PHILLIPS, Circuit Judge.
Philip Freiler was engaged in the wholesale liquor business at Elgin, Illinois, from 1883 to 1914. During that period he purchased whiskey from distillers and sold it at wholesale under the trade-mark "Century Club." On March 19, 1907, Freiler registered the mark "Century Club" for distilled alcoholic liquors on an application filed April 20, 1905. Elgin became dry
Century Company was organized under the laws of Illinois on November 1, 1933. It built a modern distillery at Peoria, Illinois, completing it in January, 1934, and engaged in the distillation of whiskey, gin, and other alcoholic liquors.
On July 25, 1934, the Supply Company, by written assignment, transferred to the Century Company its registered mark "Century Club" and the good will associated with that mark.
Ph. Schneider Brewing Company,
Since 1934 the Century Company has carried on a nation-wide business in whiskey, gin, and other distilled alcoholic beverages identified by the mark "Century." Its products are well known and highly esteemed by the trade and public in general. Its sales have aggregated in excess of $3,000,000. It expends $150,000 annually in advertising its brands "Century" and "Century Club," and those brands are well known throughout the United States.
Since 1908 the Schneider Company has expended the sum of approximately $30,000 annually in advertising "Century" beer and "Century" near beer.
On April 13, 1936, the Century Company applied to the United States Patent Office for registration of the trade-mark "Century" for gin. The Patent Office placed the application in interference with the registration of the Schneider Company of the mark "Century" for nonalcoholic cereal malt beverages. On May 17, 1938, the Examiner of Interferences decided the interference in favor of the Schneider Company. The decision of the Examiner of Interferences was affirmed by the Assistant Commissioner of Patents on October 28, 1938. Thereafter, counsel for the Schneider Company wrote letters to a number of the Century Company's customers in Wyoming and Colorado asserting that the
The Century Company does not now and never has engaged in the manufacture or sale of cereal malt beverages, and the Schneider Company does not now and never has engaged in the manufacture or sale of distilled alcoholic liquor.
The Century Company brought this suit against the Schneider Company to establish its right to use the mark "Century" on distilled alcoholic beverages and to enjoin the Schneider Company from interfering or attempting to interfere with such use. The Schneider Company filed an answer and cross-bill in which it sought to establish its exclusive right to use the mark "Century" on alcoholic beverages, including beer, whiskey, and gin, and to enjoin the Century Company from using the mark "Century" or any colorable variation thereof.
At a pretrial conference a stipulation was entered into which reads in part as follows:
"The first user of the trademark `Century' or `Century Club' for distilled alcoholic liquors was Philip Freiler of Elgin, Illinois, who used `Century Club' on whiskey as early as May 1, 1883, and established it as a well known brand which had a wide distribution primarily in the states of Illinois, Wisconsin, Minnesota, Iowa, Indiana and Michigan. He continued its use on whisky until the year 1914 when the City of Elgin voted dry under local option and he was compelled to discontinue the liquor business there. * * *
"By reason of plaintiff's wide use and exploitation of the trademarks `Century' and `Century Club' in connection with whisky, gin and alcohol, said trademarks, as applied to such products, are the means by which they are identified and distinguished by the trade and public from whisky, gin and alcohol produced by others; and as to whisky, gin and alcohol, the trademarks `Century' and `Century Club' refer and are understood by the trade and public to refer only to plaintiff's goods."
The following is a label used by the Century Company and is typical of the other labels used by that company:
It will be observed that the name and location of the Century Company prominently appear on the label.
The following is a label used by the Schneider Company and is typical of the other labels used by that company:
It will also be observed that the name and location of the Schneider Company prominently appear on the label.
The labels used by the two companies bear no resemblance, except both employ the word "Century."
The trial court found the facts as above stated. It entered a decree by which it adjudged that the Century Company is the owner of the mark "Century" as applied to distilled alcoholic beverages, including whiskey, gin, and alcohol, and is entitled against the Schneider Company to the exclusive use of the mark "Century" as applied
A trade-mark is a right appurtenant to a business or trade in connection with which the mark is employed. The right to a particular mark grows out of its use. Its function is to designate the goods as the product of a particular trader and to protect his good will against the sale of another's product as his. United Drug Co. v. Rectanus Co., 248 U.S. 90, 97, 39 S.Ct. 48, 63 L.Ed. 141.
The United States statutes, 15 U.S. C.A. § 81 et seq., providing for the registration of trade-marks and the assignment of registered trade-marks neither confer nor limit substantive rights. They merely confer certain procedural advantages to the registrant. The substantive rights are determined wholly by common-law principles.
15 U.S.C.A. § 90 provides for the assignment of a registered trade-mark by an instrument in writing duly acknowledged. It follows that the sale from Freiler to Klein did not pass Freiler's registered trade-mark. But Freiler's commonlaw right will be presumed to have passed without formal assignment, absent contrary evidence, with the sale and transfer to Klein of the business with which the mark had been identified.
When Klein organized the Supply Company in 1933 as a family corporation, it continued the use of the mark with the implied consent of Klein and acquired the equitable right to the use of the mark, although no formal transfer was made from Klein to the Supply Company.
It may be stated as a general rule that a trade-mark may not be assigned in gross. It cannot be assigned separate and apart from the good will with which it is associated. But where the mark only identifies a portion of the goods sold by a particular trader who is not the manufacturer thereof, the mark may be assigned, along with the good will associated with the goods which the mark identifies, to a person who will continue to sell the same goods, without a transfer of the remainder of the business or the physical plant of the assignor.
We conclude that the assignment from the Supply Company to the Century Company was valid and carried with it the common-law right acquired in the mark, first by Freiler, and later by Klein and the Supply Company.
Finally, we are of the opinion that no confusion of goods is likely to result from the use by the Century Company of its labels employing the word "Century" on distilled alcoholic liquors, and the use by the Schneider Company of its labels employing the word "Century" on cereal malt beverages. The test is whether the similitude in the labels would probably deceive a purchaser who exercises ordinary prudence, not the careless buyer who makes no examination.
The decree is affirmed.
Anheuser-Busch, Inc., v. Cohen, D.C. Md., 37 F.2d 393, 396;
In re Plymouth Motor Corp., Cust. & Pat.App., 46 F.2d 211, 212;
Andrew Jergens Co. v. Woodbury, Inc., D.C.Del., 273 F. 952, 965; Id., 3 Cir., 279 F. 1016.
Replogle v. Airway Co., 52 App.D.C. 364, 287 F. 765, 767;
Woodward v. White Satin Mills Corp., 8 Cir., 42 F.2d 987, 989.
Menendez v. Holt, 128 U.S. 514, 522, 9 S.Ct. 143, 32 L.Ed. 526;
Brown Chemical Co. v. Meyer, 139 U.S. 540, 548, 11 S.Ct. 625, 35 L.Ed. 247.
Tennant v. Dunlop, 97 Va. 234, 33 S.E. 620, 626;
Witthaus v. Braun, 44 Md. 303, 306, 22 Am.Rep. 44.
See, also, The Assignment of Trade-Marks and Trade Names by Mr. Grover C. Grismore, Mich. Law Rev., Vol. 30, No. 4, p. 489.
In Tennant v. Dunlop, supra, the court said:
"That the good will of a business and trade-marks of the character under consideration, which are incidents of the business, and not of the place of business or plant, with the right to use the latter in the manufacture or sale, as the case may be, of the merchandise to which they have been attached, may be sold separately from the plant or property, and also from the book debts, is, we think, not only sustained by the authorities, but is in accord with the tendency of the law, which is yet in a state of evolution, upon the subject of trade-marks, and their growing importance and increasing value in the commercial world.
"In Browne, Trade-Marks, § 362, the law is thus stated: `A property in a trade-mark may be obtained by transfer from him who has made the primary acquisition, though it is essential that the transferee should be possessed of the right either to manufacture or sell the merchandise to which the trade-mark has been attached.'"
In Witthaus v. Braun, supra, the court said:
"The mere sale of a trade-mark apart from the article to which it is affixed, confers no right of ownership, because no one can claim the right to sell his goods, as goods manufactured by another. To permit this to be done, would be a fraud upon the public. But where as in this case, the trade-mark is assigned to the person who manufactured the tobacco, to which the trade-mark was affixed, there is no false representation to the public, because the tobacco is still manufactured at the same place, and by the same person. It is in fact, the same article."
Turner & Seymour Mfg. Co. v. A. & J. Mfg. Co., 2 Cir., 20 F.2d 298;
American Tobacco Co. v. Globe Tobacco Co., C.C.Mich., 193 F. 1015;
63 C.J. p. 400, note 60.