Opinion ID: 1481462
Heading Depth: 1
Heading Rank: 1

Heading: The Anchor Packing Company.

Text: The issue of the Anchor Company's ownership of the trade-mark Tauril is one of fact considered in respect to familiar trade-mark law as affected by the war Act in question. The Hungarian Company long ago established a business in this country for the sale of its foreign-made wares under its trade-mark Tauril. In 1904 it registered the mark in the United States Patent Office. In 1908 the Hungarian Company, reserving to itself the exclusive right of manufacture everywhere, appointed the Anchor Packing Company, a Delaware corporation, the defendant's predecessor, its exclusive selling agents in the United States for a product bearing the named trade-mark, goods to be shipped to, delivered by, and payments to be made through the Strobel & Wilken Company of New York, the American business representative of the Hungarian Company. In 1911, the defendant, the New Jersey corporation, succeeded the Delaware corporation of the same name. Business continued as before. When the war interrupted shipments, the Hungarian Company, in 1915, licensed the Anchor Company to use its trade-mark on American-made packing at a royalty of seven cents per pound until shipments might be resumed. In May, 1917, shortly after the United States declared war with Germany, the parties entered into a supplemental agreement fixing the royalty at six cents per pound. On October 6, 1917, the Trading with the Enemy Act was approved. 40 Stat. 411. Among other things that Act permitted any citizen of the United States to apply for the use of an enemy-owned trade-mark (section 10 [c]) and authorized the President, or an officer acting under his direction (section 5 [a], being Comp. St. § 3115½c), to grant a license for its use on such terms as he should decide. On October 12, 1917, the President by executive order vested this power in the Federal Trade Commission, to be exercised only under exceptional circumstances. On December 7, 1917, war was declared with Austria-Hungary (40 Stat. 429). Two days later the Anchor Company filed with the Federal Trade Commission an application for a license for the exclusive use of the trade-mark Tauril, showing as a persuasive circumstance the fact that it and its predecessor had, since 1908, used the trade-mark in this country. The license was granted  and accepted  on a six cents per pound royalty. On August 4, 1920, the Custodian, under authority of the amendment of November 4, 1918 (40 Stat. 1020), seized the trade-mark subject to the license issued by the Federal Trade Commission. On July 2, 1921, Congress declared the war between the United States and Austria-Hungary at an end. The seas then being open, the Hungarian Company and the Anchor Company, on May 13, 1922, entered into a new sales agreement including a license to the Anchor Company for the exclusive use of the trade-mark in connection with the sale in the United States of its foreign-made packing. By this contract the Anchor Company agreed to pay the Hungarian Company $25,000 in full for all royalties earned and accrued under the Federal Trade Commission license. On June 28, 1922, the Hungarian Company brought suit in a District Court against the Anchor Company under section 10(f) of the Act to recover for the use of its trade-mark under the license granted by the Federal Trade Commission; and on July 1, 1922, the Alien Property Custodian brought this action under the same provision to recover for the same use. The Anchor Company bases its claim to ownership of the trade-mark Tauril primarily on the familiar law that a trade-mark cannot exist, or, if property, it is not the subject of ownership except in connection with an existing business. Hanover Star Milling Co. v. Metcalf, 240 U. S. 403, 413, 414, 36 S. Ct. 357, 360, 60 L. Ed. 713; Rosenberg Bros. v. Elliott (C. C. A.) 7 F.(2d) 962; Beech-Nut Packing Co. v. Lorillard (C. C. A.) 7 F. (2d) 967; and on the assertion that neither the Hungarian Company nor the Federal Trade Commission, licensors at different periods, had a business in the United States in connection with which to use the trade-mark, but that it alone was engaged in such a business. From this law the Anchor Company deduces two claims of ownership; the first, assuming that the trade-mark was owned by the Hungarian Company, an enemy, at the time of license, the grant to the (Anchor Company) by the Federal Trade Commission of the exclusive right to use the trade-mark made the [Anchor Company] the owner of the trade-mark subject to the obligations of the license. The license of the trade-mark by the Federal Trade Commission before seizure was a war act exercised under a war law in respect to a privilege which this country had in time of peace bestowed upon one who later became an enemy. War, and war legislation, superseded certain phases of the ordinary law of trade-marks and substituted the sovereign in their place. So, in granting a license for an enemy-owned trade-mark the Federal Trade Commission, acting for the United States, exercised the dominion of the sovereign over enemy property; and it did it without seizing the property and without acquiring title. Not having title of its own, the Federal Trade Commission could convey none to the Anchor Company through license or otherwise. It granted the Anchor Company only the right of use which theretofore belonged to the enemy owner and then for a limited time on a stated royalty. This the Anchor Company accepted, and as licensee it is not in position to challenge the power of its licensor; nor can it validity claim more than the licensor gave it or more than the licensor had power to give. The business of the Anchor Company, however appurtenant to the trade-mark before the war, did not during the war draw the trade-mark to it and thereby divest the enemy owner of its title or limit the war power of the United States either to license or seize it. Still relying on the possession of an appurtenant business, the Anchor Company's other contention is that it was the owner of the trade-mark at the time the license to use it was granted by the Federal Trade Commission    in 1918, and at the time the Alien Property Custodian attempted to seize it in 1920, and at the date of suit. The answer to this claim of ownership is found in the agreements between the two companies. In these agreements the Anchor Company uniformly recognized ownership of the trade-mark in the Hungarian Company and agreed to pay, and did pay, royalties for its use in connection, first and last, with the foreign-made product and during the interval of the war with the American-made product. In addition to its concessions of the Hungarian Company's ownership made without qualifications in the several contracts referred to, the Anchor Company, in its application to the Federal Trade Commission for a license to use the trade-mark, in terms conceded that the legal title was in the Hungarian Company. Moreover, the Anchor Company at no time asserted its ownership by availing itself of the provision of the Act whereby a person not an enemy could reclaim his property mistakenly seized. A grant of an exclusive use of a trade-mark, limited as to duration and place, whether made in contracts for sale of its associated wares or by specific license, does not convey title or establish ownership of the trademark in the licensee or in one who purchases marked goods for resale. By such contracts or licenses the Anchor Company acquired only a right to a limited use of the trade-mark. Until seized, the reversionary interest in that use remained in the owner, and so did the title. Here again the Anchor Company, being in substance a licensee under certain contracts and in terms a licensee under other contracts with the Hungarian Company, is not in position to challenge, much less to claim, the title of its licensor. We therefore hold on the facts and the law that the Anchor Company was at no time the owner of the trade-mark.