Saxlehner v. Eisner Mendelson Company

This was a bill in equity filed in the circuit court for the southern district of New York by the widow of Andreas Saxlehner, deceased, a resident of Buda-Pesth and a subject of the King of Hungary, against the Eisner & Mendelson Company, importers and wholesale dealers, to enjoin the defendant from selling any water under a name in which the word 'Hunyadi' occurs, or making use in the sale of bitter waters of labels, in form, color, design, and general appearance, imitating the labels used by plaintiff in the sale of Hunyadi Janos water.

The bill averred in substance that plaintiff's husband, Andreas Saxlehner, was, until May 24, 1889, the proprietor of a certain well within the city limits of Buda-Pesth, and that in 1863 he began to sell the waters of the same in the market under the name or trademark of 'Hunyadi Janos;' that as his business increased he acquired additional territory, opened new wells, adopted a novel style of bottles and a peculiar label, and that the water soon became known in all the markets of the world under the name of 'Hunyadi Janos,' or in England and the United States under the name of 'Hunyadi' alone; that in March, 1876, Saxlehner entered into a contract with the Apollinaris Company of London, under which such company was given the exclusive right to sell this water in Great Britain and the United States, and that such contract was not terminated until March, 1896; that this company used a label of similar design, but of different color, and that large quantities of this water were exported by Saxlehner through such company and sold in the United States under the name of Hunyadi water; that Saxlehner died May 24, 1889, and plaintiff succeeded him in the business; that prior to his death Saxlehner obtained the registration in the Patent Office of the name 'Hunyadi' as his trademark; that the defendant, knowing of these facts, had unlawfully imported and sold bitter water not coming from plaintiff's wells, in bottles of identical shape and size as those used by plaintiff, and with labels in 'close and fraudulent simulation of your orator's trademark,' but under the name of 'Hunyadi Laszlo' or 'Hunyadi Matyas,'-all in defiance of plaintiff's right, and with the design of imposing the waters upon the public as those of the plaintiff.

The answer denied the material allegations of the bill, and averred that in the year 1873, one Ignatius Markus, being the proprietor of a certain well within the limits of Buda-Pesth, applied to the proper authorities and was granted the registration of the name 'Hunyadi Matyas' as a denomination of the waters of his spring, such authorities holding that the name was distinguished from that of the 'Hunyadi Janos;' that 'Hunyadi Janos' when anglicized, is John Hunyadi, the name of a celebrated Hungarian hero, and that the name 'Hunyadi' is a common one in Hungary, and means of or from Hunyad, and that for this reason it is of itself incapable of exclusive appropriation by anyone, being a common descriptive personal name, and also used to designate certain districts and towns in Hungary; that in the year 1889 the word had become a generic term, describing a kind of bitter aperient water, the peculiar product of a large number of wells in Hungary; that the shape of the bottle and the peculiarities of the label have become common property, and were adopted by everyone who sold the Hunyadi water, whether under the name of 'Hunyadi Janos,' 'Laszlo,' 'Matyas,' 'Arpad,' etc., and that to the time of his death Saxlehner had never asserted or made any claim to the exclusive use of his style of bottle, or capsules, or labels; that in 1886 or 1887 the Apollinaris Company brought suit against the American agents of several of these waters and obtained temporary injunctions, which were subsequently dissolved upon evidence that the word 'Hunyadi' was used in Hungary as part of the name of a number of different mineral waters, that Saxlehner refused to join with or aid the Apollinaris Company in opposing a dissolution of such injunctions, and that thereafter these waters were sold freely, openly, and continuously in competition with the 'Hunyadi Janos' in the bottles and with the labels and capsules affixed thereto as before stated, with the knowledge, consent, and acquiescence of Saxlehner and his agents; that defendant, a Pennsylvania corporation, entered into a contract with the owners of the 'Hunyadi Matyas' spring, and obtained the exclusive right to import their waters into the United States for the term of twenty-five years; that in 1890 it began to sell this water in like bottles and with like capsules and labels affixed thereto as now claimed by the plaintiff herein to be in violation of her claimed rights, which bottles, capsules, and labels were similar to those in which the said 'Hunyadi Matyas' water had been first imported, and that this was done with the consent of the American agent of the Apollinaris Company, who expressly stated that he had no objection to the label used by the defendant, nor to the way in which it was advertising the 'Hunyadi Matyas' water; that in 1889 it also became the agent for sale in the United States of the 'Hunyadi Arpad,' 'Hunyadi Laszlo,' and 'Hunyadi Bela' waters, and began to sell the same in large quantities; that these waters were put up for sale and sold in bottles similar to those of the 'Hunyadi Janos,' with like capsules and labels; that these waters were sold in open competition with the 'Hunyadi Janos' until sometime in 1893, when plaintiff stopped said competition in part by purchasing the Arpad and Bela springs, and thereupon revoked the agency of the defendant to sell such waters; that in 1877 Saxlehner applied to the Commissioner of Patents for the registration of the words 'Hunyadi Janos' as a trademark; that such trademark was registered September 11, 1877, by which proceeding he abandoned all claim and assertion of right to the word 'Hunyadi' in and of itself, and that it had for many years previously been a generic term to designate this class of waters. The answer further alleged that the defendant, in order to designate the waters sold by it, and to secure additional protection to the label used by it, registered the trademark 'Hunyadi Matyas,' since which time the defendant has used such trademark as stated therein, and in accordance therewith.

As the case depended almost wholly upon questions of fact, a somewhat elaborate statement of the evidence becomes necessary.

In 1862, Andreas Saxlehner discovered within the city limits of Buda-Pesth, Hungary, in a valley surrounded on all sides by hills acting as a natural barrier, secluding it from the outer world, a spring which was named by him the 'Hunyadi' spring, and on January 19, 1863, the municipal council of Buda granted him permission to sell the water taken from such spring and to give the spring the name of 'Hunyadi,' upon the payment of a small sum of money for hospital purposes. Soon after this he began to bottle the water of his spring and to sell it under the arbitrary name or trademark of 'Hunyadi Janos;' in other words, John Hunyadi, a Hungarian hero of the fifteenth century. Several wells were subsequently sunk by him in the same valley to the number of about 112, all of which produced water substantially of the same chemical combination, which is led through a system of pipes to large subterranean cisterns, from which it is taken and bottled. It soon began to be exported beyond the limits of Hungary to other European countries, and also to the United States.

Saxlehner was not, however, the first one in Hungary to put up the bitter waters with which that kingdom abounds, but others were already sold in the market, one of them being called 'Hildegarde,' and another 'Franz Deak.' Different bottles and labels were used for these waters, when Saxlehner adopted, in conjunction with the distinctive name of 'Hunyadi Janos,' a novel style of bottle of straight shape with a short neck, to the top of which was attached a metal capsule bearing the inscription 'Hunyadi Janos, Budai Keser uviz Forr as,' meaning 'Hunyadi Janos, bitter water of Buda,' together with a supposed portrait of the hero stamped thereon. He also adopted a peculiar label covering almost the whole body of the bottle, divided into three longitudinal panels, the middle one of which bore the same portrait in a medallion, with the name of 'Hunyadi Janos' written in large letters on the top of the label, the color of the middle panel being a reddish brown and the outer panels white. As this water was exported to and sold in the various countries of the world, a different custom concerning its appellation sprung up in different countries, the Latin races using the word 'Janos' as the common appellation of the water, it being known as 'Eau de Janos' or 'Aqua di Janos,' while in England and the United States of America the name of 'Hunyadi' became its common appellation, it being known as Hunyadi water.

In 1872, it seems that one Ignatius Markus discovered a spring upon a plot of ground leased by him, which also produced bitter water of similar quality, and shortly thereafter petitioned the municipal council of Buda, not only for permission to sell the water, which was unconditionally granted upon the report of the town physician concerning the quality of the water found, but also to be allowed to name this spring 'Hunyadi Matyas,' and to bring the water into commerce under that name. This was denied, upon the petition and protest of Saxlehner, who claimed the exclusive right to the use of the name 'Hunyadi.' It was said that the granting of the denomination 'Hunyadi Matyas' to another spring 'would very likely, nay certainly, lead, both between the owners of the two springs and among the consuming public, to unpleasant misunderstandings, which it is the duty of the authorities to avoid, and even to prevent. And further, the fact that petitioner, notwithstanding the many designations at his disposal, seeks to apply the name 'Hunyadi' to his spring, undoubtedly shows the not very noble intention on his part to avail himself of the great diffusion and good renown enjoyed by the Saxlehner Hunyadi Bitter Spring, both at home and abroad, which, however, cannot be tolerated by the authorities, and in the present case all the less, as it is a well-known fact that Mr. Saxlehner was able to secure this good renown to his spring only through many years' labor and at considerable expense.'

On a petition in appeal, however, to the minister of agriculture, in 1873, the decision of the council, which denied to Markus the permission to use the name 'Hunyadi Matyas' was reversed because of certain omissions by Saxlehner to conform to the local laws, and also because 'Hunyadi Janos' and 'Hunyadi Matyas' 'represent two quite clearly different names, which may stand without any infringement to each other.' This spring was afterwards registered in Buda-Pesth by the name of 'Hunyadi Matyas,' and thereupon the proprietors of other wells began to sell their waters in Europe under the name of Hunyadi with an added name, and also with the use of a close imitation of the red and white labels. It did not appear, however, that Markus sold any water or made use of the permission granted to him by the minister, or obtained a license from the local authorities; but in 1876, the firm of Mattoni & Wille became the purchasers of the plot of ground leased by Markus and several other adjoining plots containing springs, and in that year registered a separate trademark and name for each of the six springs which they then acquired, among which was a trademark bearing the name 'Hunyadi Matyas.' In 1877 they began selling these waters in Hungary, claiming certain specific differences of composition of the various waters which recommended them for different purposes.

In February, 1876, Saxlehner made a contract with the Apollinaris Company, Limited, of London, by which that company agreed to purchase a certain quantity yearly, and Saxlehner bound himself for a term, which finally expired in 1896, to give the company the exclusive right to sell his 'Hunyadi Janos' water in Great Britain, United States, and other transmarine countries. The company agreed to purchase at least 100,000 bottles yearly until 1878, and at least 150,000 bottles thereafter at a stated price. In addition to this Saxlehner agreed not to fill any orders coming from the territory granted to the company, but to make them over to the company. A special label was designed to be used on the bottles sold by the company of substantially the same contents and characteristics, but of a different color, the body of the label being a dark blue, with a red or reddish brown central field. A narrow strip on the top of the label contained the name of the Apollinaris Company as the importer, and from the making of this contract large quantities of water bearing this label were exported and sold in the United States under the name of 'Hunyadi Janos,' or the shorter name 'Hunyadi.'

After April, 1889, and until the cancelation of the contract in 1896, this company placed upon each bottle of Janos water which it sold in this country a red diamond containing these words: 'The red diamond is the trademark of the Apollinaris Company, Limited, and is meant only to indicate that the mineral waters so marked are sold by the Apollinaris Company, Limited.'

In 1887, Saxlehner caused the name 'Hunyadi' to be registered separately from 'Janos' as a trademark in the United States Patent Office. In the statement accompanying this registration he was again careful to refer to the red and white or red and blue label upon which said trademark was used by him, and to repeat the caution that he did not in anywise intend by said registration to abridge his right to the exclusive use of said label as a whole, or to any of its features.

The Apollinaris Company embarked in the business of selling Hunyadi Janos water in the United States, but met with competition from one Scherer, who imported the water under the red and white label from Europe, buying it from parties who had purchased it from Saxlehner. The company sought to enjoin Scherer from so selling upon the ground of its exclusive right within the United States, but failed in the suit. The case was decided in 1886, and reported in 27 Fed. Rep. 18.

In the same year Mattoni & Wille of Buda-Pesth consigned to one Andres in New York 121 cases of Hunyadi Matyas water taken from one of four springs PURCHASED BY THEM, ONE OF WHICH WAS THE original markus spring above mentioned.

About the same time the firm of Ignatz Ungar & Son began to sell waters from a spring owned by them, which was designed 'Hunyadi Arpad,' through one Joseph Ungar as their agent. This water was put up in an imitation of Saxlehner's red and blue labels. The Matyas water was also put up in red and white labels of similar design. Suits were brought against them in 1886, in the circuit court of the United States, by the Apollinaris Company to enjoin the use of the name 'Hunyadi' and of the labels. These suits were, however, withdrawn for want of jurisdiction, and two other cases, one against Andres and the other against Ungar, were brought by the Apollinaris Company in the supreme court of the state. Ex parte injunctions were issued in each case in February, 1887, and remained in force until July, 1888, when the injunction in the Ungar suit was dissolved upon application of the defendant, and soon thereafter the Andres suit was voluntarily discontinued. Saxlehner appeared to have had no knowledge of these suits, although an effort was made, which the court below found to have been unsuccessful, to show that he was notified of the motion to dissolve the injunction, and refused to assist in opposing it. The defendants in these suits seem to have relied largely upon the fact that, under the laws of Hungary, as they then were, they had a right to make use of the word 'Hunyadi,' provided they annexed thereto as a suffix a word different from 'Janos,' as, for instance, 'Matyas' or 'Arpad,' and that, having obtained permission by royal grant to make use of these names in Hungary, they were entitled to make use of the same names in other countries.

In the meantime, however, and in 1887, Saxlehner instituted another suit in Hungary to enjoin the use of the name 'Hunyadi' as applied to a water sold there called the 'Hunyadi Josef.' He was again unsuccessful, not only in preventing the use of the word 'Hunyadi,' but even in preventing the use of colorable imitations of his red and white label, apparently on account of the lack of efficient statutes upon the subject of trademarks. As one of the witnesses, Saxlehner's son, states, he was advised by his lawyer that before 1890 there was a statute which gave protection against so-called counterfeit or imitation labels and against literal imitations, but not imitations which were similar merely.

In 1890, a statute was passed which gave a protection to pictorial trademarks only, but not to trademarks designated by name. Plaintiff, whose husband died in 1889, at once took advantage of this statute, and instituted suits against Mattoni & Wille, as well as a number of other infringers. In 1895, another act was passed giving protection to verbal trademarks. The suit against Mattoni & Wille resulted in an order of the minister of commerce, November 26, 1894, canceling the several trademarks of Hunyadi Matyas water, 'because, according to the opinion of three experts consulted by the chamber, such trademarks are similar in composition, design, and color, and also for general impression, to the trademarks previously registered for the firm Saxlehner, and have been found to be imitations of the same and apt to mislead the public.'

A similar suit instituted by plaintiff against the Compagnie G en erale d'Eaux Universales et de Bains de Mer resulted in a similar decree canceling the Hunyadi Laszlo label, 'because of the three experts consulted, two have pronounced same to be entirely similar to the trademark registered for Saxlehner, and the danger of misleading is greatly augmented by the fact that on this trademark the name 'Hunyadi' is applied in a prominent place.'

The sale of the Hunyadi Laszlo water seems to have been practically stopped by this decree, but notwithstanding the decree against them of November 26, 1894, Mattoni & Wille continued to use the name Hunyadi Matyas separate from the label, and exported water as before to the defendant in this suit with red and blue labels, which were not registered in Hungary.

In 1895, however, another act was passed in Hungary for the registration of words or names as trademarks. Plaintiff took advantage of this, registered the name 'Hunyadi' as a trademark, and promptly instituted another suit against Mattoni & Wille, which resulted, in 1896, in another decree canceling, not only the illustrated trademarks, but the verbal trademark 'Hunyadi Matyas,' and awarding to the plaintiff a priority of right to the exclusive use of the words 'Hunyadi Janos' and 'Hunyadi' alone, both as a commercial denomination as well as a trademark. In the decree of the minister the prior decree of the minister of agriculture of the year 1873, legalizing the use of Hunyadi Matyas, was referred to and treated as superseded by the laws of 1890 and 1895. 'There is,' says he, 'therefore absolutely no connection between that decision and the case now under consideration.' Similar decrees were rendered the same year against other defendants who sought to appropriate the name Hunyadi, including 'Hunyadi Josef,' against which Saxlehner had been unsuccessful in 1887; Hunyadi Lajos' and also 'Uj Hunyadi' or new Hunyadi, whose litigation against Saxlehner seems to have been carried on in the interest of the Apollinaris Company.

In fact, this litigation seems to have resulted in a complete vindication of the right of Saxlehner to the use of the word 'Hunyadi.'

Promptly upon the rendition of these decrees, and early in 1897, this suit, as well as the others hereinafter mentioned, was instituted.

The case came on for hearing before the circuit court upon pleadings and proofs, and resulted in a decree enjoining the defendant from selling, or offering for sale, any bitter water not coming from the 'Hunyadi Janos' wells of the plaintiff in bottles of a straight shape, with a short neck, and bearing labels in color, size, shape, and general design so closely similar to plaintiff's said label as to be calculated to deceive, but permitting the defendant to make use of the name 'Hunyadi' as a prefix to some other name than 'Janos,' and denying the injunction demanded by the plaintiff against the use of the name 'Hunyadi.' 88 Fed. Rep. 61.

On appeal to the circuit court of appeals, the decree of the circuit court was affirmed as to the name 'Hunyadi,' but reversed as to the label, and the bill dismissed. 63 U.S. App. 139, 145, 91 Fed. Rep. 536, 33 C. C. A. 291.

Messrs. Antonio Knauth, John G. Johnson, Joseph H. Choate, and Arthur Briesen for petitioner.

Messrs. Charles G. Coe and Edmund Wetmore for respondent.

Mr. Justice Brown, after stating the case as above, delivered the opinion of the court: