Court Opinion

ID: 5204654
Source: CourtListenerOpinion
Date Created: 2022-01-06 15:59:07.786937+00
Date Added: 2024-06-11T08:27:15.762639
License: Public Domain

Chester, J. (dissenting):
The action is in equity, and was brought to obtain an injunction restraining the defendant- from celling certain drill chucks like or in imitation of those made by the plaintiff, and for an accounting, and to recover such damages as the plaintiff had sustained by the alleged unfair trade methods of the defendant.
The plaintiff and its immediate predecessor in business had been engaged in the manufacture and selling of drill chucks for a period of about thirty years at Oneida, N. Y., and had made such changes and improvements in them as its experience prompted and found a market for its chucks throughout -the entire world. It operated under several patents upon various improveménts upon these chucks. The defendant had been engaged for some time in the same town manufacturing a different line of drill chucks from those of the plaintiff. After the expiration of the patents under which the plaintiff had operated, the defendant in 1902 and 1903 obtained a complete line of the plaintiff’s two types of chucks, the “ Little Giant ¡Improved ” and the “ Little Giant Double Grip,” took them apart and used the parts for models to reproduce chucks of the same appearance, and in doing so they hired men who had learned their trade and been employed in the plaintiff’s factory and who' *270knew the entire .secrets of the plaintiff’s business. The chucks so .manufactured- by the defendant were, really duplicates of the plaintiff’s chucks. They were stamped with figures and words corresponding in size and style with those which had been employed by the plaintiff for upwards of ten years prior thereto.
During" that, ten years the plaintiff had manufactured and marketed six different sizes of the “ Little ■ Giant Improved ” type of chucks with numbers beginning with, the smaller and ending with the larger; “ No. 00,’ “'No. 0’ “No. 1,” “ No. 2,” “No. 3,” “ No. 4,” and six different.sizes of the “Little Giant Double Grip” type of chucks with numbers beginning with the smaller and ending with the larger: “No. 0,” “No. 1” “No. 2,” “No.2½,’ “'No.3,” “No. 4,” each of which chucks had-stamped on its face its appropriate trade name and number, as aforesaid, which name and number were neW when adopted by the plaintiff. ' Each also- had stamped Upon it numerals showing the year when it was manufactured, and showing the size of certain screws used, the; words “keep well oiled,” the name of the plaintiff as manufacturer and the place of manufacture, “ Oneida, N. T.” The plaintiff had advertised these chucks extensively in catalogues in the Spanish, German, French and .English languages, and they were widely and favorably know.n in the trade by the. forms, sizes, finish and the -trade names and numerals stamped thereon, and had ■ also, come to -be known from the place of manufactureras “ Oneida Chucks.”
The referee found with reference tp the chucks manufactured by the defendant in addition to the facts stated, “ that the said chucks appear so exactly like plaintiff’s chucks of the- same type that it is difficult to distinguish between them, and: the said chucks as placed upon the market are calculated to deceive intending purchasers of the plaintiff’s goods, and are so constructed, stamped and marked as to place in' the power of dealers in the goods the ready means of deceiving purchasers, and in foreign lands where the plaintiff’s goods have been and are being sold in large quantities, there is no practicable means for purchasers to distinguish between the defendant’s chucks and the plaintiff’s .chucks of this type especially in non-English speaking-lands.”
Beginning in 1902 the defendant printed and circulated'various catalogues and folders and advertised in. different trade journals? *271inserting therein cuts of the various types of chucks manufactured by the plaintiff, which cuts were copies of cuts the plaintiff had made and used in its various catalogues and other advertisements for a series of years. The referee' also found: “ That the effect of the reproduction of the plaintiff’s various types of chucks by the defendant in form, finish and appearance alike with "the various numerals and words used by the plaintiff stamped thereon, and the printing of the different catalogues and folders with the cuts copied from plaintiff’s, catalogues and advertisements, together with the expressions and language used by the defendant in these advertisements was calculated to induce the belief- that defendant was the plaintiff’s concern and was calculated to deceive and mislead the public, or that portion of it having use for goods of the character and quality manufactured by the plaintiff.”
The referee further found that the acts of the defendant were done with the intent, with reference to the two types of chucks in controversy, to deceive the public and intending purchasers into believing that the chucks manufactured and sold by the defendant were the plaintiff’s chucks and was unfair and unlawful competition with the plaintiff, the effect of which was to injure the plaintiff’s business and to defraud the public and the plaintiff.
The law on this class of cases seems to be reasonably well settled, and, therefore, it appears unnecessary to review the cases.
Unfair competition is defined in 28 American and English Encyclopædia of Law (2d ed. p. 409) as “ passing off or attempting to pass off upon the public the goods or business of one man as being the goods or business of another.” It is further said at page 409 : “ Any conduct tending to produce this effect constitutes unfair competition and may be enjoined. The means employed are wholly immaterial.” “ The general rule seems to be that infringement or unfair competition exists whenever the resemblance is so close that ordinary purchasers, buying with ordinary caution, are likely to be misled. The resemblance need not be sufficient to deceive experts or persons specially familiar with the trade mark or goods involved; nor such as would deceive persons seeing the two trade marks or articles placed side by side. A similarity sufficient to make it likely that unwary purchasers will be deceived has been deemed sufficient.” (Id. pp. 410, 411.) “ Similarity in the main *272■distinguishing features will usually be sufficient to constitute infringement or unfair competition. But a cumulation of resemblances or differences has also an important bearing in the determination of the question. Similarity in a great number of points may constitute unfair competition, although in no one alone it would do so, and although there may be differences in other points.” (Id. pp. 414, 415.) “ Where otherwise the similarity between the plaintiff’s and the defendant’s labels, marks or dress of goods is sufficient to constitute infringement or unfair competition, the mere fact that the defendant has substituted his own name in place of the plaintiff’s will not alone constitute a-defense. That is not sufficient to destroy the effect of the imitation in other respects. A fortiori, it is not sufficient where it is so printed, as probably not to attract observation. It is, however, a circumstance of difference to be considered in connection with all other points of similarity or difference. * . * * It is immaterial tliat the retail dealer or immediate purchaser of the goods is not deceived or likely to be deceived as to the' identity of the goods. Unfair competition is shown if the goods .are so dressed out, marked or labeled as to enable the retailer to deceive the ultimate purchaser and make it likely that such purchaser will be deceived.” (Id. pp. 423, 424.) ■
The facts proven I think bring the. case within the rules thus stated.
The question presented for determination on this branch of the casé was whether the defendant has been guilty of unfair trade, and of knowingly putting into tlie hands of the retail dealer the. means of deceiving the ultimate purchaser into the belief' that he was receiving the plaintiff’s chucks. The question under the authorities is not whether the defendant deceived the jobbers to whom the..defendant sold his goods. The defendant insists that because its name was printed upon the chucks that the jobbers could not have been deceived, and that there was no proof of deception in these sales, but that is not' the question involved. The question is not whether the jobbers were deceived but .whether the goods were so constructed as that they were calculated to deceive the ultimate purchaser.
The question for decision was purely one of fact, and the conclusion reached by the referee seems to have ample support in the *273evidence and in the facts found by him, and I think we should not, therefore, interfere with it.
In respect tp damages the referee found in detail the number of the various kinds of chucks that were wrongfully manufactured and sold by the defendant in unlawful competition with the plaintiff; that the greater number of them were sold to persons who were at the time of such sales and prior thereto plaintiff’s customers, and that if the defendant had not sold such chucks to the plaintiff’s customers the plaintiff could and would have manufactured and supplied to such customer substantially all the chucks so manufactured and sold to them by the defendant.
The referee has based the damages allowed by him upon the net profits over all expenses which the plaintiff would have made had it manufactured and sold the various kinds of chucks and parts which were in fact made and sold by the defendant. .In addition to that he found that the defendant sold chucks to plaintiff’s customers On more favorable terms of discount, the list prices of both parties being the same, than those which the plaintiff had previously given to its customers, and that in order to meet this extra discount and to retain its trade- with its customers, the plaintiff was compelled to meet the defendant’s prices. The referee ■ also computed and found the damages that the plaintiff had suffered by reason of this unlawful competition.
He seems to have been within the authorities in thus -fixing the damages sustained by the plaintiff.
In Faber v. Hovey (1 Wkly. Dig. 529) the General Term in the first department held that the correct rule of damages is to .award the plaintiff the profits which it could have made upon the manufacture and sale of the same quantity of goods manufactured and sold by the defendant.
In 28 American and English Encyclopedia of Law (2d ed. p. 438) in discussing the question of damages in this class of cases, it is said : “ The plaintiff may also recover such actual damages to himself as he is able to prove by legal evidence. He is not limited to the profits made by the defendant. The rule is the same in cases of unfair competition as in cases of infringement of technical trademarks,” '
*274In Williams v. Mitchell (106 Fed. Rep. 168) the United States Circuit Court of Appeals in the seventh circuit held that in case of an invasion of plaintiff’s rights by unfair competition he was entitled upon proper proof to compensation to the extent of the invasion.
Damages occasioned by enforced reduction of plaintiff’s prices are properly recovered in cases of this character. (Sebast. Trade M. [4th ed.] 233, 234.)
I think the judgment and orders should be affirmed, with costs.
Sewell, J., concurred.
Final and- interlocutory judgments reversed on the. law and facts, referee discharged and new trial granted, with costs to appellant to abide event.