Petition for Writ of Certiorari — Kellogg Co. v. National Biscuit Co.

Supreme Court brief1938

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* IT, Srarement oF THE Case:

A. “Preliminary ..:.... Ree PREP es 1

B. Statement of Pacts ...5. 2... ce ceeese: - 4

IL Tuer Facts Devevorep at THE TriaL As Founn

BY THE Triau Me coe ent kk at pee eek aeas . 4

TL. Reasons FoR GRANTING THE WRIT....%....-... 13°

A. Pretiimary .. <6 o 6 cose ois. PPA pees 12

_ B.. Specific reasons for granting the Writ.. - 13

Brier IS ree Oe ee Pe ee eee Pe yy rere 21

ey CS SEUEO sce can Uh aes te wuxaaeeee es ie:

2. Jurisdictional Statement ...... Pana yoann se as 21.

.3. Statement of Case ............ Pre eae ee 21.

| 4 Specification of Errors Relied Upon .......... 21

eee RE EE EET ee aeee hese 24

EEG oo cone kan se pitt iheeesseeseeeees 27

f .' 0 | TABLE OF CASES.

x “SS PAGE

_. Amiesite. v. Interstate Amiesite Co., 72. Fed. (2nd)

3 BE Ss Skee ab aad ha Se RPL Lae re ‘17, 25

pet Metal Works v. Abraham & Strauss, 62 Fed.

TD PR EOMICR BRL PN tone aie Tis. 19

‘Beckwith v. Commissioner of Patents, 252 U. S.538.. 19, 26

Canadian Shredded Wheat Company, Ltd. v. Kellogg

Company of Canada, Ltd. (Appeal), 1936 Ontario

EEA 9,15

Canadian Shredded Wheat Company, Ltd. v. Kellogg

Company of Canada, Ltd. Saige 1936 Ontario

eR FE TA ae On 9,15

Centaur v. Heinsfurter, 84 Fed. 955 ....:.......... 18,26 —

_ Charles Broadway Rouss‘v. Winchester, 300 Fed. 706 .

> a . &

\ PAGE _

Delaware & Hudson Canal Co. v. Clark, 13 Wall. 311 17,26 ©

Du Pont Cellophane v. Waxed Products, 85 Fed. (2nd)

75; 5% Sup. Ct. 194 .......... sda nedeceeesasoees 17, 25

‘Holzapfel’s v. Rahtjen’s, 183 U.S.1.............. 19, 25

' Kellogg Company v. National Biscuit (Company, 71

BP ee nr ‘Eeeteei 9, 15, 24

Kellogg Toasted Corn Flake Co. v. ae Oats Co.,

EE fe prta 656 boa Cab ka cone dv eda siuesseds 18

‘McKesson & Robbins v. Phillips Chemical Co.,23 Fed.

(2nd) 763; 53 Fed. (2nd) 1011 ................. 25

Natural Food Company v. Williams, 30 App. D. C.

____ Sete cena 2 IR Pagan eA eae rE a ‘.seond, 24, 15,

Natural Food Company v. Buckley, Northern District

of Uhnois, Kastern Division, No. 28530 | ree . 5

"Peters v. MeDonald, 61 Fed. (Qnd) 1081 ........... 19

Saxlehner v. Wagner, 216 U. 8. 375 :........ ounces 26

_ Shredded. Wheat Co. v. inaumaiantade Cornell, 250 Fed.

Peers eee eee ree Seer ee ree 9, 13, 17

Singer v. Juné, 163 U. ree Perret 3, 9, 16,18, 25

Sleight Metallic Ink Coy v. Marks, 52 Fed. (2) 664. . 8

Standard Paint Co. v. Trinidad Asphalt Manufactur-

a EE, WO cc 5 bk k hs kk RE ROA 17

Standard Paint Co. v. Trinidad, 163 Fed. 977....... 17

William Warner & Co. v. Eli Lilly & Co., 265 U.S. -

ange ene ee ee et ee ee 3,17, 18,26 -

SratutEs.

“Sheraien, Anti Trust Act, Approved J uly 2,1890.... 17

Trade _— Act of Feb. 20, 1905 (U. S. C. Title 15, .

: TEER EN v5 ckcnwekaNwee ns ee ks ee a re 10, 14

‘ Trademark ha of March 19, 1920 .:.... Pxxues kek . 8

. | ConstiTUTION.

United. States Constitution .........5. 550... eee ee 16.

An Papamneel Court of the United States,

OCTOBER TERM 1937.

No. 396.

Ke.Lioce Company,

Petitioner-A ppellee-

Defendant,

agamst

Natrona. Biscurr Company,

’ Respondent-Appeliant- |.

~ Plain.

o s

PETITION BY KELLOGG COMPANY, DEFEND

_ BELOW, FOR WRIT OF CERTIORARI TO

CIRCUIT COURT OF APPEALS FOR THE

THIRD CIRCUIT.

“To THE Honoras.e, THE SuPREME Court.

‘oF THE UNITED Scares:

The petition of Kellogg nine defendant-appellee’

below, and herein referred to ag defendant, _Tespectfully

shows :

STATEMENT OF THE CASE.

; A. Preliminary.

This case hen tals heard twice by the Cireuit Court ‘of

Appeals of the Third Circuit, with diametrically opposite

results. The proceeding was-in equity in the District Court -

of the United States for the District of Delaware, brought

.- by National Biscuit Company, ‘as plaintiff, against peti-

_tioner, the Kellogg Company, as defendant. It sought to

restrain the Kellogg Company. from manufacturing the

_ ordinary, formerly patented shredded wheat biscuit illus-.

_- trated in expired design patent No. 24,688 (R. V.°5, p. 62),

and from using the term ‘‘shredded wheat’’ and the picture

of the biscuit as applied thereto ( Complaint, ae ee Pp. ;

5-25): ° -

‘District Judge Nields, after trial, dismissed the Will, res

. eause the forty-one patents originally granted to the plain-

tiff’s predecessor for shredded wheat, the, design patent on

the form of the biscuit and the machinery and proctss for

making it, having expired before the Kellogg Company be-

gan to éell its product, defendant was: entitled to manufac-

-ture shredded’ wheat in the usual form and to display pic-

tures of it in defendant’s advertising. The. District Court

also held that because the name ‘shredded wheat’’ was-a

term applied by the patentee to the paterit-expired ‘product

and was otherwise descriptive it was incapable of exclusive -

° appropriation as a trademark (R. V. I, p. 225).

The Distriet Court also,found as a fact that the Kellogg

Company had unmistakably distinguished its manufacture -

and that no deception of the public resulted from what

defendant did.e There was, tlfterefore, no unfair competition.

(R. V. I, pp. 204-227). The cartons in issue oer at V. I,

pp. 205-219. | .

On appeal, the Circuit Court of Appeals alareneia the

‘decree of the District Court in a per curtant opinion (R. V.

III-A, p. 2069).

‘Thereafter the Cotrt granted a rehearing, again heard

fell argument from new counsel for the plaintiff, indicated

that counsel for the defendant need not argue at length, and

thereupon did the unusual thing of ‘handing down an.

elaborate opinion completely reversing its first opinion,

grantifig all the prayers of plaintiff’s bill of complaint and

even going far beyond plaintiff final or modified prayers."

°On the original hearing ia the Court of Appeals, the Court questioned the

plaintiff's counsel concerning its power to enjoin the defendant from all |

competition whether fair or unfair, and plaintiff's counsel conceded that the

Court had power to restrai only’ unfair. competitidn; in short, defendant's

right to manufacture was admitted to. be indisputable. This oral concession

was embodied in plaintiff's -brief entitled - “Appellant’s Brief on Rehearing”,

at page 34: :

_ “We confidently submit that the decree of the District Court, dismissing

the Bill, should be reversed and the case remanded to that court, with

instructioris to enter a decree for the complainant: . . “

2. That the defendant be enjoined irom manufacturing or selling or

offering for sale Whole Wheat Biscuit in substantially the form and

shape of the plaintiff's biscuit, unless each such biscuit be banded or

marked in ‘such a distinctive manner as to state clearly ‘that it is a

product of ‘the defendant and rot of the plaintiff.”

Defendant acceptéd plaintiff's concession, and did not argue the same,

stating at page 5 of its brief on rehearing :

“2. Plaintiff's belated concession of defendant’s indubitable right to mzke

the patent-expired biscuit, necessarily concedes defendant's equaty in-

Catal right to call it by its patent-expired 1 name.” °

e Court in its second decision directed‘the District Court

enjoin the defendant nga from using the words

edded wheat as a trade’ nanfe and from offering its

duct for sale in the form and shape of plaintiff’s (R. V.

-A, pp., 2083-2093). The Court did this without finding: |

r new or different facts and without considering any

horities Which had not — before it on the earlier

aument..

The first decision of the Cireuit Court of Appeals, like

t of the District Court, was based on the doctrine of dedi-

ion of form and description to the public by patent expi-

ions as expressed by Singer v. June, 163 U.S. 169. The

ond decision can hardly be characterized as less than an

empt to reverse:the doctrine of Singer v. June, ina case in

ich the plaintiff, by threats of trademark suits, drove the

endant off the market i in 1922, not to return until 1927. The

irt’s second decision held that because plaintiff thus had _

oved | approximately five years’ exclusive occupation of

market, the case had ceased to be a patent expiration case

| had become the same as though no patents had ever been

mted. And yet the Court, in effect, revives the expired

ents and makes them perpetual. If this ruling stands,

doctrine of’ dedication 7 name and form by patent-

jivation will have ceased to exist. _

Thé nearest attempt at a similar result that we ne

n able to find was by the same Court and was frustrated

this Court in Wilfiam Warner & Co. vy. Eli Tallij & Co.,

U.S. 526. The Court of Appeals, there, instead of re-

aining the undeniably unfair acts of the defendant..

ght to penalize the entire public’by setting up in plain-

a “perpetual monopoly of the right to combine cocoa

| quinine. This Court granted certiorari and. unani-

usly reversed that attempt to use the law of trademarks

& means of setting up a revolutionary system of per-

ual monopolies in publicly. jowned rights by re leg-

tion. .

. 4

B, Statement of the Facts. ,

1. The Plaintiff's Claim.

. 1. Thig suit was brought in the United States District

Court for the District of Delaware on the claim of National

Biscuit Company, plaintiff, that its exclusively owned

trademarks consisted of (a) the shape, form or appearance

of the well known and formerly patented, rectangular

shredded wheat biscuit, a shape and form necessarily ré-_-

sulting from ‘expired machine patents, (b)- of the words

‘*shredded wheat”’, applied to any cereal product and (c)

of the representation or pictgrial description of the biscuit,

_ and that defendant had nfbosed these three ‘trademarks -

(a) by making a smaller and darker biscuit’ than plaintiff’s

and packed in distinctive cartons, (b) by calling its product

‘‘Kellogg’s Shredded Whole Wheat Biscuit’’ and (c) by

illustrating its biscuit on its clearly differentiated packages. —

_ The suit also alleged that the same three acts, (a), (b)

and (c) above, constitute fair competition. No unfair-

ness otherwise was charg No claim was made that de- .

fendant’s product, as packed and sold by defendant, had

ever been passed off as plaintiff’s or was capable of being

passed off (Complaint, R. V. I, pp. 5-25). All biscuits of

both plaintiff and defendant are sold in cartons which are

so distinctly different that no confusion . or passing off is .

possible.

li. The facts developed at the trial as Gini by the trial

_ Judge (R. V. 1, p. 193).

, 41) Shreddeduwvheat biscuit is made by ‘machine. Tire

shreds or strings arg deposited in successive layers on a’

belt. and are then cut across-to form the biscuit or loaf.

_ During the baking operation-the shreds arch. up and give a

truss-like rigidity to the fragile biscuit. The biscuit cannot

be individually marked (R. V. I, p. 221). :

(2) The patents on the so-called Perky machine used

by the plaintiff and its predecessor to make the shape and

form of biscuit in issue, expired years ago (R. V. I, pp. 196

and 228). ° ;

(3) Plaintiff ’s predecessor for many years’ prior and

up to the year 1915 printed on all the cartons of its packaged -

shredded wheat the following notice:

“Patented, September 17, 1895, October 15, 1895.

\ This Food, the Process of Making It, The Special

Machinery for Its Manufacture, are Under the Pro-

tection of The United States Cte by virtue

. of 7 Patents As Follows’? (Listing 41 patents )

(R. = » PP: 195-6).

Jnclnded among: the patents listed under this notice was

plaintiff’s patent,-No. 24,688, on the design or form cf the .

biscuit which. had been declared: invalid in Natural Food

Company v. Hénry P. Bulkley, et al., No. 28,530, N. Dist. of '

Illinois, East Div., because Perky swore falsely that the

design had not been in public use or on sale for more than_

two years before his application for patent (R. V. I, p. 197).

Plaintiff’s basic patents expired in 1912 and all of its ~

patents had expired before ‘defendant entered the field

(R. V. I, p. 223). -

(4) The machine of the expired patents eae Soa the

very form and shape of biscuit in dispute (See V. 5, pp. 12-13,

Perky patent No. 532,286 and V. 5, pp. 110-119, Perky patent

No. 678,127), A perpetual monopoly in the form and shape

of the biscuit would unavoidably give plaintiff a similar

monopoly i in the machine of the expired patents in spite of

the expirationsof the patents,.for the necessary result of

the us¢ of the machine is to produce the particular form and .

shape of biséuit in controversy. The shape of the biscuit

is functional and the function of the machine is to produce

that shape of biscuit. ;

_ (5) Defendani’s proofs established that it had tried

to mark-or band the biscuit but that it was not practical to

do so (R. V..I, p. 221). Plaintiff in effect, confessed.this

to be true by offering no proof of any way of marki

the biscuit and by contending that defendant shoul

.. make some ether shape of biscuit (R. V. 3, p. 2019, and V. I,

p. 270). Defendant’s proofs showed that the enly known

<aton visnally to distinguish its biseuit was to make them

shorterand darkey that plaintiff's and enclose them in dis-

tinctive e eirtonss. ST his: defendant has always done (BR. VLE

p. 221). As a matter of fact after defendant had marketed

its small biscuit for five Fears, plaintiff copied the defend- °

ant’s size exactly thus wiping out the size distinction which

‘defendant had adopted (R. V. I, p. 204). os

(6) The language which plaintiff claims to have ex-

clusive right to, use,’ that is, the .werds ‘‘shtedded wheat’’,

is the very language used in the specification of the Perky

patents under which plaintiff.’s predecessor had a monopoly

for seventeen years, to deséribe the product and process of

making it. Thus ..

Perky patent 'No.-520,496, May 29, 1894:

‘*the resulting product * * *-in the form of films,

strings; er shreds are deposited * * * ?’

‘these shreds * * * fall upon this+oll shat t (R. V.

«: . 5,p.10).

‘Perky ‘patent No. 532,286, January 8, 1895 (R. V. 5,

mig); * a tale a

“* * * a food preparing machine to receive the

shredded or thread-like produtt in layers,”’

_ Perky patent No. 532,697, January 15, 1895 (R. V. 5, °

p. 27):

ooo"

‘the threads or pee of the food produc

‘“‘the material to be shredded * * *”’

‘*to receive. the shreddec or filamentous dis-

charge * * *’’ ;

Perky patent-No. 53% 3,0 DOS » February 5, 1895 (R. V. 4, p.

53):

ts ‘Sone of the. vediiare’ in section * * *”’

‘*Each reducer or shredding device * * *.”’

“€adherence of the shredded or- treated prod-—

uct ***”

Perky patent No. 681 656, August 27, 1901 (Ro V.5 -p.

141):

‘‘machines for @utting shredded wheat * * *”’

_ Perky patent No. 713,795, November 18, 1902 (R. V. 5,

p.171): . . . : ;

‘¢a cracker of filamentous or shredded wheat or .

* @ @>> -

other grain

. ; : .

_- Many additional quotations from plaintiff’s. patents,

cartons and advertisements showing the use of the words

“shredded wheat’’ hv’ plaintiff in’a solely: descriptive way

- appear in Append: 4, >. 27.

(7) Plaintiff’: cartons (V. 1, p. 205) have always promi.

nently displayed various registered trademarks, no infringe-

ment of which is claimed in the present litigation. Its com-

plaint does not allege any similarity. Plaintiff’s maip brief

on appeal stated, p. 62, that ‘‘The present case is not a patent

case gor a cafton case’’, meaning that no carton similarity

was charged. The Trial Court held that defendant’s car-

tons could not be mistaken for or passed offfis Plaintiff’s.

Plaintiff’s trademark prominently carried on its cartons

from 1894 uiitil 1915, was a representation of the mytho-

logical Goddess ‘‘Ceres’’, holding a sheaf of wheat in her

arms. This trademark was registered May 22, .1906, No.

52,858 (V..4, p. 193). About 1915, the ‘‘Ceres’* mark was

supplanted by a picture of the Niagara Falls, which is still

prominently displayed on plaintiff’s cartons (V. 1, p. 209).

In 1905, plaintiff made its first claim to the words ‘‘shredded

whole wheat’’ as a trademark and sought to register these

words, first as a fanciful mark, and later as a descriptive

term. The application was rejected and the rejection up-

held'on appeal. Natural Food Co. v. Williams, 30 App.

D. ©. 348. On November 5, 1912, plaintiff registered as its

trademark the pictorial representation of its Niagara Falls

factory (V. 1, p. 205), and this trademark has since consti-

tuted fhe most.promingnt feature of its cartons. This regis-

tration No. 89,071 (V. 4, p. 199), states that the factory

picture trademark is used for ‘‘shredded wheat in Class

No. 46, foods and ingredients of foods’’. Plaintiff's -regis-

~ tration states that ‘‘No claim is made herein to the words

‘The Home of Shredded Wheat’ ’’: Plaintiff’s predecessor

also secured trademark registration No. 80,186 (V. 4, p. .

8. : ; ty

197), on an alleged trademark showing a shredded wheat

, biscuit in a dish with a spoon and cream. The regis-

tration states ‘‘no claim being made to the representatio

of a shredded wheat biscuit,’’ thus applying -the precise

"description: to the precise illustration and, in effect, dis-

claiming both.

Plaintiff’s predecessor in 1926 ica registration _

No. 216,593 (V. 4, p. 205Pfor a trademark shown in the

' drawing as a dish containing two shredded wheat biscuits.

‘The illustration of the two shredded biscuits, is elear and.

undisputable. The registration states that Plaintiff ‘‘dis-

claims any exclusive right to the hen dehnataaaiaaas of the two

biscuits apart from the mark shown.’’

Plaintiff on January 15, 1924 and again on May 25, 1926,

registered the words ‘‘shredded wheat’’ under the Act oP

March 19, 1920. (V. IV, pp. 201 and 3).' These registra- ©

tions are statutory admissions that the words are de-

scriptive, as the Act was enacted to permit registration of

descriptive terms. These a are without pre-

sumption of validity.

Charles Broadway Rouss v. Winchester, rome c. A.

' 2) 300 Fed. 706-712;

“Sleight Metallic Ink Co. v. Marks, 52 Fed. (2) 664.

Thus plaintiff twice registered other things as its trade-

mark and in each registration-illustrated-a shredded wheat

biscuit, described it.as a shredded wheat biscuit and dis-

claimed it‘as a trademark. ;

Plaintiff also disclaimed the words ‘‘shredded wheat”’

specifically and by descriptive usage. ©

Although this trademark-disclaimer-defense of the —

words and the design was clearly a bar to the injunction

ordered, as to both form and description of the biscuit, as

repeatedly held by this Court, the Circuit Court of ew

denied rehearing without having stated its position’on the

question of the disclaimer on either »arigg, although the

“defense was pressed on both hearings. ° >

_ +8. In 1915, Ross Biscuit Company began to make and

‘ sell a biscuit identical in size and color with plaintiff’s and

its right to do so was upheld by the Circuit Court of Appeals

Sed

for the 2nd Circuit in 1918. Shredded Wheat Co. y. Hum-

phrey-Cornell, 250 Fed. 960. Thereafter, the resources’ of

the Ross Company became exhausted and it retired from the

- field. (R. V. I, P. 202).

’ 9. Plaintiff’s Canadian subsidiary, "after tiris suit. was

filed, sued defendant’s Canadian subsidiary iu the Supreme

Court cf Ontario on the same cause of actiou here involved.

_. After trial, that suit’was dismissed on the ground of the

patent expirations. Canadian Shredded Wheat @. v. Kel.

logg Co. of Canada, I.td., 1936 Ontario Rep. 281. The five

judges of the Court of Appeals of Ontario unanimously up-

held that judgment. Same'v. Same, 1936 Ont. Rep. 613.

10. Plaintiff’s predecessor first warned defendant’s

predecessor i in January 1922 not to make the patent-expired

biscuit. The notice did not charffe uufair acts but warned

against any competition whether fair or not (R. V. I,

pp. 103-08). Defendant retired from the market in 1922 and

reentered in’ 1927. Suit was instituted in 1928 admittedly

in part for advertising purposes, news releases being planted

with newspapers days before the bill was filed (R. V. I,-pp.

604-605).

In 1930 that suit was withdrawn idillsial prejudice

.and this suit started two years later arid tried, defendant

" believes, because, weary of ten years of harassment, defend-

aunt sued plaintiff for violation of the Sherman Anti-trust

Act. Kellogg Co. v. National Biscuit Co., 71 Fed. (2) 662.

‘ll. After trial, the District Court dismissed the bill on

the ground that the patent-expirations precluded any re-

lief as to form, name or picture under the doctrine of

Singer v. June, (supra) ; that*the words ‘‘shredded wheat’’.

were descriptive of the patent-expired biscuit, dnd had

‘always been so used by plaintiff; that the shape of the bis-

‘cuit was functional and not merely ornamental or fan-

ciful; that relief could be based only on wrongful acts of

defendant in passing its goods off as plaintiff’s and that

‘there had been no passing off; that defendant’s packages

were incapable of, being paseed off as plaintiff’s; that de-

fendant’s biscuits outside of the package were distinguished

in size and color from plaintiff’s as far as was possible;

that further distinction of defendant’s biscuit from plain-

tiff’s other than by size and distinctive carton was impos-

sible without destruction of defendant’s undeniable right

to compete; that -plaintiff had failed to prove either its

ownership of the three exclusive and perpetual monopolies

it claimed as trademarks or any acts of unfair competition

by defendant. (The opinion of the District Court is unre-

ported and appears at R. V. I,.p. 193: The findings are in- ’

cluded in the opinion.)

IV. Plaintiff’s appeal to the Circuit Court of Appeals

for the Third Circuit was argued by Mr. Drury W. Cooper

and ex-Judge Thomas G. Haight December 3, 1935 and

the findings of fact and conclusions of law of the District

Court and its decree dismissing the bill were unanimously

affirmed in a per curtam opinion on January 16, 1936.

(The per curiam opinion of the Circuit Court of Appeals,

composed of.Circuit Judges Buffington, Davis and Thomp-

son, is unreported and appears in R. V. III-A, p. 2069).

V. Plaintiff. thereupon, on February 15, 1936, peti-

tioned for rehearing on the ground principally that its

alleged exclusive occupation of the market, from 1922 to

1937, after its patents had expired in 1912, had created ex-

elusive and perpetual monopolies-of form and of verbal ‘and ,

pictorial description of the biscuit, all by analogy to the ten

year clause of the Trademark Act of February 20, 1905

. (U.S. C. Tit, 15 Sec. 85). Plaintiff’s counsel on the rehear-.

ing petition were those previously appearing in the cause.

(R. V. III-A, p. 2079).

VI. The petitien for rehearing was granted on “May 7,

1936, and. the reargument took place on October 8, 1936

(R. V. III-A, p. 2082). Hon. David A. Reed first appeared

on plaintiff’s brief on rehearing gnd, along with Judge

Haight, argued the cause for plaintiff on rehearing, relying .

on the same authorities and facts as cited by: Mr. Cooper and

Judge Haight on the first hearing.

VII. On April 12, 1937, the Circuit Court of Appeals, |

fiied its second opinion by Davis, O. J., reversing its former

“U1

2 .

onion yi not. disturbing the findings of fact of the Dis-

trict Cofrt except as to the conclusion ‘that the words’

‘shredded wheat’’, were descriptive, saying, strangely

enough, that if the words ‘‘shredded wheai’’ were descrip-

tive they ‘‘could not have been the subject of a patent’’.

(R. V2 ITI-A, p. 2086 but see, Appendix A, pp. 27:28). The

Court ordered the District Court perpetually to enjoin .de-

fendant from marketing the patent-expired biscuit, from

pictorially describing it by illustration on its package, or

from marketing any product under the words {‘shredded

wheat’’. The second decision of the Circuit Court of Ap-

peals revived the expired design, product, process and nia-

chinery patents as applied to sh Jded wheat biscxwit and

made them perpetual, The second opinion of the Court on

rehearing is not yet reported and appears at R. V. III-A,

p. 2083.

VIII. Defendant thereupon filed a petition for rehearing ~

on May 7, 1937, and thereafter. filed motions (R. V: III-A 2130°

and 2145) for an injunction and. for recall of the. second

decision on the ground that plaintiff had widely, unfairly

and falsely advertized that defendant was under. injunction

- and had otherwise unfairly exploited ‘the Court’s second

opinion by publishing unfair excerpts therefrom, especially

as to the.phrase ‘‘The original bears this signature: W. K.

Kellogg’’ which had nev an issue in the case, was not

mentioned in the pees is not covered by the prayers

for relief or by the injunction ordered and which was off of

nearly all of deféndant’s car tons at the time of the trial

(R. V. III-A, p. 2131).

IX. The Court .on July 13, 1937 denied defendant’s _

petition fer a rehearing without opinion (R. V. AII-A, p.

2240), and on the same day denied its motions concerning re-

spondent’s untrue statement that defendant was-under in-

junction and other unfair use of the, decision (R. V. III-A,

2241).. This denial was also without comment or condemna-

tion of the unfair exploitation by plaintiff of a decision,

with no mandate issued, with a petition for rehearing pend-

‘ing and other avenues of review unexplored. °

The mandate below is still stayed pending this petition.

«iL Reasoms for Gremting the Witt:

a % Preliminary.

" The questions presented are whether the case involves

serjous and ——. rtant constitutional questions and conflicts -

of decision involving the same or similar subject matter -

as between the first decision of the Cireuit Court of Appeals - ~

and the last one and also as between that decision and the

decisions of this Court concerning the effects eLpatent ex-

— on names and forms of patented products ‘and

_ machines; also as to the effect of trademark disclaimers;

and as to the well established rule that perpetua! monopolies .

of mbnufacture of either unpatented or patent-expired —

products shall not be set up under the guise of trademarks, .

- and that patents, or monopolies,-may be granted or extended

only by Congress and not by the Courts and only for

_limited terms.

Also whether there is een between via last decision

“of the Court and the decisions of Supreme Court and.

Court of Appeals of Ontario on the gang subject matter and

involving the same rules of law as to\patent-expiration.

Also as to-whether there is conflict betwéen the Second and

Third Circuits, where on substantially the same facts one

Court holds that defendant has a cause of action against

plaintiff and the other Court helds that plaintiff has a cause

of action Against defendant. ., °

_~ Also whether there is conflict between the last decision

below holding that the words shredded-wheat were & true

trademark and the decision of the Cireuit Court. of Apprals

of ine District of Columbia which held the exact opposite.

Also whether there is conflict between the Cireuit Court

of Appeals for the Second Cireuit which held that the right

of the Ross Biscuit Company to make and sell the patent-

expired biscuit in issue was indubitable and the last ‘decision

in fhe Third Circuit, which enjoins defendant from sé

the bist t in issue and thus, in effect, from making it.

/B. Specific Reasons for Granting the Writ.

1. The last decision of the Circuit, Court-of Appeals of |

propriate e: exchisively the form. of (and thus the right. to

manufactur ¢) the biscuit in issue is in direct. conflict.

with the decision of the Circuit Court of Appeals for the

Second Circnit in Shredded Wheat Co. v. Humphrey Cor-

_nell, supra, in which an opposite conclusion was reached. |

In that case, plaintiff’s predecessor, The Shredded Wheat:

“Compaaty, sued the Humphrey Cofmell Company, dis-

tributor for Ross Biscuit — the District Court

in Connecticut for alleged tradema infringement and un-

fair competition, alleged to consist of making and selling

shredded wheat biscuit of the same size and shape as plain-

tiff’s, in cartons which. were incapablé of being confused

with plaintiff ’s cartons of shredded wheat.biscuit. - The Dis-

trict Court-after the trial enjoined the defendant from mar-

keting any biscuit in cartons or apart from cartens unless

each bisqnit was individually impressed, ‘tagged or marked

to distinguish it from plaiutiff’s unmarked biscuit. This

corresponded to, plaintiff ’s final prayer in the instant case.

Footnote, anie,'p. 2. .

Qn appeal, the Circuit Court of Appeals for the Second

Cirenit modified-the District Court’s decree by hohkding

wii that as to biscuit thatsreached the final consumer in

defendant’ s cartons, there should be no injunction, (2) that

as’ uit served apart from the carton (restaurant

Service), the defendant should endeavér for a period of

six months to tag or impress a mark npon such biscuit and

(3) that if aftgf the six month’s triai, dhe defendanf-should

De unable to nami biscuit without destreption of its right

to compete, it might apply to the Court to vacate the injunc-

tion ordered. Judge Ward dissented, holding that the

bill should-be dismissed; that the form «was functional a

that the fragile biscuit could not be marked.

Even Judge Thomas in the District Court in the

Humphrey Cornell case did not go‘so far as to enjoin

tie Selina from making the. biscuit at all and in per”

petuity, and Ward, C. J., as aforesaid, dissented from the

tentative and limited injunction ordered by the compromise

‘reached by Judges Learned Hand atid Hough of the Court

of Appeals of the Second Cireuit.. *

2. The last decision of the Circuit Court of Appeals 6f

the Third Circuit holding that the words shredded wheat are

not descriptive of the goods, were not so used by plaintiff

_ and are capable of exclusive appropriation by ,=plaintiff is

* in substantial conflict with the decision of the Court of Ap-.

peals of the District of Columbia in Natural Food Company

v. Williams, supra, in which a contrary conclusion was

reached on substantially the same issues and in which plain-

tiff acquiesced by the disclaimers aforesaid. Ante, p. 7.

In that case it appeared that the words shredded wheat

were used originally by plaintiff’s predecessor, Natural

Food Company, descriptively andswithout claim of trade-

mark, but after the enactment of the Trademark Act of Feb-

ruary 20, 1905 (U. S. C. Title 15 Sec. 85) with a provision |

permitting registngtion of descriptive words used exclwv-.

siveiy for at least ten years next preceding passage of the

Pr, a. plaintiff’s predecessor first associated a trademark

notice ‘with the words shredded wheat and filed an appli-

cation to register them, After rejection as a fanciful name, —

_plainti? vainly sought registration as a descriptive mark

used exclusively for ten years prior to 1905. Opposition was

filed by William E. Williams on the ground of concurrent

user and descriptiveness. The opposition was sustained by

the tribunals of the Patent Office and by the Court of Ap- ©

peals of the District of Columbia.

The Cireuit Court of Appeals,held that plaintiff’s prede-

cessor had not for ten ak prior to 1905 exclusively used

the words ‘‘shreddéed whole wheat’’ and that in fact it was

open to question whether the words had ever ‘been claimed |

or used asa trademark prior to the enactment of the ten

‘year clause in 1905. It was also held that the words

were clearly and solely descriptive of. the product of many.

shredded wheat patented machines and used-in the patents

as a description. Natural Food Co. v, Williants, supra.

3. The last decision of the Circuit Court of Appeals of

the Third Circuit is in substantial conflict with the decision

of the Second Circuit in K Hogg Company v. National. Bis-

cuit Company, supra.

In that-case defendant in or about 1922 sued plaintiff

for damages for alleged violation of the Sherman Anti-

Trust Act, reciting facts which it claimed established a

- conspiracy to monopolize the manufacture of the patent-

expired shredded wheat. The complaint in that action

contains the affirmative allegations made in the answer filed

by defendant in the instant litigation. District Judge

Caffey, , motion, dismissed the complaint. “ On appeal the

Circuit Court of zAppeals for the Second Circuit reversed

and held that the complaint set forth a cause of action for

Violation of the Shernfan Act. Therefore, on substantially

the same state of facts, the Circuit Court of Appeals of

‘the Second Circuit holds for defendant and the Third Cir-

‘cuit holds for plaintiff. Conflict could hardly be ‘more

_ pronounced. |

4. The om decision of the Circuit Court of Appeals

of the Third Circuit is in substantial conflict with the de-

- cision of the highest court of Ontario on the identical issues

in.Canadian Shredded Wheat Company, Ltd. v. Kellogg

Company of Canada, Ltd., supra. In that case brought after

starting the instant suit, plaintiff’s Canadian subsidiary

sued defendant’s Canadian subsidiary on the same cause of

action in- the Supreme Court of Ontario. Mr. J ustice

McTague dismissed the complaint, Canadian Shredded.

Wheat Company, Ltd. v. K ellogg Company of Canada, Ltd.,

supra, holding that plaintiff had no trademark rights in the

“form and verbal and. ee description of the pafent-°

expited biscuit.

-On appeal, the five judges of the Court of Appeals of

Ontario unanimously affirmed the judgment of Mr. Justice

McTague. *The case is now pending in the Privy Council.

- +

The Canadian law as applied in that cate is the same as

the American,.English and French law. - Defendant’s busi-

ness north of the Canadian line is now held to be- lawful

‘while south it is unlawful. This is a’serious and important

~ conflict in every way. Surely defendant should be free to -

compete: with ame in ‘a fair way in the United sm

asin Canada. - ~

nia

%. The last decision of: the Cunt below if hiso, we be:

lieve, in conflict with the decision of this Cour. in Singer v.

June, supra, regarding the effect of patent expirations upon

the form and name of a patented article.

In that case it was held that after the Singer patents had

expired the product covered by them and the name applied

thereto could not be restricted to the sole use of the patentee.

Yet in the present case the Circuit Court of Appeals for the

Third Circuit has wholly disregarded this dostring and

granted a perpetual opoly. — . @

' he Singer-June/rule of irrevocable dedication of name

and form by patent expiration is elementary, sound and

established law and should not, we submit, be overruled,

repealed or disregarded’ as the Court below does in its

second decision.

6. The last decision of the Court below is also in conflict

with the Constitution of the United States (Art. I, Sect. 8,

par. 8). The {ourt an@ Congress both lack power to revive

patents or to grant pérpetual monopolies in the form and in

the pictorial and verbal description of a product after the

expiration of patents on the*design or form*and on the

product itself, as well as the method of and machinery for its

manufacture. The Court’s action in reviving and perpetuat-

ing plaintiff’s patent monopolies after their expiration is a

virtual breach of the constitutional limitation on the powers °

of Congress. The Constitution, Art. I, Sec. 8, sub-par. 8,

grants power tg Congress to extend mongpolistic privileges

to inventors an@authors only and fora tihaited time. Under

this authorization Congress has seen fit to grant to inventors

17. « ° 2

ir return for their public dedication of their invention 1 mo-

nopolies for 17 years only.

a * The tajunction ordered is also in conflict with the —

Shite Anti-Trust Act, approved July 2, 1890, as amended.

That Act makes fair competition mandatory. Here the

Court below enjoins defendant from dill competition, fair

or otherwise. os ay 4

8. The last decision of the Court below is also in sub-

stantial conflict with its own view of the law of patent-

expiration as applied in Amiesite v. Interstate Amiesite Co.,

72 F. (2d) 946, and also with the decision of the Circuit

Court of Appeals for the Second Circuit in Du Pont. Cello-

_phane v. Waxed Products, 85 Fed. (2) 75; Certiorari denied,

o7 Sup. Ct. 194. ;

9. The last decision of the €ourt below is contrary to

Delaware & Hudson Canal Co. v. Ciark, 13 Wall, 311, Stand-

ard Paint Co. v. Trinidad Asphalt Manufacturing Co., 220

U. S. 446,* and Warner v. Eli Lilly, (supra), which hold the

invariable rule to be, that relief in trademark infringe- .

ment and unfair competition cases alike rests upon the

wrongs of the defendant in passing off its goods as plain-’

tiff’s and not upon any alleged right of a plaintiff to be ~

protected in a name or form which under the guise of a

trademark will set up monopolies in products which‘ all are

free fuirly to make and sell. Here the finding is ‘that de-

fendant’s goods have never been passed ‘off as. plaintiff’s

and are so distinctly marked’ as to be incapable of being

passed off (R. V. I, 204-226, V: III-A, 2072). |

. 10. »The last deéision of the Court below is also in con-

flict with that of this Court in Warner v.. Eli Lilly, supra,

and of the Second Circuit in Shredded Wheat Co. v. Hum- |

phrey Cornell, supra, and other cases, holding that_a Court

has power only to restrain the deceptive use of ornamental, ,

* Judge Davis, in the second decision below, cites this case in the Circuit

Court of Appeals (163 Fed. 977). Why he does, so’.we do not know unless

he is relying on the dissenting opinion of Judge Sanborn. The majority cpinion

of that Court, however, overruling the —t opinion of Judge Sanborn, was

unanimously affirmed by this Court in 220 U. S. 446. . .

iw)

)

fanciful or. non- essential features of dress or appearance

and not, by enjoining the use-of functional or mechanical

shapes, forms or essential features and descriptive names,

‘to stop the defendant from all competition however honor-

able and fair.

11. _The last decision below is in conflict with Warner

- ov. Eli Lilly, (supra), in' another respect also. The Court

below, in that case, attempted by injunction to go be-

yond the unfair acts of the defendant and to set up a per-

petual, monopoly of the right to combine cocoa and quinine

there favolved. This Court reversed that decision and the

regarded the admonition of this Court by setting up similar

perpetual monopolies of form and Ghape aud of pictorial

and verbal descriptions of a patent-expired product.” .

_» 12. The last decision below is also in conflict with Cen-

taur v. Heinsfurter, (C. C. A. 8) 84 Fed. 955, in which Mr.

Justice Brewer held that- dedication of name and form

by patent-expiration under the Singer-J une doctrine was

perpetual and not revocabie even in a case of ten years ex-

clusive uvccupation of the market by the patertees after the

patent had expired. The Third Circuit now holds that five

years occupation of the-market* (accomplished by threats)

revives the long dead patents and makes them perpetual.

13. The last decision below also conflicts with Kellogg

Toasted Corn Flake Co.v. Quaker Ogts Co., (C. C..A. 6) om

Fed. 657. The Court ‘there held that even if second

meaning for. the words ‘‘Todsted Corn Flakes’’ nointek

.. to this plaintiff’s predecessor as maker, the Quaker Oats

Company could still make the same patent-expired product

and market it as ‘‘Quaker Toasted Corn Flakes’’ in distine-

a ;

' *It is irrelevant to argue that “shredded wheat” is not descriptive, for

the picture indisputably is descriptive’ and that is enjoined too. In our

brief. (p. 35), we give instances of the use of shredded wheat in a purely

cotta way in plaintiff's patents and advertisements.

tive and fait cartons. Different “makes” of corn flakes are

just as indistinguishable, when served apart from their car-

tons, as-are shredded wheat ‘biscuit.

* 14. The last decision below 4 ‘is also squarely in conflict

with the decision of this Court in Beckwith v. Commissioyer

of Patents, 252 U. 8. 538, and Rahtjen’s v. Hotzapfel’ s, 183

U. 8. 1, holding that disclaimers embodied in trademark

certificates are irrevgcable. °

This point was wholly disregarded by the Court although

always pressed by defendant.

16. When the second decision came down, plaintiff,

with afl the driving force of its great advertising, publicity

and sales promotion departments, sent all over, the country

advertisements, circulars, and news releases, with double _

check follow ups (R. V. III- -A, p. 2130), stating that de-

- fendant was under injunction and excerpting only the

‘‘The original’ bears this signature W. K. Kellogg’’. That

phrase was never an issue ‘on the trial. The complaint

makes no‘merffion of it and there is no prayer for relief.

The injunction ordered does not mention it. The phrase

originated on defendant’s corn flake cartons and was almost

out of use at the time of the trial and had not ‘been in use

for several years prior to the second. decision. Motions

were made (R. V. ITI-A, p. 2130) to recall and to restrain

: the unfair, use of the Court’s decision. The Court denied

the motion, thus putting its seakof approval on this in-

equitable proceeding. . That action was in conflict with;

Peters v. McDonald, (C. C. A. 2nd) 61 Fed. (2nd)

1031;

- Art Metal Works v. Abraham and Straus, 62 Fed.

(2nd) 79.

_ 16. Finally, we complain because we believe the Court -

below was unfair and denied due process because at both

Nad ‘ &

: RB ea

hearings defendant’s counsel were denied an opportunity

fully to axgue the ease. This was particularly true with re-

spect to the secondary defense of disclaimer and to de-

fendant’s conceded right to make and sell the biscuit in issue. -

‘After the Circuit Court of Appeals had granted its far

reaching injunction on the sevond hearing, it refused de-

fendant an opportunity to reargue the case. This, we

believe, was unfair in view of the fact that the injunction

granted went far beyond plaintiff's final prayers. Ante, p. 2,

footnote. ° AGS

- We respectfully petition the Court to grant a writ. of

‘certiorari, ~ a:

’ Respectfully submitted,

' W.-H. CRICHTON CLARKE,’

EDWARD S. ROGERS,

‘ ROBERT T. McCRACKEN,

Counsel for Defendant-Petitioner.

—

BRIEF IN SUPPORT OF PETITION.

1. Opinions Below. .

The opinion of the District Court of the United States

for the. District of Delaware, filed January 11, 1935, is

printed at Record V. I, p. 193, and is not officially reported.

- The first opinion of the Circuit, Court of Appeals for

the Third Circuit, filed January 16, 1936, is printed at Rec-

ord, V. III-A, p. 2069, and is not yet reported.

The second opinion of the Circuit ‘Court of Appeals for* .

the Third Circuit, sur rehearing, filed Apri] 12, 1937, is

printed at Record V. III-A, p. 2083, and is not yet reported.

| -. 2, Jurisdiction. : i

The original decision of the Circuit Court of Appeals for

the Third Circuit was rendered January 16, 1986. Plaintiff

respondent duly filéd a petition for rehearing which was

granted, and the second decision of the Cirenit Court of

Appeals, sur rearguzment. was rendered April 12, 1937.

Defendant appellee thereafter duly presented its petition

for rehearing, and its- motion to recall the decision, and,

after argument on the latter, both the petition to rehear and

the motion tv recall were denied Juiy 13, 1937 (R: V. III-A, °°

pp. 2240-2241).

The jurisdiction of this Court‘is invoked under Section

240(a) of the Judicial Code as amended by Act of Congress

of February 13, 1925, Chapter 229, 43 Stat. 936. —

"3. Statement of the Case.

_ See petition, supra, pp. 4-11.

4. Specification of Errors Relied Upon.

The Circuit Court of ‘Appeals, in its second decision,

erred;

1. In holding that since the ‘expiration of plaintiff’s

patents on shredded wheat, defendant was not entitled to

«>

—

alivertipe or ‘sell shredded wheat biscuits in a form and

shape similar to plaintiff ’s, although that is the only form

. and shape in which said biscuits cari be manufactured by

_ the formerly patented machinery without modification.

2. In holding that plaintiff could appropriate, as trade- —

marks, destriptive words, forms and pictures which it had

specifically disclaimed as trademarks for the purpose of

registering other —: as its trademarks.. .

3. In holding that, since the expiration of plaintiff’s

| patents on shredded wheat, defendant is not entitled to dis-

play in its advertisements pictures of shredded wheat bis- _

cuits in form and shape similar to plaintiff’s, although that

is the only form and shape in which said biscuits can be

manufactured by the formerly patented machinery.

_ 4. In holding, in effect, that in spite of the expiration

of plaintiff’s patents on shredded wheat, defendant is not

entitled to use the formerly patented machinery for the -

purpose of manufacturing the sole product of such raa- °

chinery, shredded wheat bi scuits.

5: In substantially granting plaintiff a perpetual monop-

oly in the formerly patented machines in violation of the ~

limitation contained in Art. 1, Sec: 8, sub-par. 8 of the Con- |

stitution which provides for the granting of such monopolies

to new inventors only and for a limited time only and by

Congress enly, and grants no power even to erin to

_ revive iong dead patents.

6. In holding that, since the eee Ye of plaintiff’s

patents on shredded wheat, defendant is not entitled to use

the words«hredded wheat to describe its product, although

that is the precise language used in plaintiff’s trademark

registrations and patents to describe the product.

7. In holding that the words shredded wheat are not -

purely descripfive and that they are therefore capable of

exclusive appropriation as a trademask, even after specific

statutory disclaimer.

8. In holding that the words shredded wheat have

_acquired a-secondary meaning in the minds of the publig, °

and in further holding that’they have thud become. the exclu-

sive préperty of the plaintiff and incapable of distinguishing

and fair use by defendant. +

9. In holding that the werds shredded wheat,. after

dedication to the public by the expiration of patents per-

‘ taining .thereto, and after specific statutory trademark dis-

élaimers, may. be reappropriated exclusively by plaintiff

through continued user (principally because defendant. was

prevented by threats of litigation from competition from

. 1922:to 1927). |

10. In holding that the words shredded wheat were

capable of exclusive appropriation by plaintiff through

continued user for a period of yeass, even ini the absence of

patent-dedication and trademark disclaimer.

11. In holding that defendant, who had distinguished its

shredded wheat biscuits from plaintiff’s in so far as pos-

. sible in shape and form, and who had packed said biscuits .

in distinctive cartons, and who had never imitated plain-

tiff’s carton trademarks, was guilty wad trademark infringe-

ment or unfair competition.

‘12. In holding ‘that the words ‘the original has this

signature:. W. K. Kellogg”, s statement formerly placed |

on some of defendant’s ‘packages, was evidence of an inten-

tion to deceive the public and of unfair competition, espe-

c:ally where such phrase had never been an issue in the case,

was not mentioned in the complaint er prayers for relief, |

and was not covered by the injunction ordered.

3 *

ARGUMENT.

sy its ‘second decision the Court below ordered the

strict Court to enjoin defendant perpetually

(a) from the use of shredded wheat as a tradename.

(b) from advertising, or offering for ‘sale its prod-_

uct jn the form and shape of plaintiff’s bisevit i in

violation of its trademark.

profits |

Injunction clause (b). does hot mention ares and does

_ not mention size or calor.

' Defendant can make the patent expired product but it

is enjoined from ‘‘advertising or offering it for sale.’’

As to size, the~plaintiff’ duplicated defendant’s small

sized biscuit five years after defendant had put it on the

market and the court below has now enjoined defendant per-

-pecually from advertising or selling any sized biscuit large -

or small, whether banded, tagged, packaged or not.

Moreover, plaintiff has recently sued the Ralston Purina

Company in the United States District Court for the Eastern

District of Missouri. (National Biscuit Co. v. Ralston Purina

Company, in Equity No. 11817) for making a thumb-nail size

of shredded wheat marketed as ‘‘Shredded Ralston’’.

In short, plaintiff has now received a perpetual monopoly

against agen ever calling or picturing any product of any

size as shtedded wheat or using any kind of machinery now

known or formerly patented or hereafter devised for making

any size of product that resembles ‘‘the form and shape”’ of |

plaintiff’s biscuit. All this in perpetuity.

Plaintiit ever had anything like taat kind of protection

even during the life of its forty-one p: atents.

Petitioner respectfully submits that the second detision

of the Circuit Court of Appeals is not only in conflict with

the applicable decisions of this Court on important ques-

tions of law relating to patent-expirations, disclaimers,

trademarks and unfair competition and with recent deci-

sions of other Circuit Courts of Appeals involving substan-

5 ‘

tially the same questions of law (Kellogg Company v. Na-

tional Bisouit Company, supra), but is also in direct conflict

with Art. 1, Sec. 8, sub-par. 8 of the Constitution which

grants power to Congress to extend monopolistic privi. ileges

to inventors only and to such for a limited tinie only. Not —

even Congress is given power to revive long-degd patents

and to make them perpetual. The second decision is also in

conflict with decisions of other Courts in cases. involving the

specific trade-mark and product involved in this case.

Petftioner maintains specifically that the second de-

cision of the Court below granting perpetual monop-

olies in the name, shape and form of.a‘ patent-expired

article is directly in conflict with the decision of this Court | —

in Singer v. June (supra), of the Cireuit Court of Appeals.

of the Second Circuit in Dupont Cellophane Co. v. Waxed

Products Co. (supra), and of the Cirenit Court of Appeals

of the Third Cirenit in a decision just preceding* the one ,

here sought to be reviewed Amtesite Asphalt Co. of Amer- :

tca V. Interstate Amuvesite Co. (supra). .

. The ‘decision is directly in conflict with decisions of

another Circuit Court of Appeals bearing upon the specific

name shredded wheat in that it grants a perpetual trademark

in‘this name by injunction, althoygh the registration of such

trademark under the Act of 1905 has-been judicially denjed.

The Natural Food Company v. Williams (supra) ;