
    MULHENS & KROPFF, Inc., v. FERD MUELHENS, Inc.
    District Court, S. D. New York.
    September 16, 1927.
    1. War <©==>i2 — Sale by Alien Property Custodian of property and good will of American agent of German manufacturer by secret process did not vest purchaser with right to the process.
    Seizure and sale by the Alien Property Custodian of tbe property and good will of an American partnership acting as agent for the German manufacturer of Eau de Cologne by a secret process and formula, not known to the American firm, and which the firm sold under a trade-mark, held not to transfer to the purchaser any right to the secret.
    2. Trade-marks and trade-names and unfair competition <§=>61 — Owner of trade-mark cannot use it on product different from that for which it originally stood.
    Owner of trade-mark used on article of foreign manufacture cannot use it on a different article, so as to lead the public to believe that the article sold is identical with that for which the trade-mark originally stood.
    In Equity. Suit by Mulhens & Kropff, Incorporated, against Ferd Muelbens, Inc. On motion for preliminary injunction.
    Denied.
    Manvel Whittemore, of New York City, for plaintiff.
    Katz & Sommerich, of New York City (George F. Scull, Maxwell C. Katz, and Otto Sommericb, all of New York City, of counsel), for defendant.
   MACK, Circuit Judge.

Since 1792, tbe Muelbens family has been engaged in the making of eau de cologne at 4711 Gloekengasse, Cologne, Germany, from essential oils dissolved in tbe proper amount of alcohol and water, pursuant to a recipe transmitted from father and son and kept secret at all times, as is stated on all labels and is advertised extensively. Tbe business has become world wide under tbe mark “4711.”

Plaintiff’s president, Kropff, through whom title is asserted, came to the United States in 1878 as tbe Muelbens agent. It is unnecessary on this motion to go fully into the facts. It suffices that, for tbe purposes of a preliminary injunction, I am not satisfied that Kropff acquired knowledge of tbe recipe or of tbe nature or proportions of tbe essences used. If, however, he did acquire such knowledge, then it was acquired by him in bis capacity as agent, with full knowledge that tbe German principal intended to preserve its secrecy. It is entirely clear that, except possibly for two shipments, not the separate essences, but only a mixture of the essential oils, called Cedrae, was shipped to Kropff. In 1899, Ferdinand Muelhens and Kropff became partners. Under the agreement, tbe secret recipe remained in Muelhens, who bad tbe right to take over tbe business in ease of dissolution.

Tbe trade-mark was registered. Jurisdiction is based on tbe registration. Whether tbe trade-mark belonged to tbe partnership, or whether tbe firm was merely licensed by Muelhens to use it, need not be here determined. For tbe purpose of this motion I shall assume, although I do not determine, that through seizure by tbe Alien Property Custodian, and tbe settlement made with him by Kropff, and Kropff’s assignment to plaintiff, plaintiff became vested with legal title to the trade-mark, as well as to the good will of the business conducted by the partnership before tbe war. The Custodian however, did not expressly purport to seize or to sell tbe secret recipe. It is not specifically included in his demand or in the settlement. It never belonged to tbe partnership, and was not known in this country. It remained in Germany. It is no part of tbe good will of tbo business itself.

Plaintiff contends that as, by tbe Trading with tbe Enemy Act (Comp. St. § 3115½a et seq.), tbe Custodian’s demand has tbe same force and effect as a duly executed conveyance, therefore tbe enemy is estopped, as it is contended be would be on a voluntary conveyance, from relying on plaintiff’s ignorance of tbe recipe. Tbe basis of this contention is that an obligation to reveal tbe secret, essential to carrying on of tbe business sold and to tbe proper use of tbe trade-mark transferred, must be implied, if it is not expressed.

If, on a voluntary sale of tbe trade-mark and good will of the business dependent for its use upon a secret process, tbe vendor would come under an obligation to reveal the secret, and, failing to reveal it, would be es-topped from denying tbo vendee’s knowledge thereof, such an obligation would necessarily be based upon tbe actual intention of tbe partios; that is, upon an agreement to that effect, either express or implied. The act, however, did not purport to impose, and it is at least doubtful whether it could have imposed, such an obligation on a nonresident who made no such agreement. There was no jurisdiction over him, but only over bis property in this country; and, of course, there is no basis for implying Muelben’s assent as a fact.

If Kropff, whether as agent or wrongfully bad acquired knowledge of tbe secret recipe, lie should have given it to the Custodian as property in 'this country of the alien. There is, however, no contention that, under the demand, he did reveal the secret, ■ and/or thereafter acquired it from the Custodian in the settlement, or, without such revelation, became the assignee thereof through the Custodian’s implied assent. He did not even assert knowledge of the secret recipe at the time of the demand, and, as heretofore stated, I doubt whether he had or has such knowledge. The Custodian’s release to Kropff: from all liabilities to Muelhens may well bar any action by Muelhens for wrongs theretofore committed; it does not, however, operate as a transfer of the recipe and a grant of its use thereafter, even if Kropff knew the secret and had theretofore wrongfully used it.

At the argument, the suggestion was accepted that an indepndent analysis of plaintiff’s and defendant’s product should be made. I have concluded, however, that at present this is unnecessary, because it seems to me apparent from the affidavits of the experts that there is no real identity of the two products. They may be closely similar, but they are not the same. Plaintiff may have some part of the secret, but it does not appear to have the entire secret. Plaintiff’s product may or may not bé as good as the original “4711”; it is not, however, the original. Notwithstanding this, it has persistently advertised the product as if it were the original, by asserting in broadest terms that its product is made according to the original recipe.

It may well be that some improvements through changes in the formula by the owner of the trade-mark and the recipe, although not advertised, will not preclude him from protecting his mark as against infringers. Coca-Cola Co. v. Koke Co., 254 U. S. 143, 41 S. Ct. 113, 65 L. Ed. 189. In this ease, however, plaintiff is attempting to palm off a substitute article under what I must at present deem the false claim that it knows and has the original recipe.

If plaintiff has acquired the trade-mark in connection with the business, it nevertheless cannot properly use it, so as to lead the public to believe that the product sold by it is identical with the product for which the mark originally stood. A. Bourjois & Co. v. Katzel, 260 U. S. 689, 43 S. Ct. 244, 67 L. Ed. 464, 26 A. L. R. 567, is beside the point here involved. That case held only that, when the American trade-mark has been sold and is being here used on the original article, the foreign vendor cannot, even on identical goods, ijse that trade-mark in this country in violation of the original vendee’s rights.

A number of other questions are raised in the cause, but for the purpose of this motion I deem it unnecessary now to consider them.. It suffices that, to put it mildly, there is such serious doubt, both on the law and on the. facts, as to plaintiff’s right to injunctive relief, that in the exercise of a sound judicial discretion such relief should not be awarded in any event prior to a full trial.

The motion for a preliminary injunction will therefore be denied.  