Case: HANOVER STAR MILLING COMPANY v. METCALF; ALLEN & WHEELER COMPANY v. HANOVER STAR MILLING COMPANY
Abbreviation: Hanover Star Milling Co. v. Metcalf
Decision Date: 1916-03-06
Docket Number: No. 23
Citation: 240 U.S. 403
Volume: 240
Reporter: United States Reports
Court: Supreme Court of the United States
Jurisdiction: United States
Parties: HANOVER STAR MILLING COMPANY v. METCALF. ALLEN & WHEELER COMPANY v. HANOVER STAR MILLING COMPANY.
Judges: 
Pages: 403–426

Head Matter:
HANOVER STAR MILLING COMPANY v. METCALF. ALLEN & WHEELER COMPANY v. HANOVER STAR MILLING COMPANY.
CERTIORARI TO THE CIRCUIT COURT OF APPEALS FOR THE FIFTH CIRCUIT.
APPEAL FROM AND CERTIORARI TO THE. CIRGÜIT COURT OF APPEALS FOR THE SEVENTH CIRCUIT.
No. 23.
Argued May 7, 10, 1915; No. 30..
Argued May 10, 1915.
Decided March 6, 1916.
Two District Courts in different circuits having'granted temporary -injunctions, and both Circuit Courts of Appeals having reversed upon grounds that went to the merits and differed upon fundamental ■ questions- affecting the same trade-mark,' writs of .certiorari .were allowed by this court before final decrees, notwithstanding the general rule to the contrary.
Where neither of the parties, citizens of different' States, has.- registered the trade-mark in- dispute under any -act- of Congress or un-. der thé law of any - State, and no local rule arising from statute .or decision)is shown., cases involving.the use of such tjrade-mark must be ■ determined according to applicable common-law prin..eiples.
Redress accorded in trade-mark cases, is based upon the party’s right to be protected in the good will of the trade or business; and the English rule that a trade-mark is not the subject of property, except in connection with an. existing business, prevails generally in this country. .
The common law of trade-marks is but a- part of the broader law of unfair competition.
While common-law trade-marks and the right to their exclusive use-may be classed among property rights,- the right grows out of uso and not mere adoption.
Where two parties independently employ the same trade-mark or name, not in general use and susceptible of adoption, upon goods of the same class but in separate and remote markets,- the question of prior appropriation is legally insignificant in the absence of in-,, tent on the part of the later adopter to take the benefit of the reputation, or to forestall extension of the trade, of the earlier adopter.
While property in a trade-mark is not limited, so far as its use has. extended, by territorial bounds, the earlier adopter may not monopolize markets that his trade has never reached and where the mark - signifies no.t his goods but. those of another.
So far as controversy over a trade-mark concerns intrastate distribution as distinguished from interstate trade the subject is not within the sovereign power of the. United States.
Trade-mark fights, like others that rest in user, maybe lost by abandonment,.. non-user, laches or acquiescence.
Where a later adopter, in good faith and without notice of its use in other territory by an earlier adopter, expends' money and effort in building up a trade in a territory, which'the earlier adopter has-left. ' unoccupied for a long period — in this case more than- forty years— and into which his trade would not naturally expand, the earlier adopter is estopped to assert trade-mark- infringement in that territory. - '
A third party who enters the territory of such second, adopter and attempts to use the trade-name in a manner, calculated to, and which does, deceive- by similarity of package, even though the name of the actual manufacturer is placed thereon, is guilty of unfair competition from which the user of the trade-mark is entitled to protection.
There being- diverse citizenship and the jurisdiction of the District - Court resting thereoif the. decision of the Circuit Court of Appeals in a trade-mark case is final and' an appeal from the' decree is dismissed and the decree is reviewed here on certiorari'.
■204 Fed. Rep. 211, reversed. ,
208 Fed. Rep. 513, affirmed on certiorari and appeal- therefrom dismissed.
The facts, -which involve the rights of manufacturers of and dealers in flour to the use of “Tea Rose” as a trade-' mark, for flour sold in certain territory, and the effect of non-user on, right to use a trade-mark, are stated in the opinion.
Mr. Edgar L. Clarkson and Mr. Henry Fitts, with whom Mr. James E. Morrisette and Mr. John London were on the brief, for Hanover Star Milling Company.
Mr. J. Fred Gilster and Mr. Edward Everett Longan for Metcalf.
Mr. J. Fred Gilster and Mr. Edward Everett Longan, with whom Mr. L. O. Whitney was on the brief, for Allen & Wheeler Company.

Opinion:
Mr. Justice Pitney
delivered the opinion of the court.
These cases , were argued together, and may be disposed of in a single opinion.
In No.'. 23, the Hanover Star, Milling; Company, an Illinois corporation engaged ip the manufacture of flour in that State, filed a, bill in equity on March 4, 1912, in the United States District Court for the Middle District of Alabaipa, against Metcalf, a citizen of the State of Alabama and a merchant engaged in the business of selling. flour at Greenville, Butler County, in that State, to restrain alleged trade-mark infringement and unfair competition. . The bill averred that for twenty-seven years last past complainant had been engaged in the manufacture óf a superior and popular grade of flour-, sold by it-at all times under the name of "Tea Rose" flour, in a wrapping with distinctive markings, including the words."Tea Rose" and a design containing three roses imprinted upon labels'attached to sacks and barrels; that this flour had been marketed thus by complainant in the State of Alabama for the preceding twelve years, during which time, by maintaining a high and uniform quality, by expensive advertising, and by diligent work of its representatives, .it had built up a large and lucrative market, with annual• sales'of more than $175,000.of Tea Rose flour in that State, and had established a valuable reputation for the name "Tea Rose" and the distinctive wrappings in Alabama and other States, particularly Georgia and'Florida; that until'shortly before the commencement of the' suit complainant's Tea Rose flour was the only flour made, sold, or offered for sale under that name in Butler County or elsewhere in the State of Alabama, and the name "Tea Rose" had represented and stood for cómplainant's flour f and that recently the Steeleville Milling Company, of Steeleville, Illinois, had, through Metcalf's agency, been marketing in Alabama, and particularly in Butler County, flour of its manufacture, in packages and wrappings" substantially identical with complainant's and bearing a design containing ' three roses and the name "Tea Rose" upon the labels, in a manner, calculated to deceive and in fact deceptive to purchasers, thereby threatening pecuniary, loss to complainant exceeding $3,000 in amount and destroying the prestige of complainant's "Tea Rose" flour and damaging its trade therein. ,
Defendant's answer denied all attempts, to deceive purchasers, and further denied complainant's right to the, exclusive use of the words "Tea Rose" or the picture of a rose, as a trade-mark; averred that long prior to complainant's first use of it, and as' early as the year 1872, the name.had .been adopted, appropriated, and used.as a .trade-mark for flour by the firm of Alien .& Wheeler, of Troy, Ohio, and used by it and its sugcessor, The Align & Wheeler Company, continuously as such; and alleged that the Steeleville Milling Company had used its'"Tea Rose" brand for more.than sixteen years last past,'and as early as the year 1899 had sold flour in Alabama under that label. .
Upon consideration of the bill and answer and affidavits submitted by the respective parties, the District Court granted a temporary injunction restraining Metcallf from selling flour labeled "Tea Rose/' manufactured by..the Steeleville Company or any person, firm, or corporation other than the Hanover Company,' at Greenville, or at any other place in the Middle'District of Alabama. Upon appeal, the Circuit Court of Appeals for-the Tifth Circuit reversed this decree and remanded- the cause with direcrtions to dismiss, the bill. 204 Fed. Rep. 211. A writ of certiorari .was then allowed by this court.
In No: 30, The-Allen & Wheeler Company, a corporation of the State of Ohio,'manufacturing flour'at the City of Troy in that State, filed a bill against the Hanover -Star Milling Company on May 23; 1912,'in the United States District Court for the Eastern . District of Illinois, averring that in or before the year 1872 the firm of Allen & Wheeler,, then engaged in the manufacture of flour at Troy, adopted as a trade-mark for designating' one of its brands the words "Tea Rose," and from thénce until the year 1904 continuously used that trade-mark by placing it upon sacks,1 barrels, and packages containing the; •brand and quality of flour designated, by that term and-sold throughout the United States; that in 1904 the Allen' & Wheeler Company was incorporated and took over the mills, machinery, stock, trade-mark,, and good-will of the firm, since which time the corporation had eon--' tinued to,, use the trade-mark upon,flour of its manufacture, and had distributed and sold such flour in the mar kets of the United States, whereby the words "Tea Rose" had become the common-law trade-mark of the Allen & Wheeler Company; that recently it had learned that thej Hanover Star Milling Company had adopted the words "Tea Rose" as designating'a brand of flour manufactured by. it, and, notwithstahding notice of complainant's rights, was persisting- in the sale of its flour under that name and threatening to continue so to do;- and that defendant had sold large- quantities óf Tea Rose flour, particularly in the markets of the States of Alabama, Florida, and Mississippi, with.large gross sales,' and profits approximating $5,000 per year for the past five years, causing damage, and loss to complainant in excess of $3,000. . An injunction and an accounting of profits were prayed. Upon this bill, a demurrer filed by the Hanover Company, and affidavits presented by both parties, the District Court'granted a temporary injunction restraining the use of the words "Tea ítosé" as a trademark for flour, without territorial restriction. The Circuit Court of Appeals for the Seventh Circuit reversed this decree, and remanded-the cause to the-District Court for further ' proceedings " not inconsistent with its opinion. Hanover Star Milling Co. v. Allen & Wheeler Co., 208 Fed. Rep. 513. An appeal was taken to this court, and a writ of certiorari was subsequently granted. The appeal must be dismissed for want of jurisdiction, and the casé will be disposed of undér the writ of certiorari.
• No .question is raised respecting the propriety of passing upon the questions at' issue on a review of decisions rendered upon applications for temporary injunction. Both District Courts granted, such injunctions, and both Cirr cuit Courts of Appeals .reversed upon grounds that went-to the merits.- These courts differed upon fundamental questions, and it was because of this , that the writs of certiorari Were allowed, the situation being such , that it was deemed proper' to allow them before fina} decrees were made, notwithstanding the general rule to the Contrary. American Const. Co. v. Jacksonville Ry., 148 U. S. 372, 378, 384; The Three Friends, 166 U. S. 1, 49; The Conqueror, 166 U. S. 110, 113; Denver v. N. Y. Trust Co., 229 U. S. 123,133.
In both cases it was shown without dispute that the firm of Allen & Wheeler.adopt'ed and used the words "Tea Róse" as a trade-mark for one kind or quality of flour', manufactured by it as early as the year 1872, and continued that use until the year 1904, when the Allen & Wheeler Company was incorporated and took over the mills, machinery, stock, trade-mark, and good-will of the firm and succeeded to its business. But there is nothing to show the extent of such use or the markets reached by it, except that in the year. 1872 Allen & Wheleer sold three lots of 25 barrels each to a firm in Cincinnati, Ohio, and one lot of 100 barrels to a firm in Pittsburgh, Pennsylvania; that.in the early. 70's another firm in Pittsburgh was a custonxer for this brand; and that in the later 7Q's a firm in Boston, Massachusetts, was a customer for the same brand. As to the Allen & Wheeler Co., there are affidavits stating in general terms that since its incorporation in 1904, and "continuously down to the present time,"-the "company has used the brand "Tea'Rose" for flour; but there is a remarkable absence of particular statements as to time, place, or circumstances; in short, no showing whatever as to the extent of the use or the markets reached. .There 'is nothing to show that the Allen & Wheeler "Tea Rose" flour has been even advertised in Alabama or the adjoining States, and there is clear and undisputed proof that it has not .been sold or-offered for sale or known or heard of by the trade in Alabama, Mississippi, or Georgia'. In No. 30, there is uncontradicted proof, that the Allen & Wheeler Co. is selling flour in Alabama ahd Georgia, but under the brands "Eldean Patent" and "Trojan Special."
In both suits, the Hanover Star Milling Company introduced affidavits- fairly showing that shortly after its incorporation in- the year 1885 it adopted for, one of its brands of flour the name "Tea Rose/' and adopted for the package or container, whether sack or barrel, a label bearing the name "Tea Rose" and the design already referred, to; and- that this trade-mark was adopted and used in good, faith without knowledge or notice that the name "Tea Rose" had been adopted or used by the Allen- & Wheeler'firm, or by anybody else; I¿ 1904 the Hanover Company began and has since prosecuted á vigorous and expensive Campaign of advertising its Tea Rose flour, covering the whole of the State of Alabama, and parts bf Mississippi, Georgia, and Florida,' employing many ingenious and interesting devices that are detailed in the proofs, with the result that at the commencement of the litigation its sales of' Tea Rose flour in these markets amounted to more than $150,000 a year, the Hanover Star Milling Company has come to be known as the Tea Rose mill, the reputation of the mill is bound up with the reputation of Tea Rose flour, and "Tea Rose" in the flour trade in the territory referred to means flour of the Hanover Company's manufacture. There is nothing to show any present or former competition in Tea Rose flour between the latter company and the Allen & Wheeler firm or corporation, or that either party has ever advertised that brand of flour in territory covered by the activities of thé other.
Metcalf's purchases of competing Tea Rose flour, which gave rise to the suit brought by -.the Hanover Company against him, were made from the St'eeleville Milling Company; an Illinois corporation, which, appears to have adopted the name and design of a tea rose for flour in the year 1-895.
It should be added that, so far as appears,-none of. the parties here concerned has registered the trade-mark under any act of Congress or under the law of any Staté. Nor does it appear that in any of the States in question there exists any peculiar local rule, arising from statute or decision. Hence, the cases must be decided according to -common-law principles of general application.
Interesting and' important questions are raised concerning the territorial extent of trade-mark rights. In behalf.of the Hanover Company it is, in effect, insisted:
(a) that the failure of the Allen & Wheeler Company and its predecessors to enter'the south-eastern-territory with "'their Tea Rose flour, and the fact that such flour has been- and is wholly unknown there under that name, disentitle' it to interfere with the Hanover Company's trade established in good faith in that territory under the same mark;
(b) that the same considerations entitle Hanover to affirmative trade-mark rights of its own, enforceable against the ' Steeleville Company and everybody else over whom it has priority in that territory; and (c) that Hanover is entitled to relief against Steeleville and against Metcalf as its agént, upon the ground of unfair competition in trade regardless of the trade-mark right. An affirmative answer to the first proposition will decide the Allen & Wheeler case (No. 30) in favor of Hanover, and an affirmative answer to the third proposition will decide the Met-calf case (No. 23) in favor of Hanover, irrespective of. the disposition that might be made of the second proposition. In view of possible consequences,to the rights of parties not before the court, it is desirable to limit the range of our decision as much as practicable, especially as the proofs now before us are incomplete and in some respects unsatisfactory.
It will be convenient to dispose first of No. 30. Herp the. bill is rested upon alleged trade-mark infringement, pure and simple, and no question of unfair competition is involved. The decision .of the Court of Appeals for the Seventh Circuit in favor of the Hanoyer Company and against the Allen & Wheeler Company was rested upon the ground that although the adoption- of the Tea Rose mark by the latter antedated that of the Hanover Company, its only trade, so far as shown', was in territory no^th of the Ohio River, while the Hanover Company liad adopted "Tea Rose" as its mark in perfect good faith, with no knowledge that' anybody else was using or had used those words in such a connection, and during many years it had built up and extended its trade in the- southeastern territory, comprising Georgia, Florida, Alabama, and Mississippi, so that in the flour trade in- that territory the mark "Tea Rose" had come- to mean the Hanover Company's flour, and nothing else. The court held in effectjthat the right to protection in'the exclusive use of a trade-mark extends only to. those markets where the .trader's goods have become known and identified by his use of the mark; and because of the non-qccupancy by the' Allen & Wheeler Company of the southeastern markets it had no ground for'relief in equity. Let us test this by reference to general principles.
-. The redress that is accorded in trade-mark cases is based upon the party's right to be protected in the good-will of a trade or business. The primary and proper function of a trade-mark is to identify the.origin or ownershipi of the article to which it is affixed. Where a party has been, in the habit of labeling his goods with a distinctive mark, so that purchasers recognize goods'thus marked -as being'of his production, others are deb<~- am applying the same mark to goods of' the same de»v. tión, b'eeaüse to do so, would in effect represent their goods to be of his. production and would tend to deprive him of the profit, he might make through the sale of the goods, which the" purchaser intended to buy. Courts afford redress or relief upon the ground that a party has a valuable interest in the ' -goodwill of his trade or business, and in the trade-marks adopted to-maintain and extend it. The essence of the wrong consists in the sale of the goods of one manufacturer or vendor for those of another. Canal Co. v. Clark, 13 Wall. 311, 322; McLean v. Fleming, 96 U.S. 245, 251; Manufacturing Co. v. Trainer, 101 U. S. 51, 53; Menendez v. Holt, 128 U. S. 514, 520; Lawrence Mfg. Co. v. Tennessee Mfg. Co., 138 U. S. 537, 546.
This essential element is the Same in trade-mark cases as-in cases of unfair competition unaccompanied with .trade-mark infringement, ,. In fact, the common law of trade-marks is but a.part of*-the broader law of unfair competition. Elgin Watch Co. v. Illinois Watch Co., 179 U. S. 665, 674; G. & C.Merriam Co. v. Saalfield, 198 Fed. Rep. 369, 372; Cohen v. Nagle, 190 Massachusetts, 4, 8, 15; 5 A. & E. Ann. Cas, 553, 555, 558.
' Common-law trade-marks, and the right' to their exclusive use, are of course tq be classed among property rights, Trade-mark Cases, 100. U. S. 82, 92, 93; but only in the tense that a man's right to the continued enjoyment of his trade reputation ánd the good-will that flows from it, free from unwarranted interference by others, is a property- right, for the protection of which a trade-mark is an instrumentality. As was said in the same case (p. 94), the right grows out of .use, not mere adoption. In the English courts it often has'been said that there is no property whatever in a trade-mark, as such. Per Ld. Langdale, M. R., in Perry v. Truefitt, 6 Beav. 73; per Vice Chancellor Sir Wm. Page Wood (afterwards Ld. Hatherly), in Collins Co. v. Brown, 3 Kay &. J. 423, 426; 3 Jur. N. S. 930; per Ld. Herschell in Reddaway v. Banham, A. C. 1896,199, 209. But.since in the'same cases the courts recognised, the. right of the party to the exclusive use of marks adopted • to indicate goods of his manufacture, upon the ground that '"A man is not to séll his .own goods Under the pretense that they are the goods of another man; he cannot be per- mitted to practise such-a. deception, nor to use the means which- contribute to that end. He cannot therefore be allowed,.to usé names, marks, letters, or other indicia, by which he may induce purchasers to believe,, that the goods . which he is selling are the manufacture of another person" (6 Beav. 73); it is plain that in denying the.right of property in a trade-mark'it was inténded only to- deny such property- right except as appurtenant' to an established business or tradé in connection with which the mark is used. This is evident from the ^expressions used -in these and other English cases. Thus, in Ainsworth v. Walmsley, L. R. 1 Eq. Cas. 518, 524,. Vice Chancéllor Sir Wm. Page Wood said: "This court has takemupon itself to protect a' man in. $ie use- of a certain trade-mark as applied to .a particular description of articlé. He has no property in -.that mark per se, any more than, in any other fanciful denomination he may assume for his, own private use, otherwise than, with reference to his trade. .If he does not carry on a trade in iron, but carries op a trade in linen, and stapips a lion on' his linen, another person may stamp a . lion on iron; (but when he has appropriated a mark to a' particular species "of goods, and caused- his. goods to circulate with this mark upon them, the court has said that no one shall' be at liberty to defraud that man by using that mark, and' passing off-goods of his manufacture' as being the goods of the owner of that mark."
In short, the trade-mark is treated as merely a protection for the good-will, and not the subject of property except in connection with an existing busiPéss. The same rule prevails generally in this country, and is recognized in the decisions • of this court already cited. See álso Apollinaris Co. v. Scherer, 27 Fed. Rep. 18, 20; Levy v. Waitt, 61 Fed. Rep. 1008, 1011; Macmahan Co. v. Denver Mfg. Co., 113 Fed. Rep. 468, 471, 475; Congress Spring Co. v. High Rock Congress Spring Co., 57 Barb. 526, 551; Weston v. Ketcham, 51 How. Pr. 455, 456; Candee v. Deere, 54 Illinois, 439,457; Avery & Sons v. Meikle, 81 Kentucky, 73, 86.
Expressions are found in many- of the cases to the effect that the exclusive right to the use of a trade-ttiark is founded on priority of appropriation. Thus, iri Canal Co. v. Clark, 13 Wall. 311, 323, reference is made to "the first appropriator"; in McLean v.Fleming, 96 U. S. 245, 251, to "the person who first adopted the stamp"; hi Manufacturing Co. v. Trainer, 101 U. S. 51, 53, the expression is "any symbol or device, .not previously appropriated,which will distinguish," etc. But these expressions are to'be understood in their application to'the facts of the cases decided. In the ordinary case of parties competing under the same mark in the same market, it is correct to say that prior appropriation settles the question. But where two parties independently are employing the same mark upon goods of the same class, but in separate markets wholly remote the one from the other, the question of prior appropriation is legally insignificant, unless at least it appear that the second adopter has selected the mark with some design inimical to the interests of the first user, such as to take the benefit of the reputation of his goods, to forestall the extension of his trade, or the like.
Of course, if the symbol or device is already in general use, employed in such a manner that its adoption as an index of source or origin would only produce confusion and mislead the public, it is not susceptible of adoption as a trade-mark. Such" a case was Columbia Mill Co. v. Alcorn, 150 U. S. 460,; 464, affirming 40 Fed. Rep. 676, where it appeared that before complainant's adoption of the disputed word as a brand for its flour the same word uwas used for the like purpose by numerous mills in different parts of the country.
That property in a trade-mark is not limited in its enjoyment by territorial bounds, but may be asserted and protected wherever the law affords a remedy for wrongs, is true in a limited sense. Into whatever markets the use of a trade-márk has extended, or its meaning has become known, there will the manufacturer or trader whose trade is pirated by an infringing use, be .entitled to protection and redress. But this is not to say that the proprietor of a trade-mark, good in the markets where it . has been employed, can monopolize markets that his trade has never reached and where the mark signifies not his; goods but those of another. We agree with the court below (208 Fed. Rep.. 519) that "Since it is the trade, and-not the mark, that is to be protected, a trade-mark. acknowledges no territorial boundaries of municipalities or states or nations, but extends to every market where-the trader's goods have become known and identified by his use of the mark. But the mark, of itself, cannot travel to markets where there is no article to wear the .badge and no trader to offer the article." .
. To say that a trade-mark right is-not limited in its en- . joyment by territorial bounds, is inconsistent'with sayings that it extends'as far as the sovereignty-in which-it has been enjoyed. If the territorial bounds .of sovereignty do not limit, how can they enlarge-such a right? And-if ' the mere, adoption'and use of a trade-mark in a limited market sb,all (without statute) create an exclusive Ownership of the mark throughout the bounds of the sovereignty, the question at once, arises, ' What, sovereignty? " So far as the proofs disclose, the Allen & Wheeler mark has not been used at all, is not" known at all in a market sense, within the sovereignty-of Alabama, or the adjacent States,' where the controversy with the Hanover, Star Milling Company arose. And so far as the controversy concerns . intrastate distribution as distinguished • from interstate trade, the subject N not within the sovereign powers of the United States. Trade-Mark Cases, 100 U. S. 82, 93.
We are referred to an expression contained in the opinion of this court in Kidd v. Johnson, 100 U. S. 617, 619: "The right to úse the trade-mark is not limited to any place, city, or State, and, therefore, must be deemed to extend everywhere." But a reference to the facts of the case, and the context, shows that, the language was not used in the sense attributéd to it in the argument: The question presented for decision related to the ownership of a trade-mark used by complainants (Johnson .& Co.) on packages and barrels containing' whiskey, manufactured and sold by them in Cincinnati, and this turned in part upon the force, to be given to a written transfer executed by one Pike and delivered to complainant's predecessors in business in.connection with a sale of the distillery and its appurtenances', which were Pike's individual . property. Kidd, the defendant, claimed the' right to use the same mark as surviving partner of a firm of which Pike had been a member. The court, speaking by Mr. Justice Field, said (p. 619): "That tránsfer was plainly designed to confer whatever right Pike possessed. It, in terms, extends the use of the trader mark to Mills, Johnson & Co. and their successors. Such use, to be of any value, must necessarily be exclusive.' If others .also could use it, the trade-mark would be'of no service in distinguishing the whiskey of the manufacture in Cincinnati; and thus the company would lose all the benefit arising from the reputation the whiskey there manufactured had acquired in the market. The right to use the trade-mark is not limited, to any place, city; or State, and, therefore, must be 'deemed' to extend everywhere." This does not import that the trade-mark right assigned was greater in extent than the trade in which it was used. The record in the case showed that complainant's trade had been extended to New Orleans, and the controversy arose out of sales made there by defendants as licensees of Kidd. It was admitted in the answer that they had sold whiskey in competition with that of complainants at Néw Orleans, and under the same trademark, and the case was by stipulation treated as .a test case to settle whether Johnson . & Co. or Kidd had the exclusive right, or whether they had a joint right, to the use of the mark.
We are also referred to Derringer v. Plate, 29 California, 292, 295, in which it was said by the court: "The manufacturer at Philadelphia who has adopted and uses a trademark, has the same right of property in it at New York or San Francisco that he has at his place of manufacture." In that case plaintiff averred that he was a resident of Philadelphia, and upwards of thirty years before the action invented, a pistol and adopted as á trade-mark for it the words "Derringer, Philadel.," which was and ever since had been his trade-mark, and which he had caused to be stamped on the breech- of all pistols manufactured and sold by him; and that the defendant since 1858 had been engaged in the manufacture of pistols at San Francisco similar to plaintiff's, on the breech of which he had stamped plaintiff's trade-mark, etc. The report of the case shows (p. 294) that the only question presented was whether the California statute of 1863 concerning trademarks had repealed or abrogated the remedies afforded by the common law in trade-mark cases. This was answered in the negative, and in the course of the reasoning the court said, p. 295: "The right is not limited in its enjoyment by territorial bounds, but, subject only to such statutory regulations as may be properly made concerning the use and enjoyment of other property, or the evidences of title to the same, the'proprietor may assert and maintain his property right wherever the common law affords remedies for wrongs;" continuing with what we have first quoted. Although not expressly stated, it is implicit in the report that plaintiff's pistols were on the market in San Francisco, and his trade-mark known there and imitated by defendant for that very reason.' It was such a mark as could not be accidentally hit upon.
It results from the general principles thus far discussed that' trade-niark rights, like others that rest in user, may be lost by. abandonment, non-user, laches, or acquiescence.. Abandonment, in the strict sense, rests upon an intent to abandon; and we have no purpose to qualify the authority of Saxlehner v. Eisner, 179 U. S. 19, 31, to that effect. As to laches and acquiescence, it has-been repeatedly, held, in cases where defendants acted fraudulently or with knowledge of plaintiffs' rights, that relief by injunction would be accorded although an accounting of profits should be denied. McLean v. Fleming, 96 U. S. 245, 257; Menendez v. Hott, 128 U. S. 514, 523; Saxlehner v. Eisner, 179 U. S. 19, 39. So much must be regarded as settled.. But cases differ according to their circumstances, and neither of those cited is in point with the present. Allowing to the Allen & Wheeler firm and. corporation the utmost that- the proofs disclose in their favor, they have confined their use of the "Tea Rosé" trade-mark to a limited territory,- leaving the south-eastern States untouched. Even if they did not know — .and it does not appear that they did know — That the Hanover. Company was doing so, they must be held to have 4aken the "risk that some innocent party might, during their forty years of inactivity, hit upon the same mark and expend money and effort in building up ,a trade in flour under it. If, during the long period that has elapsed since the last specified sale of Allen & Wheéler "Tea Rose"— this was "in the later 70's " — that flour has been sold in other parts of the United States, exchiding the south-eastern States, no clearer evidence of abandonment by non-user of trademark rights in the latter field could reasonably be asked for. And when it appears, as it does, that the Hanover Company in good faith and without nóticé of the Allen & Wheeler mark has expended much money and effort in building up its trade in the south-eastern market,, so that '"¡Tea Rose" .there-mean's Hanover Company's flour and nothing else, the Allen & Wheelér Company is estopped to assert trade-mark infringement'as to that territory.
The extent .and character of that territory, and its remoteness from that in which the Allen & Wheeler mark is known, .are circumstances to be considered.' Alabama a]one — to say nothing of "fh.e other States in question— has an area of over 50,000 square miles, and by the census of 1910 contained a population of more than 2,000,000. Its most northerly point -is.more than 250. miles south of Cincinnati, which is the nearest point at which sales of Allen. & Wheeler "Tea,Rose" are shown to have been made, and these at a time antedating by approximately forty years ,the commencement of the present controversy. We are not dealing with a case where the junior appropriator of a trade-mark is occupying .territory that would probably be reached by the prior user in the natural expansion of his trade, and need pass no judgment upon such a case. Under the circumstances that are here presented, to permit the Allen & Wheeler Company to use the mark in Alabama, to the exclusion of the Hanover Company, would take the trade and goodwill of the latter company — built up at much expense and without notice of the former's rights — and confer it upon the former, to. the complete perversion of the proper theory of trademark rights.
The case is peculiar in its .facts; and we have found none precisely like it. The recent case of Rectanus Co. v. United Drug Co. (C. C. A. 6th), 227 Fed. Rep. 545; 549, 553, is closely analogous.
We come now to No. 23. The Court of Appéals (204 Fed. Rep. 211) denied relief to the Hanover Company against Metcalf under the head of trade-mark infringement partly Upbn the ground that Allen & Wheeler were the first appropriators of the mark, and that it had been ' continuously used by that firm and its successor down to the time of the suit j but principally upon the ground that, irrespective of whether this use was so general or continuous as to exclude other appropriation, the evidence. showed .a use of the same brand by the Steeleville Company commencing in the year 1895 and- carried on in the States of Illinois, Tennessee, Indiana, Arkansas and Mississippi,' with occasional shipments into Alabama;; a use so extensive and continuous as to exclude the claim of the Hanover Company to either-first appropriation or exclusive use in any of the territory.from which it sought tO'expel Metcalf; and that "the Steeleville Milling Company's first use and its extensive and continuous use established by the evidence in the territory of its selection -gave it the unqualified right to extend unhampered its trade in flour under the Tea Rose brand into any part of -the United States, and that too without incurring the legal odium of unfair competition." Relief under -the -head of unfair competition was denied upon the ground that the Hanover ^Company had not clearly shown that it had established by prior adoption the exclusive right to dress its goods in the manner claimed.
Upon the question of trade-mark rights as between the,. Hanover and the Steeleville companies (leaving Allen & Wheeler out of the question), the proofs are somewhat conflicting. There is evidence that Hanover's use of the Tea Rose brand antedated the year 1893, and probably began as early as 1886. The extent and particulars of such use, prior to the year 1903, are not made to appear. On the other hand, Steeleville appears to have adopted the brand in the year 1895, and used it in trade in Illinois., Tennessee, Mississippi, Louisiana,, and- Arkansas; the extent and particulars of the use not being shown. Sharp competition appears to have been carried on between the two companies in selling flour under the Tea Itose brand at Meridian, Mississippi, in the years 1903 to 1905, with the result that the Hanover Company, claiming that its use of the mark for flour had antedated that' of the Steele-ville Company, succeeded in obtaining a favorable decision in an informal arbitration by officials of the Millers National Federation; and for this or some other reason Steeleville appears to have retired and left the Hanover. Company in complete control of the .Meridian .market. Aside- from the business done by the Steeleville Company at Meridian, there is no proof of business done by it in the south-eastern States, except that it made an isolated sale of Tea Rose flour to a merchant at Whistler, Alabama, in the year Í899, the quantity not stated, and twp isolated sales, involving a small quantity in each case, one to a retailer in Tupelo, Mississippi, in the year 1910, the other to a retailer in West Point, Mississippi, in January, 1912.
As we regard the proofs, they do not sustain the view of the Circuit Court of Appeals for the Fifth Cifcuit either as to first use or as to extensive, continuous, or exclusive use of the Tea Rose brand by the Steeleville Company, and there is nothing in the history of the use of the brand in the disputed territory to deprive the Hanover Company of its right to be protected at least against unfair competition at the hands of the Steeleville Company or of Metcalf as its representative.
That there was such unfair competition, commenced by Metcalf shortly before the bringing of the suit, the proofs clearly show. Repeating that since the year-1904 the Hanover Company had extensively advertised its Tea Rose -floúr throughout the State of Alabama and parts of Mississippi, Georgia, and Florida, with the result that its sales of that flour in those markets amounted to more than $150,000 a year, while the Hanover Star Milling Coriipany had come to be known as the Tea Rose mill, and the words "Tea Rose" in the flour trade in that territory meant flour of the Hanover Company's manufacture and nothing else, and that, except for isolated sales in' Mississippi in 1910. and 1912, already mentioned, ño Teft Rose flour'other than that of the Hanover Company had been sold in that territory for a. number of 'years, it further should be stated that Hanover Tea Rose was distributed in Butler County ,and adjoining counties in Alabama by the McMullan Grocery Company, whose place of business was at Greenville: . They-had built up a large trade for. this flour in Butler County and the neighboring counties, of Conecuh, Covington, Lowndes, and Crenshaw. The McMullan Company had the exclusive sale of the Hanover Company's Tea Rose flour, so that Metcalf, who likewise did. business at Greenville,- was unable to procure it for distribution to his customers. A short time befoie the suit was commenced, however, he announced-to the public and the trade in Butler County, that he had secured Tea Rose flour, and on receiving % consignment from the Steeleville Company, which wa's' labeled "Tea Rose" and put up in packages closely resembling those used by the Hanover Company — so closely that, according to the undisputed evidence,. they are "calculated to and do in fact deceive the ordinary and casual purchaser of flour into the belief that he is purchasing the article of that'name manufactured by the said Hanover Star Milling Company" — Metcalf put large banners on his mules and dray advertising to the public that he had received a shipment of Tea Rose flour, and that it was "Steeleville Milling Company's Tea Rose flour, best quality." Metcalf, and his traveling salesman who marketed the greater part of this consignment, and several parties who purchased it in lots of from one to ten barrels, deposed that it was not sold under a representation that it was manufactured' by the Hanover Company, but, on the contrary, that it was Tea Rose'flour manufactured by the Steeleville Milling Company. But Met-calf's purpose' to take advantage of the reputation of the • Hanover Company's Tea Rose flour is so manifest, and the tendency of the similarity of the brand and accompanying design, and of the make-up of the packages, to mislead ultimate consumers is so evident, that it seems to us a case of unfair competition is made out. The circumstances strongly indipate a fraudulent intent to palm off the' Steeleville Tea Rose flour upon customers as being the same as the Tea Rose flour made by complainant, the reputation of which is shown to be so well established. The mere substitution of "Steeleville" in the place of "Hanover" on the labels is not convincing either that the intent is innoeent or that the result will be innocuous, since it is. accompanied'with the words "Tea ftose," (shown to have acquired a secondary meaning), and with the distinctive wrapping, both indicative, in that market of complainant's flour. Complainant is thus shown to be entitled-to an injunction against Metcalf, irrespective of its claim to affirmative trade-mark rights in that territory. Coats v. Merrick Thread Co., 149 U. S. 562, 566; Elgin Nat'l Watch Co. v. Illinois Watch Co., 179 U. S. 665, 674. Adjudication of the latter claim may be made, if necessary, upon final hearing, when the proofs will presumably be more complete than they now are.
It results that the decree under review in No. 28 should be reversed, and the cause remanded for further procéed,ings in accordance with this opinion, and that the decree in No. 30 should be affirmed.
Decree in No. 23 reversed.
Appeal in No. 30 dismissed.
Decree in No. 30 affirmed.'