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a use, is not sufficient to create an exclusive right thereto. Mr. Justice Clifford in the leading case of McLein v. Fleming, 96 U. S. 245, 251, 24 L. Ed. 828, 831, expresses the rule thus:
"Where, therefore, a party has been in the habit of stamping his goods with a particular mark or brand, so that the purchasers of his goods, bearing that mark or brand, know them to be of his manufacture, no other manufacturer has a right to adopt the same stamp."
In the Trade-Mark Cases, 100 U. S. 82, 94, 25 L. Ed. 550, 552, Mr. Justice Miller, speaking for the court, says:
"The ordinary trade-mark has no necessary relation to invention or discovery. The trade-mark recognized by the common law is generally the growth of a considerable period of use, rather than a sudden invention. At common law the exclusive right to it grows out of its use, and not its mere adoption."
In the case of Levy v. Waitt (decided by the circuit court of appeals for the First circuit) 10 C. C. A. 227, 61 Fed. 1008, 1011, 25 L. R. A. 190, in a case somewhat analogous to that now before us, it is said:
"It seems to have been assumed in the discussions of this case that the common-law right to a trade-mark comes more from selection or discovery than from actual occupation of the market. But this is not the law. The right to a trade-mark at common law must not be confused, as it too frequently is, with the prima facie right existing under registration statutes. It arises to such a limited extent from the mere matter of selec tion or discovery of the name or symbol used that this may be of trivial consequence."
The court then adopts the language employed by Vice Chancellor Sir W. Page Wood in Collins Co. v. Brown, 3 Kay & J. 423, as a good compendium of the common law of trade-mark, as follows:
"The simple question in these cases is, has the plaintiff, by the appropriation of a particular mark, fixed in the market where his goods are sold a conviction that the goods so marked were manufactured by him?"
In the case of McAndrew v. Bassett, 4 De Gex, J. & S. 380, 386, Lord Westbury states that property in words stamped upon a vendible article exists when "the article goes into the market so stamped, and there obtains acceptance and reputation, whereby the stamp gets currency as an indication of superior quality, or some other circumstance which renders the article so stamped acceptable to the public." To the same effect are the following cases: George v. Smith (C. C.) 52 Fed. 830; Tetlow v. Tappan (C. C.) 85 Fed. 774; Hygeia Distilled Water Co. v. Hygeia Ice Co., 70 Conn. 516, 533, 40 Atl. 534.
According to the rule hereinbefore announced, the present case must be decided by answering the following question: Did the complainant make such use of the word "Antiphlogistine" in connection with its medicinal preparation as to cause it to be known and recognized in the market by that word? For a period of over 20 years, beginning in 1867, the preparation in question had been sold and known (if at all) by the name "Saturated" or "Concentrated Tincture of Aconite and Iodine, Prepared * by T. J. Macmahan." Afterwards, at about the time of the formation of the complainant corporation in 1890, the word "Antiphlogistine" first appeared on the label, but it then, and continuously thereafter,
appeared immediately and prominently associated with the name of the discoverer of the preparation, the person who had been handling it and selling it for a period of 20 years theretofore. In that label the attractive and suggestive feature is the old word "Macmahan's." There was apparently a purpose manifested by the new corporation to continue the name by which the preparation had been so long known, and, accordingly, the label reads "Macmahan's Concentrated Tincture of Aconite, with lodine. Antiphlogistine." Obviously the word "Macmahan's" was intended to be a catchword descriptive of the preparation; otherwise there would have been no necessity for using it at all. It was not thereby intended to indicate that the preparation was manufactured by the Macmahan Pharmacal Company, because that fact is explicitly stated at the bottom of the label. The only two circulars shown by the proof ever to have been published by complainant bear a striking heavy-leaded caption, not "Antiphlogistine,' but "Macmahan's Antiphlogistine." The business card, billheads, letterheads, and envelopes also show that complainant was not content to describe its preparation as “Antiphlogistine" alone, but each and all of them have the forerunner "Macmahan's." For the reasons appearing in the statement of the case to the effect that there is no evidence as to when, or how long, or how extensively the business cards, billheads, letterheads, and envelopes were used, they afford no substantial evidence of the existence of the trade-mark prior to its adoption by the defendant, but they nevertheless evince a consistent attitude on the part of complainant to make the word "Macmahan's" a part of its trademark. From the foregoing, we can readily understand that the decoy prescriptions shown to have been sent to old-established pharmacists in New York, calling for "Antiphlogistine" alone, shortly before the evidence was taken in this case, were not filled by using "Macmahan's Antiphlogistine." The pharmacists did not recognize the word "Antiphlogistine" as complainant's brand. Not only so, but the limited sales of the preparation by any name indicate an unfamiliarity with it certainly as "Antiphlogistine." Ninetyeight different persons only inquired for it during the decade following the supposed adoption of the trade-mark in question, and the aggregate amount paid by them for all the purchases made amounted to the sum of $514.18 only. There is no evidence in the record showing that complainant's preparation was kept in drug stores generally for sale. On the contrary, the only fair inference from all the evidence is that it was manufactured in very small quantities, kept for sale exclusively by complainant, advertised little if any, sold infrequently and in small quantities, and most generally to dentists located in near proximity to complainant's drug store, unknown to the trade generally by any name, and when known in the region where sold it was not known as "Antiphlogistine" but "Macmahan's Antiphlogistine." Such being the evidence, we are of opinion that complainant's mixture had obtained no such acceptance or reputation in the trade under the name "Antiphlogistine" as to confer upon complainant a right of property in that word. alone. The test laid down by the supreme court, in cases supra, is not met. The use was not sufficient to ripen into a right of
property. The mark "Antiphlogistine" on any package would not have been recognized by the trade as evidence of its origin, or as an indication of complainant's ownership. It follows that defendant's large and prosperous business, innocently and at great expense organized and developed by the use of this same word under the circumstances shown by the proof, cannot be destroyed on complainant's claim of a superior right thereto.
The question was much argued by counsel whether the liquid dentifrice of complainant prepared and offered for sale in small bottles is of the same class of merchandise as the plastic compound of defendant, prepared and offered for sale in tin cans. It is true both of them are intended, in a general sense, to reduce inflammation, but complainant's is practically a dental remedy, employed almost exclusively in connection with the teeth, while the defendant's is a general remedy, inapplicable to the use of dentists, but intended. for and solely applicable to external use as a substitute for ordinary poultices, blisters, and counterirritants. It is conceded that if these were different classes of merchandise, within the accepted meaning of those words, in their relation to trade-mark, then each party might adopt and use the same trade-mark, as there would be no danger of confusion resulting therefrom. We, however, do not deem it necessary for the disposition of this case to pass upon the main question so argued. We feel, however, constrained to say this much, that, in our opinion, the complainant, by undertaking to sell the right to use the word in question to Dr. Campbell for his use in handling plastic compounds, evinced an intention to abandon its claim to the trade-mark, except in connection with its liquid preparation, and cannot claim in a court of equity that it does not belong to a separate class of plastic compounds, or that it will be damaged by defendant's use of the same word in connection with its plastic compound. In fact the complainant is making no such claim. This suit is prosecuted by Dr. Campbell, not for complainant's benefit, but for his own. He was a prominent executive officer, and largely interested in defendant corporation, had participated in the early and continued struggles of the company to secure a trade for its compound, had necessarily known and approved of the large outlays of money for advertising it as "Antiphlogistine," and had on behalf of his company investigated complainant's claim, and pronounced it invalid. For reasons unexplained, he afterwards sold his stock, resigned his position as an officer of the defendant company, made the contract referred to with complainant, and caused this suit to be instituted. The main purpose of the contract was to transfer from complainant company to Dr. Campbell the right to use the word "Antiphlogistine" as a trade-mark for his preparation, which, by agreement, was not to be in "liquid form." There was no transfer to him of complainant's business, or any part of it, and no license to operate at complainant's place of business. The sole purpose was to separate what complainant called its trade-mark, reserving to itself the right to use it on its preparation in liquid form, and transferring it to Dr. Campbell for his use on preparation not in liquid form. This contract betrays a false conception of the character of trade-mark property. A trade-mark cannot be assigned,
or its use licensed, except as incidental to a transfer of the business or property in connection with which it has been used. An assignment or license without such a transfer is totally inconsistent with the theory upon which the value of a trade-mark depends and its appropriation by an individual is permitted. The essential value of a trade-mark is that it identifies to the trade the merchandise upon which it appears as of a certain origin, or as the property of a certain person. When its use has been extensive enough to accomplish that purpose, and not till then, it becomes property, and when it so becomes property it is valuable for two purposes: (1) As an attractive sign manual of the owner, facilitating his business by its use; (2) as a guaranty against deception of the public. By familiarity with the trade-mark attached to the owner's merchandise, purchasers are enabled to buy what they desire, and are thereby protected against imposition and fraud. Disassociated from merchandise to which it properly appertains, it lacks the essential characteristics which alone give it value, and becomes a false and deceitful designation. It is not by itself such property as may be transferred. Browne, Trade-Marks (2d Ed.) § 363; Heinisch's Sons Co. v. Baker (C. C.) 86 Fed. 765; Kidd v. Johnson, 100 U. S. 617, 620, 25 L. Ed. 769. To sustain complainant's contention in this case would, in effect, permit Dr. Campbell to commence a new business in 1899, with which he had theretofore in no manner been associated, and, on complainant's theory of its own exclusive right thereto, to falsely certify to the public that the merchandise manufactured and sold by him was in fact manufactured and sold by complainant. Not only this, but it would enable Dr. Campbell to antagonize the defendant's right to use the trade-mark which he himself had for six years recognized as valid and had encouraged the defendant to expend large sums of money in perfecting and establishing a business under its supposed protection. The language employed by the supreme court of the United States in Medicine Co. v. Wood, 108 U. S. 218, 223, 227, 2 Sup. Ct. 436, 439, 442, 27 L. Ed. 706, 708, 709, is so apposite to the situation disclosed by this record that we cannot refrain from quoting it.
"If one affixes to goods of his own manufacture signs or marks which indicate that they are the manufacture of others, he is deceiving the public and attempting to pass upon them goods as possessing a quality and merit which another's skill has given to similar articles, and which his own manufacture does not possess, in the estimation of purchasers. * Those who come into a court of equity, seeking equity, must come with pure hands and a pure conscience. If they claim relief against the frauds of others, they must themselves be free from the imputation. If the sales made by the plaintiff and his firm are effected, or sought to be, by misrepresentation and falsehood, they cannot be listened to when they complain that, by the fraudulent rivalry of others, their own fraudulent profits are dimini. ed An exclusive privilege for deceiving the public is assuredly not one that a court of equity can be required to aid or sanction. To do so would be to forfeit its name and character."
The foregoing quotations are alone applicable on the fundamental theory of the complainant in this case, namely, that it had made such use of the word "Antiphlogistine" as its trade-mark that the public recognized it, when found on any packages either of liquid or plastic medicinal preparations, as convincing evidence that they were put up
by complainant company. On that theory, Dr. Campbell's use of the mark on his preparations would be such a flagrant imposition upon the public that no court of equity would permit, much less facilitate, it.
We are of opinion, for the reasons hereinbefore stated, that complainant never acquired any right of property in the word "Antiphlogistine" as a trade-mark, and, if it had, that the business arrangement made with Dr. Campbell forfeited all right to the equitable relief prayed for in this action.
Öther interesting questions arising in this case were argued at the bar, but in the view we have taken of the propositions already discussed it becomes unnecessary to express our views concerning them.
The decree of the circuit court dismissing the bill was undoubtedly correct, and is accordingly affirmed.
(113 Fed. 476.)
ROTHCHILD v. MEMPHIS & C. R. CO. et al.
(Circuit Court of Appeals, Sixth Circuit. February 10, 1902.)
1. RAILROAD-CORPORATIONS-STOCKHOLDERS - TENANTS IN COMMON-TRUST RELATION-JUDICIAL SALE-PURCHASE OF PROPERTY.
Where a stockholder of a railroad corporation, though cwning a majority of the stock, does not actually control the affairs of the company for his own benefit and to the prejudice of the minority stockholders, he does not occupy a trust relation towards them, and, as they are not tenants in common, he may purchase the property of the corporation at a judicial sale for his own benefit, if there be no actual fraud.
2. SAME-ACTION TO AVOID SALE-LACHES.
Where the minority stockholders of a railroad made no objection to a judicial sale of the property to the majority stockholder and no effort to protect themselves for 17 months, and until the purchaser had expended large sums in the payment of debts and improvement of the property, an action to avoid the sale wa then too late.
3. SAME-PURCHASE BY ANOTHER ROAD-POWER TO HOLD-RIGHT TO QUESTION. Where at a judicial sale of a Tennessee railroad it was purchased by a railroad company incorporated in Virginia, which had filed its charter in Tennessee, and was authorized to make the purchase under Acts Tenn. 1881, c. 9, § 2, providing that a railroad may acquire another road by purchase, after the sale is confirmed and title vested in the purchaser, the state alone can question the purchaser's power to hold such title.
Appeal from the Circuit Court of the United States for the Western District of Tennessee.
A bill was filed in the circuit court for the Western district of Tennessee by the complainant, who is a stockholder in the Memphis & Charleston Railroad Company, on behalf of himself and all other stockholders desiring to become parties complainant, against the Memphis & Charleston Railroad Company and the Southern Railway Company. The purpose of the bill is to have the title of the Southern Railway Company to the property and franchises of the Memphis & Charleston Railroad Company, purchased at a foreclosure sale, declared to be held in trust for the benefit of the shareholders of the Memphis & Charleston Railroad Company. The bill states: That in January, 1892, nearly if not all of the lines of the Southern Railway Company in the state of Tennessee were owned and operated by