A combination of words, made by a firm engaged in mercantile
business, from a foreign language in order to designate merchandise
selected by them in the exercise of their best judgment as being of
a certain standard and of uniformity of quality, may be protected
to them and for their use as a trademark, and does not fall within
the rule in
Manufacturing Co. v. Trainer, 101 U. S.
51.
The addition of the infringer's name to a trademark in the place
of the owner's does not render the unauthorized use of it any less
an infringement.
When a partner retires from a firm, assenting to or acquiescing
in the retention by the other partners of the old place of business
and the future conduct of the business by them under the old name,
the goodwill remains with the latter as of course.
A trademark may be part of the goodwill of a firm, and in this
case it was part of the goodwill of the appellee's firm.
A person who comes into an existing firm as a partner and, after
remaining there a few years, goes out, leaving the firm to carry on
the old line of business under the same title in which it did
business both before he came in and during the time he was a
partner, does not take with him the right to use the trademarks of
the firm in the absence of an agreement to that effect.
Page 128 U. S. 515
The intentional use of another's trademark is a fraud, and when
the excuse is that the owner permitted such use, that excuse is
disposed of by affirmative action to put a stop to it, and no
estoppel arises.
The case, as stated by the Court, was as follows:
Appellees, partners in business under the firm name of Holt
& Co., filed their bill of complaint July 17, 1882, against
appellants, engaged in business under the firm name of Jose
Menendez & Brother, alleging that they were dealers in and
bought and sold flour and grain; that Robert S. Holt had
theretofore been for more than twenty-five years at the head of the
firm of Holt & Co., which firm had from time to time been
changed or dissolved by the retirement of various members, but in
each such instance a new firm had been immediately formed and
succeeded to the firm name, goodwill, brands, trademarks, and other
assets of the preceding firm, so that there had been no
interruption of the name and business identity of Holt & Co.
for over twenty-five years, during which time said firm had had a
high reputation in the trade; that complainants were now legally
seized of the goodwill and all the trademarks ever at any time used
by the firm; that they were the owners of a certain trademark for
flour, which consisted of the fanciful words "La Favorita," which
was originated by the firm, and had been used by it for more than
twenty years, to distinguish a certain flour of their selection and
preparation; that said firm at all times exercised great care in
the selection, packing, and preparation of the flour packed and
sold by them under the said brand "La Favorita," and had carefully
advertised the same, and by their care and efforts extensively
introduced it to the trade, so that the said brand had come to be
widely known and sought after by the trade, and the sale of flour
so branded constituted an important part of the firm's business;
that the brand was applied by stenciling it on the barrels, and
that it had been duly registered by the firm in pursuance of law.
Defendants were charged with having made use of the brand as a mark
for flour of their own preparation or selection, in violation of
complainants' rights.
Page 128 U. S. 516
The answer admitted the existence of the trademark and that the
defendants had used it, but denied that Holt & Co. were the
owners and averred that one Stephen O. Ryder was a member of Holt
& Co. from 1861 to 1868, and had since used, and was entitled
to use, said trademark as his own; that said Ryder put his own name
on flour in connection with the name "La Favorita;" and that
defendants had sold such flour as the special selection of said
Ryder, and not as selected by complainants.
Evidence was adduced in relation to the connection of Ryder with
the firm of Holt & Co., his retirement therefrom, and the
ownership of the brand thereupon, to establish the use of the
trademark by Ryder and others without protest on complainants'
part; also, subject to objection, to show a prior use of the same
as a trademark for flour.
It appeared that Holt & Co. deposited facsimiles of the
trademark October 17, 1881, in the Patent Office, and that it was
duly registered February 28, 1882.
The circuit court refused an accounting, but held complainants
entitled to the exclusive use of the words as a brand or trademark
for flour, and that the defendants had infringed the rights of
complainants in the use of the words on flour not prepared by
complainants, and decreed a perpetual injunction. From that decree
this appeal was prosecuted.
Page 128 U. S. 519
MR. CHIEF JUSTICE FULLER, after stating the facts as above,
delivered the opinion of the Court.
A reversal of the decree in this case is asked on the grounds
that the words "La Favorita," as used by the complainants,
Page 128 U. S. 520
cannot be protected as a trademark, that there has been no
infringement, that the words had been used as a brand before being
used by Holt & Co., that the title of Holt & Co. was not
superior to that of S. O. Ryder, and that whatever rights
complainants may once have had had been forfeited by laches.
The fact that Holt & Co. were not the actual manufacturers
of the flour upon which they had for years placed the brand in
question does not deprive them of the right to be protected in the
use of that brand as a trademark. They used the words "La Favorita"
to designate flour selected by them, in the exercise of their best
judgment, as equal to a certain standard. The brand did not
indicate by whom the flour was manufactured, but it did indicate
the origin of its selection and classification. It was equivalent
to the signature of Holt & Co. to a certificate that the flour
was the genuine article which had been determined by them to
possess a certain degree of excellence. It did not, of course, in
itself indicate quality, for it was merely a fancy name, and in a
foreign language, but it evidenced that the skill, knowledge, and
judgment of Holt & Co. had been exercised in ascertaining that
the particular flour so marked was possessed of a merit rendered
definite by their examination, and of a uniformity rendered certain
by their selection. The case clearly does not fall within the rule
announced in
Manufacturing Co. v. Trainer, 101 U. S.
51,
101 U. S. 55,
that
"letters or figures which, by the custom of traders or the
declaration of the manufacturer of the goods to which they are
attached, are only used to denote quality are incapable of
exclusive appropriation, but are open to use by anyone, like the
adjectives of the language,"
or in
Raggett v. Findlater, L.R. 17 Eq. 29, where an
injunction to restrain the use upon a trade label of the term
"nourishing stout" was refused on the obvious ground that
"nourishing" was a mere English word denoting quality. And the fact
that flour so marked acquired an extensive sale, because the public
had discovered that it might be relied on as of a uniformly
meritorious quality, demonstrates that the brand deserves
protection, rather that
Page 128 U. S. 521
that it should be debarred therefrom on the ground, as argued,
of being indicative of quality only.
Burton v. Stratton,
12 F. 696;
Godillot v. Harris, 81 N.Y. 263;
Ransome v.
Graham, 51 L.J. (N.S.) 897.
Holt & Co., then, having acquired the exclusive right to the
words "La Favorita" as applied to this particular vendible
commodity, it is no answer to their action to say that there was no
invasion of that right because the name of S. O. Ryder accompanied
the brand upon flour sold by appellants, instead of the name of
Holt & Co. That is an aggravation, and not a justification, for
it is openly trading in the name of another upon the reputation
acquired by the device of the true proprietor.
Gillott v.
Esterbrook, 48 N.Y. 374;
Coats v. Holbrook, 2
Sandf.Ch. 586.
These views dispose of two of the defenses specifically urged on
behalf of appellants, and we do not regard that of prior public
use, even if it could be properly considered under the pleadings,
as entitled to any greater weight. Evidence was given to the effect
that from 1857 to 1860, the words "La Favorita" were occasionally
used in St. Louis by Sears & Co., then manufacturing in that
city, as designating a particular flour; but the witnesses were not
able to testify that any had been on sale there under that brand
(unless it were that of Holt & Co.) for upwards of twenty
years. The use thus proven was so casual, and such little
importance apparently attached to it, that it is doubtful whether
Sears & Co. could at any time have successfully claimed the
words as a trademark, and at all events such use was discontinued
before Holt & Co. appropriated the words to identify their own
flour, and there was no attempt to resume it.
It is argued, however, that the title of Holt & Co. to the
use of the mark was not superior to that of S. O. Ryder because it
is said that Ryder, upon leaving the firm, took with him his share
of the goodwill of the business, and consequently of the
trademarks, and hence that the defendants below rightfully sold
flour under the brand "La Favorita" when selected by Ryder and so
marked by him. Goodwill was defined by Lord Eldon, in
Cruttwell
v. Lye,
Page 128 U. S. 522
17 Ves. 335, 346, to be "nothing more than the probability that
the old customers will resort to the old place," but
Vice-Chancellor Wood, in
Churton v. Douglas, V.C. 174,
188, says it would be taking too narrow a view of what is there
laid down by Lord Eldon to confine it to that, but that it must
mean every positive advantage that has been acquired by the old
firm in the progress of its business, whether connected with the
premises in which the business was previously carried on or with
the name of the late firm or with any other matter carrying with it
the benefit of the business.
It may be that where a firm is dissolved and ceases to exist
under the old name, each of the former partners would be allowed to
obtain "his share" in the goodwill, so far as that might consist in
the use of trademarks, by continuing such use in the absence of
stipulation to the contrary; but when a partner retires from a
firm, assenting to or acquiescing in the retention by the other
partners of possession of the old place of business and the future
conduct of the business by them under the old name, the goodwill
remains with the latter as of course.
Holt & Co. commenced business in 1845, and had had an
uninterrupted existence under that name since 1855. The trademark
in question was adopted by the senior member of the firm in 1861,
and had been thereafter in continuous use. Ryder became a partner
in 1861, and retired February 1, 1869, when a circular was issued,
in which he participated, announcing the dissolution by his
retirement, the continuance of the business by the other partners
under the same firm name, and the formation of another partnership
by Ryder with one Rowland to transact the flour and commission
business at another place under the name of Rowland &
Ryder.
In addition to these facts, it is established by the
preponderance of evidence that it was verbally agreed at the time
Ryder retired that he surrendered all interest in the brands
belonging to Holt & Co. Ryder attempts to deny this, but his
denial is so qualified as to render it unreliable as against the
direct and positive character of the evidence to the contrary.
Page 128 U. S. 523
Indeed, when asked why the brands were not made the subject of
appraisement when he went out, as it was conceded all the other
property of the firm was, he says that it was because he "gave up
all right, title, and interest to those valuable brands to Robert
S. Holt out of friendship, so there was no occasion for it." In our
judgment, Ryder's claim to any interest in the goodwill of the
business of Holt & Co., including the firm's trademarks, ended
with his withdrawal from that firm.
Counsel in conclusion earnestly contends that whatever rights
appellees may have had were lost by laches, and the desire is
intimated that we should reconsider
McLean v. Fleming,
96 U. S. 245, so
far as it was therein stated that even though a complainant were
guilty of such delay in seeking relief upon infringement as to
preclude him from obtaining an account of gains and profits, yet if
he were otherwise so entitled, an injunction against future
infringement might properly be awarded. We see no reason to modify
this general proposition, and we do not find in the facts as
disclosed by the record before us anything to justify us in
treating this case as an exception.
The intentional use of another's trademark is a fraud, and when
the excuse is that the owner permitted such use, that excuse is
disposed of by affirmative action to put a stop to it. Persistence
then in the use is not innocent, and the wrong is a continuing one,
demanding restraint by judicial interposition when properly
invoked. Mere delay or acquiescence cannot defeat the remedy by
injunction in support of the legal right unless it has been
continued so long and under such circumstances as to defeat the
right itself. Hence, upon an application to stay waste, relief will
not be refused on the ground that, as the defendant had been
allowed to cut down half of the trees upon the complainant's land,
he had acquired by that negligence the right to cut down the
remainder.
Attorney General v. Eastlake, 11 Hare 205; nor
will the issue of an injunction against the infringement of a
trademark be denied on the ground that mere procrastination in
seeking redress for depredations had deprived the true proprietor
of his legal right.
Fullwood v.
Page 128 U. S. 524
Fullwood, 9 Ch.D. 176. Acquiescence, to avail, must be
such as to create a new right in the defendant.
Rodgers v.
Nowill, 3 De G., M. & G. 614. Where consent by the owner
to the use of his trademark by another is to be inferred from his
knowledge and silence merely, "it lasts no longer than the silence
from which it springs. It is, in reality, no more than a revocable
license." Duer, J.,
Amoskeag Mfg. Co. v. Spear, 2 Sandford
599;
Julian v. Hoosier Drill Co., 78 Ind. 408;
Taylor
v. Carpenter, 3 Story 458, 2 Woodb. & Min. 1.
So far as the act complained of is completed, acquiescence may
defeat the remedy on the principle applicable when action is taken
on the strength of encouragement to do it; but so far as the act is
in progress and lies in the future, the right to the intervention
of equity is not generally lost by previous delay, in respect to
which the elements of an estoppel could rarely arise. At the same
time, as it is in the exercise of discretionary jurisdiction that
the doctrine of reasonable diligence is applied, and those who seek
equity must do it, a court might hesitate as to the measure of
relief, where the use by others for a long period, under assumed
permission of the owner, had largely enhanced the reputation of a
particular brand.
But there is nothing here in the nature of an estoppel --
nothing which renders it inequitable to arrest at this stage any
further invasion of complainants' rights. There is no pretense of
abandonment. That would require proof of nonuser by the owner, or
general surrender of the use to the public. The evidence is
positive that Holt & Co. continuously used the trademark,
always asserted their exclusive right to it, and never admitted
that of any other firm or person, and, in the instance of every
party, including Ryder, who used this brand on flour not of Holt
& Co.'s selection, that use, when it came to their knowledge,
was objected to by the latter, and personal notice given, while
publication was also made in the newspapers circulating where the
flour was usually marketed, containing a statement of Holt &
Co.'s rights and warning against imitations. It is idle to talk of
acquiescence in view of these facts. Delay in bringing suit there
was, and such delay as to preclude recovery of damages for prior
infringement; but there
Page 128 U. S. 525
was neither conduct nor negligence which could be held to
destroy the right to prevention of further injury.
The decree of the circuit court will therefore be
Affirmed.
