Court Opinion

ID: 9636926
Source: CourtListenerOpinion
Date Created: 2023-08-22 14:49:51.20135+00
Date Added: 2024-06-11T18:09:51.076585
License: Public Domain

MINTON, Circuit Judge
(dissenting).
I am unable to agree with the majority, and I believe it worthwhile to state my views briefly. I start out with the proposition that unfair competition is a tort. It is a wrong. If there is no wrong committed, there can be no relief. Clearly, confusion itself is not the wrong and confusion which may arise from the mere use of a descriptive word in the public domain can of itself lead to no action. We have already said as much in General Industries Co. v. 20 Wacker Drive Bldg. Corporation et al., 7 Cir., 156 F.2d 474, 476-478. The Supreme Court said in Howe Scale Co. v. Wyckoff et al., 198 U.S. 118, 140, 25 S.Ct. 609, 614, 49 L.Ed. 972: “* * * courts will not interfere where the only confusion, if any, results from a similarity of the names, and not from the manner of the use.” . .
The Illinois Supreme Court, whose statements of the law bind us in this case, said in Hazelton Boiler Co. v. Hazelton Tripod Boiler Co. et al., 142 Ill. 494, 509, 30 N.E. 339, 345:
“If any confusion has occurred, it has arisen from the similarity of the two corporate names, ánd not from any attempts on the part of the defendant to deceive. But, as we have already held, the similarity *165of names is a circumstance of which the complainant has no right to complain, the defendant having at least as good a right to the use of its corporate name in the transaction of its business as the complainant has to use its name. If injury results to the complainant from such cause, it is damnum absque injuria.”
An eminent authority, Mr. Nim's, in Unfair Competition and Trade Marks, Vol. 1, Sec. 92, p. 280, says:
“Where the names consist of descriptive or geographical words, and neither party can show that its name has a secondary meaning, priority of use does not avail. « * * If plaintiff had attached to the descriptive words a distinguishing feature, it could have prevented the copying of that distinguishing feature.”
The foregoing authorities state the law as I understand it. If there is a wrong that leads to confusion or the likelihood thereof, there may be an action. So if there is a valid trade-mark and it or a colorable imitation is used by another so that there is likelihood of confusion, that is infringement and is actionable. So with a trade name that has acquired a secondary meaning. The use of that name in a manner that would likely lead to confusion is actionable. If the name has acquired no secondary meaning, it must be used in a way that is deceptive or for the fraudulent purpose of palming off the goods of one as the goods of another or such misuse of the name must create likelihood of confusion. There must always be some element of wrongdoing that results in or is likely to result in confusion. So it’ is in any tort. There must be a wrong that injures. Wrong is the basis of the whole conception of tort action, whether it be in unfair competition or otherwise.
The word “Consumers” is the only word in issue here. “Consumers” is a descriptive word in the public domain, incapable by the mere act of appropriation of becoming the exclusive property of any one. The plaintiff has not attempted to register the name as a trade-mark and there is no finding of secondary meaning attaching to the word as used by the plaintiff. The majority opinion freely admits: “ * * * that the defendant was guilty of no fraud or palming off but that the case is solely one of confusion of corporate identity or trade name. In fact, we are satisfied there is nothing in defendant’s conduct that demonstrates a lack of honesty or good faith.”
If these things be true, and they cannot be disputed, then I ask what wrong has the defendant committed? What the question boils down to is this: Does the mere confusion arising from the use by the parties of the same descriptive word, which word is in the public domain, give the first user in the field the exclusive right to use that name? The majority holds that it does, but its authorities do not support its holding. The Waterman, Lady Esther, and Johnson cases were all cases where secondary meaning was expressly found or not disputed. In the Landlords’ Protective case there was evidence of misrepresentation and wrongful conduct. The Investors Syndicate case involved an administrative act of the Secretary of State of Illinois in passing on an application for the right to use a certain corporate name. The statute set the standard he was to observe, and his discretion was not disturbed. Cases of this kind are not authorities in the field of unfair competition. Nims, Unfair Competition and Trade Marks, Vol. I, Sec. 82, p. 247.
The majority opinion’s error in this regard stems from its misconception of the issue here. Since the Lady Esther case, it is certainly the law in Illinois that the parties need not be competing in the same market for the same customers for unfair competition to occur. In this context the courts often remark on the law’s emphasis on confusion rather than competition, but the courts do not overlook the initial requirement of the defendant’s wrongful appropriation of a word to which the plaintiff has established his right. Since in this case the parties are in competition, the issue raised by such cases is not involved.
Even if there were law for the majority’s opinion, which I respectfully submit there is not, the plaintiff is not the first user of the name in any such sense as would authorize a court of equity to interfere. From *1661913 to 1925, when the plaintiff was organized, the defendant used the name “Consumers” in the general fuel business in Chicago and had built up considerable good will in that field when the plaintiff came along. With the whole lexicon of names to choose from in order to enter a branch of the fuel field in Chicago, .the plaintiff chose the defendant’s name, already in use in the general fuel field. The defendant had a well known and widely advertised seal which it used in its business, and the plaintiff imitated that seal in its fuel oil business. Such conduct on the part of the plaintiff warranted the District Court in finding that: “Its adoption of a similar name and seal is hereby found not to have been innocent or accidental” and its conclusion of law that the plaintiff did not come into court with clean hands.
In 1927 the defendant was advertising fuel oil in the same media in juxtaposition to the plaintiff’s advertising, and was selling fuel oil furnished it by Standard Oil but sold under the name and seal of the defendant. The defendant did not expand its fuel oil business until 1938 when it installed its own tanks and began to sell fuel oil extensively. That it had a right to do. That was fair competition, in which 'the public has an interest. The defendant only continued to use its name as it had used it for twelve years before the plaintiff came into existence and for thirteen years after the plaintiff came into existence. The District Court found that: “Defendant in engaging in the fuel oil business under its established corporate name did not do so with any improper motive and no fraudulent, improper or unfair act on the part of defendant has been proved.”
The plaintiff argued, and the majority of the court was impressed with the argument, that not until 1938, when the defendant changed its method of selling fuel oil by selling its own product and not that of another and engaged more extensively in the fuel oil business, did the plaintiff begin to feel the impact of the defendant’s competition, and that the defendant then began to share in the good will built up by the plaintiff in the fuel oil business. There was nothing wrong or unfair about that. The Supreme Court said in Kellogg Co. v. Nat. Biscuit Co., 305 U.S. 111, 122, 59 S.Ct. 109, 115, 83 L.Ed. 73:
“Kellogg Company is undoubtedly sharing in the goodwill of the article known as ‘Shredded Wheat’; and thus is sharing in a market which was created by the skill and judgment of plaintiff’s predecessor and has been widely extended by vast expenditures in advertising persistently made. But that is not unfair. Sharing in the goodwill of an article unprotected by patent or trade-mark is the exercise of a right possessed by all — and in the free exercise of which the consuming public is deeply interested. There is no evidence of passing off or deception on the part of the Kellogg Company * * *
The only evidence of questionable conduct in the instant case is that of the plaintiff.
I agree with the District Court that the complaint should have been dismissed as without equity and for the further reason that the plaintiff did not come into court with clean hands. I would deny equitable relief and certainly would agree that there are no damages due the plaintiff.