Spieker v. Lash

California Supreme Court Mar 28, 1894 No. No. 18195Published

Before: Vancliff

AI Brief

AI-generated · verify before citing

Holding. The court held that while a party may not be enjoined from manufacturing a similar medicinal preparation, they may be enjoined from using their own name or imitating labels in a manner that infringes upon a transferred trademark or constitutes unfair competition. The judgment was modified to narrow the scope of the injunction to specifically prohibit trademark infringement and deceptive trade practices rather than the manufacture of the product itself.

Issues

Whether the defendant may be enjoined from using their own name or firm name to sell a similar medicinal preparation after transferring the original trademark and goodwill.
Whether the defendant's use of labels and business practices constituted an infringement of the plaintiff's trademark and unfair competition.
Whether the original injunction granted by the trial court was overly broad in prohibiting the manufacture of the competing product.

Disposition. modified and affirmed

Quotations verified verbatim against the opinion

“the defendants, T. M. Lash and wife, expressly transferred all their rights in that trademark to the plaintiff, and therefore may properly be enjoined from the use of any label which indicates that medicine of the same nature is prepared”

“A competing business firm is bound to deal fairly in placing its rival article upon the market; and if it clearly appears that the defendant has closely imitated the plaintiff’s labels and style, and has done obvious damage”

“The plaintiff is not a patentee of the preparation manufactured and sold by him; and defendants cannot be enjoined from the manufacture and sale of that or any similar preparation.”

Synopsis

Trademark—Proper Subjects.—Words merely descriptive of the thing manufactured are not the proper subjects of a trademark, but the name of the maker, and every device in the form and contents of a label or wrapper affixed to denote that goods are manufactured, produced, compounded, or sold by him, other than a name, word, or expression denoting that the goods are of some particular class or description, are proper subjects of a trademark.

Id.—Assignment of Trademark—Protection of Assignee—Injunction. When the claimant has secured a trademark or name by filing with the secretary of state his claim to the same, and otherwise complying with section 3197 of the Political Code, he may transfer the same, .and the right to the exclusive use thereof, to another, and the property right so transferred will be protected from infringement by injunction.

Id. —Improper Use of One’s Own Name.—The improper use of one’s own name may be enjoined, where, for a valuable consideration, he has voluntarily sold a trademark of which his name forms an essential part, and the goodwill of a partnership business in which his own name is the leading and characteristic designation of the firm.

Id.—Imitation of Labels—Fraud.—Apart from the infringement of a valid trademark, a competing business firm is bound to deal fairly in placing its rival article upon the market, and if it clearly appears that the defendant has closely imitated the plaintiff’s labels and style, and has done obvious damage to the latter’s business through the unlawful business methods employed, the plaintiff is entitled to relief upon the ground of fraud.

Id.—Injunction Restraining Use of Name.—Injunctions may be issued to restrain the use of one’s own name where such use is made with such additions as to intentionally deceive the public, and make them believe he is selling the goods of another.

Id.—Manufactube and Sale of Medicinal Pbepabation—Tbadehabk —Goodwill—Injunction.—A plaintiff who is not a patentee of a medic, inal preparation sold by him, but is merely the assignee of a trademark of such preparation, and of the goodwill of the firm which originally manufactured it, cannot maintain an injunction against his assignor, to prevent the manufacture and sale of that or any similar preparation; but may enjoin the use of labels by his assignor infringing the trademark, or constituting a colorable imitation of his labels, the resemblance being such as to justify the conclusion that they were intended and adapted to mislead the public, and to injure the plaintiff’s business, and may prevent the defendant from drawing off the plaintiff’s patrons and customers.

Vancliff, C. Suit in equity to enjoin the infringement of a trademark and the diversion of the trade or custom of the plaintiff to whom had been transferred the goodwill of the business in which the trademark had been acquired and used.

The complaint contains two counts, the first alleging an infringement of plaintiff’s trademark and proprietary name, “Lash’s Kidney and Liver Bitters”; and the second, a cause of action for breach of warranty implied in a sale of the goodwill of the business, which included the manufacture and sale of said bitters.

In the year 1884 the plaintiff and defendant formed a partnership at Sacramento under the firm name of T. M. Lash & Co., in the purchase and sale of drugs and medicines, and the manufacture and sale of medicinal preparations.

In 1886 they made up a formula for a medicinal preparation of bitters principally intended to benefit the kidneys and liver, and gave it the name “Lash’s Kidney and Liver Bitters”; and thereafter the partnership of T. M. Lash & Co. built up a large and profitable [42]business in the manufacture and sale of that preparation. The preparation was not patented, but the firm registered a trademark thereof in the office of the secretary of state. In carrying on the business of the firm, Spieker remained at the store and attended to the business of manufacturing and filling orders for the bitters, while Lash traveled over the country advertising the bitters and securing orders therefor.

On November 9, 1889, the firm of T. M. Lash & Co. was dissolved by consent of the partners, and all the interest of Lash in the property of the firm was transferred by him to Spieker. It is alleged in the complaint, and admitted by the answer, and found as a fact by the court, that this transfer included the goodwill of the business. On October 31, 1889, T. M. Lash and his wife, Jennie Lash, transferred to Spieker the trademark of “ Lash’s Kidney and Liver Bitters,” together with the right to use the same, and covenanted to warrant and defend the same.

In July, 1890, T. M. Lash commenced, at Sacramento, to manufacture a preparation similar to “ Lash’s Kidney and Liver Bitters,” which he called “Dr. Web’s Liver and Kidney Bitters,” and soon afterwards formed a partnership with his wife under the name “ T. M. Lash & Co.” for the purpose of manufacturing and selling the same. On the back label of this preparation he thereafter described himself as “ T. M. Lash, manufacturer of Dr. Web’s, the only genuine, Liver and Kidney Bitters,” and notified the public to address all orders, “ T. M. Lash & Co., Proprietors, 923 K street, Sacramento, Cal.”

Spieker v. Lash

AI Brief

Synopsis

More from California Supreme Court

Related research

AI Brief