Holzapfel's Compositions Company v. Rahtjen's American Composition Company

The respondent, a New York corporation, commenced this suit in equity in the circuit court for the southern district of New Yor1q01 against the petitioner, which is a foreign corporation organized under the laws of the Kingdom of Great Britain and having a place of business in the city of New York, to restrain it from the use of the trademark which the respondent averred it had acquired in the name 'Rahtjen's Composition,' and to obtain an accounting of the profits and income which the petitioner had unlawfully derived from the use of such trademark, and which it had by reason thereof diverted from the respondent. Issue was taken on the various allegations in the bill, and upon the trial the circuit court dismissed the same (97 Fed. 949), but upon appeal to the circuit court of appeals the decree of the circuit court was reversed and the case remanded to that court, with instructions to enter a decree enjoining the petitioner from selling or offering to sell Rahtjen's Composition under that name, and from using the name upon its packages or in its advertisements. 41 C. C. A. 329, 101 Fed. 257.

Judge Wallace dissented from the judgment and opinion of the circuit court of appeals, holding that the case was properly decided in the court below, and that the decree ought to be affirmed.

The defendant and petitioner then prayed this court for a writ of certiorari, which was granted, and the case thus brought here.

The trademark in regard to which this contest arises pertains to a certain kind of paint for the protection of ships' bottoms from rust and from vegetable or animal growth thereon, either in salt or fresh water. The paint was of three kinds, numbered, respectively, Nos. 1, 2, and 3. The evidence in the record shows that some time between the years 1860 and 1865 one John Rahtjen invented in Germany a particular kind of paint for the purpose above mentioned. In connection with his sons he began in 1865 to manufacture the paint for general use, and it speedily acquired a high reputation among owners of shipping as valuable for the purposes intended. The elder Rahtjen never obtained a patent for the article in Germany; neither did he or his sons apply for or obtain one in the United States. They first shipped some of the paint manufactured by them in Germany to the United States in 1870, consigned to Henry Gelien. They did not put it upon the market by sending generally to those who might wish to use it, but all their consignments from 1870 to 1878 were made to Gelien. Under what marks he sold the article does not appear.

On November 19, 1869, one of the firm wrote to Mr. Gelien from Bremerhaven, making him the sole agent of the firm for the sale of its paint in the United States, and informing him that they had not obtained a patent for their composition in America, nor applied for one in the United States, as there was no danger in introducting the composition in America, the invention not being of a nature facilitating good imitations. The father died in 1873, after which the sons continued the business.

Gelien was succeeded as the consignee of the paint in the United States, in 1878, by the firm of Hartmann, La Doux, & Maecker, to whom for a short time the paint was consigned from Germany, and then it was sent them from England through Rahtjen's assigns there. The Hartmann firm was succeeded in July, 1886, by Emil Maecker, as agent for the sale of the paint in the United States, and on January 1, 1889, Maecker was succeeded by one Otto L. Peterson, and in 1891 Petersen was succeeded by the respondent corporation, and was made its president.

On January 15, 1878, 'Joh' Rahtjen assigned to 'Messrs. Suter, Hartmann, & Co., in London, the exclusive right of sale of my patent composition paint for the United States of North America, for the period of twelve years from the commencement of 1878 to the end of 1889.' After 1870 the firm of Hartmann Brothers, or Suter, Hartmann, & Co., manufactured the composition for themselves in England, by the license of the Rahtjens, and for a time after 1874 Rahtjen also manufactured in England as well as in Germany. During this time the composition when manufactured by Hartmann was marked 'Rahtjen's Ratent Composition, Hartmann's Manufacture.' Up to the time of the above assignment the Rahtjens had consigned their paint to New York in barrels or casks addressed to Gelien, and with labels affixed thereon, in which the article was described as 'Rahtjen's Patent Composition;' and after Hartmann, La Doux, & Maecker became agents, the casks were addressed to that firm at New York, and labeled the same way.

While Gelien acted as consignee he prepared and issued a show card and also letter heads and circulars with 'Rahtjen's Composition Paint, known as the German Paint,' on the cards and on the heading of his letters and circulars, and also directly underneath was the picture of a vessel. The show cards and circulars were issued for the purpose of advertising the paint, and the show card was copyrighted by Gelien for himself.

After the assignment to Suter, Hartmann, & Co. of the exclusive right of sale in the United States, and up to the year 1883, that firm sent the paints to the United States under the description of 'Rahtjen's Patent Composition,' and the Rahtjens themselves sent no more paint to the United States from Germany.

In 1873 they entered into negotiations with Suter, Hartmann, & Co., in England, for the sale of their paint in that country, and on November 29, 1873, Heinrich Rahtjen obtained in England a patent for the paint for the term of fourteen years from the date thereof, providid, among other conditions, he should at the end of seven years pay a stamp duty of 100, and in case he did not pay, the patent was to 'cease, determine, and become void.' It remained in existence for seven years, or until November 29, 1880, and then ceased because of the failure to pay the  100 stamp duty as provided for in the patent.

The label used by Suter, Hartmann, & Co. in sending the paint to their different agents and customers contained the words 'Rahtjen's Patent Composition' and 'None genuine without this signature, Suter, Hartmann, & Co.' These words were used by them from the outset of their career as consignees for the composition.

In May, 1883, two years and a half after the expiration of the English patent, the predecessors of the petitioner commenced in England to make and sell this paint, and in 1884 they sent it to the United States under the name of 'Rahtjen's Composition, Holzapfel's Manufacture.' On June 25, 1883, John Rahtjen filed with the English office an application for registration as a trademark of the words 'Genuine Rahtjen's Composition for Ships' Bottoms,' &c. This application was opposed by Holzapfel & Co., through their solicitors, and no counter statement having been filed by Rahtjen the application was deemed to be withdrawn.

On July 7, 1883, Rahtjen filed another application for registration of the words 'Rahtjen Composition.' This, too, was opposed, and the application thereafter held to be withdrawn.

On June 28, 1883, Suter, Hartmann, & Co. filed an application for registration of the words 'Rahtjen's Patent Composition for Ships' Bottoms, Buoys, &c. None genuine without this signature, Suter, Hartmann, & Co.' This application was opposed by defendant's predecessors, Holzapfel & Co., and was withdrawn.

On the 25th of April, 1883, Hartmann Brothers filed an application for a trademark in this form:

[NOTE: MATERIAL SET AT THIS POINT IS NOT DISPLAYABLE (GRAPHIC OR TABULAR MATERIAL)]

The application was granted, and from that time they had an exclusive right to use that mark. It is not charged that the defendant has ever in any way imitated or infringed upon it.

On January 9, 1884, Suter, Hartmann, & Co. filed an application for the registration of the words 'Rahtjen's Patent Composition for Ships' Bottoms, Buoys, &c. Directions. Suter, Hartmann, & Co.' In their application for registration they said: 'We do not claim the exclusive use of the words Rahtjen's Patent Composition for Ships' Bottoms, Buoys, &c., Directions,' or any of such words, except as part of the combination constituting our trademark, as represented annexed, and to which we claim exclusive right.' This trademark was registered. The following is a copy:

RAHTJEN'S

PATENT COMPOSITION,

For SHIPS' BOTTOMS, BUOYS, &C.

Directions.

SUTER, HARTMANN & CO.

There has never been any infringement of it by defendant, but it has used the words 'Rahtjen's Composition' in connection with the statement that it was manufactured by Holzapfel & Co., and it has so used them on goods sold in the United States, and did so at the time of the commencement of this suit.

Before the assignment to Suter, Hartmann, & Co. of the exclusive right to sell the composition in the United States, Rahtjen had transferred to Hartmann Brothers in England the exclusive right to manufacture it there, and so in their manufacture it was described as 'Rahtjen's Composition. Hartmann Brothers' Manufacture.'

In 1888 Suter, Hartmann, & Rahtjen's Composition Company (Limited) was formed, and Suter, Hartmann, & Co. assigned their rights and interests in the paint and trademark to that company, and in 1891 the respondent company, was formed and the English company transferred to it all rights to the trademarks belonging to and used by the English company in America, and agreed not to carry on any business of a like character in the United States.

In 1899 complaint was made before the court of commerce sitting at Antwerp, by Rahtjen and by Suter, Hartmann, & Co., against defendant W. Wright, in which they complained of the defendant that he had put on the sign of his house the inscription 'Manufacturers of Rahtjen's Composition,' and that in his prospectus and other publications he announced that he sells the 'Original Rahtjen's Composition for Ships' Bottoms, manufactured by the London Oil & Colour Co., Limited.' This use of the name of the complainant by the defendant, the court held, constituted an illegal act, and, even if the complainants had not retained their right to the use of the words 'Rahtjen's Composition,' that the defendant had not acquired the right to use the name in such a way as to cause the public to believe that his product was the product of Rahtjen or of his delegates. The defendant was therefore condemned in judgment and enjoined from the use of the words in future. An appeal was taken from this decision and the court above reversed the judgment, holding that the name 'Rahtjen's Composition' had become the property of the public, which had the right to 'offer it for sale under the name generally used to describe it, because any other name would completely mislead the purchaser, always supposing that the public is not to be led astray as to the individuality of the manufacturer, or as to the source of the said products. As it is shown by the documents deposited in the present process that the varnish invented by the associate is generally known in England and in Belgium under the name of Rahtjen's Composition, so that in the eyes of the public this name of Rahtjen has become a sort of qualifying adjective indicative of this special product; as the appellant has always in his sign and in his circulars been careful to announce that the product that he sells was manufactured by the 'London Oil & Colour Company,"-the court held that the intention of bad faith which constitutes an element necessary to the establishment of breach of faith had no actual existence, and the judgment was therefore reversed.

Complaint had also been made by Mr. John Rahtjen in the court at Hamburg against Holzapfel and others for the wrongful use of the words 'Rahtjen's Composition,' and that court held in substance that there was no longer any exclusive property in the words used, and that the defendants should therefore be discharged.

Messrs. ''Wm. McAdoo, John G. Carlisle, R. B. McMaster, and F. P. B. Sands'' for petitioner.

Messrs. T. D. Merwin and T. B. Kerr for respondent.

Mr. Justice Peckham, after making the above statement of facts, delivered the opinion of the court: