Court Opinion

ID: 9636872
Source: CourtListenerOpinion
Date Created: 2023-08-22 14:46:25.063358+00
Date Added: 2024-06-11T18:09:50.481248
License: Public Domain

L. HAND, Circuit Judge
(dissenting).
The transfer of a trade-mark along with a business is lawful, though it is somewhat doubtful whether customers who have come to rely upon the mark as the warrant for a certain standard of excellence, or commercial integrity, or the like, are in such cases really getting what they suppose. Under modem conditions, however, where the personnel of a business is so shifting, this consideration has not been controlling; it is assumed that the successor will maintain those qualities which the mark has come to identify. At any rate the practice has been long recognized and the public probably reckons with it. Muhlens, after the dissolution of the firm by the breaking out of war, was the sole owner of the American business; Kropff had no rights but to his share of the past profits, and the Custodian by seizing Muhlens’s rights became vested with the business, which included his chattels, choses in action and his good will, that is, the likelihood that customers would continue to trade with him and that he might gain others. My brothers believe, as I do, that this authorized the plaintiff to use the marks in selling any goods on which it had eorne to mean no more than the accustomed source, Muhlens or Muhlens’s successor; when applied to cologne, though made under the secret recipe, it meant the same. If the case had contained nothing else, the plaintiff must win.
However, so far as applied to cologne, made under the recipe, the mark meant more. It had for so long been associated with declarations that the cologne was made under the recipe, that, two meanings had coalesced; these were, (1) “emanating from the old source,” (2) “made under the old recipe.” The plaintiff could truthfully say the first; it could not say the second; in fact it said both. But when the defendant came into the market and sold cologne made under the ree-ipe but by Muhlens, it made the same representations, and the first was untrue, while the second was true. I say that the first was untrue, because the cologne did not come from the old source, which was the American branch. Our decision in Koppel v. Oren-stein, 289 F. 446, Id. (D. C.) 12 F.(2d) 1009, went so far, even after we had modified it. I agree that the right here becomes very thin, since in fact Muhlens was always the real source; and the essences were made by him in Germany and sent over to be made up here. Customers presumably eared nothing about the place where the cologne was made up, and much about the essence. Still, it was Muhlens’s rights that were sold, including all but the recipe. It can make no difference where he made the essences. We must hold the marks to have been transferred unless we are to say that no separate branch can be sold without the whole business. The ease stands otherwise as to the use of proper names.
Therefore, the plaintiff’s path still seems to me clear except for the fact that it has been deceiving its customers; it has led them to suppose they were getting cologne made under the recipe when they were not. This would of course be fatal to any bill in equity while it continued, but it is possible to purge the user of the deceit, certainly if that be done long enough before bill filed to make certain that its effect has passed. Moxie Nerve Food Co. v. Modox Co. (C. C.) 153 F. 487, affirmed 162 F. 649 (C. C. A. 1); Diamond Crystal Salt Co. v. Worcester Salt Co., 221 F. 66 (C. C. A. 2); Gaines v. Turner-Looker Co., 204 F. 553 (C. C. A. 6); George G. Fox Co. v. Best Baking Co., 209 Mass. 251, 95 N. E. 747. The argument of the District Court seems to me unanswerable, that as Muhlens could have changed his recipe, his successor may, if he declares so plainly enough to avoid deception. The first of the two meanings would then alone survive; the plaintiff having made it clear that the cologne was not of the old kind, the mark would stand merely for its origin, just as in the ease of any of its other products.
However, the plaintiff did not do this; it had a change of heart only when the suit was brought, and that was too late. Alaska Packers’ Association v. Alaska Importing Co. (C. C.) 60 F. 103; Diamond Crystal Salt Co. v. Worcester Salt Co., 221 F. 66 (C. C. A. 2); Vick Medicine Co. v. Vick Chemical Co., 11 F.(2d) 33 (C. C. A. 5). I think that it ought to be too late, unless by the time the suit gets to final decree the probationary period has passed. The District Court thought that only ten years would be enough under the circumstances, and I see no reason to think that less will do; in any case as my views are not to prevail, that is a 'detail which I need not consider. But until the mark has been so purged, the plaintiff ought not to be able to protect it; and for this reason the decree should be modified. I do not see that we need dismiss the bill, certainly not so as to make it res judicata, as we are doing. The *941parties are before us now and it is not necessary, I believe, to put them to another equally burdensome litigation. What seems right to me is to give a decree in the terms of the court below, but to stay the issue of any writ until the probationary period has ended. Till then I do not believe that the plaintiff should be able to enjoin the defendant’s use of the mark; thereafter it may. It may be argued that this is in effect a declaratory decree, but this is not true. The bill was filed for relief and relief is decreed, though it is suspended until the plaintiff performs the prescribed condition. The suit still remains a contentious proceeding; equity may always delay its final action. Maas v. Lonstorf, 166 F. 41 (C. C. A. 6).
Nor can I see, if that were done, that those who wish to buy the old cologne could not get it under its old name. The name is nothing as name; by hypothesis before they become unable to get it under that name, its descriptive significance will have gone, except in so far as the defendant’s own continued user may destroy the effect of the plaintiff’s efforts. This can hardly be charged against the plaintiff.
I think the decree should be modified as I have said, but except for that it should be affirmed.