtless would have been if it had included a mandatory injunction.

Section 1 of this Act provides “That whenever any person, association or union of workingmen have adopted, or shall hereafter adopt for their protection any label, trade mark or form of advertisement announcing and denoting that goods to which such label, trade mark or form of advertisement shall or may be attached were manufactured by such person, or by a member or members of such association or union, it shall not be lawful for any person or corporation to counterfeit or imitate such label, trade mark or form of advertisement,” and then provides that every person violating this section shall be deemed guilty of a misdemeanor, and upon conviction be punished by imprisonment or fine, or both, as therein provided. Section 2 makes every person, corporation or association, who shall use any counterfeit or imitation of any label, trade mark or form of advertisement of any such person, etc., knowing the same to be counterfeit or imitation, guilty of a misdemeanor, subject to imprisonment or fine, or both, and places the burden on the defendant of proving that he did not know the true character of it, and that he used the same in good faith. Section 3 provides for filing the label, etc., for record in the office of the Secretary of State, and for the effect of his certificate. Section ‡ provides the relief above stated. Section 3 makes it a misdemeanor to use or display the genuine label, etc., of any such person, etc., in any manner not authorized by him, and section 6 prohibits the use of the name or seal of any such person, association or union, or officer thereof, in and about the sale of goods or otherwise, without being authoi'ized to so use the same.

The certificate of the Secretary of State is dated the 1st day of June, 1904, and we understand that to have been the date on which the label was filed, as no other is given. This bill was filed and the injunction granted on the 28th of that month. The bill does not in terms allege that the defendant had sold any of the paper bags with this label on them since the certificate of the Secretary of State was issued. It does allege that the said Smith, Dixon & Co. “have for sometime past been selling” them “and which said bags contain an imitation of your orator’s said form of advertisement.” It does not specifically state how long the plaintiff has been selling bags with this label on them. It says he has been “engaged in the business of making paper bags, a sample of which is herewith filed and marked ‘Plaintiff’s Exhibit A,’ that the said firm has cax'ried on said business for thirty-two years at the same place in the city of Baltimoi-e * * * and to further pi'omote and extend the sale of the same your ox-ator adopted the cut or print which appears on the said exhibit, and which serves as an attractive and useful form of advertisement in bringing the contents of said bags to the notice of customers and parties dealing in the same.” It does allege that the defendant has deprived the plaintiff “of the large profits which he would have earned in the regular course of business if he had not been thus unlawfully interfered with by the defendant, contrary to the provisions of the said Act,” etc., but no one can, from the reading of the bill, be certain that the defendant has sold any of the bags since June ist, and it is impossible to reach the conclusion that he has, unless it be from mere inference, and there is no allegation that he intends or threatens to continue to do so. “If the facts, as stated upon the face of the bill, be not full and sufficiently definite and clear, in support of the right asserted, and that such right has been violated in the manner charged, the Court will not order the defendants to be restrained before they are heard in their defense.” Miller’s Eq. Proc., 687. Remembering that we have already said that this preliminary injunction was based on the Act of 1892, the reason we have assigned is sufficient to show that it should not have been issued.

But the right to the relief prayed is too doubtful in other respects, as made out by the bill and exhibits. It seems to us to be perfectly manifest that the label filed with the Secretary of State is a copy of that used by C. D. Kenny Co., filed as “Plaintiff’s Exhibit A,” which, as must be inferred from the bill, had been used long before June ist. When it was made there was an effort to leave off the name of C. D. Kenny Co., but the upper and lower part of the letter “K” and the lower part of the letter “y” are apparent — are the same shape and about, if not exactly, the same size. Indeed we understand the bill to admit — at least inferentially — that the plaintiff had printed that form for C. D. Kenny Co. for a long time before the plaintiff filed the label with the Secretary of State. If, as we think can be inferred from the bill, the C. D. Kenny Co. has been for years using this form of advertisement for the sale of their teas, coffees and sugars, the plaintiff should not necessarily be permitted to assert the exclusive right to it, simply because he sold the bags and printed that form on it. No one would suppose from looking at the bags that it was a trade mark of the plaintiff — but, if of anyone, that of the company selling its goods in it. Of course we are not speaking of the imprint at the bottom of the bag, with Stevens name on, but of this label which is alleged to be like that filed with the Secretary of State. It could hardly be said that it would be to the advantage of C. D. Kenny Co., in the sale of their goods, to have the public know or believe that the plaintiff makes the bags in which they are sold. It might be important to have the stamp of the Trades Council on them, but it is not involved in this case, and presumably the defendant has as much right to such a stamp as the plaintiff, if the Trades Council chose to allow it. The public could not possibly be deceived by C. D. Kenny Co. selling their merchandise in bags made by defendant, instead of by the plaintiff, and it might work a great hardship on that company if in fact it has for years been using this form of advertisement of its merchandise, if the plaintiff, simply because he furnished the bags and printed the labels on them, can control it by registering the form with the Secretary of State. Some competitor of C. D. Kenny Co. might buy the right from the plaintiff, and by the use of the form accomplish one of the principal things the law of trade marks seeks to prevent — impose on the public, as well as on the company. This statute undertakes to make the certificate of the Secretary proof of the right of the party receiving it to adopt the label, and, if the plaintiff’s theory is correct, not only the defendant and other dealers in paper bags that C. D. Kenny Co. might buy from are criminally liable, but that company itself is liable, for using an imitation of a label which, apparently according to the bill, they have been using for years on the paper bags and possibly have adopted that form to advertise their goods, in ways other than on the bags.

In Robertson v. Berry, 50 Md. 591, it was held that a property right may be acquired in the devices, emblems and title pages of an almanac by adoption and user, without the derivation of a legal title from the original owner. In Eddleston v. Vick, 18 Jurist 8, cited by Judge Miller in the above case, it was held “that the right of property in certain labels or engraved papers or wrappers in which pins manufactured by the' plaintiff were put up could be acquired by user alone." Judge Miller in commenting on it said, “The plaintiff in that case was not the original inventor, or proprietor of the labels or engraved papers or wrappers, but claimed from the assignees in bankruptcy of a former partner of the original proprietor and inventor. He had, however, carried on business and used the labels for a period of more than eleven years, and by this alone he was held to have acquired a right of property in them.” He also quoted with approval from Canal Company v. Clark, 13 Wallace, 322, where the Supreme Court said, “Undoubtedly words or devices may be adopted as trade marks, which are not original inventions of him who adopts them, and Courts of equity will protect him against any fraudulent appropriation or imitation of them by others.” Those were cases where the plaintiffs were relying on the iise of trade marks to enforce their rights as plaintiffs in Courts of equity, and when it can be seen from the bill and exhibits that others may thus have acquired rights against one seeking the aid of a Court of equity it behooves the Court to be very cautious about giving such aid, before there has been an opportunity to investigate and ascertain the rights of the parties.

In Witthaus v. Mattfeldt, 44 Md. 303, Judge Robinson said, in speaking of trade marks, “In order to justify the interposition of a Court of equity by %vrit of injunction, this right ought to be established by the most satisfactory proof. ” There the question was whether the party who claimed protection for a trade mark was in fact entitled to it, as there was evidence that a very similar device had been used by another sometime before. Testimony had been taken but as it left the matter in doubt the Court refused an injunction, even after hearing.

We do not deem it necessary to determine whether that part of the Act which refers to the effect to be given to the certificate of the Secretary of State is unconstitutional, as claimed by the appellant, but we are satisfied that the bill does not show the plaintiff to be so clearly entitled to control the use of the label as to justify the Court in issuing an injunction before giving the defendant an opportunity to be heard, but on the contrary the bill and exhibits leave the plaintiff’s right to it in too much doubt to admit of such a summary proceeding. The statute may doubtless be a useful one in many cases, to protect rights and prevent frauds, but when sufficient appears in the bill arid exhibits to suggest that great injustice may be done, not only to the defendant but to those not parties to it, great caution is required of Courts in granting an injunction before hearing, especially when no urgent necessity is apparent for such a course. Being of the opinion that this order should not have been passed it will be reversed, but the cause will be remanded, so the rights of the parties can be properly determined, after testimony is taken, or such other proceedings adopted as may be desired by the parties and sanctioned by the Court.

(Decided December 1st, 1904.)

Order reversed and cause remanded, the appellee to pay the costs in this Court and the costs below to abide the final residt of the case.