
    LONG CONTINUED USE OF TRADE MARK WITHOUT OBJECTION BARS ACTION FOR INFRINGEMENT.
    Common Pleas Court of Montgomery County.
    William R. Witt v. The McLaren Products Company.
    Decided June 27, 1924.
    
      Trade Marks — Estoppel Against Claim of Exclusive Rights in — Injunction not Available, Even Where Prior Right Once Existed, When — Adoption in Good Faith of Same Trade Mark by Parties Operating in Widely Separated Territory.
    
    1.. Long delay in commencing suit for infringement of a trade mark with knowledge of open infringement and great expenditure is laekes and injunctive relief and accounting will be denied.
    2. Where two parties engaged in the manufacture of goods of the same class in states widely separated, and acting entirely independent of each other and in good faith have used the same trade mark in building up a trade in their respective-territories, neither of them can maintain an action for infringement against the other.
   Snediker, J.

This action was brought originally for injunctive relief and for an accounting. The plaintiff, who is in business in Chicago, Illinois, under the name of The Real Cake Cone Company, claims that for many years, and from a date prior to May 6th, 1911, he has manufactured sold and distributed ice cream cones under the name and mark “Real Cake.” This name and mark, he says, is and has been molded on the outside of each cone and has been displayed upon the containers in which the cones were packed for distribution, and has been used in his advertising matter generally; and he avers that hé has been at great expense in promoting the sale of the cones, and has built up a large and profitable business for their sale as “Real Cake” cones; and that the name and mark “Real Cake” has acquired a secondary meaning; that is, it is coming to mean in the mind of the trade and of the purchasers of ice cream cones the very cone manufactured and sold by him. He avers that the defendant, 'wrfch knowledge of the foregoing facts, and knowing the distinctive, character of the cone manufactured by him, have 'manufactured- and sold and are manufacturing and selling cones of inferior quality, similar in appearance to the cones made and sold by the plaintiff. The plaintiff makes certain claims with respect to the character of the dough, shortening and coloring used by the defendant; claims imitation of his trade name “Eeal Cake,” which is molded on the exterior of its cones, and displayed on its packages and container’s and in its advertising the same name, with the purpose of deceiving purchasers of the cones and to' palm off its cones for the plaintiff’s, all of which, the plaintiff avers, is with intent to injure him in his business. Plaintiff claims great pecuniary loss and that unless the defendant is enjoined by this court, great and irreparable injury will accrue to him in his business as manufacturer of “Eeal Cake” cones.

Denying in its answer the material averments of the plaintiff’s petition, the defendant in its cross-petition avers that it acquired the right to the use of the name “Eeal Cake” many years ago, and that it has since the year 1909, through itself and by its predecessors, been continuously engaged and is now engaged in the manufacture of ice cream cones as “Eeal Cake.” It claims that the secondary meaning which “Eeal Cake” has acquired in the ice cream cone business, is that such cones are the cones of the defendant’s manufacture. The defendant recites the expenditure of large sums of money in advertising “Eeal Cake” cones* and that it has built up a large and profitable business by reason thereof. And, based thereon, it says that “Eeal Cake” has become valuable largely by reason of the defendant’s expenditures in advertising and sales efforts, and especially because of its use in connection with defendant’s cones which are of superior quality and appearance. And it claims that its cones are so manufactured and molded and marked that they are distinctive in their character. The defendant claims that the plaintiff’s cones are marked “Eeal Cones” and are packed and sold in packages bearing “Eeal Cake” in simulation of the defendant’s trade name “Eeal Cake;” that the inferior quality of the plaintiff’s cone has materially lessened and will continue to lessen the value, of such trade name; and that it will be damaged in its investments and property by the continuance of the use of the trade name by the plaintiff. The defendant claims a confusion of business occasioned by the plaintiff which has resulted in damage to it. It avers a lack of good faith on the part of the plaintiff in bringing his action, and claims that it is brought for ulterior motives.

The defendant asks that plaintiff be enjoined from using or causing to be used in connection with ice cream cones, or similar commodities, the name “Real Cake”, and that he be restrained and enjoined from doing business as “The Real Cake Company.”

By way of reply, the plaintiff denies each and every allegation in the answer and cross-petition contained not admitted in his petition.

The foregoing recites the principal contentions of the respective parties and the issue between them. The plaintiff is in business in the city of Chicago, Illinois, as The Real Cake Cone Company. The defendant is an Ohio corporation conducting a like business. Both make ice cream cones bearing the distinctive mark “Real Cake”.

The evidence on behalf of the plaintiff shows that since early in July, 1910, he made use of the term “Real Cake” in the manufacture of his cones, and molded it into them; that in May, 1911, he registered his label, “Real Cake” in the Patent Office and thereafter used in on his containers. Since that time he has been continuously in the business of manufacturing “Real Cake” cones. Plaintiff’s cones are hand-rolled, having an irregular upper edge, and an open seam running lengthwise diagonally. In the conduct of his business the plaintiff has been limited to Chicago and immediate territory. His method of advertisement and distribution has been simple. He has never acquired a large business. The defendant derived its right to use the name “Real Cake” by assignments coming from one Frederick A. Bruckman. Bruckman first adopted and used this name on ice cream cones early in the spring of 1909. In June of 1912 he transferred to Alexander McLaren the exclusive right to its use in the states east of the Mississippi river, and with it the right to use an automatic ice cream cone manufacturing machine invented by him. Shortly thereafter a machine was furnished McLaren by Bruckman, and was put in operation in this city. Alexander McLaren transferred his right to the use of the machine and to the use of the name, to The Purity Cake Cone Company ; the Purity Cake Cone Company transferred its rights to The American Cone & Wafer Company; The American Cone & Wafer Company assigned and transferred to The McLaren Products Company, that is, to the defendant. During all the time, from 1912, until the date of the hearing of this case, the McLaren Products Company and its predecessors had continuously and uninterruptedly engaged in the business of manufacturing “Real Cake” cones.

The defendant company, in the conduct of its business, engaged in extensive and intensive advertising campaigns, which, as the testimony showed, since the year 1912, ran close to $150,000. By these means their sales were so increased that in 1923 they manufactured and disposed of 200,000,000 “Real Cake” cones, and during all the years had had. a business which gradually grew to these proportions and covered all the territory east of the Mississippi river, including Chicago territory.

Both parties are now in the- business contending for the exclusive right to use the trade name “Real Cake”.

Let us first consider the question of the right of the respective parties to an injunction. First, is the plaintiff entitled to such relief against the defendant? Knowledge of the use of the name, “Real Cake”, by the defendant, was brought home to the plaintiff years ago, and until the filing of this suit in 1923, he took no steps to cheek or prevent it. He permitted the defendant to expend the large sums of money to which we have referred, in promoting the reputation of “Real Cake” ice cream cones, and allowed them to make extended efforts which necessarily attended the conduct of the business, such as theirs was; during the years in which they have manufactured; and permitted them to expend further large sums of money in equipment.

Now, assuming that he had a prior right, after having been silent and having thus acquiesced in the use of the trade name, can he be afforded the relief prayed for?

In the case of Valvoline Oil Company v. Havolin Oil Company et al., 211 Fed. Rep. p. 189, the court say: . (i,

“A delay of several years before commencing suit for infringement of a trade mark with knowledge that the defendant was openly using the alleged infringing name and expending large sums in advertising its product thereunder, constitutes such laches as to require a court of equity, in view of modern business conditions, to deny injunctive relief as well as an accounting.”

In the case of Old Times Distillery Co. v. Casey & Swasey, 104 Ky. Rep., p. 516, the language of the court is:

“Where plaintiff and defendant have both used the same trade mark for ten years and the defendant with expense and labor has built up a trade for its goods with the plaintiff’s knowledge, the latter will be denied an injunction to protect his alleged ownership of the trade mark, without regard to the rightful ownership of same.”

In view of these authorities and of others to which we might refer, we are of the opinion that this plaintiff is not entitled to the relief prayed for in his petition.

We come now to the question as to whether, or not the defend1ant is entitled to an injunction against the plaintiff. The most favorable theory of the defendant’s case against the plaintiff is that its predecessor in title to the trade name, “Real Cake”, used that name early in 1909, which was one year prior to its use by the plaintiff; that defendant legally acquired, in June of 1912, from such predecessor, by assignment, his right to the use of the machine and of the cone east of the Mississippi river; that- subsequently it engaged in the business of manufacture, eventually extending its trade into the Chicago territory; that in the meantime the plaintiff had established a valuable business and continued to conduct it in that same territory as a competitor of the defendant. During this time the registry of the trade mark of the plaintiff was notice to the defendant of his claim of right to use the name “Real Cake”.

A like case was before the Supreme Court of the United States, in March of 1918, in The United Drug Company v. Theodore Rectanus Company, 248 U. S., p. 90. The Supreme Court in affirming the Court of Appeals, say:

“Where A had a trade-mark in. Massachusetts, in connection with a business there and in neighboring states, and B, afterwards, in good faith, without notice of A’s use, or intent to injure or forestall A, adopted the same mark in Kentucky, where A’s business theretofore had not extended, and built up a valuable business under it there. Held, that A, upon entering B’s field with notice of the situation, had no equity to enjoin B as an infringer, but was estopped.”

The court here quotes 240 U. S., p. 403, Hanover Milling Company v. Metcalf, as follows:

j “In the ordinary ease of parties competing under the same mark in the same market, it is correct to say that prior appropriation settled the question. But where two parties independently are employing the same mark upon goods of the same class, but in separate markets wholly remote the one from the other, the question of prior appropriation is legally insignificant, unless at least it appear that the second adopter has selected the mark with some design inimical to the interests of the first user, such as to take the benefit of the reputation of his goods, to forestall the extension of his trade, or the like.”

It does not appear from the evidence in this case that at the time the plaintiff commenced the manufacture of “Real Cake” cones in Chicago, Bruckman, who is claimed by the defendant to be the original user of the trade name had any business in that territory, or that the defendant had for many years afterward. Nor does it appear that plaintiff had any design inimical to defendant or Bruckman. Defendant came into the Chicago territory at a time when the plaintiff’s business was established, and it may well be said that Chicago was a market wholly remote from the business of both Bruckman and Alexander McLaren. The defendant, therefore, has no equity to' enjoin plaintiff.

We find from the evidence before us that both parties have adopted and used a name “Real Cake” in good faith, and we are of the opinion that both should be permitted to continue in the business, each limiting himself to the same character of cone manufactured as heretofore.

An order may be drawn accordingly.  