Court Opinion

ID: 6989162
Source: CourtListenerOpinion
Date Created: 2022-07-24 03:21:49.307267+00
Date Added: 2024-06-11T16:09:33.914441
License: Public Domain

Moran, J. The main points of dispute between the parties to this suit arise on the construction to be given to the agreement of February 7, 1870, set out in full in the statement of facts. Consideration of the circumstances under which the agreement was made and an analysis of it in the light of these circumstances will aid in arriving at its true construction. Frazer, at the time of making the agreement, was disposing of his entire interest in the business of manufacturing axle grease, a business in which he and his partners had been engaged for many years under different firm names. The axle-grease had been compounded according to a formula discovered by Frazer, and had been made known to the public under the name of “ Frazer’s Axle Grease,” “ Frazer’s Lubricator ” and “Frazer’s Grease.” Under such designations the product became favorably known, and the business which Frazer sold out was a growing and profitable one. Frazer’s patent did not cover the process of compounding the axle grease but did cover an improvement in the distillation of rosin oils, which oils formed an essential ingredient in the axle grease as manufactured. The parties of the second part to the agreement were purchasing Frazer’s interest therein with the intention of continuing the manufacture of the grease in the same manner that it had theretofore been made, and selling their product under the name by which it had become known and under which it had gained a reputation for excellence. Frazer’s patent had, at the time of the sale, four years to run, and if not renewed or extended all persons would have the right to distill rosin oils as therein described at the end of that time. Looking now at the agreement we find that the parties contract with reference to different subjects, to wit, the letters patent, the use of Frazer’s name by the parties, of the second part, the extension or renewal of the patent, and the engagement of Frazer in the manufacture thereafter of the material secured by said letters patent. Bringing the portions of the agreement having reference to the patent together we find that Frazer sells and assigns his patent to the parties of the second part, and his right and title to any extensions or renewals thereof, and agrees to sign all writings that may be required by said second parties for obtaining renewals or extensions of said patents. As to the use of Frazer’s name we find Frazer authorizes its use by the second parties and their assigns and successors exclusively so far as may be necessary, either as a trade mark or as indicating the material which had been manufactured under the letters patent and known as “ Frazer’s Axle Grease,” “ Frazer’s Lubricator ” or “ Frazer’s Grease”’ and agrees to confer that authority on no other person or corporation or association, and not to use or authorize the use of his name as a trademark or otherwise for the manufacture of said lubricator, axle grease or grease or any other product made under said letters patent. If it was in the power of Frazer to invest Packard and his associates by contract with the right to use his name in the manufacture and sale of the product or material mentioned and to exclude himself and, his associates from the use of his name in the manufacture or sale of such product or material, it. must be admitted that he has done so by the terms of the agreement. That it is legally competent for a person who lias carried, on a business under a trade name or manufactured and sold a particular article in. such manner as by the use of his name as a trade name or trade mark to cause the business or article to become known and established in favor under such name or trade mark, to sell or assign such trade name or trade mark when he sells the business or manufacture, and by such sale or assignment to conclude himself from the further use thereof, seems to be well established on authority. Kidd v. Johnson, 100 U. S. 617; Grow v. Seligman, 47 Mich. 607; Dixon Crucible Co. v. Guggenheim, 3 Am. L. T. 288. It is contended by appellants’ counsel, however, that whatever right was given by the contract to Packard and his associates to use the name of Frazer, terminated at the expiration of the patent, which was by the same contract assigned to him. We do not so construe the contract. The right to distill rosin oils by the process covered by the patent would be free to all persons on the expiration of the patent, but the business of compounding axle grease, according to Frazer’s formula, and selling it in the market under the name of “ Frazer’s Axle Grease,” might continue as long as the parties engaged in it saw fit, and the longer it continued, if honestly conducted, the greater would be the reputation of the article and the more valuable the use of the trade name or trade mark'under which it was sold. The phrases “ manufactured under said letters patent,” and “ made under said letters patent,” are not to be read as fixing a time limit to the contract, but rather as identifying the material or particular kind of axle grease which was to be sold under the names “Frazer’s Axle Grease,” “ Frazer’s Lubricator,” and “ Frazer’s Grease.” Nor is there, as appellants contend, any element of concealment or imposition upon or lack of good faith with the public in appellees’ continuing to sell their product under the name of “Frazer’s Axle Grease.” It is shown by the record that the grease is compounded of the same ingredients and in the same manner and in all respects after the same formulas as used by Frazer and his different firms to which appellee is successor. Mo suggestion is made that appellee has attempted to palm off a cheaper or an inferior article, or an article that is any other than the same that was sold by Frazer and his associates under the name of “ Frazer’s Axle Grease.” The name indicates the origin of the article, and identifies it to the public. A name, though originally the name of the first maker, may in time become a mere trade mark or sign of quality and cease to denote or be current as indicating that any particular person is the maker. * * * * * In such cases the name is accepted in the market either as a brand of quality or it becomes the denomination of the commodity itself, and is no longer a representation that the article is the manufacture of any particular person. Hall v. Barrows, 4 De G., J. & S., 150. There is no representation that Frazer’s Axle Grease is now manufactured by Frazer. On the contrary it is truthfully stated on the label used, that it is manufactured by the Frazer Lubricator Company. The doctrine invoked by counsel and applied in Manhattan Med. Co. v. Wood, 108 U. S. 218, has no pertinency to the facts of this case. The contract giving to appellee the use of Frazer’s name as a trade'mark in the sale of the axle grease, and agreeing not to use or permit others to use said name as a trade mark or otherwise in the manufacture of the article, is in no sense against public policy as being in restraint of trade. The portion of the contract now under consideration, in no way prevents him from engaging in the manufacture of axle grease, or in the manufacture even of the particular kind of axle grease made by appellee. He is at liberty to use his skill and experience in the compounding of a better grease from the same ingredients, but his contract restrains him from availing himself, in putting his grease before the public, of the reputation gained by the use of his name as a trade mark on the axle grease made in accordance with his formulas, and known to the public as “ Frazer’s Axle Grease.” The public are not deprived by those stipulations of the contract of Frazer’s skill, nor of the benefits of his competition in business as a rival of appellee. There is no restraint of trade but a restraint of the use, in the particular trade, of a name which he treated as having a property value, and sold to appellee and agreed not to use in connection with the sale and manufacture of the particular product. This brings us to the question, were the acts done by Frazer and his co-defendants a violation of appellees’ rights. Whether we regard the complainants as having in the words and picture printed upon their labels and attached to packages of their product a trade mark, entitled to protection from infringement, or we place the obligations of defendants toward complainants on the stipulations of Frazer contained in the contract, we are of opinion that the conduct of defendants was wrongful. To infringe a trade mark it is not necessary that it should he counterfeited or exactly simulated. It is enough that such a resemblance is produced as is calculated to mislead purchasers who use such ordinary care and observation as are commonly used by the public. McLean v. Fleming, 96 U. S. 245. The label used by defendants on their packages is printed on yellow paper differing slightly in shade from that used by complainants. The pictures on the two labels are different but express to the beholder the same idea. The name Frazer is made prominent and so printed as to direct attention to the point that the axle grease is a Frazer product. When the labels are examined together there are many differences but the general appearance of the label, the color of the paper, the resemlffance of the prominent features which go to make up the whole, taken in connection with the fact that the label is placed on packages in size, shape and appearance like those of appellee, are well suited to divert the attention of the purchaser from a critical examination that might correct the impression gained by casual inspection. The fact that careful buyers who scrutinize closely are not deceived only shows that the injury is less in degree, not that there is no injury. 39 Conn. 450. The use of the name “ Frazer” and the words “ axle grease ” are the misleading elements in the combination of words on the label, and prefixing the adjective “ superior ” to the words “ axle grease ” has no corrective effect. The conspicuous reiteration of the name on the labels and printed notice attached to the packages of defendants and in the circular sent out by them indicates a conviction on the part of appellants that in making sales in the market and to consumers of an article of axle grease, “ Frazer’s ” was a good name to conjure with. Tet the entire potency of the name was acquired in manufacturing and selling “ Frazer’s Axle Grease,” and all the advantages of its use in the sale of such a product was contracted by Frazer to Packard and his associates, and belongs to appellee. Extended fame and notoriety have been given to the name by the expenditure of large sums in advertising, and the enlarged business done in the manufacture and sale of the artide by appellee, and equity will not permit Frazer nor those who associate with him in business to use the name which has thus become a distinguishing feature of appellee’s trade mark in the sale of an article similar to appellee’s in such manner as to derive a benefit from the trade established by appellee, or deprive ajapellee of the full benefit of the use of such name, particularly in the face of his agreement “ not to use or authorize the use of his name as a trade mark or otherwise for the manufacture of said lubricator, axle grease or grease, or any other product made under said letters patent.” A case in some of its features very like the one at bar is Probasco v. Bonyon, 1 Mo. App. 241. Oakes and Probasco were in partnership in the manufacture and sale of candies, which became known under the name of “ Oakes’ candies.” Oakes sold his interest in the business to Probasco, and gave him by a bill of sale the “ exclusive right to make and sell Oakes’ candy and the use of the name thereof.” Afterward Oakes formed another partnership and began the sale of candies under that name. The court in deciding the ease say: “ Whatever rights other men may have to the name of Oakes, this particular Oakes, the defendant in the case, will not be permitted to use the name of Oakes in the manufacture and sale of candies, at least in the locality where the name has a peculiar signification and a business value, and where he is bound by valid agreement to abstain from the use of his name. If it is claimed that Oakes has a right to use his own name, the answer is that he has no right to use it in this way, if he has sold that right, and if, as we hold, it was a right which he could sell and which plaintiff could acquire. A court of equity will restrain a breach of contract or of covenant, and to do so in this case will not be against public policy or in restraint of trade. Oakes may still make and sell candy, but not under the name the use of which he has for this purpose sold.” See also Oakes v. Tonsmierre, 4 Woods, 555, and as illustrating the application of this doctrine by courts of equity Homes, Booth & Co. v. Holmes, Booth & Co., 37 Conn. 278 ; Shaver v. Shaver, 54 Iowa, 208; Thorly Food Co. v. Massom, 42 L. T. Rep. N. S., 1851; Stonebraker v. Stonebraker, 33 Md; 252; Gillis v. Hall, 2 Brewster, 342; 45 N. Y. 291. The court below was correct in refusing to enforce against Frazer the stipulation of the agreement which prevented him from engaging in the manufacture, directly or indirectly, of the product or material of the axle grease. Such stipulation is without limit as to time or territory within which it is to bind, and therefore is in general restraint of trade. The court below had jurisdiction to enter a decree for the damages. In this class of cases where the main relief sought is to restrain defendants, and protect complainants in the rights granted by the contract, the ascertaining of the profits made by the wrongdoer or the damage done to the complainants, is treated as incidental, and it is the practice to decree the profits or damages to the complainants. Hostetter v. Vowinkle, 1 Dillon, 329; Atlantic Milling Co. v. Robinson et al., 20 Fed. Rep., 217. Here the damages were ascertained by agreement, and it would have been idle to send them to the law side to enter the judgment. Equity having jurisdiction for one purpose will administer complete relief. Savage et al. v. Berry, 2 Scam. 545; Wade v. Bunn, 84 Ill. 120. - FTo error appearing in the decree appealed from, it must be affirmed. Decree affirmed.