Court Opinion

ID: 9444085
Source: CourtListenerOpinion
Date Created: 2023-08-03 19:40:41.383083+00
Date Added: 2024-06-11T17:29:42.414214
License: Public Domain

MEDINA, Circuit Judge
(dissenting).
Even were defendant’s simulation of plaintiff's package done innocently and in good faith plaintiff would be-entitled to the injunction granted by the trial court. See John H. Woodbury, Inc., v. William A. Woodbury Corp., D.C.S.D. N.Y., 1938, 23 F.Supp. 162, quoting from Coty, Inc., v. Parfums De Grande Luxe, Inc., 2 Cir., 1924, 298 F. 865, 870; Handler & Pickett, “Trade-Marks and Trade Names — An Analysis and Synthesis II/’' 30 Col.L.Rev. 759, 769-77 (1930). But here we have a deliberate; fraud by an habitual offender and. the remedy should be sufficiently drastic to prevent any further filching of plaintiff’s customers. “A ■ defendant whose business enterprise is based upon-express and deliberate fraud will not find a court of equity strenuous-to preserve all rights he might have-hád if his conduct and motives had been honest.” Peninsular'Chemical Co: v. Levinsbn, 6 Cir., 1917, 247 F. 658, 663.
In American Chicle Company v. Topps Chewing Gum, Inc., 2 Cir., 1953, 208 F.2d 560, this Court affirmed a judgment restraining this same defendant from continuing to use a package deliberately designed to attract buyers of plaintiff’s Chiclets. Concerning defendant’s conduct, Judge Learned Hand wrote-208 F. 2d at pages 562-563:
“It would be absurd to see in this anything but a hope to bring to its own net just those buyers who are on the fringe of the plaintiff’s possible customers. * * * Indeed, ■ it is generally true that, as soon as we see that a second comer in a market has, for no reason that he can assign, plagiarized the ‘makeup’ of an earlier comer, we need no more; for he at any rate thinks that any differentia he adds will not, or at least may not, prevent the diversion and we are content to accept his forecast that he is ‘likely’ to succeed. Then we feel bound to compel him to exercise his ingenuity in quarters further afield.”
Defendant’s new scheme to appropriate to its own use plaintiff’s customers and good will in relation to Clorets must be viewed as an integral whole, and against the background of the conduct just described. The package, together with the name “Clor-aid,” has, for a-very considerable period of time, been used to accomplish defendant’s illegal purpose. There is only one way effectively to compel defendant to exercise its' “ingenuity in quarters further afield,” and that is to enjoin all further' use of the scheme, lock, stock and barrel. Otherwise, there will be the usual making of a few miiior changes in design, leading to further proceedings and perhaps further changes. This is the course pursued by the typical infringer, and it closely resembles'efforts to escape the effect of cease and desist order's of the Federal Trade Commission relative to' false and misleading practices of one kind or another. The basis for numerous’ decrees in antitrust cases, where the entire scheme is enjoined, and not "merely the patently illegal features, is that equity will fashion its decrees in such a manner as definitely to put a stop to the monopoly or restraint of trade under attack. There is no reason perceptible to me why the courts should treat an habitual infringer more leniently. This is not by way of punishment or the imposition of any penalty. It is no more than the exercise of plain common sense in order to make a decree which shall accomplish its purpose. The more cunningly devised and specious the scheme or plan, the more *685alert should the courts be to stamp it out. Otherwise, the honest merchant is at the mercy of an unscrupulous competitor. Surely there is enough before us here to show that this defendant cannot be trusted.
These views find ample support in the authorities. The principle involved is clearly stated in Mainzer, Inc. v. Gruberth, 1st Dept., 1932, 237 App.Div. 89, 260 N.Y.S. 694, 698-699, affirmed 262 N.Y. 484, 188 N.E. 30, as follows:
“Cases of unfair competition present varying degrees of wrongdoing. There is a distinction between those where one accidently uses a label or design owned by another, or where there has been an honest mistake, and those where there has been a deliberate attempt to appropriate a trade-mark, label, or design, or the business of a competitor.
“In the interest of common honesty and fair dealing, the courts naturally frown upon such practices. The bold attempt to take away the business of another by adopting the trade-marks, even to the extent of adopting the color, size, and form of packages in which the goods are sold, indicates to what extreme some of our modern businessmen will resort. When unfair competition is so designedly accomplished, all opportunity to continue it in any form should be prevented by an injunction sufficiently broad to insure such a result.”
Where a defendant’s past conduct has convinced the court that nothing short of such an injunction would give plaintiff adequate protection, a competitor has been enjoined from all use of his own personal name in his business. Westphal v. Westphal’s World’s Best Corp., 1st Dept., 1926, 216 App.Div. 53, 215 N.Y.S. 4, affirmed 243 N.Y. 639, 154 N.E. 638.
As Justice Holmes wrote, in Schlitz Brewing Co. v. Houston Ice & Brewing Co., 1919, 250 U.S. 28, 29, 39 S.Ct. 401, 63 L.Ed. 822, “It is a fallacy to break the fagot stick by stick.”
Accordingly, I would modify the judgment below by broadening the terms of the injunction and restraining the use of the name “Clor-aid.”