Appeal indigenous the ar Court that the United says for the southerly District of new York.

activity by the Kellogg Company against the national Biscuit Company. Native an stimulate dismissing the amended complaint, plaintiff appeals.

Reversed, through directions.




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Crichton Clarke, of new York City, for appellant.

Cooper, Kerr Dunham, of brand-new York City (Drury W. Cooper and Charles A. Vilas, both of new York City, that counsel), because that appellee.


AUGUSTUS N. HAND, Circuit Judge.

It can at first seem that this activity against the nationwide Biscuit firm by a contender to recover treble loss under ar 4 that the Clayton action (15 USCA § 15) to be without foundation, however we are on the whole inclined come think that enough is collection forth in the complaint to stand up to demurrer and to require the defendant to send to trial.

The charge in general is of an unlawful attempt to monopolize the company of marketing shredded wheat. This charge is confused with cases that the defendant is responsible because that acts done by Shredded Wheat Company, a predecessor corporation indigenous which the purchased a organization in shredded wheat, with each other with details trade-marks and also property. That is i do not have anything alleged that this purchase affiliated a merger, consolidation, or other an approach of sequence whereby the defendant would come to be responsible for the legal responsibility in contract or tort of its predecessor. For all us know, it obtained the properties because that cash and also succeeded to none that the liabilities of Shredded Wheat Company.

A good part of the verbose and at times confused allegations of the amended complain relates come transactions of defendant"s predecessor which that is sought to impute to the defendant by alleging that it "has ratified, embraced and still continues the before described system of its predecessor to suppress competition in claimed interstate shredded wheat business and also thereby for sure to itself a complete syndicate therein. * * *" together the complaint stands, this portion of what might be termed the prologue is virtually entirely irrelevant to a reason of action that only occurred after the defendant had purchased the business and trade-marks that Shredded Wheat firm in 1930, and has no application other than as it contains allegations the vague import that because the purchase the defendant has ongoing the food of conduct of that predecessor. Yet the alleged torts of the defendant must not rest on indefinite comparisons with one more corporation, yet on precise allegations as to its very own actions.

clause 43 and also the clauses following, however, seem to contain specific allegations pertinent to the reason of activity asserted. Castle state that about the year 1930 the defendant purchased the walk business and also property that the Shredded Wheat firm and directed its salesmen to slander plaintiff and also its product by informing dealers that its product is one inferior and also outlaw product, the it is not shredded wheat, yet a spurious and also inferior imitation and also that the defendant alone has actually the to exclude, legal right of making and selling shredded wheat. The complaint more alleges dangers that dealers will certainly be prosecuted as contributory infringers because that buying, handling, and also vending plaintiff"s product and also must stop on ache of being unable come procure various other of defendant"s products, that they will certainly be boycotted and held approximately the profession as infringers and also conspirators v the device of outlaw goods, and also that they must break your contracts through plaintiff. It is further alleged that with newspapers, magazines, and also trade newspaper of the country a similar false, intimidating, and libelous project of propaganda has actually been command by defendant versus plaintiff, that is product and dealers, defendant at time basing such propaganda upon false cases of exclusive legal rights to expired patent processes and also trade-mark words, every for the purpose of destroying plaintiff"s competitive company in shredded wheat biscuits and of specifically appropriating the exact same to itself. The plaintiff similarly alleges the the defendant, as a additional step in that is monopolistic scheme, in negative faith instituted, in June, 1932, an "unwarranted, vexatious and unjustifiable" action in the United says District Court for the district of Delaware come restrain the manufacture of shredded wheat in the form and shape shown in the expired architecture patent previously belonging to defendant"s predecessor and also to enjoin the use of the native "shredded wheat" in any kind of way, and that it has threatened a huge number of client of plaintiff with the several says whose names are set forth, warning them the plaintiff"s product is not shredded wheat and also that defendant has exclusive best to market that product. This things room alleged to have been done by the defendant, despite it knew that its exclusive monopoly and trade-mark claims were invalid, in order to restrain competition and secure a monopoly in the business of shredded wheat. The is additional alleged that defendant, in the year 1932, together a component of the unlawful scheme, marketed a new size that biscuit substantially identical from the biscuit i beg your pardon plaintiff had actually designed in stimulate to differentiate its products from those that defendant, and also that this to be done in order the defendant"s biscuit could be substituted because that plaintiff"s biscuit and also palmed off together such. The complaint additional alleges that, by reason of the vexatious suit and the attempted monopoly and false propaganda, plaintiff has been damaged in the business and also property in a sum in overfill of $1,000,000.

reading the complaint as a whole, it appears probable that plaintiff tiny relies on the simple allegations that defendant has falsely represented that plaintiff"s goods are of worse quality and infringe process patents, or on hazards to perform no business with involves that are customers the plaintiff, however really bases its cause of activity on the ground that defendant has asserted come the profession that plaintiff can not do its biscuits in the form of defendant"s and also could not usage the native "shredded wheat" in any method and has made this assertion despite the fact that defendant has actually no precious trade-mark or various other rights one of two people in the surname "shredded wheat" or in the form of the biscuits that sells and also was mindful of this fact. This interference with plaintiff"s use of descriptive words and forms that shredded wheat functionally essential is said to have prevented it from marketing that goods and also to have tended both come restrain competition and to result a monopoly. In support of this view, plaintiff says that in Shredded Wheat Co. V. Humphrey Cornell Co., 250 F. 960, we chose that, while the shape of shredded wheat biscuits work by the Shredded Wheat firm had obtained a secondary an interpretation indicating that such biscuits were the product of the company, we would not call for the defendant in that case to change the form or size of the biscuits, but only come affix a note or sign thereon the would indicate that castle were no the products of the Shredded Wheat Company. Plaintiff alleges that it has made the biscuits of a various shape native those of defendant and also that they are now readily distinguishable from the usual shape of the latter. Therefore, plaintiff says, defendant"s claims to the trade of exclusive legal rights are only calculated to protect against plaintiff native competing and to help defendant in maintaining a monopoly. Plaintiff likewise argues the the decision that the Court of Appeals that the district of Columbia in natural Food Co. V. Williams, 30 App. D.C. 348, shows the lack of structure and bad faith of defendant"s claim of one exclusive ideal to usage the surname "shredded wheat," for the court refuse to sustain a trade-mark in the native "shredded whole wheat" under the plot of February 20, 1905 (15 USCA § 81 et seq.), top top the ground the the language was purely descriptive and had not been solely used by organic Food Company, among the precursors in title of national Biscuit Company, for more than ten years.

we cannot regard either Shredded Wheat Co. V. Humphrey Cornell Co. Or organic Food Co. V. Williams, supra, as mirroring that defendant"s claims of one exclusive appropriate to usage the surname "shredded wheat," or the shape in which the vends that is biscuits, room without merit or certainly as identify the rights of one of two people party hereto. Nor would they in any event afford regulating criteria either because that this court or the ar Court of Delaware, where the parties space not the same and also the proofs may totally differ. Moreover, the decision in organic Food Co. V. Williams impacted only trade-marks approve under the act of 1905, and was merely that the native "shredded totality wheat" had not at the time been specifically used by organic Food company for an ext than ten years. There seems nothing in either decision that necessarily determines the civil liberties of the parties here.

The question arising upon the attempt of the present action will it is in of the sufficiency of evidence of acts showing an attempt to effect a syndicate and substantially to restrain vain in shredded wheat. To bring the defendant under the Anti-Trust acts (15 USCA § 1 et seq.), the plaintiff may present that defendant has actually threatened to cease dealings v customers uneven they decreased to address plaintiff, has actually falsely stood for plaintiff"s products to it is in inferior, and also has in negative faith and without probable cause told plaintiff"s customers that they might not use the indigenous "shredded wheat" or market a biscuit the the form employed by the defendant. That is alleged the the plaintiff has been doing company recently without utilizing shredded wheat as a name to point out its goods, and also it may not appear that any kind of loss has complied with from that course. If such have to be the case, that is an overwhelming to intend that plaintiff has actually suffered damage unless from false propaganda come the effect that plaintiff"s items were inferior, or the they were spanned by patents which had in truth expired — the is to say, from hazards of one sort or one more whereby plaintiff has been deprived the customers.

Defendant earnestly contends that also deliberate poor faith in claiming an exclusive appropriate to the name "shredded wheat" and to the kind in i beg your pardon its biscuits are marketed would only develop a reason of action for unfair vain or malicious prosecution. We are not encouraged that such is the case. Undoubtedly such causes of activity would ordinarily have nothing to perform with the Anti-Trust Acts. Yet if lock were component of an effort to effectuate a syndicate we cannot see that they would certainly fall outside of the state merely because the truth furnished a communication for reasons of action for unfair vain or malicious prosecution. If a person having actually no comprehensive claim come a trade-mark in the words "shredded wheat" provides the insurance claim in poor faith come threaten a competitor and his customers with lawsuits in stimulate to stop dealings by the latter in the commodity, they would certainly seem come be measures in an effort to attain a monopoly. If the claims, without probable cause and also in bad faith, the he is entitled to market all the shredded wheat the a details size or shape, that would be a further step.

It should be borne in mind, however, the it would not be sufficient to present that the defendant lugged a groundless fit to establish a trade-mark or the exclusive best to market goods of a certain shape. There need to be adequate proof that it was v the attempt not to create the right however to restrain competition and also monopolize component of the trade or commerce between the several states. Virtue v. Creamery package Mfg. Co., 227 U.S. 8, 38, 33 S. Ct. 202, 57 L. Ed. 393. While the doubtless would certainly not be within the Anti-Trust acts to carry a suit to assert a patent or trade-mark right whatever the motive, if the insurance claim was valid, an attempt to assert a known invalid insurance claim would it is in a different matter. Virtue v. Creamery package Co. (C.C.A.) 179 F. 115, 120, affirmed 227 U.S. 8, 33 S. Ct. 202, 57 L. Ed. 393; Mitchell Woodbury Corp. V. Albert choose Barth Co., Inc. (C.C.A.) 41 F.2d 148. The remarks to the contradictory in worldwide Visible solution Corp. V. Remington-Rand, Inc. (C.C.A.) 65 F.2d 540, v all respect, we space unable to agree with. But questions regarding the purpose of prosecuting the Delaware suit room for the attempt court, and cannot be figured out on a activity attacking the complaint.

on the trial, the primary question will certainly be even if it is the defendant has attempted come monopolize the trade in shredded wheat or just to create exclusive legal rights in certain trade-names, trade-marks, and also shapes the the manufactured product. If the latter, the cause of action so much as it is based on bringing the Delaware suit need to fail. Indeed, unless much an ext can be created than the pass of that suit and also that it is i can not qualify to succeed, it would certainly seem that this plaintiff should try out its rights there and also not load the courts with an activity which would, in the event, present no promise. In view of the rule that on demurrer every intendment is required to be in donate of the pleader, us think over there are enough general allegations to protect against a dismissal.

the is competed by defendant the its registered trade-marks cannot be assaulted collaterally. While the is true the a registered trade-mark cannot be canceled other than by direct assault in the method prescribed in the statute, trade-marks registered under the legislation of 1920 (Act Cong. In march 19, 1920, 41 Stat. 533 <15 USCA § 121 et seq.>), together those in concern were, room not in order to rendered valid. Their validity might still be doubted in any suit in i beg your pardon they are relied upon. The act was for the objective of permitting persons in this nation to register trade-marks so the they might obtain registration under the legislations of international countries. Together we claimed in Charles Broadway Rouss v. Winchester Co., 300 F. 706, it has no result on the residential rights of the human whose trade-mark is registered. In short, the registration cannot in itself determine any type of of the issues affiliated in the present case.

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The order is reversed, with direction to deny the movement to i disbanded the complaint.