A right of trademark is not a right in gross; it exists only as
appurtenant to an established business, and for the protection of
the goodwill thereof. P. 248 U. S.
The adoption of a trademark does not project the right of
protection in advance of the extension of the trade. P.
248 U. S.
Where A had a trademark in Massachusetts in connection with a
business there and in neighboring states, and B afterwards, in good
faith, without notice of A's use or intent to injure or forestall
A, adopted the same mark in Kentucky, where A's business
theretofore had not extended, and built up a valuable business
under it there, held
that A, upon entering B's field with
notice of the situation, had no equity to enjoin B as an infringer,
but was estopped. P. 248 U. S.
html#103">248 U. S. 103.
226 F. 545 affirmed.
The case is stated in the opinion.
Page 248 U. S. 93
MR. JUSTICE PITNEY delivered the opinion of the Court.
This was a suit in equity brought September 24, 1912, in the
United States District Court for the Western District of Kentucky
by the present petitioner, a Massachusetts corporation, against the
respondent, a Kentucky corporation, together with certain
individual citizens of the latter state, to restrain infringement
of trademark and unfair competition.
The district court granted an injunction against the corporation
defendant pursuant to the prayer of the bill. 206 F. 570. The
circuit court of appeals reversed the decree and remanded the cause
with directions to dismiss the bill. 226 F. 545. An appeal was
allowed by one of the judges of that court, and afterwards we
allowed a writ of certiorari. Pursuant to a stipulation, the
transcript of the record filed for the purposes of the appeal was
treated as a return to the writ. Under § 128, Judicial Code, as
amended by Act of January 28, 1915, c. 22, § 2, 38 Stat. 803, the
appeal must be dismissed and the cause will be determined on the
writ of certiorari.
Page 248 U. S. 94
The essential facts are as follows: about the year 1877, Ellen
M. Regis, a resident of Haverhill, Massachusetts, began to compound
and distribute in a small way a preparation for medicinal use in
cases of dyspepsia and some other ailments, to which she applied as
a distinguishing name the word "Rex" -- derived from her surname.
The word was put upon the boxes and packages in which the medicine
was placed upon the market, after the usual manner of a trademark.
At first alone, and afterwards in partnership with her son under
the firm name of "E. M. Regis & Company," she continued the
business on a modest scale; in 1898, she recorded the word "Rex" as
a trademark under the laws of Massachusetts (Acts 1895, p. 519, c.
462, § 1); in 1900, the firm procured its registration in the
United States Patent Office under the Act of March 3, 1881, c. 138,
21 Stat. 502; in 1904, the Supreme Judicial Court of Massachusetts
sustained their trademark right under the state law as against a
concern that was selling medicinal preparations of the present
petitioner under the designation of "Rexall Remedies" (Regis v.
185 Mass. 458); afterwards the firm established
priority in the mark as against petitioner in a contested
proceeding in the Patent Office, and subsequently, in the year
1911, petitioner purchased the business with the trademark right,
and has carried it on in connection with its other business, which
consists in the manufacture of medicinal preparations, and their
distribution and sale through retail drug stores, known as "Rexall
stores," situate in the different states of the Union, four of them
being in Louisville, Kentucky.
Meanwhile, about the year 1883, Theodore Rectanus, a druggist in
Louisville, familiarly known as "Rex," employed this word as a
trademark for a medicinal preparation known as a "blood purifier."
He continued this use to a considerable extent in Louisville and
vicinity, spending money in advertising and building up a trade, so
Page 248 U. S. 95
except for whatever effect might flow from Mrs. Regis' prior
adoption of the word in Massachusetts, of which he was entirely
ignorant, he was entitled to use the word as his trademark. In the
year 1906, he sold his business, including the right to the use of
the word, to respondent, and the use of the mark by him and
afterwards by respondent was continuous from about the year 1883
until the filing of the bill in the year 1912.
Petitioner's first use of the word "Rex" in connection with the
sale of drugs in Louisville or vicinity was in April, 1912, when
two shipments of "Rex Dyspepsia Tablets," aggregating 150 boxes and
valued at $22.50, were sent to one of the "Rexall" stores in that
city. Shortly after this, the remedy was mentioned by name in local
newspaper advertisements published by those stores. In the previous
September, petitioner shipped a trifling amount -- five boxes -- to
a drug store in Franklin, Kentucky, approximately 120 miles distant
from Louisville. There is nothing to show that, before this, any
customer in or near Kentucky had heard of the Regis remedy, with or
without the description "Rex," or that this word ever possessed any
meaning to the purchasing public in that state, except as pointing
to Rectanus and the Rectanus Company and their "blood purifier."
That it did and does convey the latter meaning in Louisville and
vicinity is proved without dispute. Months before petitioner's
first shipment of its remedy to Kentucky, petitioner was distinctly
notified (in June, 1911) by one of its Louisville distributors,
that respondent was using the word "Rex" to designate its medicinal
preparations, and that such use had been commenced by Mr. Rectanus
as much as 16 or 17 years before that time.
There was nothing to sustain the allegation of unfair
competition, aside from the question of trademark infringement. As
to this, both courts found in substance that the use of the same
mark upon different but somewhat
Page 248 U. S. 96
related preparations was carried on by the parties and their
respective predecessors contemporaneously, but in widely separated
localities, during the period in question -- between 25 and 30
years -- in perfect good faith; neither side having any knowledge
or notice of what was being done by the other. The district court
held that, because the adoption of the mark by Mrs. Regis antedated
its adoption by Rectanus, petitioner's right to the exclusive use
of the word in connection with medicinal preparations intended for
dyspepsia and kindred diseases of the stomach and digestive organs
must be sustained, but without accounting for profits or assessment
of damages for unfair trade, citing McLean v. Fleming,
96 U. S. 245
Menendez v. Holt, 128 U. S. 514
Saxlehner v. Eisner & Mendelson Co., 179 U. S.
; Saxlehner v. Siegel-Cooper Co.,
179 U. S. 42
circuit court of appeals held that, in view of the fact that
Rectanus had used the mark for a long period of years in entire
ignorance of Mrs. Regis' remedy or of her trademark, had expended
money in making his mark well known, and had established a
considerable though local business under it in Louisville and
vicinity, while, on the other hand, during the same long period,
Mrs. Regis had done nothing, either by sales agencies or by
advertising, to make her medicine or its mark known outside of the
New England states, saving sporadic sales in territory adjacent to
those states, and had made no effort whatever to extend the trade
to Kentucky, she and her successors were bound to know that, misled
by their silence and inaction, others might act, as Rectanus and
his successors did act, upon the assumption that the field was
open, and therefore were estopped to ask for an injunction against
the continued use of the mark in Louisville and vicinity by the
The entire argument for the petitioner is summed up in the
contention that, whenever the first user of a trademark has been
reasonably diligent in extending the
Page 248 U. S. 97
territory of his trade, and as a result of such extension has in
good faith come into competition with a later user of the same mark
who in equal good faith has extended his trade locally before
invasion of his field by the first user, so that finally it comes
to pass that the rival traders are offering competitive merchandise
in a common market under the same trademark, the later user should
be enjoined at the suit of the prior adopter, even though the
latter be the last to enter the competitive field and the former
have already established a trade there. Its application to the case
is based upon the hypothesis that the record shows that Mrs. Regis
and her firm, during the entire period of limited and local trade
in her medicine under the Rex mark, were making efforts to extend
their trade so far as they were able to do with the means at their
disposal. There is little in the record to support this hypothesis,
but, waiving this, we will pass upon the principal contention.
The asserted doctrine is based upon the fundamental error of
supposing that a trademark right is a right in gross or at large,
like a statutory copyright or a patent for an invention, to either
of which, in truth, it has little or no analogy. Canal Co.
13 Wall. 311, 80 U. S. 322
McLean v. Fleming, 96 U. S. 245
96 U. S. 254
There is no such thing as property in a trademark except as a right
appurtenant to an established business or trade in connection with
which the mark is employed. The law of trademarks is but a part of
the broader law of unfair competition; the right to a particular
mark grows out of its use, not its mere adoption; its function is
simply to designate the goods as the product of a particular trader
and to protect his goodwill against the sale of another's product
as his, and it is not the subject of property except in connection
with an existing business. Hanover Milling Co. v. Metcalf,
240 U. S. 403
240 U. S.
The owner of a trademark may not, like the proprietor
Page 248 U. S. 98
of a patented invention, make a negative and merely prohibitive
use of it as a monopoly. See United States v. Bell Telephone
Co., 167 U. S. 224
167 U. S. 250
Bement v. National Harrow Co., 186 U. S.
, 186 U. S. 90
Paper Bag Patent Case, 210 U. S. 405
210 U. S.
In truth, a trademark confers no monopoly whatever in a proper
sense, but is merely a convenient means for facilitating the
protection of one's goodwill in trade by placing a distinguishing
mark or symbol -- a commercial signature -- upon the merchandise or
the package in which it is sold.
It results that the adoption of a trademark does not, at least
in the absence of some valid legislation enacted for the purpose,
project the right of protection in advance of the extension of the
trade, or operate as a claim of territorial rights over areas into
which it thereafter may be deemed desirable to extend the trade.
And the expression, sometimes met with, that a trademark right is
not limited in its enjoyment by territorial bounds, is true only in
the sense that, wherever the trade goes, attended by the use of the
mark, the right of the trader to be protected against the sale by
others of their wares in the place of his wares will be
Property in trademarks and the right to their exclusive use rest
upon the laws of the several states, and depend upon them for
security and protection, the power of Congress to legislate on the
subject being only such as arises from the authority to regulate
commerce with foreign nations and among the several states and with
the Indian tribes. Trade-Mark Cases, 100 U. S.
, 100 U. S.
Conceding everything that is claimed in behalf of the
petitioner, the entire business conducted by Mrs. Regis and her
firm prior to April, 1911, when petitioner acquired it, was
confined to the New England states, with inconsiderable sales in
New York, New Jersey, Canada, and Nova Scotia. There was nothing in
all of this to give her
Page 248 U. S. 99
any rights in Kentucky, where the principles of the common law
obtain. Hunt v. Warnicke's Heirs,
3 Ky. 61, 62;
Lathrop v. Commercial Bank,
38 Ky. 114; Ray v.
77 Ky. 1, 9; Aetna Ins. Co. v. Commonwealth,
106 Ky. 864, 881; Nider v. Commonwealth,
140 Ky. 684, 687.
We are referred to no decision by the courts of that state, and
have found none, that lays down any peculiar doctrine upon the
subject of trademark law. There is some meager legislation, but
none that affects this case (Kentucky Stats. § 2572c, subsec. 7; §§
4749-4755). There was nothing to prevent the State of Kentucky
(saving, of course, what Congress might do within the range of its
authority) from conferring affirmative rights upon Rectanus,
exclusive in that commonwealth as against others whose use of the
trademark there began at a later time than his, but whether he had
such rights, or respondent now has them, is a question not
presented by the record, there being no prayer for an injunction to
restrain petitioner from using the mark in the competitive
It is not contended, nor is there ground for the contention,
that registration of the Regis trademark under either the
Massachusetts statute or the act of Congress, or both, had the
effect of enlarging the rights of Mrs. Regis or of petitioner
beyond what they would be under common law principles. Manifestly
the Massachusetts statute (Acts 1985, p. 519, c. 462) could have no
extraterritorial effect. And the Act of Congress of March 3, 1881,
c. 138, 21 Stat. 502, applied only to commerce with foreign nations
or the Indian tribes, with either of which this case has nothing to
do. See Ryder v. Holt, 128 U. S. 525
is there any provision making registration equivalent to notice of
rights claimed thereunder. The Act of February 20, 1905, c. 592, 33
Stat. 724, which took the place of the 1881 Act, while extending
protection to trademarks used in interstate commerce, does not
Page 248 U. S. 100
the effect of previous registrations, unless renewed under the
provisions of its twelfth section, which has not been done in this
case; hence we need not consider whether anything in this act would
aid the petitioner's case.
Undoubtedly the general rule is that, as between conflicting
claimants to the right to use the same mark, priority of
appropriation determines the question. See
Canal Co. v.
13 Wall. 311, 80 U. S. 323
McLean v. Fleming, 96 U. S. 245
96 U. S. 251
Manufacturing Co. v. Trainer, 101 U. S.
, 101 U. S. 53
Columbia Mill Co. v. Alcorn, 150 U.
, 150 U. S. 463
But the reason is that purchasers have come to understand the mark
as indicating the origin of the wares, so that its use by a second
producer amounts to an attempt to sell his goods as those of his
competitor. The reason for the rule does not extend to a case where
the same trademark happens to be employed simultaneously by two
manufacturers in different markets separate and remote from each
other, so that the mark means one thing in one market, an entirely
different thing in another. It would be a perversion of the rule of
priority to give it such an application in our broadly extended
country that an innocent party who had in good faith employed a
trademark in one state, and by the use of it had built up a trade
there, being the first appropriator in that jurisdiction, might
afterwards be prevented from using it, with consequent injury to
his trade and goodwill at the instance of one who theretofore had
employed the same mark, but only in other and remote jurisdictions,
upon the ground that its first employment happened to antedate that
of the first-mentioned trader.
In several cases, federal courts have held that a prior use of a
trademark in a foreign country did not entitle its owner to claim
exclusive trademark rights in the United States as against one who
in good faith had adopted a like trademark here prior to the entry
of the foreigner into this market. Richter v. Anchor Remedy
Page 248 U. S. 101
455, 458; Richter v. Reynolds,
59 F. 577, 579;
Walter Baker & Co. v. Delapenha,
160 F. 746, 748;
Gorham Mfg. Co. v. Weintraub,
196 F. 957, 961.
The same point was involved in Hanover Milling Co. v.
Metcalf, 240 U. S. 403
240 U. S. 415
where we said:
"In the ordinary case of parties competing under the same mark
in the same market, it is correct to say that prior appropriation
settles the question. But where two parties independently are
employing the same mark upon goods of the same class, but in
separate markets wholly remote the one from the other, the question
of prior appropriation is legally insignificant, unless at least it
appear that the second adopter has selected the mark with some
design inimical to the interests of the first user, such as to take
the benefit of the reputation of his goods, to forestall the
extension of his trade, or the like."
In this case, as already remarked, there is no suggestion of a
sinister purpose on the part of Rectanus or the Rectanus Company;
hence, the passage quoted correctly defines the status of the
parties prior to the time when they came into competition in the
Kentucky market. And it results, as a necessary inference from what
we have said, that petitioner, being the newcomer in that market,
must enter it subject to whatever rights had previously been
acquired there in good faith by the Rectanus Company and its
predecessor. To hold otherwise -- to require Rectanus to retire
from the field upon the entry of Mrs. Regis' successor -- would be
to establish the right of the latter as a right in gross, and to
extend it to territory wholly remote from the furthest reach of the
trade to which it was annexed, with the effect not merely of
depriving Rectanus of the benefit of the goodwill resulting from
his long continued use of the mark in Louisville and vicinity, and
his substantial expenditures in building up his trade, but of
enabling petitioner to reap substantial benefit from the publicity
Page 248 U. S. 102
has thus given to the mark in that locality, and of confusing if
not misleading the public as to the origin of goods thereafter sold
in Louisville under the Rex mark, for, in that market, until
petitioner entered it, "Rex" meant the Rectanus product, not that
In support of its contention, petitioner cites the same cases
that were relied upon by the district court, namely, McLean v.
Fleming, 96 U. S. 245
Menendez v. Holt, 128 U. S. 514
Saxlehner v. Eisner & Mendelson Co., 179 U. S.
, 179 U. S. 39
and Saxlehner v. Siegel-Cooper Co., 179 U. S.
. They exemplify the rule that, where the proof of
infringement is clear, a court of equity will not ordinarily refuse
an injunction for the future protection of the proprietor of a
trademark right, even where his acquiescence and laches have been
such as to disentitle him to an accounting for the past profits of
the infringer. The rule finds appropriate application in cases of
conscious infringement or fraudulent imitation, as is apparent from
a reading of the opinions in those cases; but it has no pertinency
to such a state of facts as we are now dealing with. In McLean
the only question raised in this Court that
affected the right of the appellee to an injunction was whether the
circuit court had erred in finding that defendant's labels "Dr.
McLean's Universal Pills," etc., infringed complainant's label "Dr.
C. McLane's Celebrated Liver Pills," and this turned upon whether
the similarity was sufficient to deceive ordinarily careful
purchasers. The evidence showed without dispute that, from the
beginning of his use of the offending labels, the defendant
(McLean) had known of the McLane liver pills, and raised at least a
serious question whether he did not adopt his labels for the
purpose of palming off his goods as those of complainant. What he
controverted was that his labels amounted to an infringement of
complainant's, and when this was decided against him, the propriety
of the injunction was clear. In Menendez v.
Page 248 U. S. 103
likewise, defendants (Menendez) admitted the
existence of the brand in question -- the words "La Favorita" as
applied to flour -- and admitted using it, but denied that Holt
& Co. were the owners, alleging that one Rider was a former
member of that firm and entitled to use the brand, and that, under
him, defendants had sold their flour branded "La Favorita, S. O.
Rider." There was, however, no question but that defendants adopted
the brand knowing it to be already in use by others. In the
cases, the facts were peculiar, and need not be
rehearsed; injunctions were allowed to restrain the sale of certain
waters in bottles and under labels in which those of complainant
were intentionally imitated. In all four cases, the distinguishing
features of the present case were absent.
Here, the essential facts are so closely parallel to those that
furnished the basis of decision in the Allen & Wheeler
case, reported sub nom. Hanover Milling Co. v. Metcalf,
240 U. S. 403
240 U. S.
-420, as to render further discussion unnecessary.
Mrs. Regis and her firm, having during a long period of years
confined their use of the "Rex" mark to a limited territory wholly
remote from that in controversy, must be held to have taken the
risk that some innocent party might in the meantime hit upon the
same mark, apply it to goods of similar character, and expend money
and effort in building up a trade under it, and since it appears
that Rectanus in good faith, and without notice of any prior use by
others, selected and used the "Rex" mark, and by the expenditure of
money and effort succeeded in building up a local but valuable
trade under it in Louisville and vicinity before petitioner entered
that field, so that "Rex" had come to be recognized there as the
"trade signature" of Rectanus and of respondent as his successor,
petitioner is estopped to set up their continued use of the mark in
that territory as an infringement of the Regis trademark. Whatever
confusion may have
Page 248 U. S. 104
arisen from conflicting use of the mark is attributable to
petitioner's entry into the field with notice of the situation, and
petitioner cannot complain of this. As already stated, respondent
is not complaining of it.