Lewis v. Vendome Bags, Inc. ( 1939 )

SWAN, Circuit Judge.

This appeal involves the doctrine of Hurn v. Oursler, 289 U.S. 238, 53 S.Ct. 586, 77 L.Ed. 1148, and its application to the facts at bar. Both plaintiff and defendant were citizens of the same state; federal jurisdiction rests on the ground that the charge of patent infringement raised a federal question. The bill of complaint charged infringement of the plaintiff’s design patent #101, 880 and also unfair competition with the plaintiff’s business of manufacturing and selling handbags alleged to be of the patented design. The district judge made findings of fact and law to the effect that the defendant’s bag did not infringe the patent in suit, but was a copy of the plaintiff's commercial bag, exhibit 3, which also differed from the patented design to such an extent as not to be protected by the patent; that in copying exhibit 3 the defendant had unfairly competed with the plaintiff, and as the final conclusion of law, that

“The unfair competition arises from the same facts before the Court on the infringement of the patent claim and the Court has jurisdiction over the unfair competition claim though infringement has not been proved.”

The decree permanently enjoined the defendant from manufacturing or selling bags embodying the design employed by the plaintiff in exhibit 3, and ordered an accounting of the profits received by the defendant by reason of its acts of unfair competition.

Hurn v. Oursler, 289 U.S. 238, 53 S.Ct. 586, 77 L.Ed. 1148, as a majority of the court understands the decision, requires a reversal of the decree on appeal. In that case the amended bill of complaint charged the defendant with three wrongs: (1) infringement of a copyrighted play of the plaintiff; (2) unfair competition with the copyrighted play; and (3) unfair competition with an uncopyrighted revision of the plaintiff’s play. The district court dismissed -the bill on the merits in so far as grounded on copyright infringement, and for want of jurisdiction in so far as grounded on unfair competition. This court affirmed the decree in 2 Cir., 61 F.2d .1031. The Supreme Court modified it. It held that the federal question raised by the charge of copyright infringement gave the district court jurisdiction of the case; that rejection of the federal claim on the merits did not deprive the court of .jurisdiction to decide the claim of unfair competition in ’.respect to the copyrighted play, and that this claim should also have been dismissed on the merits; it affirmed the decree in so far as it dismissed for want of jurisdiction the claim of unfair competition in respect to the uncopyrighted revision of the plaintiff’s play, since this was a separaté and distinct non-federal cause of action. In the case at bar the allegations of the bill definitely limit the bags of the plaintiff’s manufacture in respect to which unfair competition is charged, to bags embodying the patented design. Hence, the court had jurisdiction of the case, because the allegation of patent infringement raised a federal question and the charge of unfair competition in respect to bags of the patented design was, so far as appears, made in good faith. But the latter charge was not proved. What was proved was unfair competition with bags not embodying the patented design — at least, so we must assume, for the proof has not been incorporated in the record, only the findings. Consequently the findings of fact and the decree are not supported by the allegations of the complaint regarding unfair competition; and the complaint should have been dismissed for failure to prove the unfair competition alleged. It is like the failure of proof in Hurn v. Oursler, 289 U.S. 238, at page 247, 53 S.Ct. 586, at page 590, 77 L.Ed. 1148, where Mr. Justice Sutherland said:

“It is entirely plain that the holding of the trial court disposing of the claim of infringement on the merits also disposed of the claim of unfair competition in respect of the copyrighted play, since both depended upon the same allegations of wrongful appropriation of certain parts of, and conceptions embodied in, petitioners’ play. The finding of the court is comprehensive— ‘That no version of the defendants’ play “The Spider” infringed in any way, either with respect to plot, material, arrangement or sequence of events, or incidents, or otherwise, the plaintiffs’ copyrighted play.’ This finding — not challenged here — contains every essential element necessary to justify the conclusion that there was likewise no unfair competition in respect of the copyrighted play, since it negatives the allegations of the bill made for the purpose of establishing by the same facts an infringement of the copyrighted play and unfair competition in relation thereto.”

While usually a variance between pleading and proof may be corrected by an amendment to conform the bill to the proof, this, we think, is not permissible where the effect of the amendment is to allege a cause of action beyond the jurisdiction of the court. Had the plaintiff pleaded the facts developed upon the trial, the bail would have charged (1) infringement of the patent and (2) unfair competition in respect to bags of an unpatented design. The latter charge sets up a separate, distinct and non-federal cause of action, as did the claim of unfair competition in respect to the uncopyrighted revision of the plaintiff’s play in Hurn v. Oursler, supra, 289 U.S. page 248, 53 S.Ct. 586, 77 L.Ed. 1148. In Atkins v. Gordon, 7 Cir., 86 F.2d 595, 597 the court refused to discuss the charge of unfair trade methods on the ground that since the parties were residents of the same state, “the Federal court’s jurisdiction is dependent upon the appellee’s sustaining the patent infringement charge of the complaint.” See also In re Amtorg Trading Corp., Cust. & Pat. App., 75 F.2d 826, 834; Foster.D. Snell, Inc. v. Potters, 2 Cir., 88 F.2d 611; Davies v. Columbia Pictures Corp., D.C.S. D.N.Y., 20 F.Supp. 809. Cf. Armstrong Co. v. Nu-Enamel Corp., 305 U.S. 315, 324, 59 S.Ct. 191, 83 L.Ed. 195; 4 Univ.Chi.L. Rev. 679, criticizing the Atkins decision.

But even if it be assumed that the court had jurisdiction to decide that the defendant competed unfairly with bags of the plaintiff which did not embody the patented design, the findings of fact are insufficient to sustain the decree. The plaintiff’s name was stamped upon the lining of its bags; the defendant’s bags bore no name. There are no findings, and no indication that there was any evidence, to the effect that the defendant palmed off its bags as the plaintiff’s product, or that the design of exhibit 3 had become so associated with the plaintiff in the mind of the public as to acquire a secondary meaning and cause any bag of the same appearance to be ascribed to the plaintiff as the source of production. The essence of the wrong of unfair competition is selling the goods of one manufacturer or vendor as those of another, and unless the defendant passes off its goods as those of the plaintiff the action fails. Goodyear’s Rubber Co. v. Goodyear Rubber Co., 128 U.S. 598, 604, 9 S.Ct. 166, 32 L.Ed. 535; Howe Scale Co. v. Wyckoff, Seamans & Benedict, 198 U.S. 118, 140, 25 S.Ct. 609, 49 L.Ed. 972. Merely copying an article unprotected by patent, copyright or trademark does not establish -unfair competition, unless the article or its design has acquired a secondary meaning. Crescent Tool Co. v. Kilborn & Bishop Co., 2 Cir., 247 F. 299, 300; Cheney Bros. v. Doris Silk Corporation, 2 Cir., 35 F.2d 279; Krem-Ko v. R. G. Miller & Sons, Inc., 2 Cir., 68 F. 2d 872; Sinko v. Snow-Craggs Corp., 7 Cir., 105 F.2d 450, 452. Nor does the fact that bags of the appearance of exhibit 3 have become popular as a result of the plaintiff’s advertising make the defendant’s duplication of them a tort. Kellogg Co. v. Nat. Biscuit Co., 305 U.S. 111, 122, 59 S. Ct. 109, 83 L.Ed. 73. Since the evidence is not before us and the findings of fact do not establish any passing off of the defendant’s bags as those of the plaintiff’s manufacture, we are of opinion that the decree should be reversed,and the complaint dismissed. It is so ordered.