manufacturer, that the ordinary man who buys it and uses it can not tell it from the genuine, even though the actual sale to the jobber, the wholesaler or the middleman is without misrepresentation."šīа As to the dealers being deceived Judge Lacombe's retort is classic-"No one expects that they will be, ''57b

As we have noted, the policy of the law is to encourage legitimate competition. Thus it has been held that a manufacturer under a patent can not complain of the competition of a former employe who has patented an invention in the same art and is manufacturing under his patent.58

This rule that fraud must be proven in cases of unfair competition is exemplified by reference to the cases cited in the footnote, where such comparisons have been made by the courts, resulting in a finding that the competition of the respondent was fair,50 and others where the facts have led the court to the contrary conclusion.60

57a-Tuttle, J., in Kawneer Mfg. Co. v. Detroit Showcase Co., 240 Fed. Rep. 737, 743; citing Coca Cola Co. v. Gay-Ola Co. (C. C. A. 6), 200 Fed. 720; 119 C. C. A. 164; Gaines v. Turner-Looker Co., 204 Fed. 553, 556; 123 C. C. A. 79; Enterprise Mfg. Co. v. Landers et al. (C. C. A. 2), 131 Fed. 240, 241; 65 C. C. A. 587; Yale & Towne Mfg. Co. v. Adler (C. C. A. 2), 154 Fed. 37; 83 C. C. A. 149; Rushmore v. Badger Brass Mfg. Co. (C. C. A. 2), 198 Fed. 379, 380; 117 C. C. A. 255; Ludwigs v. Payson Mfg. Co. (C. C. A. 7), 206 Fed. 60; 124 C. C. A. 194; Farmers' Handy Wagon Co. v. Beaver Silo & Box Mfg. Co. (C. C. A. 7), 236 Fed. 731.

57b-National Biscuit Co. v. Baker, 95 Fed. Rep. 135; Chapelle v. Applebaum, 254 Fed. Rep. 709, 710. 58-American Coat Pad Co. v. Phoenix Pad Co., 113 Fed. Rep. 629; 51 C. C. A. 339.

59-Kroppf v. Furst, 94 Fed. Rep. 150; Putnam Nail Co. v. Ausable Horsenail Co., 53 Fed. Rep. 390; Sterling Remedy Co. v. Eureka Mfg. Co., 70 Fed. Rep. 704; N. K. Fairbank Co. v. Luckel, King & Cake Soap Co., 88 Fed. Rep. 694; Klotz v. Hecht, 73 Fed. Rep. 822;

Investor Pub. Co. v. Dobinson. 82 Fed. Rep. 56; C. F. Simmons Med. Co. v. Simmons, 81 Fed. Rep. 162; La Republique Francaise v. Schultz, 94 Fed. Rep. 500; Vitascope, Co. v. United States Phonograph Co.. 83 Fed. Rep. 30; Brown v. Doscher, 147 N. Y. 647; Mumm v. Kirk, 40 Fed. Rep. 589; Jaros Hygienic Underwear Co. v. Simons, 49 Fed. Ren. 276; Pearlberg v. Rosenstone, 70 N. J. Eq. 638; 62 Atl. Rep. 446; Warren Bros. v. Barber Asphalt Paving Co., 145 Mich. 79; 108 N. W. Rep. 652; Banzhaf v. Chase, 150 Cal. 180; 88 Pac. Rep. 704; Pearlberg v. Smith, 70 N. J. Eq. 638; 62 Atl. Rep. 442. For a case embracing many different forms of fraudulent competition, see Todd Protectograph Co. v. Hedman Mfg. Co., 254 Fed. Rep. 829.

Canadian Cases-Davis v. Kennedy, 13 Gr. 523; McCall v. Theal, 28 Grant 48; Singer Mfg. Co. v. Charlebois, Q. R. 16 S. C. 167; Camera Co., Ltd., v. Hogg, Q. R. 183 C. 1; Rose v. McLean, 24 A. R. 240; Pabst v. Ekers, Q. R. 21 S. C. 545; Gramm Motor Truck Co. v. Fisher Motor Co., 17 D. L. R. 745.

60-Draper v. Skerrett, 94 Fed. Rep. 912; Anheuser-Busch Brewing

"Mere possibility of deception is not enough" (0)-Equity should never intervene unless deception will be the natural and probable result of the defendant's acts. If a deceptive tendency is not so clear as to amount to something more than mere possibility, equity may decline to interfere unless and until actual deception has resulted.b

With the exception of this feature, the same general rules of law and procedure prevail in this class of cases as obtain in proceedings to restrain trademark infringement. Thus, an injunction to restrain an unfair competition has been expressly denied upon the ground that the complainant was guilty of laches and acquiesence.1

Federal jurisdiction in cases of unfair competition must of course be predicated upon the general rules fixing the jurisdiction of the federal courts, so that those courts can not entertain such an action arising between citizens of the same state.62

Fraudulent intent is presumed where the defendant persists in using an imitative dress after he has been notified of its similarity, even if his first adoption and use of the dress was innocent.63

Misrepresentation by retailers.-In cases of unfair competition, evidence that the retail dealers practiced deception upon their customers in palming off defendant's goods for those of the plaintiff is immaterial, unless from the entire record the court finds that the defendant was responsible for such deception.зa

Ass'n v. Fred Miller Brewing Co., 87 Fed. Rep. 864; Block v. Standard Distilling Co., 95 Fed. Rep. 978; Allegretti Chocolate Cream Co. v. Keller, 85 Fed. Rep. 643; City of Carlsbad v. Tibbetts, 51 Fed. Rep. 852.

60a-Harris, J., in Columbia Eng. Works v. Mallory, 75 Oreg. 542, 547; 147 Pac. Rep. 542, 544.

60b-Union Fishermen's Co-op. Packing Co. v. Point Adams Packing Co., Oreg.; 217 Pac. Rep. 642, 646.

61-La Republique Francaise v. Schultz, 94 Fed. Rep. 500, 501.

62-Illinois Watch Case Co. v. Elgin Nat. Watch Co., 94 Fed. Rep. 667-672. And see Air-Brush Mfg. Co. v. Thayer, 84 Fed. Rep. 640.

63-Lamont, Corliss & Co. V. Hershey, 140 Fed. Rep. 763.

63a-Rathbone v. Champion Co., 189 Fed. Rep. 26, at pp. 32, 33; 110 C. C. A. 596; 37 L. R. A. (N.S.) 258; Armour & Co. v. Louisville Provision Co., 283 Fed. Rep. 42, 49; C. C. A. 6.

A statement by a retail dealer's salesman that the retailer was passing off defendant's goods as plaintiff's, testified to by the witness to whom the statement was made, is hearsay."

63b

§ 23. Trade slander and libel.-The question whether equity will enjoin competing traders from publishing libelous or slanderous matter concerning their competitor's business has been frequently presented to the courts. In an early case Lord Eldon said: "The publication of a libel is a crime, and I have no jurisdiction to prevent the commission of crimes, except, of course, such cases as belong to the protection of infants, where a dealing with an infant may amount to a crime-an exception arising from that peculiar jurisdiction of this court." 64 How far this doctrine-which extended to all forms of libel-has been modified by the federal courts of the United States is an involved question, the discussion of which would not be relevant to this book.

65

But at an early date Lord Cottenham, in refusing to enjoin libelous statements uttered of the plaintiff's literary work, said that the proper remedy lay in an action at law. And the English courts have subsequently held that where matter has been held libelous in an action at law, the repetition of the libel would be enjoined in equity. In one case where the court refused to enjoin a defendant from circulating an adver

63b-Empire Guano Co. v. Jeffer

son Fertilizer Co., 201 Ala. 277; 78 So. Rep. 53.

64-Gee v. Pritchard, 2 Swanst. 402. To the same effect see (refusing an injunction against the exhibition of a painting falsely purporting to be a copy of a picture by the plaintiff) Martin v. Wright, 6 Sim. 297; refusing to enjoin a publication by defendant of a statement disparaging the plaintiff's literary work, Seely v. Fisher, 11 Sim. 581; 10 L. J. Ch. N. S. 274. And see

Clark v. Freeman, 11 Beavan, 112;

66

Fleming v. Newton, L. R. 1 H. L. C. 363; Bullock v. Chapman, 2 DeG. & Sm. 211; Browne v. Freeman (2), Cox, Manual, 424; Prudential Assurance Co. v. Knott, L. R. 10 Ch. D. 142; Fisher & Co. v. The Apollinaris Co., L. R. 10 Ch. D. 297-299; Ward v. Drat, Cox, Manual, 607.

65-Seely v. Fisher, 11 Sim. 581; 10 L. J. Ch. N. S. 274.

66-Saxby v. Easterbrook, Cox, Manual, 606; Hinrichs v. Berndes, Cox, Manual, 594; Thorley's Cattle Food Co. v. Massam, L. R. 46 L. J. Ch. 713.

tisement among the plaintiff's customers which charged the plaintiff with infringing his trademarks, the court intimated that the injunction might have been granted if malice had been shown.67 It may now be regarded, however, as the settled law of England that "the court will interfere by injunction where statements are made with reference to the infringement of a patent, or the invasion of a trademark and the like, if it is proved to the satisfaction of the court that these statements are untrue."68

The same doctrine would seem to obtain in this country. It is libelous to publish of a dealer in school books that he deals in "antiquated books" and books which are "disgraceful trash." 69 And it has been held libelous per se to publish of another dealer of the same name (Davey) "that an unscrupulous grocer of the same name, in the immediate vicinity, advertises 'Davey's teas and coffees,' with a view to deceive the public, and may sell an inferior article." 70 Judge Lacombe has laid down the broad proposition that "every legal occupation from which pecuniary benefit may be derived creates such special susceptibility to injury by language charging unfitness or improper conduct of such occupation that such language is actionable, without proof of special damage." It is the necessary corollary of this rule that a disparaging statement concerning the goods sold by another, whether under a trademark or not, must be of a character to charge him with business incapacity or improper conduct of his business before it can come within the class of matter that is slanderous or libelous per se. For if the words used apply to the plaintiff's merchandise in such a manner as to constitute an imputation of his improper conduct in or want of capacity for his business, they will be libelous or slanderous per se.72

67-Colley v. Hart, 7 R. P. C.

101.

68-Chitty, J., in Anderson v. Liebig's Extract of Meat Co., 45 L. T. N. S. 757-758; and to the same effect, Halsey v. Brotherhood, 45 L. T. N. S. 640; Empire Typesetting Machine Co. v. Linotype Co., 79 L.

T. N. S. 8.

71

69-American Book Co. v. Gates, 85 Fed. Rep. 729-734.

70 Davey v. Davey, 50 N. Y. Supp. 161.

71-Ohio & Miss. Ry. Co. v. Press Pub. Co., 48 Fed. Rep. 206. 72-So where in a criminal pros ecution under the Oregon Code the words applied to the property of

The truth is always a defense in actions of this character. Thus where the plaintiff had bought the goods in question from the defendant and advertised them for sale, the publication of àn advertisement by the defendant that read as follows: "An opinion of Shawknit hose should not be formed from the navy blue stockings advertised as first quality by (plaintiff), since we sold (plaintiff) some lots which were damaged in the dyehouse," was held not libelous, in the absence of a showing of its untruth.73 And a wide latitude is allowed in criticism of chattels where the facts are not mis-stated. So it is not libelous to attack the theories advanced in a book even with sarcasm and ridicule, if there is no misrepresentation of what is set forth in the book; 74 and a criticism of one of the pictures of an artist stating that it is not good of its kind is not libelous, where it does not attack him in his professional character generally. So, it has been held in England that no action will lie against a defendant trader for stating falsely and maliciously that his goods are superior to those of the plaintiff, even though the plaintiff suffers special damage therefrom.76 . and no false statement directly disparaging the plaintiff's goods. is actionable in the absence of proof of special damage.77

Where an alleged libel consisted of a charge that the plaintiff had no right to use a certain trademark, it was held to be a slander of title and not a libel upon the plaintiff; that the burden was upon the plaintiff to prove malice, falsity and special damage, and that the cause of action survived the plaintiff's death.78

The remedy for libel or slander affecting the title to a trademark depends upon whether there is a threatened continuance. of the publication of the libelous or slanderous matter. "Courts of "quity have no jurisdiction of libel or slander affecting title to property or property rights, or any other slander or libel,

the prosecuting witness in such a manner as to expose him to hatred, contempt or ridicule, they were held to be a libel upon him. State v. Mason, 38 Pac. Rep. 130; 26 Or. 273.

73-Boynton v. Shaw Stocking Co., 140 Mass. 219; 15 N. E. Rep. 507.

74-Dowling v. Livingstone, 108 Mich. 321; 66 N. W. Rep. 225. 75-Battersby v. Collier, 54 N. Y. Supp. 363.

76-Hubbuck v. Wilkinson (C. A.), L. R. (1898) 1 Q. B. 86. 77-Mellin v. White, L. R. (1895) A. C. 154.

78-Hatchard v. Mege, L. R. 18 Q. B. D. 771-775; Nat. L. McGuire Oil & Supply Co. v. Marvin (Mo. App), 201 S. W. Rep. 628.