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DU PONT CELLOPHANE CO. v. WAXED PRODS. CO.

May 11, 1934

DU PONT CELLOPHANE CO., Inc.,
v.
WAXED PRODUCTS CO., Inc.



The opinion of the court was delivered by: CAMPBELL

CAMPBELL, District Judge.

This is an action brought by the plaintiff for the alleged infringement by the defendant of a trade-mark of the plaintiff, "Cellophane," by using the same in connection with goods not of plaintiff's manufacture, in which plaintiff seeks an injunction.

Plaintiff is a Delaware corporation, and a wholly owned subsidiary of E. I. DuPont de Nemours & Co.

 Defendant is a New York corporation, a citizen of the Eastern District of New York, a wholesaler and converter of transparent sheets.

 The defendant purchases goods from Sylvania Industrial Corporation, which is one of the plaintiff's principal competitors, and admits that Sylvania Industrial Corporation manufactures the material which was sold by the defendant as alleged in the complaint.

 It is admitted by the defendant that attorneys selected and paid by Sylvania Industrial Corporation, and not by defendant, are defending and guiding this suit.

 That plaintiff claims Cellophane as its trade-mark is known to defendant, but on calls for Cellophane defendant sells the product of Sylvania Industrial Corporation as Cellophane, but bills it as cellulose.

 In addition to the formal allegations, the complaint alleges that plaintiff owns the registered trade-mark Cellophane, and complains of substitution of merchandise not manufactured by plaintiff on calls for Cellophane, representation that merchandise other than plaintiff's is Cellophane, infringement of plaintiff's trade-mark rights, and facilitation of substitution and passing off by causing transparent wrapping, not of plaintiff's manufacture, to be put up in such a manner as to make it difficult, if not impossible, for the public to identify its source, that defendant threatens to continue these acts, and the damage resulting will be irreparable.

 The defendant by its answer denies these essential allegations, both as to ownership of the trade-mark and as to defendant's acts, but admits that the defendant has supplied a product not plaintiff's to customers ordering Cellophane.

 The amended answer alleges the following as separate defenses:

 (1) Cellophane is the generic name of a product manufactured under certain expired patents; (2) irrespective of said patents, it is the only descriptive and generic name used by the public for this product and plaintiff itself has so used it; (3) if Cellophane ever was a valid trade-mark, it has been abandoned through the descriptive use made of it by plaintiff, and its acquiescence in such use by others; and (4) plaintiff is estopped to deny Cellophane is the generic name of a product.

 I find the following facts:

 Dr. Little, an American chemist, in the year 1892, knew of film of hydrated cellulose and other material. He actually made it in the same year, in connection with the American Viscose Company and the Cellulose Products Company.

 Cross and Bevan, English chemists, applied for an received, in 1894, a United States patent for what they described as "plastic compound of cellulose," and stated that this compound of cellulose might be rolled in sheets, and was afterwards called viscose.

 Cross and Bevan, in 1893, applied for and later received a patent for the "modification of cellulose" obtained from the above compound and adapted to be manufactured into sheets. It contained glycerin for softening purposes.

 Dr. Cohoe, an American chemist, knew of transparent sheets and the terms "transparent foil," "film," and "sheets."

 Dr. Little, in 1897, demonstrated transparent cellulose hydrate sheets which he had made himself at the Franklin Institute, an account of which appeared in the Journal of that Institute.

 Dr. Little said that in 1898 "there was an extraordinary amount of industrial interest in viscose all over Europe * * * the properties of the material were exceedingly well known."

 Stearn, in 1898, applied for and later received a British patent for the manufacture of a film of cellulose.

 Chorley, in 1899, applied for and later received a British patent for making cellulose film.

 Little went to England in 1899 to investigate the viscose industry and saw the Chorley process in actual operation, in the Manchester Viscose Company plant, turning out cellulose hydrate films, glycerin being used as a softener, and the material being transparent.

 The written report, of 425 pages, made by Dr. Little, which is in evidence, states in part: "The manufacture of continuous films of cellulose has been developed by Mr. Chorley as chemist for the Manchester Viscose Co., Ltd., and a thoroughly practical and well-designed machine has been evolved and is now set up and in operation at the small plant of the company in Manchester * * *." "The most important use which has thus far been proposed for these films is for soap wrappers in place of tinfoil, and the company is in receipt of a request from Mr. A. Pears, who desires to use large quantities of the films, and has expressed his willingness to pay two shillings a pound for them * * *."

 The film which Dr. Little saw manufactured in England was substantially the same as that produced by plaintiff to-day.

 In his said report Dr. Little recommended the acquisition of the rights to the use of the continuous film machine for the United States, gave complete details of the Chorley manufacture of continuous films, and a drawing of the machine.

 Stearn, in 1903, applied for and received a second patent for the manufacture of sheets or films from cellulose, and Dr. Little was acquainted with Stearn and familiar with his patents and processes.

 Cross and Bevan, in 1908, manufactured film, and Dr. Cohoe knew of a firm in Lyons, France, making transparent film prior to that year.

 The words "film," "foil," "sheets," "cellulose," "viscose," and "transparent" were all part of the English language at that time.

 The word "Cellophane" was coined prior to April, 1908, and its first use was as a trade-mark by Blanchisserie et Teinturerie de Thaon, of Thaon les Vosges, France, on its transparent film, which is thus described in an application for a trade-mark registration: "* * * cellulose sheets obtained by the regeneration and transformation of viscose whether transparent, opaque, colored, or uncolored."

 Brandenberger, in 1909, applied for and later received two United States patents, one for a machine, describing it as an "Apparatus for the continuous manufacture of cellulose films," and the other for "Manufacture of cellulosic films."

 Both were purchased by the plaintiff in 1923, and neither patent mentioned the term "Cellophane."

 Euler, in January, 1912, obtained an exclusive sales agency for the French company's product in the United States and Canada.

 Shipments were made by the French company to Franz Euler & Company, New York, in the form of rolls of one hundred pieces, three or four rolls to a case.

 Later, bundles of five hundred sheets were shipped.

 These packages bore a factory label, and sometimes were received in larger bales by Euler, broken up, and the small packages distributed, which packages also bore the factory labels, and sometimes shipments were made directly from the factory to Euler's customers in America, and these also bore the French labels.

 Henle Paper Company was one of these customers, and the witness Jacobson was from that concern.

 None of the original labels can be found, but they contained the name and address of the French company, Blanchisserie et Teinturerie de Thaon, the word "Cellophane," and French measurements. Jacobson of the Henle Paper Company remembers them, and says that they were similar to the later label which is in evidence as Exhibit 119, and I so find.

 This label was identified by Euler as having been first used between August, 1914, and April, 1917. Packages received by Henle Paper Company from Euler, bearing these factory labels, were shipped by that company to its customers with said labels, and without adding any other labels.

 Euler did not use any labels of his own which reached the consuming public; he "did distribute some small labels at one time with a slogan on it indicating that the material that was wrapped around that merchandise was La Cellophane."

 Blanchisserie registered Cellophane as a trade-mark in France, No. 245, dated March 25, 1912, in renewal of a prior registration made in the year 1908.

 Euler applied to register in Class 37, Paper and Stationery, the term "La Cellophane" for parchment tissue, on May 11, 1912.

 At that time Euler was the exclusive agent or distributer of the factory for the United States. The factory neither authorized Euler to register the trade-mark, nor even knew of the registration by him. He acted solely on his own responsibility.

 Blanchisserie, on August 2, 1912, applied under sections 1 and 2 of the Trade-Mark Act of 1905, as amended (15 USCA §§ 81, 82), based on a French registration No. 245, dated March 25, 1912, to register the word "Cellophane" in the United States as its trade-mark for cellulose sheets, claiming first use in its business since April 11, 1908.

 Euler issued a circular to his trade as follows: "'La Cellophane' (made in France) * * * a transparent parchment tissue paper of the highest merit. La Cellophane is imported only by Franz Euler & Co. * * * who are the representatives for the Cellophane factory of France in the United States and Canada. La Cellophane is registered in the United States Patent Office and infringers will be prosecuted to the fullest extent of the law. Every package or roll bears the Factory's label with the registered trade mark La Cellophane."

 Every package or roll carried the factory's label, "La Cellophane."

 At first Euler bought his goods in the open market in France.

 From the beginning until the purchase by DuPont, the word "Cellophane" was used only as a trade-mark on film sold in the United States by the French manufacturers, and by Euler as distributer, and by no one else except by persons whose use was promptly objected to by Euler, and without exception these persons respected his protest and stopped when objections were made by him.

 No film has been sold here at any time under the brand Cellophane, except goods of Blanchisserie and its successors.

 Euler always confined the word to the product of this one concern.

 Euler filed his trade-mark registration with customs authorities about this time, to protect his interest as importer of this material.

 Cross and Bevan's book was published in England in 1912. It stated at pages 161 and 162 (S7): "* * * the manufacture of cellulose film from viscose by continuous processes is a result attained only after long years of persistent study of the exceptionally complex technical problem * * *." "The viscose film (cellulose) under the powerful auspices of the Societe Industrielle de Thaon is at length a fait accompli, and is an article of commerce under the descriptive term Cellophane."

 Chemical Abstracts, published by the American Chemical Society, stated at page 2469: "The use of Cellophane for inclosing food substances * * *" "A favorable report to the Minister of Agriculture on this product, which is a thin cellulose membrane * * *."

 After 1912, others than Euler imported the material, but they did not get very much of it; that which Birn sold he secured through jobbers in Paris, Belgium, and Germany, as he was not able to buy direct from the French manufacturers at that time, and his business was very limited from 1913 to 1921. The film he imported carried the label "La Cellophane" from the beginning, and was manufactured by the French concern.

 Euler began in 1913 to advertise in the Confectioners' Journal, and continued this until January, 1917, and held himself out in such advertising as the exclusive agent of the French factory, pointing out that La Cellophane, described as transparent paper, is "made in France," and in connection with the name, the notice, "Reg. U.S. Pat. Off." In these advertisements, especially the issue of August, 1913, reference is made to the factory labels thus, "See that the factory labels state the quality number."

 Candy companies, which prior to this time had used gelatin paper, began to use transparent paper, and witnesses from two such companies testified. The witness Guth produced no specimens of advertising in which the word "Cellophane" appears, and his testimony as to uses is speculative.

 There is nothing in the Guth testimony to show any connection of plaintiff with such uses, or that those customers ever used the word "Cellophane" in a manner which would injure plaintiff's rights.

 Guth says that when he bought from Birn & Wachenheim he thought he was buying a DuPont product and adds: "I naturally always associated DuPont with Cellophane, * * * they did a great service to anybody that puts out package goods." He thought Sylvania was a part of DuPont's business, but remembers Fenestra as the trade-mark of Birn & Wachenheim.

 The witness Hinds, representing Daggett, the other candy manufacturer, testified that they did not begin to use the product before 1919.

 The Journal of Industrial and Engineering Chemistry, in June, 1913, under the heading "Cellophane," says: "Mueller regards Cellophane as 'Viscose' of the highest technical importance. The elasticity of Cellophane is said to be remarkable * * *. Cellophane is soluble in water and alcohol * * *."

 The Literary Digest of March 7, 1914, describes this film as a "novelty."

 The War interfered with Euler's importations, and this is indicated by his advertisements in December, 1914, January, February, and March, 1915.

 Birn says that Euler handled practically no Cellophane from the latter part of 1914 to 1921. This is denied by Euler, who says that from 1914 to 1921 they were the accredited agents of La Cellophane Company, and while their imports were restricted between 1914 and 1918, they continued up to 1921, and that he thinks they received all that came over, not during the entire time, but during the greater part of the time, and is corroborated as to this by Jacobson. Euler protested in writing to Birn & Wachenheim against their use of the trade-mark "Cellophane," and they stopped it.

 The French factory did not, between 1914 and 1920, so far as Euler knows, export direct to the United States except to him. After 1919, he also obtained the product of the factory through French jobbers. This product was always sold by Euler as Cellophane. Birn & Wachenheim and Bendix purchased a small amount from jobbers, even while Euler's agency existed. Euler notified competitors to stop the use of the term "Cellophane," and every one of them did so, and adopted trade-marks of their own.

 In the New York Times of March 11, 1915, is an article headed "Uses of Cellophane," which states: "Appraisers hold it should not pay duty as gelatin." Impressed with the great variety of uses to which an article known as "Cellophane" is put, the Board of General Appraisers sustained a protest by Franz Euler and Rose & Frank Company against Collector Malone's assessment on the product. Appraiser Sague reported that: "The merchandise consists of thin sheets of cellulose variously described as cellophane, flexoloid, dramantine, and brilliantine," and stated that its use is a substitute for thin gelatin sheets in wrapping various things.

 On December 31, 1915, the time limit of Euler's contract was reached, but his agency relationship with the factory continued.

 It was in 1915 or 1916 that Euler first learned of the registration of the trade-mark by Blanchisserie.

 From time to time from 1916 to 1923, Birn & Wachenheim, Catty, and Bendix imported some of the product from French jobbers, and, after 1920, sometimes from the factory; but seldom did more than one concern have it at the same time.

 They sold it under different trade-marks of their own creation some time during this period; that of Bendix Company being "Bendiphane," Catty used "Glassolyn," and Birn & Wachenheim, "Fenestra."

 On March 16, 1916, Laussedat, assignor to the French company, applied for, and in 1917 secured, a United States patent for a label for bottles and other receptacles, stating: "This invention relates to a label made of cellophane * * *." "The cellophane label could be put over some other label * * *." "The label could be stuck on the cellophane one." "The label * * * can be made of any other material than cellophane."

 Birn & Wachenheim, in 1917, began the use of "Fenestra" as their own trade-name, because, among other reasons, as stated by Birn, Euler had the name "Cellophane" copyrighted, and they did not want to get into any controversy with him. Euler continued to sell, and the demand so far exceeded the supply that advertising became unnecessary. Birn & Wachenheim used the trade-mark "Fenestra" on labels and bills, but they had no film business to speak of until 1921.

 Transparent film was used in the French Army and was considered for use in the American Army, the material used here coming from France.

 In a number of reports and letters in 1917 and 1918 from different government departments regarding gas masks, the word "Cellophane" was used, sometimes with capitals, sometimes with quotations, and sometimes with a small "c."

 A report dated November 10, 1917, in Chemical Warfare Service, vol. 1, part I, p. 6, states: "Cellophane is a French trade name for sheet cellulose * * *." Again the same statement is found at page 195, part II, of the same volume.

 Chemical Abstracts for October, 1919, p. 2490, published by the American Chemical Society, contained an article relating to photography, and used the word "cellophane" with a small "c."

 Technology of Cellulose Esters, vol. I, p. 3075, published in 1919, stated: "The viscose sheets of C. Stearn, F. Woodley, Brozykoski, and especially of E. Brandenberger, deserve mention. The product of the latter inventor, under the name of 'Cellophane' has found wide application as a wrapping material for the protection of packages * * * Flexoloid, Biophane, Dramantine, Brilliantine, and Visca are commercial names for similar products."

 The witness Hinds, of Daggett Chocolate Company, produced no records, and relied solely on his recollection as to how he used the word "Cellophane" in 1919, but says that in purchases from H.D. Catty Company he used the word "Cellophane," and later when Birn & Wachenheim came along, he called it "Fenestra," which was their trade-name.

 On March 18, 1920, Euler sent Pfaltz to France to re-establish his agency with the French concern, which, after seeing Pfaltz, wrote him asserting its ownership of the trade-mark and refusing to continue relations, unless Euler's registration was transferred to it as owner. Euler wrote the French concern refusing to transfer the trade-mark under the conditions stated in the letter of the French concern, which were that it would sell to Euler, but would not give him the agency.

 Euler continued to claim rights even against concerns that thereafter were appointed exclusive agents of the factory.

 Euler in his advertising in 1921 referred to his registration, and described the product as "transparent wrapper."

 Brandenberger, assignor to the French company, on January 25, 1921, applied for, and on February 17, 1922, received, a United States patent for bands of cellulosic material. In the specification he gave "cellophane," printed in this manner with a small "c," as an example of the cellulosic material which might be used in connection with his invention, and used descriptive terms such as "cellulosic material," and "transparent cellulosic material."

 Catty was given exclusive agency in the United States in 1921, but Euler thought it was in 1919 or 1920. Catty sold the French film under the trade-name "Glassolyn."

 In the transcript of record of Custom Appeal No. 2135, the protest of Roland Freres used a capital "C" for Cellophane, but in other places the word "cellophane" is sometimes used with a small "c." Catty testified in that proceeding that the product was sold under other names in the trade, such as "Glassolyn," "Fenestra" and "Flexoloid."

 Dr. Cohoe, in 1921 and 1922, exchanged letters with his partner, La Meistre, in which the word "Cellophane" was sometimes used with a capital "C," and sometimes with a small "c."

 Birn & Wachenheim, on January 1, 1922, obtained the factory agency in the United States, and held it until plaintiff took it over. They imported the genuine material, which from the beginning came wrapped in packages bearing labels marked "La Cellophane," and they resold it as "Fenestra," which they registered as their trade-mark, claiming use since 1917.

 The factory printed and distributed through Birn & Wachenheim about 10,000 circulars, dated January 1, 1922, which read: "La Cellophane * * * the ideal transparent wrapper, can be furnished in all sizes, in all colors, in thickness from 0.02-0.12 m.m., plain and embossed. Exclusive sale for the United States, Birn & Wachenheim, 121, 125 West 17th Street, New York City."

 The Confectioners' Journal for January, 1922, contained this advertisement: "Societe La Cellophane, France, announce Birn & Wachenheim, 121 West 17th Street, New York, their American agents. Fenestra is the trade name used in America."

 There is no evidence to connect the last recited advertisement with either Euler or the factory; on the contrary, the circular issued by the French company shows that the advertisement was not authorized by it. Euler protested against it. The advertisements by Birn & Wachenheim that followed in later months in the same publication show that they heeded that warning. That the advertisement in question emanated from Birn & Wachenheim is shown by their advertisements in February and March of that year. In October, 1922, they dropped all use of the word "Cellophane" and did not resume it.

 One, lader, bought this material from Birn & Wachenheim while they were agents, and later sold it to Euler, who in turn sold it as "Cellophane." Euler also bought at times from one Schick, who in turn bought from Amecousema, a French jobber.

 The Tariff Act of 1922 states (§ 1, par. 1213 [19 USCA § 121, par. 1213]): "Products of cellulose, not compounded, whether known as visca, cellophane, or by any other name * * *."

 On November 30, 1922, the Paper Trade Journal contained an article entitled "Cellophane, Its Properties and Methods of Testing," which stated: "Cellophane, which in Germany is called 'Cellulose-Glass Film,' is a product similar to our artificial silk, in the form of a sheet as in paper. * * * A plant has been erected in Germany for manufacturing cellophane which today is made solely by the Societe La Cellophane in Bezons, France." The word "cellophane" is used several times in this article with the small "c."

 In 1922 the name "DuPont" had become a most valuable trade-mark, identified with a large diversity of products. The name, in the oval, was advertised as a badge of quality, and many trade-mark names were advertised in connection with the word "DuPont." The DuPont name had a large sales value.

 The history of the DuPont oval as a trade-mark is given in the DuPont Magazine of September, 1925, and it had been in use for sixteen years.

 The DuPont business was founded in 1802, and in 1925 the company was the owner of many United States registered trade-marks and many foreign registrations, of which the oval was the best known. A number of trade-marks include the word "DuPont" and another word within an oval. In some cases the word used has been claimed as a trade-mark, i.e., "DuPont Cellophane," "DuPont Fabrikoid," and "DuPont Duco"; in other cases the word has been the name of a product, i.e., DuPont Rayon and DuPont Dyestuffs.

 Prior to August in the year 1923, the DuPont interests and the French interests owning the Thaon factory arranged to join forces and begin the manufacture of the material in America, and for this purpose a corporation, plaintiff's predecessor of the same name, was organized in June. In the corporation charter the word "cellophane" was spelled with a small "c." The new corporation acquired the two Brandenberger patents, one for "Improvement in Apparatus for the Continuous Manufacture of Cellulose Films," and the other for "Improvements in or Relating to the Manufacture of Cellulosic Films," also the registration by Blanchisserie of the name of "Cellophane."

  By this arrangement the French interests' patents, the trade-mark "Cellophane," and their business of exporting film to the United States, the certificate of registration, together with the good will of the business in connection with which said trade-mark is and has been used, were assigned by the French concern to plaintiff's predecessor, on October 13, 1923, and the assignment was recorded November 10, 1923, in the Patent Office.

  In August, 1923, DuPont Cellophane Company, Inc., announced: "That as of August 1, 1923, they have secured the exclusive sales and manufacturing rights of the product known as Cellophane, and manufactured by La Cellophane, of Bezons, France. We are now importing this product and all inquiries will receive our prompt attention * * *."

  This advertisement appeared in the August and September numbers of the Manufacturing Confectioner.

  In August, 1923, Euler's attorney wrote the new corporation regarding his trade-mark claims. The letter is not in evidence, but the reply to it is in evidence, in which its attorney made plain its position, and in the concluding paragraph of that letter said: "However, we feel that in the assignment now being executed by the Blanchisserie et Teinturerie de Thaon to the DuPont Cellophane Company, the latter will acquire in this country the right to the use upon its products of the trade mark Cellophane, and we are prepared to protect our rights."

  A period of development of three or four years followed the organization of the DuPont Cellophane Corporation, in which the corporation built its factory and devoted its attention to improving the quality and uniformity and reducing the cost of the product. Production in the new plant at Buffalo began in 1924, but during the development period the output was comparatively small.

  Plaintiff began to use the DuPont oval device with the brand Celophane in it on its goods, at first without a registration notice, but following the registration of the mark in 1924, with the notice, "Reg. U.S. Pat. Off.," which has been used consistently ever since.

  The DuPont Magazine of October, 1923, contains an article headed "Cellophane -- A New DuPont Product," subtitle "The DuPont Cellophane Company will manufacture it at Buffalo, New York."

  In this article the word "cellophane" is used with a small initial letter. It is called a "transparent cellulose product," and states: "The DuPont Cellophane Company has obtained the patent rights for North America, and pending the completion of its factory at Buffalo, will be the selling agents in this country for the product which the company is now importing. It is expected that the new factory will be completed in May or June of next year."

  In the same magazine for December, 1923, appears another article "That New Wood Product -- Cellophane."

  In this article the name is used with a small letter.

  Euler continued his advertisements in the Confectioners' Journal, in November, 1923, January, February, and March, 1924: "La Cellophane -- (Reg. U.S. Pat. Off.) -- ...


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