Source: https://supreme.justia.com/cases/federal/us/179/19/
Timestamp: 2019-04-22 08:08:39+00:00

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Justia › US Law › US Case Law › US Supreme Court › Volume 179 › Saxlehner v. Eisner & Mendelson Co.
In 1862, plaintiff's husband discovered a spring of bitter water in Hungary, and was granted by the Municipal Council of Buda permission to sell such water, and to give the spring the name of "Hunyadi Spring." He put up these waters in bottles of a certain shape and with a peculiar label, and opened a large trade in the same under the name of "Hunyadi Janos." In 1872, one Markus discovered a spring of similar water and petitioned the Council of Buda for permission to sell the water under the name of " Hunyadi Matyas." This was denied upon the protest of Saxlehner, but in 1873, the action of the Council was reversed by the Minister of Agriculture, and permission given Markus to sell water under the name of "Hunyadi Matyas." Other proprietors seized upon the word "Hunyadi "which became generic as applied to bitter waters. This continued for over twenty years when, in 1895, a new law was adopted, and Saxlehner succeeded in the Hungarian courts in vindicating his exclusive right to the use of the word "Hunyadi." In 1897, he began this suit.
law of Hungary of 1895 reinstating the exclusive right of Saxlehner, and that the name having also become public property here, his right to an exclusive appropriation was lost.
Held also: that even if this were not so, he, knowing the name "Hunyadi" had become of common use in Hungary, was also chargeable with knowledge that it had become common property here, and that he was guilty of laches in not instituting suits and vindicating his exclusive right to the word, if any such he had.
Held also: that acts tending to show an abandonment of a trade-mark being insufficient, unless they also show an actual intent to abandon, there was but slight evidence of any personal intent on the part of Saxlehner to abandon his exclusive right to the name "Hunyadi," and that a company to whom he had given the exclusive right to sell his waters in America was not thereby made his agent, and could not bind him by its admissions.
Held also: that the fact that he registered the trademark "Hunyadi Janos" did not estop him from subsequently registering the word "Hunyadi" alone.
Held also: that the appropriation by other parties of his bottle and label, being without justification or excuse, was an active and continuing fraud upon his rights, and that the defense of laches was not maintained.
Held also: that the adoption by the defendant of a small additional label distinguishing its importation from others did not relieve it from the charge of infringement, inasmuch as the peculiar bottles and labels of the plaintiff were retained.
This was a bill in equity filed in the circuit court for the Southern District of New York by the widow of Andreas Saxlehner, deceased, a resident of Buda-Pesth and a subject of the King of Hungary, against the Eisner & Mendelson Company, importers and wholesale dealers, to enjoin the defendant from selling any water under a name in which the word "Hunyadi" occurs, or making use in the sale of bitter waters of labels, in form, color, design, and general appearance, imitating the labels used by plaintiff in the sale of Hunyadi Janos water.
under the name of "Hunyadi Janos," or in England and the United States under the name of "Hunyadi" alone; that in March, 1876, Saxlehner entered into a contract with the Apollinaris Company of London under which such company was given the exclusive right to sell this water in Great Britain and the United States, and that such contract was not terminated until March, 1896; that this company used a label of similar design, but of different color, and that large quantities of this water were exported by Saxlehner through such company and sold in the United States under the name of Hunyadi water; that Saxlehner died May 24, 1889, and plaintiff succeeded him in the business; that, prior to his death, Saxlehner obtained the registration in the Patent Office of the name "Hunyadi" as his trademark; that the defendant, knowing of these facts, had unlawfully imported and sold bitter water not coming from plaintiff's wells, in bottles of identical shape and size as those used by plaintiff, and with labels in "close and fraudulent simulation of your orator's trademark," but under the name of "Hunyadi Laszlo" or "Hunyadi Matyas" -- all in defiance of plaintiff's right and with the design of imposing the waters upon the public as those of the plaintiff.
to sell such waters; that in 1877, Saxlehner applied to the Commissioner of Patents for the registration of the words "Hunyadi Janos" as a trademark; that such trademark was registered September 11, 1877, by which proceeding he abandoned all claim and assertion of right to the word "Hunyadi" in and of itself, and that it had for many years previously been a generic term to designate this class of waters. The answer further alleged that the defendant, in order to designate the waters sold by it, and to secure additional protection to the label used by it, registered the trademark "Hunyadi Matyas," since which time the defendant has used such trademark as stated therein, and in accordance therewith.
As the case depended almost wholly upon questions of fact, a somewhat elaborate statement of the evidence becomes necessary.
In 1862, Andreas Saxlehner discovered within the city limits of Buda-Pesth, Hungary, in a valley surrounded on all sides by hills acting as a natural barrier, secluding it from the outer world, a spring which was named by him the "Hunyadi" spring, and on January 19, 1863, the municipal council of Buda granted him permission to sell the water taken from such spring and to give the spring the name of "Hunyadi," upon the payment of a small sum of money for hospital purposes. Soon after this, he began to bottle the water of his spring and to sell it under the arbitrary name or trademark of "Hunyadi Janos" -- in other words, John Hunyadi, a Hungarian hero of the fifteenth century. Several wells were subsequently sunk by him in the same valley to the number of about 112, all of which produced water substantially of the same chemical combination, which is led through a system of pipes to large subterranean cisterns, from which it is taken and bottled. It soon began to be exported beyond the limits of Hungary to other European countries, and also to the United States.
bottles and labels were used for these waters, when Saxlehner adopted, in conjunction with the distinctive name of "Hunyadi Janos," a novel style of bottle of straight shape with a short neck, to the top of which was attached a metal capsule bearing the inscription "Hunyadi Janos, Budai Keseruviz Forras," meaning "Hunyadi Janos, bitter water of Buda," together with a supposed portrait of the hero stamped thereon. He also adopted a peculiar label covering almost the whole body of the bottle, divided into three longitudinal panels, the middle one of which bore the same portrait in a medallion, with the name of "Hunyadi Janos" written in large letters on the top of the label, the color of the middle panel being a reddish brown and the outer panels white. As this water was exported to and sold in the various countries of the world, a different custom concerning its appellation sprung up in different countries, the Latin races using the word "Janos" as the common appellation of the water, it being known as "Eau de Janos" or "Aqua di Janos," while in England and the United States of America the name of "Hunyadi" became its common appellation, it being known as Hunyadi water.
on his part to avail himself of the great diffusion and good renown enjoyed by the Saxlehner Hunyadi Bitter Spring, both at home and abroad, which, however, cannot be tolerated by the authorities, and in the present case, all the less as it is a well known fact that Mr. Saxlehner was able to secure this good renown to his spring only through many years' labor and at considerable expense."
On a petition in appeal, however, to the minister of agriculture, in 1873, the decision of the council which denied to Markus the permission to use the name "Hunyadi Matyas" was reversed because of certain omissions by Saxlehner to conform to the local laws and also because "Hunyadi Janos" and "Hunyadi Matyas" "represent two quite clearly different names, which may stand without any infringement to each other." This spring was afterwards registered in Buda-Pesth by the name of "Hunyadi Matyas," and thereupon the proprietors of other wells began to sell their waters in Europe under the name of Hunyadi with an added name, and also with the use of a close imitation of the red and white labels. It did not appear, however, that Markus sold any water or made use of the permission granted to him by the minister, or obtained a license from the local authorities; but in 1876, the firm of Mattoni & Wille became the purchasers of the plot of ground leased by Markus and several other adjoining plots containing springs, and in that year registered a separate trademark and name for each of the six springs which they then acquired, among which was a trademark bearing the name "Hunyadi Matyas." In 1877, they began selling these waters in Hungary, claiming certain specific differences of composition of the various waters which recommended them for different purposes.
thereafter at a stated price. In addition to this Saxlehner agreed not to fill any orders coming from the territory granted to the company, but to make them over to the company. A special label was designed to be used on the bottles sold by the company of substantially the same contents and characteristics, but of a different color, the body of the label being a dark blue, with a red or reddish brown central field. A narrow strip on the top of the label contained the name of the Apollinaris Company as the importer, and from the making of this contract large quantities of water bearing this label were exported and sold in the United States under the name of "Hunyadi Janos," or the shorter name "Hunyadi."
"The red diamond is the trademark of the Apollinaris Company, Limited, and is meant only to indicate that the mineral waters so marked are sold by the Apollinaris Company, Limited."
In 1887, Saxlehner caused the name "Hunyadi" to be registered separately from "Janos" as a trademark in the United States Patent Office. In the statement accompanying this registration, he was again careful to refer to the red and white or red and blue label upon which said trademark was used by him, and to repeat the caution that he did not in anywise intend by said registration to abridge his right to the exclusive use of said label as a whole, or to any of its features.
The Apollinaris Company embarked in the business of selling Hunyadi Janos water in the United States, but met with competition from one Scherer, who imported the water under the red and white label from Europe, buying it from parties who had purchased it from Saxlehner. The company sought to enjoin Scherer from so selling upon the ground of its exclusive right within the United States, but failed in the suit. The case was decided in 1886, and reported in 27 F. 18.
purchased by them, one of which was the original markus spring above mentioned.
About the same time, the firm of Ignatz Ungar & Son began to sell waters from a spring owned by them, which was designed "Hunyadi Arpad," through one Joseph Ungar as their agent. This water was put up in an imitation of Saxlehner's red and blue labels. The Matyas water was also put up in red and white labels of similar design. Suits were brought against them in 1886 in the circuit court of the United States by the Apollinaris Company to enjoin the use of the name "Hunyadi" and of the labels. These suits were, however, withdrawn for want of jurisdiction, and two other cases, one against Andres and the other against Ungar, were brought by the Apollinaris Company in the supreme court of the state. Ex parte injunctions were issued in each case in February, 1887, and remained in force until July, 1888, when the injunction in the Ungar suit was dissolved upon application of the defendant, and soon thereafter, the Andres suit was voluntarily discontinued. Saxlehner appeared to have had no knowledge of these suits, although an effort was made, which the court below found to have been unsuccessful, to show that he was notified of the motion to dissolve the injunction, and refused to assist in opposing it. The defendants in these suits seem to have relied largely upon the fact that, under the laws of Hungary as they then were, they had a right to make use of the word "Hunyadi," provided they annexed thereto as a suffix a word different from "Janos," as, for instance, "Matyas" or "Arpad," and that, having obtained permission by royal grant to make use of these names in Hungary, they were entitled to make use of the same names in other countries.
advised by his lawyer that, before 1890, there was a statute which gave protection against so-called counterfeit or imitation labels and against literal imitations, but not imitations which were similar merely.
"because, according to the opinion of three experts consulted by the chamber, such trademarks are similar in composition, design, and color, and also for general impression, to the trademarks previously registered for the firm Saxlehner, and have been found to be imitations of the same and apt to mislead the public."
"because of the three experts consulted, two have pronounced same to be entirely similar to the trademark registered for Saxlehner, and the danger of misleading is greatly augmented by the fact that, on this trademark, the name 'Hunyadi' is applied in a prominent place."
The sale of the Hunyadi Laszlo water seems to have been practically stopped by this decree, but notwithstanding the decree against them of November 26, 1894, Mattoni & Wille continued to use the name Hunyadi Matyas separate from the label, and exported water as before to the defendant in this suit with red and blue labels, which were not registered in Hungary.
only the illustrated trademarks, but the verbal trademark "Hunyadi Matyas," and awarding to the plaintiff a priority of right to the exclusive use of the words "Hunyadi Janos" and "Hunyadi" alone, both as a commercial denomination as well as a trademark. In the decree of the minister, the prior decree of the minister of agriculture of the year 1873, legalizing the use of Hunyadi Matyas, was referred to and treated as superseded by the laws of 1890 and 1895. "There is," says he, "therefore absolutely no connection between that decision and the case now under consideration." Similar decrees were rendered the same year against other defendants who sought to appropriate the name Hunyadi, including "Hunyadi Josef," against which Saxlehner had been unsuccessful in 1887; "Hunyadi Lajos" and also "Uj Hunyadi" or new Hunyadi, whose litigation against Saxlehner seems to have been carried on in the interest of the Apollinaris Company.
In fact, this litigation seems to have resulted in a complete vindication of the right of Saxlehner to the use of the word "Hunyadi."
Promptly upon the rendition of these decrees, and early in 1897, this suit, as well as the others hereinafter mentioned, was instituted.
The case came on for hearing before the circuit court upon pleadings and proofs, and resulted in a decree enjoining the defendant from selling or offering for sale any bitter water not coming from the "Hunyadi Janos" wells of the plaintiff in bottles of a straight shape, with a short neck, and bearing labels in color, size, shape, and general design so closely similar to plaintiff's said label as to be calculated to deceive, but permitting the defendant to make use of the name "Hunyadi" as a prefix to some other name than "Janos," and denying the injunction demanded by the plaintiff against the use of the name "Hunyadi." 88 F. 61.
On appeal to the circuit court of appeals, the decree of the circuit court was affirmed as to the name "Hunyadi," but reversed as to the label, and the bill dismissed. 91 F. 536.
This case involves the question of plaintiff's exclusive right to the use of the name "Hunyadi" as a trademark for Hungarian bitter waters, as well as her right to the red and blue label and its characteristic features used by her upon the bottles in which she has been accustomed to sell "Hunyadi Janos" water.
1. That Saxlehner was the first to appropriate and use the name "Hunyadi" as a trademark for bitter waters, and that such name, being neither descriptive nor geographical, but purely arbitrary and fanciful as applied to medicinal waters, was the proper subject of a trademark.
2. That in the shape of his bottles, the design of his capsules and his labels, he was originally entitled to be protected against a fraudulent imitation.
of agriculture of 1873, that decision did not cover the use of the simulated label, the adoption of which seems to have been an act of undisguised piracy.
Practically, the only defenses pressed upon our attention are those of abandonment and laches.
laws upon the subject of trademarks, he could do no more. In 1877, he registered the trademark "Hunyadi Janos" in the Patent Office of the United States. In 1884, he registered both his red and white and red and blue labels in the Buda-Pesth Chamber of Commerce, the latter being intended for use by the Apollinaris Company. In 1887, he instituted an unsuccessful suit in Hungary, against the use of the words "Hunyadi Josef." Upon the passage of the Hungarian law of 1890 legalizing the use of pictorial trademarks, the plaintiff again registered the three labels, and in the following year instituted suits against all infringers in Hungary, which finally resulted in a complete establishment of her rights to the name of "Hunyadi." In 1887, Saxlehner registered the word "Hunyadi" as his trademark in the Patent Office of the United States, and in 1895, when the act for the protection of verbal trademarks was enacted, plaintiff registered the same word in Hungary. Saxlehner appears, however, to have successfully protested against Mattoni & Wille's registration of "Hunyadi Matyas" in Germany. In June, 1896, plaintiff also instituted a suit against the Apollinaris Company in England, and obtained a final injunction against the illegal use of the name "Hunyadi." In the decree of the Court of Chancery, which is reproduced, it was ordered that the Apollinaris Company deliver up to the plaintiff for destruction all labels, trade documents, and capsules in their possession which, by reason of their exhibiting the name "Hunyadi," are capable of being used for business in the United Kingdom for any Hungarian bitter water not being Hunyadi Janos water. Immediately upon the determination of the Hungarian litigation, and in the spring of 1897, plaintiff began these suits.
"that, if a thing contains twenty-five parts and but one is taken, an imitation of that one will be sufficient to contribute to a deception, and the law will hold those responsible who have contributed to the fraud."
Guinness v. Ulmer, 10 Law Times 127. While this may be a somewhat exaggerated statement, the reports are full of cases where bills have been sustained for the infringement of one of several words of a trademark. Shrimpton v. Laight, 18 Beav. 164; Clement v. Maddick, 1 Giff. 98; Hostetter v. Vowinkle, 1 Dill. 329; Morse v. Worrell, 10 Phila. 168; Grillon v. Guenin, Weekly Notes (1877) 14; American Grocer Pub. Association v. Grocer Pub. Co., 25 Hun, 398. It would seem that the registration in 1887 of the single word "Hunyadi" was really unnecessary for the protection of Saxlehner's rights, though we see no reason for holding the former registration an estoppel. The evidence shows that these Hungarian bitter waters were largely known in this country as Hunyadi waters, and that, in a certain sense, Hunyadi had become a generic word for them. Of course, if it became such with the assent and acquiescence of Saxlehner, he could not thereafter assert his right to its exclusive use. But as this appropriation was made against his constant protest, and as he apparently made every effort in his power to put a stop to the use of it, it ought not to be charged up against his claim that the word had become generic.
the company his agent. He agreed to sell the company a certain number of cases of his water at a certain price, and also agreed to sell to no one else during the pendency of the contract. It was agreed that their consignments should carry the label "Sole importers, Apollinaris Company, Limited, 19 Regent street, London, S.W." The company agreed not to compete with Saxlehner upon the continent, and upon his part he agreed to make over to the company all orders arising from countries reserved to it, as well as to refuse such orders where he had good reason to suppose they were intended for such countries. This is practically all there is of the contract. No agreement was made with respect to the trademark or the goodwill of the business, and the company reserved the right, which it subsequently exercised, of cancelling the contract upon notice. While such contract may have authorized the company to prosecute infringers here, and in the conduct of those particular suits Saxlehner may have been bound, it did not agree to do so or preclude the institution of other suits by him, nor was there any authority on the part of the company to bind him by its admissions.
sufficient as against them to defeat a suit for an injunction, but would not be binding upon the plaintiff unless done with her knowledge and acquiescence.
2. The defense of laches depends upon somewhat different considerations, and, so far as it applies to the use of the word "Hunyadi," we think it is established. It appears that, after the decision of the minister of agriculture in 1873 sustaining the claim of Markus to the trademark "Hunyadi Matyas," other springs were opened whose waters were bottled under different trademarks, in all of which the word "Hunyadi" was a component, and as early as 1886 these waters found their way to the United States, and were put on sale here with the knowledge of the Apollinaris Company. There is no evidence that Saxlehner had personal knowledge of these infringements, and while something may be said in his favor in view of his persistent efforts to establish his rights in Hungary, he was bound to know the law in this country, and to take steps within a reasonable time to vindicate his rights. The infringers were making use of their trademarks under licenses from the Hungarian government, and we see no reason to doubt that they were proceeding in good faith to dispose of their waters under the trademarks registered in Hungary. Under these circumstances, if Saxlehner had intended to assert his rights under the laws of this country to the exclusive use of the word "Hunyadi," he was bound to act with reasonable promptness. It is true that he may have supposed the Apollinaris Company would assert his rights in that particular for their own benefit, but if, as we have already held, he was not bound by their admissions, he is in no position to take advantage of their inaction, and, as against traders who were selling bitter waters under trademarks legalized by the Hungarian government, he should not have waited until the name "Hunyadi" had become generic in this country and indicative of this whole class of medicinal waters.
"every reproduction of trademarks which, in the countries or territories of the one of the contracting parties, are affixed to certain merchandise . . . is forbidden in the countries or territories of the other of the contracting parties,"
"If the trademark has become public property in the country of its origin, it shall be equally free to all in the countries or territories of the other of the two contracting parties."
In view of the decision of the minister of agriculture of 1873 sustaining the trademark "Hunyadi Matyas" and the subsequent adoption of the word "Hunyadi" in connection with some other word by numerous proprietors of similar waters, it seems to be clear that the word became, and continued to be for twenty years, public property in the Kingdom of Hungary, and it is difficult to escape the conclusion that it also became so here. It is true the law of Hungary was subsequently changed in this particular, and that the courts of that country held the plaintiff entitled to the benefit of that change; but it needs no argument to show that if the word once became public property here, a subsequent change in the law in her own country would not inure to the advantage of the plaintiff here. The right to individual appropriation, once lost, is gone forever.
inquiries upon his own account, and, regardless of his contract with the Apollinaris Company, have seen to it that his own interests were protected. If the Apollinaris Company were not his agent for the protection of his rights in the United States, then it was incumbent upon him to assert such rights personally or through some other recognized medium. In now invoking our laws, his successor is bound to show that she has complied with our requirements of diligence and promptness in instituting suit. She has failed in this particular. By twenty years of inaction, she has permitted the use of the word by numerous other importers, and it is now too late to resuscitate her original title.
"the reason which induced Eisner to make this lease was his desire to control the American label, so that neither Mattoni & Wille nor European purchasers could interfere with the American trade. A new label was therefore forthwith devised by Eisner which was a reddish brown and blue label, and is described in the complaint containing the name 'Hunyadi Matyas,' 'Buda Keseruviz' and a medallion portrait of King Stephen in the center of the red division. He intentionally simulated the Saxlehner United States label for the purpose of obtaining, by means of the simulation, a part of the goodwill which the Janos water had gained"
importers. But in cases of actual fraud, as we have repeatedly held, notably in the recent case of McIntire v. Pryor, 173 U. S. 38, the principle of laches has but an imperfect application, and delay even greater than that permitted by the statute of limitations is not fatal to plaintiff's claim. We have only to refer to the cases analyzed in that opinion for this distinguishing principle that, where actual fraud is proved the court will look with much indulgence upon the circumstances tending to excuse the plaintiff from a prompt assertion of his rights. Indeed, in a case of an active and continuing fraud like this, we should be satisfied with no evidence of laches that did not amount to proof of assent or acquiescence.
"equity courts will not, in general, refuse an injunction on account of delay in seeking relief where the proof of infringement is clear, even though the delay may be such as to preclude the party from any right to an account for past profits."
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. Fullwood, L.R. 9 Ch.Div. 176. . . . 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."
In the case under consideration, we do not see how it is possible to wring an abandonment on the part of Saxlehner or the plaintiff from the repeated and persistent efforts made by them in Hungary to assert their rights. But it was not until the law was amended in 1895 that these efforts were successful. It can scarcely be wondered at that, in view of the disabilities under which he labored in his own country, Saxlehner should have thought it futile to undertake the prosecution of his rights in a distant land. As the defendant is unable to call to his assistance any authority from the home government for the use of these simulated labels, and as they and their vendors in Hungary seized upon these labels with knowledge of Saxlehner's rights, it is no hardship to enjoin their further use and to hold defendant liable for such profits as it may have realized or for such damages as the plaintiff may have sustained by reason of the illegal use.
"Ask for the Seal brand. This label has been adopted to protect the public from imitation and as a guarantee of the genuineness of the Hunyadi Matyas Water imported solely by Eisner & Mendelson Co., New York."
Matyas water, and that from its adoption it freed the defendant from the charge, which before that time was true, that it was cajoling or deceiving the ordinary purchaser into the belief that he was buying the Janos water, and in its decree refused to enjoin the defendant from selling such water under the red and blue label bearing the name "Hunyadi Matyas" in connection with the Seal brand label.
We are of opinion, however, that, as defendant's bottle and label are a clear infringement upon those of the plaintiff, it would be destructive to her just rights to permit the use of such bottles and labels by the defendant, notwithstanding the affixing of the Seal brand, which is a mere private mark of the importer. The injury to her is in the simulation of her bottle and label, and she has the right to require that her competitors shall be forced to adopt a style of bottle which no one with the exercise of ordinary care can mistake for hers. While this label may have been adopted in good faith, we do not think its employment would prevent the casual customer from purchasing this water as that of the plaintiff, and that the injunction should also go against its use and that plaintiff should recover her damages therefor.
We are therefore of opinion that the decree of the circuit court of appeals must be reversed, and the case remanded to the Circuit Court for the Southern District of New York with directions to reinstate its decree of April 29, 1898, except so far as it denies to the plaintiff an injunction against the use of the Seal brand labels and damages sustained by such use, and for further proceedings not inconsistent with the opinion of this Court.

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