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ELGIN NAT WATCH CO v. ILLINOIS WATCH CASE CO, 179 U.S. 665 (1901)

U.S. Supreme Court

ELGIN NAT WATCH CO v. ILLINOIS WATCH CASE CO, 179 U.S. 665 (1901)

179 U.S. 665

ELGIN NATIONAL WATCH COMPANY, Appt.,
v.
ILLINOIS WATCH CASE COMPANY, Thomas W. Duncan, and Myer Abraham.
No. 121.

Argued December 5, 6, 1900.
Decided January 7, 1901.

[179 U.S. 665, 666]   This was a bill filed in the circuit court of the United States for the northern district of Illinois by the Elgin National Watch Company, a corporation organized under the laws of the state of Illinois, having its principal place of business at Elgin and its office in Chicago in that state, against the Illinois Watch Case Company, also a corporation of Illinois, with its principal place of business at Elgin, and certain other defendants, citizens of Illinois.

The bill alleged:

It was further averred 'that, on the 19th day of July, A. D. 1892, under the act of Congress relating to the registration of trademarks, your orator caused said trademark to be duly registered in the Patent Office of the United States according to law, as by the certificate of said registration, or a copy thereof, duly certified by the Commissioner of Patents, here in court to be produced, will more fully and at large appear.'

The bill charged that defendants had infringed the rights of complainant by engraving or otherwise affixing the word 'Elgin' to the watch cases made and sold by them; that such watch cases were adapted to receiving watch movements [179 U.S. 665, 668]   of different construction from those made by complainant; that inferior watch movements were liable to be and often were incased in them; and that when so incased the entire watch, including both movement and case, appeared upon the market with the owrd 'Elgin' upon it, thereby leading the public to believe that the watch as an entirety was made by the complainant, and enabling parties wrongfully using complainant's trademark to profit by the great reputation of complainant, to palm off other and inferior goods as goods made by complainant, to injure the reputation of complainant as a watchmaker, and to deprive it of a portion of the business and patronage which it would otherwise receive from the public, to the irreparable damage of complainant.

The prayer was for damages and for an injunction to restrain defendants 'from directly or indirectly making or selling any watch case or watch cases marked with your orator's said trademark, and from using your orator's said trademark in any way upon watches or watch cases or in the defendants' printed advertisements, circulars, labels, or the boxes or packages in which their said watch cases are put or exposed for sale.'

A demurrer having been overruled, defendants answered denying the legality of the registration of the alleged trademark, and any attempt on their part to deceive the public, or the doing of anything they did not have the legal right to do; and asserting that they had never manufactured or offered for sale watches or watch movements; that they manufactured at Elgin watch cases only; that complainant had never manufactured or sold watch cases with the word 'Elgin' on them; that the business of the two companines was separate and distinct; and that when ever the defendant company had used the word 'Elgin' it had usually, if not invariably, been done in connection with some other word, as 'Elgin Giant' or 'Elgin Commander' or Elgin Tiger,' or some other word in combination with the word 'Elgin;' that defendant company had never used the word 'Elgin' alone, or separately, as registered by complainant, upon goods exported to foreign nations or used in foreign commerce, but only in domestic commerce, and to inform the public of the place where watch cases of the defendant com- [179 U.S. 665, 669]   pany were manufactured; that such watches were sold upon a guaranty running for a number of years, so that it was necessary to indicate the name of the location where defendant company was carrying on its business, that purchasers might be able to find the company in case it became necessary to call upon it to make good its guaranties; 'and that owing to the distinct lines of business in which the complainant and the defendant company are engaged, no misunderstanding or confusion has arisen or can arise, as these defendants are informed and believe.'

It was further alleged 'that the word 'Elgin,' being a geographical name or word indicating the name of a prominent manufacturing city in which any manufacturer of watches, watch movements, or watch cases is at liberty to locate and carry on his business, is not appropriable by any single manufacturing person, firm, or corporation, but is open as of common right to the use of any person, firm, or corporation carrying on business at the city of Elgin.'

Replication was filed, proofs taken, and a hearing had. By leave of court complainant amended its bill, alleging that the watch cases so manufactured and marked by defendants in violation of complainant's rights were intended by defendants to be sold in foreign countries, and were in fact exported to and sold in foreign countries.

The circuit court decreed that the use of the word 'Elgin,' whether alone or in connection with other words, was a violation and infringement of complainant's exclusive rights in the premises, and that an injunction issue restraining the use of the word alone or in connection with other words or devices, upon watches, or watch cases, or packages containing watches or watch cases, going into commerce with foreign nations or with the Indian tribes, in such a way as to be liable to cause purchasers or others to mistake said watches or the watch movements incased in said watch cases for watches or watch movements manufactured by complainant. 89 Fed. Rep. 487. The case having been carried to the court of appeals, that court reversed the decree of the circuit court, and remanded the cause, with instructions to dismiss the bill. 35 C. C. A. 237, 94 Fed. Rep. 667. [179 U.S. 665, 670]   Mr. Lysander Hill for appellant.

Messrs. Thomas A. Banning and Ephraim Banning for appellees.

Mr. Chief Justice Fuller delivered the opinion of the court:

The circuit court of appeals held that the bill must be dismissed for want of jurisdiction. The parties to the suit were all citizens of Illinois, and the court was of opinion that it could not be maintained under the act of March 3, 1881 (21 Stat. at L. 502, chap. 138).

In the Trademark Cases, 100 U.S. 82 , sub nom. United States v. Steffens, 25 L. ed. 550, this court held that the act of July 8, 1870, carried forward into 4937 to 4947 of the Revised Statutes, was void for want of constitutional authority, inasmuch as it was so framed that its provisions were applicable to that which was subject to the control of Congress. The cases involved certain indictments under the act of August 14, 1876, 'to punish the counterfeiting of trademark goods and the sale or dealing in of counterfeit trademark goods;' and the opinion treated chiefly of the act of 1870 and the civil remedy which that act provided, because, as Mr. Justice Miller observed, 'the criminal offenses described in the act of 1876 are, by their express terms, solely referable to frauds, counterfeits, and unlawful use of trademarks which were registered under the provisions of the former act. If that act is unconstitutional, so that the registration under it confers no lawful right, then the criminal enactment intended to protect that right falls with it.'

In its opinion the court, adhering to the settled rule to decide no more than is necessary to the case in hand, was careful to say that the question 'whether the trademark bears such a relation to commerce in general terms as to bring it within congressional control, when used or applied to the classes of commerce which fall within that control, is one which, in the [179 U.S. 665, 671]   present case, we propose to leave undecided.' And, further: 'In what we have here said we wish to be understood as leaving untouched the whole question of the treaty-making power over trademarks and of the duty of Congress to pass any laws necessary to carry treaties into effect.'

The act of March 3, 1881, followed. By its 1st section it was provided that 'owners of trademarks used in commerce with foreign nations or with the Indian tribes, provided such owners shall be domiciled in the United States, or located in any foreign country or tribes, which by treaty, convention, or law, afford similar privileges to citizens of the United States, may obtain registration of such trademarks by complying with' certain specified requirements.

By the 2d section the application prescribed by the 1st 'must, in order to create any right whatever in favor of the party filing it, be accompanied by a written declaration' 'that such party has at the time a right to the use of the trademark sought to be registered, and that no other person, firm, or corporation has the right to such use, either in the identical form or in any such near resemblance thereto as might be calculated to deceive; that such trademark is used in commerce with foreign nations or Indian tribes, as above indicated; . . .'

The 3d section provided that 'no alleged trademark shall be registered unless the same appear to be lawfully used as such by the applicant in foreign commerce or commerce with Indian tribes as before mentioned, or is within the provision of a treaty, convention, or declaration with a foreign power; nor which is merely the name of the applicant; nor which is identical with a registered or known trademark owned by another and appropriate to the same class of merchandise; or which so nearly resembles some other person's lawful trademark as to be likely to cause confusion or mistake in the mind of the public, or to deceive purchasers.'

By the 4th section certificates of registration of trademarks were to be issued, copies of which and of trademarks and declarations filed therewith should be evidence 'in any suit in which such trademarks shall be brought in controversy;' and by 5 it was provided that the certificate of registry [179 U.S. 665, 672]   should remain in force for thirty years from its date, and might be renewed for a like period. By the 11th section nothing in the act was to be construed 'to give cognizance to any court of the United States in an action or suit between citizens of the same state, unless the trademark in controversy is used on goods intended to be transported to a foreign country or in lawful commercial intercourse with an Indian tribe.' The 7th section was as follows:

Thus it is seen that under the act registration is prima facie evidence of ownership; that the certificate is evidence in any suit or action in which the registered trademark is brought in controversy; that the act practically enables treaty stipulations to be carried out, and affords the basis for judicial redress for infringement in foreign countries, where such redress cannot ordinarily be had without registration, as well as in the courts of the United States, when jurisdiction would not otherwise exist. For it is the assertion of rights derived under the act which gives cognizance to courts of the United States when the controversy is between citizens of the same state, though the benefits of the act cannot be availed of if the alleged trademark is not susceptible of exclusive ownership as such, and not, therefore, of registration.

Trademarks are not defined by the act, which assumes their [179 U.S. 665, 673]   existence and ownership, and provides for a verified declaration by applicants for registration, that they have the exclusive right to the particular trademark sought to be registered.

The term has been in use from a very early date, and, generally speaking, means a distinctive mark of authenticity, through which the products of particular manufacturers or the vendible commodities of particular merchants may be distinguished from those of others. It may consist in any symbol or in any form of words, but as its office is to point out distinctively the origin or ownership of the articles to which it is affixed, it follows that no sign or form of words can be appropriated as a valid trademark which, from the nature of the fact conveyed by its primary meaning, others may employ with equal truth and with equal right for the same purpose.

And the general rule is thoroughly established, that words that do not in and of themselves indicate anything in the nature of origin, manufacture, or ownership, but are merely descriptive of the place where an article is manufactured or produced, cannot be monopolized as a trademark. Delaware & H. Canal Co. v. Clark, 13 Wall. 311, 20 L. ed. 581; Brown Chemical Co. v. Meyer, 139 U.S. 540 , 11 Sup. Ct. Rep. 625; Columbia Mill Co. v. Alcorn, 150 U.S. 460 , 37 L. ed. 1144, 14 Sup. Ct. Rep. 151; and cases cited.

The word 'Elgin' is and has been for very many years the name of a well-known manufacturing city in Illinois. The factory and business of appellees were located at Elgin, and in describing their watch cases as made there it is not denied that they told the literal truth so far as that fact was concerned, and this they were entitled to do according to the general rule. Obviously, to hold that appellant had obtained the exclusive right to use the name 'Elgin' would be to disregard the doctrine characterized by Mr. Justice Strong in Delaware & H. Canal Co. v. Clark, as sound doctrine, 'that no one can apply the name of a district or country to a wellknown article of commerce, and obtain thereby such an exclusive right to the application as to prevent others inhabiting the district or dealing in similar articles coming from the district from truthfully using the same designation.'

But it is contended that the name 'Elgin' had acquired a [179 U.S. 665, 674]   secondary signification in connection with its use by appellant, and should not, for that reason, be considered or treated as merely a geographical name. It is undoubtedly true that where such a secondary signification has been acquired, its use in that sense will be protected by restraining the use of the word by others in such a way as to amount to a fraud on the public, and on those to whose employment of it the special meaning has become attached.

In other words, the manufacturer of particular goods in entitled to the reputation they have acquired, and the public is entitled to the means of distinguishing between those and other goods; and protection is accorded against unfair dealing, whether there be a technical trademark or not. The essence of the wrong consists in the sale of the goods of one manufacturer or vendor for those of another.

If a plaintiff has the absolute right to the use of a particular word or words as a trademark, then, if an infringement is shown, the wrongful or fraudulent intent is presumed, and although allowed to be rebutted in exemption of damages, the further violation of the right of property will nevertheless be restrained. But where an alleged trademark is not in itself a good trademark, yet the use of the word has come to denote the particular manufacturer or vendor, relief against unfair competition or perfidious dealing will be awarded by requiring the use of the word by another to be confined to its primary sense by such limitations as will prevent misapprehension on the question of origin. In the latter class of cases such circumstances must be made out as will show wrongful intent in fact, or justify that inference from the inevitable consequences of the act complained of. Lawrence Mfg. Co. v. Tennessee Mfg. Co. 138 U.S. 549 , 34 L. ed. 1004, 11 Sup. Ct. Rep. 396; Coats v. Merrick Thread Co. 149 U.S. 562 , 37 L. ed. 847, 13 Sup. Ct. Rep. 966; Singer Mfg. Co. v. June Mfg. Co. 163 U.S. 169 , 41 L. ed. 118, 16 Sup. Ct. Rep. 1002

In Singer Mfg. Co. v. June Mfg. Co. the Singer machines were covered by patents, whereby there was given to them a distinctive character and form, which caused them to be known as the Singer machines, as differing from the form and character of machines made by others. The word 'Singer' was adopted by the Singer Company as designative of their [179 U.S. 665, 675]   distinctive style of machines, rather than as solely indicative of the origin of manufacture. That word constituted the generic description of the type and class of machines made by that company, and on the expiration of the patent, the right to make the patented articel and to use the generic name necessarily passed to the public. But, nevertheless, this court held that those who availed themselves of this public dedication to make the machines and use the generic designation did so on condition that the name should be so used as not to deprive others of their rights or to deceive the public. Mr. Justice White, delivering the opinion, said:

,'It is obvious that if the name dedicated

In Reddaway v. Banham [179 U.S. 665, 1896]   A. C. 199, much relied on by appellant's counsel, Reddaway was a manufacturer of belting from camel hair, which belting he had called 'camel-hair belting' for many years, so that it had become known in the trade as belting of his manufacture. Banham, long after, made belting from the same material, which he sold and advertised as Arabian belting, but subsequently he, or a company he had formed, began to call it 'camel-hair belting.' Reddaway and Reddaway's company brought an action for injunction, which was tried before Collins, J. (now Lord Justice Collins), and a special jury. The jury answered certain questions to the effect that 'camel-hair belting' meant belting made by plaintiffs as distinguished from belting made by other manufacturers; that the words did not mean belting of a particular kind without reference to any particular maker; that the defendants so [179 U.S. 665, 676]   described their belting as to be likely to mislead purchasers and to lead them to buy defendants' belting as and for plaintiffs' belting; and that defendants endeavored to pass off their goods as and for plaintiffs' goods, so as to be likely to deceive purchasers. On the findings of the jury, Collins, J., entered a decree for plaintiffs, and granted an injunction restraining defendants 'from continuing to use the words 'camel hair' in such a manner as to deceive purchasers into the belief that they are purchasing belting of the plaintiffs' manufacture, and from thereby passing off their belting as and for the belting of the plaintiffs' manufacture.' The case having gone to the court of appeal, the decree was reversed, and judgment entered for defendants ( [179 U.S. 665, 1895]   Q. B. 286); and plaintiffs thereupon prosecuted an appeal to the House of Lords, which reversed the court of appeal, and reinstated the decision of Collins, J., with a slight modification. The case was held to fall within the principle, as put by the Lord Chancellor, 'that nobody has any right to represent his goods as the goods of somebody else.'

Lord Herschell, referring to Wotherspoon v. Currie, L. R. 5 H. L. 508, said:

And Lord Herschell further said that he demurred to the view--

These and like cases do not sustain the proposition that words which in their primary signification give notice of a general fact, and may be used for that purpose by every one, can lawfully be withdrawn from common use in that sense; but they illustrate the adequacy of the protection from imposition and fraud in respect of a secondary signification afforded by the courts.

In the instance of a lawfully registered trademark, the fact of its use by another creates a cause of action. In the instance of the use in bad faith of a sign not in itself susceptible of being a valid trademark, but so employed as to have acquired a secondary meaning, the whole matter lies in pais.

It is to be observed, however, that the question we are considering is not whether this record makes out a case of false representation, or prefidious dealing, or unfair competition, but whether appellant had the exclusive right to use the word 'Elgin' as against all the world. Was it a lawfully registered trademark? If the absolute right to the word as a trademark belonged to appellant, then the circuit court had jurisdiction under the statute to award relief for infringement; but if it were not a lawfully registered trademark, then the circuit court of appeals correctly held that jurisdiction could not be maintained.

And since, while the secondary signification attributed to its use of the word might entitled appellant to relief, the fact that, primarily, it simply described the place of manufacture, and that appellees had the right to use it in that sense, though not the right to use it without explanation or qualification, if such use would be an instrument of fraud, we are of opinion that the general rule applied, and that this geographical name could not be employed as a trademark, and its exclusive use vested in appellant, and that it was not properly entitled to be registered as such.

In view of this conclusion, and of the fact that the question [179 U.S. 665, 678]   of the constitutionality of the act of Congress was not passed on by the court below, we have refrained from any discussion of that subject.

The Circuit Court of Appeals was right, and its decree is affirmed.

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