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celfCIJit,Court o!'.4..ppell.ls, Slive-nth Circuit. ,r ,f, ' , . ', No·'n6.

1S94.)

1. TnADIIl·}iARKS-RIGHTS DEFINED BY CONTRACT.
   

2.

Where two parties have been using similar trade-marks, a contract' between them whereby one party is to use one form of the trade-mark in connection with certaip: words" an,a ,other Is to use another form of it in connection with other word's. followed by the use of such trade-' marks fori8everal 'yeal'sin, accordance with the terms of the contract, establishes the rights of the parties, and is. binding. upon their assigns, in . . ' isnqt to Jlltlle patent otllj::e, since it Is not a, .trade-m,a-rlt.
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APPl?I!J!,'Q:m the.CiNll1-t,eourt of the United States for the Northern District O'fIllinois. Suit for B;ygj:\'ia, Water Company against the 'Waukesha Hygeia MineralE)pqngs Qpmpany. Complainant obtained a decree. Defendant appeals.
;aygeia SpiU'ltljng Di$tilled Water Company" filed its bill in eql,li,tY. f.,Qo. ..;' J..Hj.Ull!c1;io.n r. .. . . the. a..·. p.pellan.,t, Wa l,l. a .H.ygeia Mineral, the wj>rd "l1r@ia" as It trade-mark or namll Springs C,dtnpany, for dtilikttlkwatersJexceI>t the way specified iJ;l a contract entered August ,2(1,1 ,'J!lSSq, between,·th'e appellee 'alidthe appellant's predecessorS. The lUtd!1l1ed a the answer denying the equi·· ..'. .0/'1i,n.g" h. tbat *ejtl1eged contract ,with its predeC(!Ssor . .apPElll '. t . . 1;Ise the w or.d "Hygeia"broad . .. ..l.y ties of as a and is not mfldlWlullon! theaptye.Ilant, for want of reco,rd6r notice, and is. IJ,ot enfOrcea;ble/ in: equity for va.'Ptous reasbns; 'the croSs bi11 alleging that· tbtt to use of ithe !word as a trade-mark, and praying that t4e APPftuee 1;Ie dec,roo, is fora perpetual injunction in faVOr of 'thE! ,hpel1eein a!Ccor<iance Witll the allegations and prayer of the original b'11l/"TfiEl'appellee ilbi ot water, to whicllthe trade-nameiQf'ffHygeia" had:,tilien applteB'for some tillie"prior to 1886. The appellant of at Waukesha; Wis. (acqUired by ititl 1891, unl1er from ,Who made the c<mtract of 1886),! itowhich the,nfUp,e,ofI'Hygeia" had bee;u,appl\ed;and its waters were marked with the nlmfe('iaygeia" as part of the deSIgnation, prior to 1886. The spring, was owned :and: ·its businesEI cOndtictedby' James H. and Charles T. Smith, in and and,;to'&void cobtroversy With reference to a tradename, Of, a. contract was entered into betWEie'Jlme appellee, as first PartY. an.d 'the Smiths, .as second ,partie", August 20, 'iSS\:!" that thefl.rSt party was engaged in, ilie factur.e watel'Sr:itiid'''used:as the essential feature of its tra,demark la::figure goddess of Hygeia," there shown;. that mineral spl'ing at Wauke;N,ll-qxr/llMlneJ.!% S»rlng,' and have used as tpee.ssensha, 1 tial feature 01' their trade-Jl\arll: .In the"sMa of the waters of said I3pring, the the words 'WaUkeBbll. ,Elygeia Mineral Sprflit," together with' a figure goddess of which is ,also showdiiifithe contract; 'and that they deeire to infr1n2ii/Il.en.t !:loth ofethelr respectlve trademarks," and tdthat eJlQ. have.e:nteredintocoqtract. . Thereupon, "in considera.tion bfithe' and of five hUIldreq d6Ullrs" piUd by the first party to the'$econdparties,the fdUowiilgproviS1ons are 'made: "First. And the party oft}1 first:partshall ha.ve; and is fa s ha.ving, the exclusive' rigpt both tQ use ¢e word 'Hygela' and'tl)e. figure ot wliich thetlrst above 18i ..

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WAUKESHA H. M. SPRINGS CO. V. HYGEIA S. D. WATER CO.

439

a fac simile, in with the distllUng of water and the manufacture and sale of carbonated and 3.l'tificial mineral waters, vichy, seltzer, ginger ale, etc., made. by distilled water. The said party of the first part, however. shall !lot in any way'or' manner use the said worp. 'Hygeia' In connection with any natural mineral spring water, and shall not likewise use the words 'KaturaJ' or 'Spring' water in or upon any stamp, cork, label, circular, advertlsement,slgn, bill head, letter head, etc., In any way or manner calculated to deceive or mislead the public. Second. The said parties of the second part shall have, and are hereby recognized as having, the exclusive right forever in and to the use of the said word 'Hygeia' in combination with 'Waukesha Hygeia Mineral Spring' with or without the word 'Water' superadded, and of fue figure of which the second above Is a fac simile, including said word 'Bygela' as now a part thereof, used In any manner or connection with the bottling, putting up, and sale of the waters, whether carbonated or in said spring so situated at Waukesha, Wisconsin, as aforesaid, and of ginger ale tl1e waters for which are from said spring. They shali not, however, use the .said figure except In connection on the same label, etc., with said combination 'Waukesha Hygela :Mineral Spring,' and they shall not In any way or manner use the said word 'Hygela' otherwise than In connection with said figure. and in such combination as above Indicated on any stamp, cork, label, circular, advertisement, sign, bill head, letter head, etc. They shall not use the said word, figure, or combination in connection with distilled water, nor In with any other water than said spring water." The testimony on the part of the appellee is directed to showing their use of the trad\Huark prior to this contract (having registered it in the patent office in December, 1883); and that, for the several years that intervened between the mll.king of the contract and the purchase by the appellant, there was strict compliance with the provisions of the contract by both parties, and the appellee expended large sums in reliance upon it, giVing great value to its trade-mark. The testimony of the appellant is mainly directed to showing In contravention of the contract that its predecessors named their spring "Hygeia," and had appropriated and used fuat as the distinguishing word In the combination of words by which the water was known and put upon the'market, prior to any use by the appellee; that the appellant had no notice, 'actual or constructive, of the contract made by its predecessor in title, and was a bona fide purchaser; that the contract was an imposition upon the Smiths, and was harsh and Inequitable; and that the appellant's predecessor was not incorporated at the time of entering into the contract.

Banning, Banning & Payson (William B. Keep and Frank O. Lowden, of counsel), for appellant. Isham, LinCOln & Beale and Herrick & Allen, for appellee. Before JENKINS, Circuit Judge, and BUNN and SEAMAN, District Judges. ' SEAMAN, District Judge (after stating the facts). The complainant, Hygeia Sparkling Distilled Water Company, seeks to restrain the Waukesha Hygeia Mineral Springs Company from use of the word "Hygeia" as a trade-name for its waters otherwise than specified in a contract entered into August 20, 1886, between complainant and. defendant's predecessors. The defendant (appellant here) seeks .to ignore or avoid that contract, and claims prior appropriation of the word, as the distinguishing name of its waters, and pl"ays, by cross bill, for an injunction restraining the complainant from using the word in its corporate name or trade-mark. The controlling question in this controversy is whether or not the contract is operative between these parties for the purpo.se of establisping l;tnd defining their respective trade-mark rights. in con-

4'40

I'EDERAL ,BEPGMER J

¥OI. 63.,

conduct. ,If the contract of use is,'immaterial, is, elltitle9.,toprotectionagainstem,'ployment of the word as atradlHlame for waters, without the qualifying words provided by the contract. If the contract is excluded, the complainant fails to estaNish a case of prior appropriation of the name, this record atlell'st; and it would remain to inquire whether the defendant W,as entitled to affirmative relief. The contract of August 20, 1886, was, between the complainant, of the one H. andObarles, T. Smith, defendant's predecessors, part, and of the other ,part, after each .had undispntedly employed the word as a portion of the trade-name of their respective waters. The record shows clearly that the purpose and provisions of the contract were well the original parties; that it was executed deliberately, after considerable negotiation, and' was followed by con,stant and (apParently) satisfactory compliance by both parties for several years, without dissent or disturbance, until after the defendant,t>urchased and commenced oper;:ttions. There is no the objection ,thlit the contract was obtained unfairly, and the adequacy of the consideration paid the Smiths is not here open to question. The agreement recited that the complainant wai!lengaged-in the manufacture or preparation of distilled tbe essential feature of its tradewaters, for wldeh it had used , mark the w.ord "Hygeia" and a, figure of the goddess Hygeia; that the .Smiths owned a spring at Waukesha, called, the ''Hygeia , Natural used as Lheessential feature of their trade-mark, in thesale'ofJhe waters, the words ''Waukesha "Hygeia Mineral together with another figure of the goddessHygeia. It does not assert priority for either, and, if its' statement:,of the existing trade-mark of the Smiths be taken as true, the use of the word "Hygeia" in the combination there shown, prior to any "U;ije by the other, party, was not conclg,sive of a right to the single word as a trade-mark. Whether it or the word , ''Waukesha''wJtsthe distinguis,hing word was at lE!!:l-st open to question, and dependent upon ,cirCUmstances. In that view, and, as the contract states, "to avoid'eonfiict and infringement in the use of both of tbeir respective trade-marks," an agreement between the users would .seem commendable" and for the best interest of the parties and the public, if Wcoftlllbe reached and made effective for mutual. protection., This cbtitract was thereupon made,. and it ,provides, in clear and unequi'\l"ocnlterms, for recognition and preser· l vation of the then existing form's of trade-mark' which are there as the exclusive right' lof respectiV'ely; viz.: (1) The first party to rise the and its figure of the goddess, 'in only with its of wruter and the manufl1c. tureand sale .carbonated andattificial mineral, waters, vichy, seltzer, ale, etc., made, of distilled water," and not to use the word ''Hygeia'' in conneetion, with natural mineral or spl'ing water, or the words ''Natllral''or''Spring'' water upon any label, etc., calculated to deceive the publie; and (2) the second parties to use "the word 'Hygeia' in combination 'Waukesha Hygeia

g?yerJ;k$;1Jfe prqpf ten4ing

WAUKESHA H. M.SPRINGSClO. 11. HYGEIA S. D. WATER CO.

441

Mineral Spring,' with or without the word 'Water' superadded," and its figure of the goddess, "including said word 'Hygeia' as now a part thereof," in connection with "the bottling, putting up, and sale of the waters, whether carbonated or not, of said spring," and of ginger ale made of said waters; but the figure was only to be used in connection and upon the same label with the combination "Waukesha Hygeia Mineral Springs," and "they shall not in any way or manner use the word 'Hygeia' otherwise than in connection with said figure, and in such combination as above on any stamp, label, etc., and shall not use either in connection with any other than said spring water. It is not an attempt to transfer or license the use of a trade-mark, or any rights' therein, or in any word thereof, but fixes and defines the existing trade-mark of each, that confusion and infringement may be prevented. If the word ''Hygeia'' had been used by the second party, at any time, otherwise than in the combination named, such use was thereupon and thereafter abandoned,-declared without right, and of no effect. The contraCtt operates by way of estoppel upon each of the contracting parties, precluding each from "saying that that which by the intervention of himself or his has once become accredited for truth is false." 2 Best, Ev. (Morgan's Ed.) § 534. Between the parties and those claiming under them, it may well constitute the fundamental evidence of what was adopted by each as a trademark; while trade-mark rights are established by the teiltimonJ of subsequent exclusive use, respectively, in accordance therewith. The contract does not create the trade-mark, but it is clear evidence of its purpose and elements. Its provisions tend directly to the end for which the law of trade-marks has been evolved, viz. for protection of the public as well as the owner from imposition,-"that one man is not allowed to offer his goods for sale, representing them to be the manufacture of another trader in the same commodity:' McLean v. Fleming, 96 U. S. 245. This is the view in which complainant's bill sets up the contract; and the action is not in the nature of specific performance, as the defendant's contention would have it treated, but is clearly for the enforcement of alleged trademark rights. Infringement in this case is undisputed. The single word "Hygeia" is used by the defendant for the Waukesha water, upon labels and advertisements, without any of the other words designated therefor by the contract, and duplicating the complainant's trade-name. If the Smiths were thus infringing, the relief prayed for would be granted as a matter of course, under the operation of the contract above expressed; and the only question which remains for consideration is whether the same rule is enforceable against the defendant, a purchaser, in 1891, of the property and rights of the Smiths in the Waukesha water. The claim is made in behalf ()f the defendant that the contract is not operative against it (1) because of a bona fide purchase without actual or constructive notice of its terms; (2) that it should have been recorded in the patent ()ffice, under the trade-mark act of 1881, to make it effective against an innocent purchaser. Neither of these propositions is tenable.

442··

:, FEDERAl.:'lltEl'OaTER, vol.

63.

(l)!'Jlli.e:purchase,'II\;a,s not9f t4e:character whi.ch" rasweretben vested in the tlleir in 189J., .five y-ear3after the contract wl1enthe trade-m.ark of each bad .become el;!tablisbed, 'with thedefinitiltIDsof the,contract. The foUJ;l.,o its trade,name, "Waukesha HygelaMj):l;el'all&pdng in. coutant and well·settled use.; theccomplainant;usin,g the word "Hygeiarr for its 'distilled, waters. This at: least). PrC?tice of t4e conditilcmsexisting; under the, The defelld l1Iit, f:lln no m:,nopoly in the name "Hygeia" un;less i,tcan sl;lowJ.1glltt4ron gb the Smiths.· No<larger claim-can be maintainedthanwasposselSSed bythesonrce is sjUbject to the I!111We equities, abandonment,ol':estoppel.which could jbe.asserted against the vel')dor.(2) The .co:lil:tract was:not r.ecordable under the trade,mark act. . Section ,12.is dtedas :but it doell'ln9t prov;ide for l·ecoi.'d df.any instrument ,except the right to use trade, markS.ii'As this:cQntracti$>not.a transfer or aSfjiignment, and does not purport to give benefits to one wl1ic:h were ,claimed to be vested in the other, or to confer any new rights, it is ;not within the act. Thefatltthat compla.inanthad recorded 'its trade"mark in the patent o:tlice·would therefol'eneither require nor permit record of the contract which effected DO change in it. 'l'hat which was entered of record was the same Which was specified lind ,retained in the contract. The trade·mark. 'when established, is valid and entitled to protection, whether registeted 01' . pot. If the fact of registry confeI'Sany benefits, it is OIllly those which are specially provided in the act of congress, and not covered ' by the common law rule. The appeUl\nt urges .as afurthN' obJection to. the decree that the appellee must bl:!.barred·fl'om. any, relief because it is qisclosed that at some' timedurillg its inception the trade-mark W8,S employed by parities. in' the name ofa-corporation, when there wa;sno corporation in fact, violating a criminal of the state of Illinois (section 220: Of the CriminaFCode), which imposes a fine ·"if any company, association or person puts fGrth any sign or advertisement, and therein assumes, for the purpose of solititing business, a corporateriaine, not beingi:ncorporated." '1:hi8 statute has no application here,even if Wheal'S the constl'u<ition for which appellant contends,for the reason: that the fact ,is undisputed that the complainaiatwas duly incorpUrated, undertbe laws of thestate of .New York,inthe year 1885, pnior to the .ex(;'cution of the contract in question, and therefore the alleged pr'elllrttureillegal assumption of corporate existence wflsheyond scope of iUfl"Iiry in this case; and for '!the further rea$onthnt the acts do not appear to have been committed in the state of Illino,s, .01' after the commencement of business therein,a:nd"were lawful in the state of New York. TheIiei:seutire ttbSelU'f' lof anv showing oi' ,and. we find no groundfol' this obJection, either the stat\lte referred to or any rules of equ.ity, As stated in Oannl:0o. v. Clark, l3Wall. 311: "The office of a trade-mark is to point out distinctively the origin or o;wnership of rights!were

WAUKESHA H/M. SPRINGS

:00.

V. HYGEIA

S. D. WATER CO.

443

the article to which it is affixed; or, in other words, to give notice who was the producer." The word "Hygeia" has no original sig· nif\cationwhichWQUld PQint out the water of complainant, or any other water or article; but it has, by association at least since the making of the contract, became identified with that water in the markets; so that the. word used alone is an emblem of the -complainant's productio:r,t, ahd so usedwould not be associated with the defendant's water, ttl the general market, where it had become well.known by the combination name, in which the name of its :spiin,g,. a,nd its local designlltion are preserved. The distinction IPraiie,i:J:I::p'llJ;'Suance of the contract is well marked, and is well main· taipedit;l practice which followed up.derit. It is tb,e duty of thd 'court to protect both the public and the parties from imposi· tion and confusion which would arise from indiscriminate use of thesetra<Je·names; and,to the end that each should be distinctive ·of the origin and ownership by associati<m, the defendant was prop· erlY enjoined from infringement, and the decree is affirmed.

WAUKESHA HYGEIA MINERAL SPRINGS CO. v. HYGEIA SPARKLING DISTILLED WATER.CO. (Circuit Court of Appeals, Seventh Circuit. No. 144. Defendant had the' right to use the words "Waukesha Hygeia Mineral Springs" as a trade.mark, and complainant had the exclusive right to the use: of the wl;lrd "Hygeia" as a trade-mark. except in the form used by defendant. Held; that the fact that defendant made the word "Hy· geia" more conspicuous than the rest of his trade-mark did not consti· tute an infringement of complainant's rights.
WHAT CONSTITUTES INFRINGEMENT.

October 1, 1894.)

Appeal from theOircuit Court of the United States for the North· ern District of Illinois. . Suit for injuncHon by the Hygeia Sparkling Distilled Water Com· pany against the Waukesha Hygeia Mineral Springs Company. Complainant obtained a, deCree. Defendant appeals.
This bill in equity is filed by way of supplement to an original bill between the same parties, on which there was a decree in favor of the complainant, reo 'straining the'd'efendant (appellant here) from using the word "Hygeia" as a trade-name otherwise than in the combination "Waukesha Hygeia Mineral Spring," with or withuut the word "Water" superadl1ed; or, in effect, ac· ·cording to the definitions of the respective trade-marks conu,lned in a certain contract,. beai'ing date August 20, 1886. The present bilI seeks further injunctional relief by preventing the defendant from using the word "Hygeia" 'in the combination allowed by the former decree "in m(}re conspicuous let· tel's than the other words in said combination," by using the same in "larger or different colored letters than the other words in said combination. 01' in any other manner." A copy of the bill, record and proofs in the original case is annexed as an and made a part of this bill; and certain signs, advertisements·. labels, etc.,· referred to as the infringing devices. WE're before the court as exhibits. with the bill. The defendant filed a general.delllUlTer, which was overruled. Upon its election to stand by the demurrer, .a decree for 'perpetual Injunction was entered, in accordance with the prayer of the bill; and the defendant appeals from the decree.