Trade Name. Damages, In suit in equity. Equity Pleading and Practice, Findings by master. Wrongdoer without Remedy.
A master, to whom a suit to restrain an infringement of a trade name and label and for damages had been referred for the assessment of damages after a decree in accordance with a decision of this court that the plaintiff was entitled to an injunction, found that there was no conduct on the plaintiff's part which justified the defendant in believing that he acquiesced in the manufacture and sale of infringing substances unless the defendant "was so justified as a matter of law by the facts I find and report herein." He also found that previous to the suit against the defendant the plaintiff had successfully maintained a suit against another person to establish his right to the use of the trade name and that the defendant knew nothing of that suit, that thereafter he had called together many manufacturers of a substance of the same name as his "to fix a living price for their product," and that the name used by the plaintiff had come into general use and did not necessarily mean the product of the plaintiff alone. The evidence was not reported. Held, that the specific facts found by the master were not sufficient to warrant a ruling that as a matter of law the plaintiff had abandoned his rights.
The master in the suit above described found that the defendant purchased of a third party a substance under the same name as the plaintiff's and resold it, and that the profit to the defendant was the difference between the sum paid to the third party and the selling price. This sum was awarded as damages to the plaintiff. The defendant contended that he should be allowed to deduct a share of his general operating expenses. Held, that the contention could not be sustained, as this would permit the defendant to deduct the expense of carrying on a deliberate wrong against the plaintiff.
BRALEY, J.
It having been decided in Grocers Supply Co. v. I. Renaud Co. 219 Mass. 576, that the plaintiff had acquired the exclusive right to make and vend in this Commonwealth a bleaching and cleansing fluid under the trade name of "Kormon" water and in connection with the sale to use a distinctive label, relief was granted enjoining the defendant from manufacturing and selling a similar fluid under the name adopted by the plaintiff and from putting it upon the market in bottles or other containers bearing a label of such similitude to the plaintiff's that the ordinary buyer would mistake the defendant's for the plaintiff's product, the case was referred to a special master "to find . . . what profits, and damages if any, the plaintiff is entitled to." The defendant upon the coming in of the original and supplemental reports alleged exceptions which having been overruled and, a final decree having been entered for the plaintiff, it appealed to this court.
While the former decision is decisive on the questions of liability for infringement and diversion of profits, the defendant contends under the first exception that the master should have found that the plaintiff's conduct constituted such acquiescence as to preclude it from recovering profits during the period from March 1, 1909, to March 26, 1915. It is settled that both damages and profits are recoverable and the master expressly finds that there was no conduct on the part of the plaintiff which justified the defendant in believing that the plaintiff acquiesced in the manufacture and sale of the fluid under the name "Kormon" water or names similar thereto "unless it was so justified as a matter of law by the facts I find and report herein." The evidence is not reported and in so far as the question of waiver and acquiescence was one of fact the finding of the master is conclusive, and the facts found are not sufficient as matter of law to establish an abandonment by the plaintiff of its rights for reasons stated in our former opinion. The first and second exceptions must be overruled. Regis v. Jaynes Co. 191 Mass. 246. Reading Stove Works v. S. M. Howes Co. 201 Mass. 437. Forster Manuf. Co. v. Cutter-Tower Co. 215 Mass. 136.
Nor can the third exception, which is to the refusal of the master to find and rule that gross profits which the defendant received from certain sales should not be allowed, as only net profits were recoverable, be sustained. To allow the defendant, as now urged in argument, to charge upon the gross profits any share of its general operating expenses would be to permit it to take advantage of its own deliberate wrong when it intentionally palmed off its goods as having been made by the plaintiff. Regis v. Jaynes Co. 185 Mass. 458, 462. Reading Stove Works v. S. M. Howes Co. 201 Mass. 437, 443, and cases cited.
The result is that, finding no error, the decrees are severally affirmed with costs of the appeal.
Ordered accordingly.