1. Respondents engaged in the business of repairing used
trademarked spark plugs and reselling them without removing the
original trademarks. In a suit by the manufacturer, the trial court
found that respondents had infringed the trademark but that there
had been no fraud or palming off. It denied an accounting, but
enjoined further infringement.
Held: the equities of this case are satisfied by a
decree requiring that the word "repaired" or "used" be plainly and
durably stamped on each plug, and that the containers and printed
matter used in connection with the sales clearly show that the
plugs are used and reconditioned by respondents, giving their names
and address -- even though the decree does not require that the
trademarks be removed. Pp.
331 U. S. 126-132.
2. Under the Trade Mark Act of 1905, a finding that a trademark
has been infringed does not necessarily require that an accounting
be ordered where an injunction will satisfy the equities of the
case. P.
331 U. S.
131.
3. In the circumstances of this case, a finding that respondents
had also engaged in unfair competition does not require more
stringent controls, or that an accounting be ordered. Pp.
331 U. S.
130-132.
156 F.2d 488, affirmed.
The District Court found that respondents had infringed
petitioner's trademark, enjoined further infringement, and denied
an accounting. 56 F. Supp. 782, 61 F. Supp. 247. The Circuit Court
of Appeals modified the decree in certain details. 156 F.2d 488.
This Court granted certiorari. 329 U.S. 709.
Affirmed, p.
331 U. S. 132.
Page 331 U. S. 126
MR. JUSTICE DOUGLAS delivered the opinion of the Court.
Petitioner is a manufacturer of spark plugs which it sells under
the trademark "Champion." Respondents collect the used plugs,
repair and recondition them, and resell them. Respondents retain
the word "Champion" on the repaired or reconditioned plugs. The
outside box or carton in which the plugs are packed has stamped on
it the word "Champion," together with the letter and figure
denoting the particular style or type. They also have printed on
them "Perfect Process Spark Plugs Guaranteed Dependable" and
"Perfect Process Renewed Spark Plugs." Each carton contains smaller
boxes in which the plugs are individually packed. These inside
boxes also carry legends indicating that the plug has been renewed.
[
Footnote 1] But respondent
company's business name or address is not printed on the cartons.
It supplies customers with petitioner's charts containing
recommendations for the use of Champion plugs. On each individual
plug is stamped in small letters, blue on black, the word
"Renewed," which at time is almost illegible.
Petitioner brought this suit in the District Court, charging
infringement of its trademark and unfair competition.
See
Judicial Code § 24(1), (7), 28 U.S.C. § 41(1), (7). The District
Court found that respondents had infringed the trademark. It
enjoined them from offering or selling
Page 331 U. S. 127
any of petitioner's plugs which had been repaired or
reconditioned unless (a) the trademark and type and style marks
were removed, (b) the plugs were repainted with a durable grey,
brown, orange, or green paint, (c) the word "Repaired" was stamped
into the plug in letters of such size and depth as to retain enough
white paint to display distinctly each letter of the word, (d) the
cartons in which the plugs were packed carried a legend indicating
that they contained used spark plugs originally made by petitioner
and repaired and made fit for use up to 10,000 miles by respondent
company. [
Footnote 2] The
District Court denied an accounting.
See 56 F. Supp. 782,
61 F. Supp. 247.
The Circuit Court of Appeals held that respondents not only had
infringed petitioner's trademark, but also were guilty of unfair
competition. It likewise denied an accounting, but modified the
decree in the following respects: (a) it eliminated the provision
requiring the trademark and type and style marks to be removed from
the repaired or reconditioned plugs; (b) it substituted for the
requirement that the word "Repaired" be stamped into the plug,
etc., a provision that the word "Repaired" or "Used" be stamped and
baked on the plug by an electrical hot press in a contrasting color
so as to be clearly and distinctly visible, the plug having been
completely covered by permanent aluminum paint or other paint or
lacquer, and (c) it eliminated the provision specifying the precise
legend to be printed on the cartons, and substituted therefor
Page 331 U. S. 128
a more general one. [
Footnote
3] The case is here on a petition for certiorari which we
granted because of the apparent conflict between the decision below
and
Champion Spark Plug Co. v. Reich, 121 F.2d 769,
decided by the Circuit Court of Appeals for the Eighth Circuit.
There is no challenge here to the findings as to the misleading
character of the merchandising methods employed by respondents, nor
to the conclusion that they have not only infringed petitioner's
trademark, but have also engaged in unfair competition. [
Footnote 4] The controversy here
relates to the adequacy of the relief granted, particularly the
refusal of the Circuit Court of Appeals to require respondents to
remove the word "Champion" from the repaired or reconditioned plugs
which they resell.
We put to one side the case of a manufacturer or distributor who
markets new or used spark plugs of one make under the trademark of
another.
See Bourjois & Co. v. Katzel, 260 U.
S. 689;
Old Dearborn Distributing Co. v.
Seagram-Distillers Corp., 299 U. S. 183,
299 U. S. 194.
Equity then steps in to prohibit defendant's use of the mark which
symbolizes plaintiff's goodwill and "stakes the reputation of the
plaintiff upon the character of the goods."
Bourjois & Co.
v. Katzel, supra, at
260 U. S.
692.
We are dealing here with second-hand goods. The spark plugs,
though used, are nevertheless Champion plugs and not those of
another make. [
Footnote 5]
There is evidence
Page 331 U. S. 129
to support what one would suspect -- that a used spark plug
which has been repaired or reconditioned does not measure up to the
specifications of a new one. But the same would be true of a
second-hand Ford or Chevrolet car. And we would not suppose that
one could be enjoined from selling a car whose valves had been
reground and whose piston rings had been replaced unless he removed
the name Ford or Chevrolet.
Prestonettes, Inc. v. Coty,
264 U. S. 359, was
a case where toilet powders had as one of their ingredients a
powder covered by a trademark and where perfumes which were
trademarked were rebottled and sold in smaller bottles. The Court
sustained a decree denying an injunction where the prescribed
labels told the truth. Mr. Justice Holmes stated,
"A trademark only gives the right to prohibit the use of it so
far as to protect the owner's goodwill against the sale of
another's product as his. . . . When the mark is used in a way that
does not deceive the public, we see no such sanctity in the word as
to prevent its being used to tell the truth. It is not taboo."
264 U.S. at
264 U. S.
368.
Cases may be imagined where the reconditioning or repair would
be so extensive or so basic that it would be a misnomer to call the
article by its original name, even though the words "used" or
"repaired" were added.
Cf. Ingersoll v. Doyle, 247 F. 620.
But no such practice is involved here. The repair or reconditioning
of the plugs does not give them a new design. It is no more than a
restoration, so far as possible, of their original condition. The
type marks attached by the manufacturer are determined by the use
to which the plug is to be put. But the thread size and size of the
cylinder hole into which the plug is fitted are not affected by the
reconditioning. The heat range also has relevance to the type
marks. And there is evidence that the reconditioned plugs are
inferior so far as heat range and other qualities are concerned.
But inferiority is expected in most second-hand articles.
Indeed,
Page 331 U. S. 130
they generally cost the customer less. That is the case here.
Inferiority is immaterial, so long as the article is clearly and
distinctively sold as repaired or reconditioned, rather than as
new. [
Footnote 6] The result
is, of course, that the second-hand dealer gets some advantage from
the trademark. But, under the rule of
Prestonettes, Inc. v.
Coty, supra, that is wholly permissible so long as the
manufacturer is not identified with the inferior qualities of the
product resulting from wear and tear or the reconditioning by the
dealer. Full disclosure gives the manufacturer all the protection
to which he is entitled.
The decree as shaped by the Circuit Court of Appeals is
fashioned to serve the requirements of full disclosure. We cannot
say that, of the alternatives available, the ones it chose are
inadequate for that purpose. We are mindful of the fact that this
case, unlike
Prestonettes, Inc. v. Coty, supra, involves
unfair competition as well as trademark infringement, and that,
where unfair competition is established, any doubts as to the
adequacy of the relief are generally resolved against the
transgressor.
Warner & Co. v. Lilly & Co.,
265 U. S. 526,
256 U. S. 532.
But there was here no showing of fraud or palming off. Their
absence, of course, does not undermine the finding of unfair
competition.
Federal Trade Commission v. Winsted Hosiery
Co., 258 U. S. 483,
258 U. S.
493-494;
G. H. Mumm Champagne v. Eastern Wine
Corp., 142 F.2d 499, 501. But the character of the conduct
giving rise to the unfair competition is relevant to the remedy
which should be afforded.
See Jacob Siegel Co. v. Federal Trade
Commission, 327 U. S. 608. We
cannot say that the conduct of respondents in this case, or the
nature
Page 331 U. S. 131
of the article involved and the characteristics of the
merchandising methods used to sell it, called for more stringent
controls than the Circuit Court of Appeals provided.
Mishawaka Rubber & Woolen Mfg. Co. Kresge Co.,
316 U. S. 203,
states the rule governing an accounting of profits where a
trademark has been infringed and where there is a basis for finding
damage to the plaintiff and profit to the infringer. But it does
not stand for the proposition that an accounting will be ordered
merely because there has been an infringement. Under the Trade Mark
Act of 1905, [
Footnote 7] as
under its predecessors, an accounting has been denied where an
injunction will satisfy the equities of the case.
Saxlehner v.
Siegel-Cooper Co., 179 U. S. 42;
Rowley Co. v. Rowley, 193 F. 390, 393;
Middleby-Marshall Oven Co. v. Williams Oven Mfg. Co., 12
F.2d 919, 921;
Golden West Brewing Co. v. Milonas &
Sons, 104 F.2d 880, 882;
Hemmeter Cigar Co. v. Congress
Cigar Co., 118 F.2d 64, 71, 72;
Durable Toy & Novelty
Corp. v. J. Chein & Co., 133 F.2d 853, 854, 855. The same
is true in case of unfair competition.
Straus v. Notaseme
Co., 240 U. S. 179,
240 U. S.
181-183. Here, as we have noted, there has been no
showing of fraud or palming off. For several years, respondents
apparently endeavored to comply with a cease and desist order of
the Federal Trade Commission requiring them to place on the plugs
and on the cartons a label revealing that the plugs were used or
second-hand. Moreover, as stated by the Circuit Court of Appeals,
the likelihood of damage to petitioner or profit to respondents due
to any misrepresentation
Page 331 U. S. 132
seems slight. In view of these various circumstances, it seems
to us that the injunction will satisfy the equities of the
case.
Affirmed.
[
Footnote 1]
"The process used in renewing this plug has been developed
through 10 years continuous experience. This Spark Plug has been
tested for firing under compression before packing."
"This Spark Plug is guaranteed to be a selected used Spark Plug,
thoroughly renewed and in perfect mechanical condition, and is
guaranteed to give satisfactory service for 10,000 miles."
[
Footnote 2]
The prescribed legend read:
"Used spark plug(s) originally made by Champion Spark Plug
Company repaired and made fit for use up to 10,000 miles by Perfect
Recondition Spark Plug Co., 1133 Bedford Avenue, Brooklyn,
N.Y."
The decree also provided:
"the name and address of the defendants to be larger and more
prominent than the legend itself, and the name of plaintiff may be
in slightly larger type than the rest of the body of the
legend."
[
Footnote 3]
"The decree shall permit the defendants to state on cartons and
containers, selling and advertising material, business records,
correspondence, and other papers, when published, the original make
and type numbers provided it is made clear that any plug referred
to therein is used and reconditioned by the defendants, and that
such material contains the name and address of defendants."
[
Footnote 4]
See Federal Trade Commission v. Winsted Hosiery Co.,
258 U. S. 483,
258 U. S.
493-494;
Warner & Co. v. Lilly & Co.,
265 U. S. 526,
265 U. S.
530.
[
Footnote 5]
Cf. Federal Trade Commission v. Klein, 5 F.T.C.
327.
[
Footnote 6]
See Federal Trade Commission v. Typewriter Emporium, 1
F.T.C. 105;
Federal Trade Commission v. Check Writer
Manufacturers, 4 F.T.C. 87;
In the Matter of Federal Auto
Products Co., 20 F.T.C. 334.
[
Footnote 7]
Section 19 of that Act, 33 Stat. 724, 729, 15 U.S.C. § 99,
provides in part,
". . . upon a decree's being rendered in any such case for
wrongful use of a trademark, the complainant shall be entitled to
recover, in addition to the profits to be accounted for by the
defendant, the damages the complainant has sustained thereby, and
the court shall assess the same or cause the same to be assessed
under its direction."