*

To the author's mind the better rule is announced in the case of Warner v. Koehr, in which the instructions of Judge Blodgett to a jury said in part: "In cases of this character, where you are satisfied from the proof and from the admissions in the case that the fraud-the intention to defraud-is at the bottom of the matter, the jury are not confined to the exact monetary damages, but may give what are known as vindictive or exemplary damages, for the purpose of deterring others from embarking in the same scheme of fraud and deception." 37 It is not to be doubted that this doctrine is more reasonable and just, and better adapted to protect society from the ravages of trademark infringers, than the rule stated in Taylor v. Carpenters and Addington v. Cullinane.39 It is difficult to see how the result stated in those cases has been attained.40 They are wholly without precedent and opposed to the rule of damages which obtained at common law. What that rule was, and is, so far as our federal courts are concerned, is nowhere more clearly stated than by Mr. Justice Grier in an opinion in which he speaks for the federal supreme court. He says:

"It is a well-established principle of the common law that in actions of trespass and all actions on the case for torts a jury may inflict what are called exemplary, punitive or vindictive damages upon a defendant, having in view the enormity of his offense rather than the measure of compensation to the plaintiff. We are aware that the propriety of this doctrine has been questioned by some writers; but if repeated judicial decisions for more than a century are to be received as the best exposition of what the law is, the question will not admit of argument. By the common as well as by statute law men are often punished for aggravated misconduct or lawless acts by means of civil action, and the damages, inflicted by way of penalty or punishment, given to the party injured. In many civil actions, such as libel, slander, seduction, etc., the wrong done to the plaintiff is incapable of being measured by a money standard; and the

37-Warner v. Roehr, Fed. Case

No. 17189A. 38-Supra. 39-Supra.

40-The language of this text approved. Lampert v. Judge &

Dolph Drug Co., 238 Mo. 409, 421; 141 S. W. Rep. 1095, 1099; reversing Lampert v. Judge & Dolph Drug Co., 119 Mo. App. 693; 100 S. W. Rep. 659.

damages assessed depend on the circumstances, showing the degree of moral turpitude or atrocity of the defendant's conduct, and may properly be termed exemplary or vindictive rather than compensatory.

"In actions of trespass where the injury has been wanton and malicious, or gross and outrageous, courts permit juries to add to the measured compensation of the plaintiff which he would have been entitled to recover, had the injury been inflicted without design or intention, something further by way of punishment or example, which has sometimes been called 'smart money.' This has always been left to the discretion of the jury, as the degree of punishment to be thus inflicted must depend on the peculiar circumstances of each case." 41

Judge Thayer has said: "Punitive damages may be awarded when a wrongful act is done willfully, in a wanton or oppressive manner, or even when it is done recklessly-that is to say, in open disregard of one's civil obligations and of the rights of others.

42

We find the rule sanctioned and reaffirmed repeatedly by the Supreme Court of the United States.43 It has been the doctrine. adhered to by that court ever since Mr. Justice Story in a case of marine tort spoke of exemplary damages as "the proper punishment which belongs to such lawless misconduct. It is manifest that in a case of deliberate counterfeiting of a trademark there should be a recovery of punitive damages, or at least an opportunity given the jury to assess punitive damages.

44

As to the award of actual damages at law, it has been held that nominal damages will be awarded where a fraudulent intent is shown, even though no specific injury is pleaded or proven.45

41-Day v. Woodworth, 54 U. S. (13 Howard), 363, 371; 14 L. Ed. 181. See Press Pub. Co. v. Monroe, 73 Fed. Rep. 196, 201.

42-Fotheringham v. Express Co., 36 Fed. Rep. 252, 253.

43-Philadelphia R. R. Co. V. Quigley, 62 U. S. (21 Howard), 213; 16 L. Ed. 73; Milwaukee R. R. Co. v. Arms, 91 U. S. 487, 492; 23 L. Ed. 374; Missouri Pacific Railway v. Humes, 115 U. S. 512, 521; 29 L. Ed. 463; Barry v. Edmunds, 116 U. S. 550, 562; 29 L.

Ed. 729; Denver Railway v. Harris, 122 U. S. 597, 609; 30 L. Ed. 1146. Exemplary damages may be allowed even where no actual damage is proven. Press Publishing Co. v. Monroe, 73 Fed. Rep. 196, 201.

44-The Amiable Nancy, 16 U. S. (3 Wheat.) 546, 558; 4 L. Ed. 456.

45-Le Page Co. v. Russia Cement Co., 2 C. C. A. 555; 51 Fed. Rep. 941, 949; Taylor v. Carpenter, 11 Paige, 292; 2 Sandf. 603; Cof

The St. Louis Court of Appeals has said, by Blakewell, J., in an action of deceit based upon trademark infringement: "As to the damages, the facts present a case of fraud on plaintiff and violation of his rights for which the action lies without proof of specific damages. And the damage was not confined to the loss of such actual sales as could be specifically shown to be lost, but the jury might make such inferences as to the loss and injury sustained by plaintiff as they might think warranted by the whole evidence in the case." 46 Much to the same effect is the holding of the Massachusetts Supreme Court.47

In California the rule of assessing damages would seem to give the plaintiff the profits made by the defendant in his sales of goods bearing the infringing mark.48

But it is very doubtful if that course is proper in an action at law. Damages were the appropriate, and indeed the only, remedy at law, while the account of profits was peculiar to courts of equity.49

Under the English practice a custom has grown up by which a complainant in equity may pray for an account of profits and an inquiry as to damages (and it has been held in Wisconsin that this is the proper course in pleading) 50 but before any order for discovery can be made he must elect between the accounting of profits and the inquiry of damages. He can not have both.51 As said by Cotton, L. J., in the English Court of Appeal, in refusing discovery asked by a complainant before he had elected between profits and damages: "At the time when the order was made, the plaintiff had not elected to waive his account of profits. Would it then be right to allow the plaintiff to get a jury to determine what damages he was entitled to before he had made his election betwen damages and profits? Should the jury award

feen v. Brunton, 4 McLean, 516, 520; Fed. Case No. 2946; Blofield v. Payne, 4 Barn. & Ad. 410, 411; Marsh v. Billings, 7 Cushing, 322, 331; Conrad v. Brewing Co., 8 Mo. App. 277, 285; El Modello Cigar Co. v. Gato, 25 Fla. 886, 915; 9 So. Rep. 23.

46-Conrad v. Brewing Co., 8 Mo. App. 277, 285.

47-Marsh v. Billings, 7 Cushing, 322, 332.

48-Graham V. Plate, 40 Cal. 593, 598.

49-Sebastian, Trademarks (4th Ed.), p. 232.

50-Leidersdorf v. Flint (2), 50 Wis. 401.

51-Neilson v. Betts, L. R. 5 H L. R. 1.

him a large sum for damages, he would probably accept it; but if they gave him a small sum only, then he might say, 'No, I would rather have an account of profits, as I see by the defendant's books that he has made a much larger sum.'"' 52

It would seem that the damages at law must be based upon the injury sustained by the complainant by loss of sales 52a and injury to the reputation of his trademark. Evidence of the extent of the defendant's sales may be proper,53 but only as proof of injury to the complainant, and not with a view to measuring the plaintiff's damages by the defendant's profits.

Of course the fact that the defendant has discontinued his infringement is no defense to an action of damages,5+ which would be barred only by the operation of the statute of limitations. It is competent to show that plaintiff's sales have fallen off because of the infringement.5 55

A Canadian decision held that damages could not be recovered for the sale of a second-hand stove to which a second manufacturer's name-plate has been added, where the plate was put on by an employe without the employer's knowledge and the purchaser was informed of the real manufacture of the stove.56

52-Fennessy v. Clark, L. R. 37 Ch. D. 184, 187.

52a-Howard Dustless Duster Co. v. Carleton, 244 Fed. Rcp. 881.

53-Le Page Co. v. Russia Cement Co., 2 C. C. A. 555; 51 Fed. Rep. 941, 949; 17 L. R. A. 354.

54-Lemoine v. Gauton, 2 E. D. Smith, 343; Cox, 142; Seb. 125.

55-Shaw v. Pilling, 175 Pa. St. 78, 84. It is competent to show

CHAPTER XIII.

THE ACTION IN EQUITY.

§ 185. The basis of equitable jurisdiction.-Lord Westbury said: "Imposition on the public occasioned by one man selling his goods as the goods of another can not be the ground of private action or suit. In the language of Lord Thurlow in Webster v. Webster, 'The fraud upon the public is no ground. for the plaintiff coming into court.' It is, indeed, true, that, unless the mark used by the defendant be applied by him to the same kind of goods as the goods of the plaintiff, and be in itself such that it may be and is mistaken in the market for the trademark of the plaintiff, the court can not interfere, because there is no invasion of the plaintiff's right; and thus the mistake of the buyers in the market, under which they, in fact, take the defendant's goods as the goods of the plaintiff, that is to say, imposition on the public, becomes the test of the property in the trademark having been invaded, and not the ground on which the court rests its jurisdiction." 2

In quoting the extract given above, Vice Chancellor Van Vleet has said: "The rule as thus stated I understand to be the established doctrine now in force on this subject both in this country and in England." 3

In the early English practice the chancellor had power to refuse or postpone the application of equitable remedies in trademark cases until the title to the trademark had been determined in a court of law. This practice continued until November 1, 1862, when the "Chancery Regulation Act, 1862,"4 went into

1-3 Swanst. 490.

2-Leather Cloth Co. v. American Leather Cloth Co., 4 DeG. J. & S. 137, 141.

3-Schneider v. Williams, 44 N. J. Eq. 391, 393. To the same effect see Weener v. Brayton, 152 Mass. 101, 103; Avery v. Meikle, 81 Ky. 73, 91; Liggett & Myers Tobac

co Co. v. Sam Reid Tobacco Co., 104 Mo. 53, 60; McLean v. Fleming, 96 U. S. 245, 251; 24 L. Ed. 828; Shaver v. Shaver, 54 Iowa, 208, 209; Barrows v. Knight, 6 R. I. 434, 438; Handy v. Commander, 49 La. Ann. 1119.

4-25 and 26 Victoria, c. 42, p 154.