W. A. Gaines & Co. v. Rock Spring Distilling Co.

226 F. 531, 141 C.C.A. 287, 1915 U.S. App. LEXIS 2223

• Court: Court of Appeals for the Sixth Circuit
• Decided: July 20, 1915
• Docket: No. 2572
• Status: Published

Opinions

DENISON, Circuit Judge

(after stating the facts as above). [1] I. The first objection which plaintiffs alleged trade-mark rights must meet is that the words are descriptive, and so incapable of becoming a true trade-mark. If nothing were involved except the effect of the 1909 registration, this objection might be passed without decision, since the application for registration indicates use for more than 10 years before 1905, thus perfecting rights which might have been imperfect when the use began, and would have so continued except for the stalute (Davids Co. v. Davids, 233 U. S. 461, 34 Sup. Ct. 648, 58 L. Ed. 1046; Nashville Co. v. Coca Cola Co., 215 Fed. 527, 529, 132 C. C. A. 39); but it is impossible wholly to separate the force of this registration from the underlying broader question, because rights prior to this registration are indirectly involved.

[2] During the lifetime of the distiller Crow, it seems clear enough that to call his product by his name could not amount to- the adoption of a valid trade-mark; the use of the name was descriptive, rather than arbitrary, and a manufacturer cannot thus exclude all others. Such use might give rise to quasi exclusive rights on the secondary meaning theory; but this theory is not alleged. The same situation, apparently, must continue after Crow’s death, and in reference to whisky which had been manufactured by him during his life. The necessary meaning of the words, as merely describing the article or stating the name of the maker, would seem to merge and destroy any otherwise possible implication that they were an arbitrary symbol of origin. As the making of whisky after Crow’s death, but by the same formula and methods, was continued by Pepper or by Gaines, and as it continued to be called “Old' Crow,” this appellation would gradually change its character. -It at once ceased truly to personify the maker; it did not immediately become merely arbitrary. As the trade lost the sense of Crow’s personality, as he became less real and more traditional, as no one else of the same name challenged the growing right, and as with Crow’s personality fading there must also fade the vague descriptive effect of using his formula, the words “Old Crow” would become less-descriptive and more arbitrary, and after a period of such unchallenged use they would become dominantly and substantially a mere symbol of origin. Whether this right of exclusive appropriation as a trademark had matured in 1866 or 1867, when Gaines, Berry & Co. began the use, or matured in 1870, the date named in their first trade-mark registration, or matured at some other date, is not now material. The facts seem to show an unbroken development of the type which the courts had recognized, but which had not been effectuated by statute until the law of 1905. Words which were at first essentially incapable of exclusive appropriation were continually used as descriptive by the only one who could truthfully make such use, until, by change of circumstances and by long acquiescence, they had come to indicate, and indicate only, a particular product of a particular manufacturer. It might be otherwise, if the words had originally been more purely descriptive of quality or method; and it may be that some person named Crow would even yet have a measure of right to call his product “Crow.” We do not meet either of these questions; and, in what has been said regarding the capability of the name for exclusive appropriation, we have, for the time being, disregarded whatever force the St. Louis use by Heilman may have.

[3] 2. When we consider the claim that the Heilman decree is a bar to any relief in this suit, we first meet the objection that there is no privity of parties. We must think that privity sufficiently appears. The parties defendant in that case, at the time of its commencement, had been the two Heilmans, 'who were partners. Pending the suit, one partner died, and his administrator, Kahn, was substituted. Later, but still pending the suit, the entire business of the Heilman Bros, was transferred to the just organized corporation, the Heilman Distilling Company, and by supplemental bill this corporation was made defendant. The corporation was therefore a party to the suit at. the time of the final decree. During the existence of the partnership- of Heilman Bros., it had leased the distillery of the Rock Spring Distilling Company, near Owensboro, Ky., and as lessee it had manufactured whisky there in 1904. The Heilman Distilling Company, as such lessee, continued such manufacturing in 1905, 1906, and 1907. In 1909 all this remained in bond in the distillery warehouse. In 1909, and after the final decree in the Missouri case, the Heilman Distilling Company contracted with the Rock Spring Company, and with Rosenfield, as its lessee, for the further manufacture of whisky, and for the bottling in bond of the 1904 stock, and for the use upon such bottles of the brand or label “Heilman’s Celebrated Old Crow.” The Heilman Company gave to defendants a bond of indemnity to protect them against plaintiff’s claims; in using this brand or label, defendants are acting for and in behalf of the Heilman Distilling Company; and the right of that company to use this brand on this article is the very thing in controversy. The former decree must be given the same force and effect as if the Heilman Distilling Company were the nominal, as it is the real, defendant here. Kessler v. Eldred, 206 U. S. 285, 27 Sup. Ct. 611, 51 L. Ed. 1065.

[4] 3. Plaintiff next urges, by way of escape from the claimed force of the Heilman decree, and even if that decree is to be considered as an adjudication that the plaintiff had no lawful title to the trade-mark, yet that, since the only use there involved was upon a blended whisky, while the use here involved is upon a straight whisky, a judgment that plaintiff had no trade-mark valid agaihst a blended whisky would not be a judgment that plaintiff had no trade-mark valid for straight whisky. Disregarding, for the present, such limitations as for the purposes of this suit must be thought to have been imposed on plaintiff’s rights by the peculiar form of the 1909 registration, and with reference only to the general question and the general rule, we cannot be satisfied with the theory which would thus interpret and then limit the effect of the Heilman decree. ■ The general rule is clear that a common-law trade-mark for one article extends to another article of the same descriptive properties; the difficulties come in applying this limitation, “of the same descriptive properties.” The distinctions between a straight whisky and a blended whisky have given rise to much controversy in other legal fields; but it seems to us dear that, whatever the extended classifications and subclassifications of the Patent Office practice may contemplate, neither the common law nor the registration statute can intend such confusion as must result from recognizing the same trade-mark as belonging to different people for different kinds of the same article. Established trade-marks directly indicate origin; but, if they have any value, it is because they indirectly indicate kind and quality, and to say that the seller of a blended whisky might properly put upon it a mark which was known to stand for a straight whisky, or vice versa, would be to say that he might deceive the public, not only as to the origin, but also as to the nature and quality, of the article. The decided cases do not permit a trade-mark like this to he thus divided as to its subject-matter;¹ and we must think that whatever was adjudicated regarding plaintiff’s title to its trademark applies to its use on both kinds of whisky.

[5] 4. It is next urged that the Eighth Circuit decree may be reconciled with granting the relief now sought, and upon the theory that trade-mark rights may be limited in territory, and that plaintiff might have the right to this trade-mark for whiskies throughout the country generally, while the Heilmans might have an' exclusive right to the same words as a trade-mark for the same article in St. Louis and the Southwest, thus being’ given the field which they claimed they had first exploited and reduced to possession. This suggestion, presents two conflicting theories of trade-mark origin and right, — and we speak now only of marks which are so-called “technical” trade-marks. One theory is that the right arises from adoption, — from a kind of creation or discovery followed by appropriation. Whether the right is perfect at the instant of adoption, or whether there first must- be sufficient use upon the goods to create for the mark a meaning among that part of the public which begins to purchase, is a detail which would not usually be important. According to- this theory, if the right is once acquired by prior adoption, it is by its very nature exclusive of all later similar rights which might otherwise he acquired by similar adoption; and from that theory it would seem to- follow that one who first adopts the mark and applies it to- his. goods in interstate commerce, and who extends his business into- new localities, until, in regular course, his business may cover the country, may prevent the use of the mark by another later user, even though that other has adopted the mark in good faith, and in his particular field has given it identity with his goods. How much diligence on this theory the first user must employ in extending his business to get the full benefit of his initial right need not now be considered. The other theory is that no right is perfected until the mark has been used to such an extent that it has come to have a meaning to the particular purchasing public as to which a controversy arises, and that the, duty bf courts of equity to enforce such rights depends essentially upon the duty of protecting this public against being misled. From this theory it will follow, or it may follow,'that the later adopter, who- has brought it about in a given locality that the mark indicates to the public that the goods are of his manufacture, may thereby .himself acquire a trade-mark right or its' equivalent, affirmatively enforceable in that locality and among that public, even against the first proprietor.

We do not find it necessary to consider or to attempt to decide the question so presented. For the purposes of this case, and without intimating any opinion, we give the first appropriator the benefit of the doubt and assume that his title is prima facie country-wide and exclusive against all others, and that as against all who have no special and superior equity he is entitled to carry his' trade into- the new territory and there to enforce his exclusive right. However, the existence of this general or prima facie exclusive right is not inconsistent with an inability to enforce it against' some persons and under some circumstances. Instances may arise where the affirmative conduct or the laches of the first appropriator, and with reference to what he was at first entitled to call am infringement, has been such that on the principles of estoppel a court of equity cannot tolerate that he should enforce against the later user the right which might have been originally perfect. This subject is more fully discussed and the reasons which lead us to this conclusion pointed out, with some reference to the decided cases, in our opinion in the Rectanus Case, 226 Fed. 545, - C. C. A. -, this day decided. Under these considerations, and upon reference to the pleadings and the proofs in the Heilman Case, we conclude that the latter case is of the class where the refusal to give an injunction to the first appropriaior of the mark may be justified upon the ground of his estoppel; and so this ground of support must he considered in determining what is the true basis of that decree.

5. Is the Eighth Circuit decree a judgment that the trade-mark, in its general, prima facie, affirmative aspect, belonged to the Heilmans by prior appropriation? This-is the interpretation claimed by defendants. The language in the body of the Circuit Court of Appeals opinion is consistent with that interpretation, but the last paragraph indicates that the two judges (only two sitting) did not unite in putting the decision on this ground. When we turn to the record for further light, we find, first, that the defendants’ cross-bill claiming the trademark ownership was dismissed, and that the dismissal became final. I f, it had been even seriously contended by defendants that their early use of the words was effective to vest a trade-mark right therein, surely there would not have been acquiescence in the dismissal of the cross-bill. It was apparent, then as now, that affirmative title to the trademark would have been of great value to defendants, if they could maintain that position. We find, second, that there was in the record practically nothing indicating that the Heilmans ever pretended to adopt or claim these words as their trade-mark. They stamped some barrels with the words “P. Crow” or “J. W. Crow”; but no person of this surname had ever been connected with the Heilmans. The Crow, or ()ld Crow, which, in 1863, had been manufactured in Kentucky for 20 years or more, was at least considerably known on the market No reason has ever been suggested in this litigation, and we can think of none, why they should put this name on their barrels, unless they intended to indicate that the whisky was that made by Crow of Kentucky. Unless the selection of this name meant that it meant nothing. Witnesses for the defense frankly stated that in those years it was nothing unusual for jobbers or blenders of whisky to use well-known brands belongingto others, and that, if the initial of a proper name was changed, this was thought sufficient in morals to remove any objection to the appropriation. .This may be the genesis of the otherwise unexplained use of “P.” and “J. W.” ² The Heilmans also used advertising signs “Celebrated Old Crow Bourbon.” From the record, we must doubt whether these signs antedated 1870. But if they did reach back to 1863, and if they referred to the blend or mixture which the Hell-mans produced, it was neither “Celebrated,” nor “Old,” nor “Crow,” nor, unless by chance, “Bourbon.” ³ It was made by mixing colors and flavors with neutral spirits or high wines, or, sometimes, straight whisky; hut, if the latter, it was whatever they happened to have on hand. Defendants’ witness says, “Any brand would do.” Records which seem to be complete show that during the seven years from 1863 to 1870 the Heilmans sold, of this “Crow” whisky, an average of less than eight barrels per year.

In considering whether their use was of a trade-mark character, the peculiar nature of their business and their markings must not be overlooked. The brands or marks on whisky are usually those of the original manufacturer. The dealer or jobber may handle many well-known brands, and may mark his own name upon the packages or upon the advertisements; but this does not indicate that he claims the brands as his, or that he is acquiring a' trade-mark right therein. While the stencils on the barrel and the glass signs carried the name “Hellman & Co.,” they did not say “manufactured by,” or that Hellman & Co. were manufacturers or distillers, nor were they in any way inconsistent with mere sale by Heilman as jobber of a well-known brand made by some one else. The thus described nature and character of the Hellman early use might not always be thought sufficient to initiate and support even a defensive right; but they were so regarded in the former decree, and it is immaterial whether we would independently reach that conclusion. It did there appear that the Heilman use thus began and continued for seven years before 1870, or four years before 1867, the earliest date to which, under the pleadings, plaintiff could then resort, and that after 1870 it continued, increasing somewhat, although remaining comparatively small, and continuing without challenge from plaintiff until 1904. It may well be that, even if plaintiff did not know of this use and acquiesce, it was legally chargeable with such knowledge and acquiescence for many years, and that in 1904 the use would have matured into a possession of which a court of equity would not deprive defendant. At any rate, we think that is the theory upon which the former decree should be considered to stand; and, accordingly, it adjudicates 'such defensive right and nothing more. As interpreted by Judge Tacombe in the Baltimore Club Case (Carroll v. Mcllvaine [C. C. A. 2] 183 Bed. 22, at page 28, 105 C. C. A. 314), this right does not go beyond what has actually been “reduced to possession” by defendant, and does not extend to any whisky not mixed or blended, so as to be of the same general type as that which defendants had been making, or to trade or territory which they were not selling when that bill was filed. Such difficulties as there may be in; drawing the exact line of its effect are not here involved, because the infringement here sought to be enjoined is in another locality and of another character. This limitation — to blended whisky as distinguished from straight — thus imposed on defendants, is not inconsistent with our earlier holding that a trade-mark cannot be so divided. This limitation is not of the trade-mark right itself, but of .the fraction thereof which has been lost.

[6, 7] 6. The validity of plaintiff’s registration under the act of 1905 is attacked upon two grounds: First, that the registration was forbidden by section 5, because the mark was identical with a “known trade-mark owned and in use by another and appropriated to merchandise of the same descriptive properties,” viz., the Heilman trade-mark; and, second, that it would be invalid under that provision of section 21 which relates to certificates of registration fraudulently obtained.

We pass by the plaintiff’s contention that, the validity of registration cannot be collaterally attacked, but must be directly reached under the provisions of section 13, which provides for the cancellation of the certificate if it is made to appear that the registration was unlawful; and we do so because we conclude that the registration of a word capable of exclusive appropriation has no effect upon the substantive rights of 1he parties, excepting its evidential force to make a prima facie case of title. We find nothing in the act purporting to cut off or impair any substantive defense which would have been open to the defendant if there had been no registration, except in so far as it perhaps may affect the character of registrant’s title to a descriptive word of a secondary meaning (Nashville Co. v. Coca Cola Co., 215 Fed. 527, 529, 132 C. C. A. 39), and this effect is not now involved. If, then, the law does not otherwise indicate the intention to cut off or embarrass ordinary defenses by one who has not been heard in the registration proceedings, that intention cannot be inferred merely from the insertion of a provision by which a hostile party can secure the cancellation of a certificate and so destroy even its evidential force and its effect upon questions of jurisdiction as between different courts.

'I'he first objection is that because the trade-mark “Old Crow” belonged to the Heilmans for use upon blended whisky, and because this is an article of the same descriptive qualities as plaintiff’s straight whis-ky, the registration was forbidden. This objection must fall, when it is found, as we have held, that upon the basis of the former decree the adjudication does not establish the ownership of. the trade-mark by the Heilmans, but only a defensive right sufficient to protect them against the remedy then sought, and that, if we go behind the adjudication and into the facts, the Heilman right is not enlarged.

[8] It is next said that the registration was “fraudulently obtained” because, before the application was made, the Fighth Circuit litigation had been finished, and yet the application falsely stated two things, the untruth of which had then been judicially established: (1) That the trade-mark had been continuously in use by registrant and its predecessors since 1835; (2) that no other person had the right to use the mark. The statement that the trade-mark had been in use since 1835 is not. shown to be untrue to such extent and with such certainty as would be necessary to fix a fraudulent character on the application, within the meaning of “fraudulent” as used in this connection. The proof does not carry the use of the word back to a definite beginning. At Crow’s death, in 1855, the name had been long used. No one undertakes to say how long. It was not important for plaintiff to prove that the use did extend back of say 1850, and defendant did not undertake to prove that the use did not go as far as 1835. The period between 1835 and 1850 was not important, either for the purpose of registration or for the purpose of this suit. It is true that the use was of a character analogous to a descriptive use, rather than a strictly trade mark use, for a period which did not expire until an indefinite date, perhaps 1870, perhaps earlier; but this fact, with these surroundings, is plainly insufficient to make “fraudulent” the statement that the trade, mark had been continuously used since an earlier period.

[9] The application says “that no other person * * * has the right to use the trade-mark.” It had then been decided that, as against plaintiff’s claimed exclusive right, the Heilmans could continue to use the words as they had been doing, viz., in their trade and territory and upon their blended product. The registrant thought to avoid this apparent conflict by limiting the registration to straight whisky only, and undoubtedly the application, when read together, is only a statement that no one else has the right to use the words upon straight whisky. We have expressed our opinion that a trade-mark cannot be so limited; but we see no reason why an applicant may not, if he wishes, confine his registration and its effect to such classes or subclasses of the article “of the same descriptive properties” as he may select,⁴ or why he thereby necessarily abandons such rights as he may have to the use of the mark upon other-subclasses of the same article. It is true that the jurisdiction in this case depends upon this registration; but the decree sought is confined strictly within the limitations of the registration, viz., it affects straight whisky only, and it is no concern of defendants if the registration might have been broader. The application, obviously, did not state the whole truth regarding the mark; but, as far as it stated anything in this respect, it was carefully accurate. It claimed only that exclusive right of use which remained unimpaired by the Heilman decree.

[10] It is also said that the registration was fraudulent because the Heilmans’ well-known interests were, by silence, concealed, whereby they were not summoned as adverse claimants, and lost their chance to be heard. The registration statute contemplates that adverse claimants, when known, shall have notice and an opportunity to oppose. There is little reason to doubt that this application was carefully so shaped as to avoid any necessity for such specific notice, and if the effect of the registration was to take away any right of use which the Heilmans actually owned, it might well be that any intentional failure to disclose facts which might give another the right to be heard, would be fatal to the proceeding; but, with due regard for the limited effect of the registration, there is no occasion for so strict a rule in determining “when the certificate is fraudulently obtained.” Whatever new rights, of evidence or of forum, plaintiff was getting, were confined to its trade-mark used upon straight whisky; in that use, the Heilmans had no' concern. Their failure to receive notice impaired no right of theirs; and it follows that the deliberate limitation and shaping of the registration so as to avoid conflict with their claims was not fraudulent, as against them or as against the public.

[11] We think the plaintiff was entitled to an injunction against, the continuance of what defendants were doing, viz., using the names “Crow” or “Old Crow” in connection with straight whisky not made by plaintiff. Extending the injunction in t-he broad terms of the prayer of the bill might not only cause confusion with rights secured by- the Eighth Circuit decree, but might go beyond our jurisdiction in this case. That jurisdiction is confined to protecting the class of merchandise specified in the certificate of registration, “straight Bourbon or rye whisky”; and if, upon the principles herein declared, plaintiff would he entitled to any broader measure of relief, this limitation of the injunction will not prejudice proceedings therefor in a court whose jurisdiction does not depend solely upon the registration. The difficulty of distinguishing between the results of defendants’ wrongful use of these names as compared with the results of a rightful use make the case inappropriate for an accounting. Ludington Co. v. Leonard (C. C. A. 2) 127 Fed. 155, 157, 62 C. C. A. 269.

The decree below is reversed, with costs, and the case is remanded for the entry of a new decree consistent with this opinion.

1 Coffee and cocoa, Baker v. Harrison (Ct. App. D. C.) 338 Off. Gaz. 770; toilet brushes and tooth brushes, Florence Co. v. Dowd (C. C. A. 2) 178 Fed. 73, 101 C. C. A. (565; soda and baking powder, Layton Co. v. Church (C. C. A. 8) 182 Fed. 35, 104 C. C. A. 475, 32 L. R. A. (N. S.) 274; axes and shovels, Collins v. Ames Co. (C. C.) 18 Fed. 561 (Mr. Justice Blatchford); tobacco and cigarettes, American Co. v. Polacsek (C. C.) 170 Fed. 117 (Coxe, Circuit Judge).

2 One of the stencils was “J. Crow-Bourhon-Paris, Ky.” — a plain declaration that “Crow” was a maker’s name, and not a Heilman trade-mark; and as there never was any “Crow” in “Paris, Ky.,” the intent seems clear enough.

3 Assuming that, at that date, “Bourbon” fairly meant a corn whisky from somewhere in Kentucky, even if not from Bourbon county.

4 Kohler v. Beeshore, 59 Fed. 572, 8 C. C. A. 215, Richter v. Reynolds, 59 Fed. 577, 8 C. C. A. 220, and Pittsburgh Co. v. Diamond Co. (C. C.) 85 Fed. 637, pertain to the word itself, not to its use.