Case Name: Schering & Glatz, Inc., Appellant, v. American Pharmaceutical Company, Inc., and Another, Respondents, Impleaded with The Chemical Foundation, Inc., Defendant
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1932-07-01
Citations: 236 A.D. 315
Docket Number: 
Parties: Schering & Glatz, Inc., Appellant, v. American Pharmaceutical Company, Inc., and Another, Respondents, Impleaded with The Chemical Foundation, Inc., Defendant.
Judges: 
Reporter: Appellate Division Reports
Volume: 236
Pages: 315–319

Head Matter:
Schering & Glatz, Inc., Appellant, v. American Pharmaceutical Company, Inc., and Another, Respondents, Impleaded with The Chemical Foundation, Inc., Defendant.
First Department,
July 1, 1932.
Fritz v. Briesen of counsel [Briesen & Schrenk, attorneys], for the appellant.
Albert T. Scharps of counsel [Louis Barnett, attorney], for the respondents.
Revd., 261 N. Y. 304.

Opinion:
Townley, J.
Plaintiff brings an action for an injunction restraining the use by the defendants American Pharmaceutical Company, Inc., and Philip Kachurin of the trade-mark " Anusol " and asks damages and an accounting of profits. Thirteen separate defenses have been set up and four counterclaims. The order appealed from denies the motion to strike out these four counterclaims as insufficient in law. Plaintiff's case depends upon proving exclusive ownership in the trade-mark.
The first and second counterclaims involve the same facts and state in substance that the plaintiff circularized retail and wholesale druggists in the State of New York and elsewhere, in which circulars the plaintiff falsely represented that it had the exclusive right to the names " Anusol Hemorrhoidal Suppositories " and " Anusol," and threatened to sue any retail or wholesale druggist who continued to purchase Anusol Hemorrhoidal Suppositories and other products from the defendants or either of them. These two counterclaims must be based either on the assertion of title to the trade-mark in the defendants or on the theory of unfair competition by the plaintiff with the entire business of the defendants. As a counter claim for damages for slander of title, since no special damage is pleaded, the counterclaims are improperly pleaded. (Seeck & Kade, Inc., v. Pertussin Chemical Co., Inc., 235 App. Div. 251.) As tort actions for unfair competition with the entire business of the defendants, the counterclaims are improperly interposed as not arising out of the subject-matter of the complaint.
The third counterclaim sets up at great length the alleged history of the trade-mark " Anusol," certain actions of the Alien Property Custodian and the Chemical Foundation, Inc., and alleges that plaintiff's trade-mark registration was obtained by [false and fraudulent statements of material facts and did not destroy the right of the defendant Chemical Foundation, Inc., as exclusive owner of the names " Anusol " and " Anusol Hemorrhoidal Suppositories " and the good will of the business appurtenant thereto. The third counterclaim asks no damages but demands that it be adjudged on behalf of the defendant American Pharmaceutical Company that the defendant Chemical Foundation, Inc., is the sole and exclusive owner of the " Anusol " trade-mark and is trustee for the American public. This counterclaim must be dismissed because the defendants American Pharmaceutical Company and Kachurin are not beneficiaries of the trust and have no right to bring any suit to enforce it. (Seeck & Kade, Inc., v. Pertussin Chemical Co., Inc., supra.) In the next place, nonexclusive licenses under the trade-mark are void and illegal. (Falk v. American West Indies Trading Co., 180 N. Y. 445.) Finally the third counterclaim is improperly interposed in that demand is made for a declaratory judgment to the effect that a legal defense set up in the fifth defense has been established. (Slowmach Realty Corp. v. Leopold, 236 App. Div., decided herewith.)
The fourth counterclaim asserts that the Chemical Foundation, Inc., corruptly conspired with the plaintiff to clothe plaintiff with an apparently exclusive right to the trade-mark " Anusol," and that as a result of such agreement the Chemical Foundation, Inc., failed to grant a non-exclusive license applied for by the defendants and permitted plaintiff to obtain a registration in violation of its duty as trustee. Some $20,000 damage is demanded. Substantially the same counterclaim was presented in Seeck & Kade, Inc., v. Pertussin Chemical Co., Inc., and found faulty on the grounds, (1) that there was no fiduciary relationship between the Chemical Foundation, Inc., and Pertussin Chemical Company, which would entitle it to'sue, and (2) that since the most that defendants claimed was a non-exclusive license which is void and of no effect, no damage was shown and the counterclaim, therefore, was based on no cause of action. We adhere to this conclusion on the present facts.
The order should be reversed, with ten dollars costs and disbursements, and the motion to dismiss the four counterclaims granted, with ten dollars costs.
Merrell and McAvoy, JJ., concur; Finch, P. J., and Martin, J., dissent and vote for affirmance.