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HOLT v. METROPOLITAN REF. CO.

January 31, 1935

HOLT
v.
METROPOLITAN REFINING CO., Inc.



The opinion of the court was delivered by: CAMPBELL

CAMPBELL, District Judge.

This suit is brought on United States registered trade-mark No. 147,024, dated September 27, 1921, of the word "Rust-I-Cide," application for which was filed by The Rusticide Company, an Ohio Corporation, on December 16, 1920, and the certificate of registration states continuous use in business since October 8, 1920.

The bill also alleges infringement by defendant of the common-law rights to the trade-mark and for unfair competition by the defendant in using the name "Rust-I-cide," which forms the essential part of the business name of the plaintiff, and likewise formed essential portions of business names of plaintiff's predecessors to the business of whom he succeeded.

 The bill asks for the usual injunction and accounting.

 The plaintiff is a resident of the state of Ohio.

 The defendant is a New York corporation, which was incorporated about September 30, 1925.

 Although there were more defenses pleaded in the answer, the defendant, as appears by its briefs, relies only on the three following defenses:

 "1. There is and has been and can be no confusion between the goods of the plaintiff and the goods of the defendant for the reason that the product sold by plaintiff is an entirely different product that that sold by defendant. The products of the respective parties cannot be used for the same purposes. They do not accomplish the same result. They are merchandised in an entirely different way to entirely different people, through entirely different channels of trade.

 "2. The evidence shows that each party knew of the other's product as far back as 1929, and possibly longer. Each party recognized that it could not fill any order that it received for the other's goods and in a few instances where the orders meant for one party were received by the other, the orders were sent to the party who could fill the order.

 "3. The word Rust-I-Cide is descriptive, meaning 'to kill rust' or 'rust Killer.' It is not the proper subject of a trade-mark and no one can acquire any exclusive rights therein."

 The following facts are admitted by the answers to interrogatories:

 The defendant admits that within six years prior to the commencement of this suit it applied the notation "Rusticide" to drums containing its rust-removing compound, in the manner depicted by photograph Plaintiff's Exhibit No. 27, and sold in interstate commerce preparations for removing rust in such containers or drums, so marked. The defendant admits its compound is sold as Rusticide, a liquid chemical preparation for removing rust.

 Defendant admits that if first learned of the existence of plaintiff and/or his predecessors in business in October, 1929, and at the same time learned of the use by plaintiff's predecessor of the trade-mark "Rust-I-Cide." Also defendant admits knowledge that the notation "Rusticide" was part of the name of plaintiff's predecessors in business, under which name they did business, and that said knowledge was obtained in October, 1929.

 Defendant admits that it first received notice from plaintiff of the alleged infringement of plaintiff's registration for trademark in suit March 1, 1934, and that it did not acknowledge said notice.

 Defendant said that it used its preparation for removing rust only in the interior of pipes where liquid is present.

 Defendant said it used only the trade-marks "Rusticide" and Duboth" upon its rust-removing preparation.

 The proofs at the trial showed that defendant employed at least one other trade-mark related to the subject-matter in controversy, namely, "Killrust," registered by defendant February 24, 1925.

 The testimony of eight of the plaintiff's witnesses was taken by deposition, only the plaintiff testified orally on his own behalf at the trial.

 From all the testimony on behalf of plaintiff it clearly appears that The Rusticide Company commenced business as early as November, 1920, continuing the use of the trade-mark "Rust-I-Cide" actually applied to the goods previously by certain individuals who became members of that company. It also appears that the trade-mark "Rust-I-Cide" was directly applied by labels to the goods, that the trade-mark was effected by an application filed in December, 1920, which resulted in the certificate of registration in 1921, and that the trade-mark as applied to the labels after registration was presented to the public as registered in the United States Patent Office.

 It further appears that the said The Rusticide Company continued the business under the said trade-mark until the year 1930, when that company's business, assets, trade-marks, inventory, and obligations were, at a sale in bankruptcy proceedings, taken over by Harvey O. Yoder, and the business continued under the name "Rusticide Products" practically as before, but on a reduced basis, due to the adverse business conditions of 1930 and succeeding years, until 1934, when all of the assets, including good will, business, trade-marks, and registration of trade-marks "Rust-I-Cide" and "Glassobrite" were conveyed to plaintiff, T. T. Holt, who has continued the business since his purchase as aforesaid, up to date, under the name "The Rusticide Products." Orders have been received and filled by this company, operated by the plaintiff, T. T. Holt, in respect to practically all of the states of the Union and in foreign countries. Both Yoder, doing business as Rusticide Products, and T. T. Holt, doing business as The Rusticide Products, have continuously used the trade-mark "Rust-I-Cide" for a rust removing or preventing chemical preparation.

 The gross amount of business done by The Rusticide Company and Rusticide Products, between 1920 and 1930, was estimated by Mr. Yoder to be between $75,000 and $125,000. The better years were as high as $18,000 or $20,000, and the lower years $6,000.

 The plaintiff testified that, since he had taken over the business, he had done approximately $12,000 gross business, and that at the time of giving his testimony he had taken over and was selling about 50 per cent. of the customers that the previous company sold.

 The defendant offered evidence that it had since its organization in 1925 done, and is doing, up to the time of the trial, a business in excess of $100,000 a year in selling and servicing of water supply systems, etc., by the use of its composition sold as Rusticide.

 On the trial defendant offered in evidence two letters dated February 21, 1933, and March 8, 1933, respectively Defendant's Exhibits E and F, which I received subject to the objection that there was no showing whatever of any authority of the writer to negotiate with the defendant in reference to the business of Rusticide Products, with the statement that, if such authority was not shown, they would not bind.

 These letters were written on the stationery of Rusticide Products, but were signed personally by George N. Dobie, who requested that he be addressed at his home 1532 Elmwood avenue, Lakewood, Ohio. The address of Rusticide Products, which company was owned by Harvey O. Yoder, was 5500 Walworth avenue.

 The writer of those letters, George N. Dobie, had been one of the organizers of The Rusticide Company, the predecessor of Rusticide Products, but, after Harvey O. Yoder became the owner and continued business under the name Rusticide Products, said Dobie had been simply an employee of Harvey O. Yoder, and had no authority to sell or negotiate for sale of the trade-mark "Rust-I-Cide" or the business connected with it in the years 1930, 1931, 1932, or 1933. This appears from the evidence taken by deposition before the trial, and no evidence was offered by defendant to rebut it.

 The letters themselves plainly show that the writer, George N. Dobie, was negotiating personally with the defendant for purposes of personal advancement. They were his letters, not those of the company.

 The said letters are not binding on the plaintiff or his predecessor.

 The defendant offered as a defense prior use, but the use so alleged was use by the defendant, and did not include use by its predecessors. Use by the defendant was what plaintiff prepared to meet, and it was not called upon to meet use by defendant's predecessors.

 The defense of prior use must be pleaded with sufficient definiteness to apprise the plaintiff as to the use, by whom and when, so that by investigation plaintiff may be prepared to meet it, and a plea of prior use by a corporation organized in 1925 cannot be amendment on the trial be carried back to a use by its predecessor five or six years before that time.

 The evidence showed that the defendant was not incorporated until 1925, which was long after the registration of the trade-mark owned by plaintiff and its use, and therefore there was no issue tendered as to priority.

 Plaintiff is entitled to priority.

 In any event, the evidence on behalf of defendant with reference to marking its product with the name "Rusticide" is not of the character required to convince me that defendant marked its product with the name "Rusticide" from a date as early as 1925.

 The contention of defendant that it could prove prior use by the predecessors of defendant under the following allegation of the answer: "The mark or name Rusticide has been used in various States of the United States for many years since October 8, 1920, by persons unassociated with the plaintiff or his predecessors in interest with the knowledge of the plaintiff and his predecessors," is without merit as October 8, 1920, is a date when ...


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