Supreme Court of Canada
Prest-O-Lite Co. v. People's Gas Supply Co., (1917) 55
SCR 440
Date: 1917-10-09
The Prest-O-Lite Company (Plaintiffs)
Appellants;
And
The People's Gas Supply Company (Defendants)
Respondents.
1917: June 11; Oct. 9.
Present:-Sir Charles Fitzpatrick C.J. and Davies,
Idington, Duff and Anglin JJ.
ON APPEAL FROM THE EXCHEQUER COURT OF CANADA.
Trade-mark—Infringement — Use — Selling marked goods —
Covering trade-mark.
The Prest-o-Lite Co. manufacture tanks for storage of
acetylene gas and are proprietors of the trade-mark "Prest-o-Lite"
which is embossed upon each tank. The People's Gas Supply Co. manufacture
acetylene gas and purchase said tanks, charge them with their own gas and sell
or exchange them. On the tanks so sold is affixed a label covering said
trade-mark, which states that the tank is filled with gas manufactured by The
People's Gas Supply Co. This label is of paper affixed to the tank by shellac
and can only be removed by scraping with a knife or other instrument. In an
action by the Prest-o-Lite Co. for infringement of their trade-mark,
Held, Fitzpatrick C.J. and Duff J. dissenting, that such
action must fail; that defendants did all that could reasonably be expected to
prevent a prejudicial use of the trade-mark; and that they did not
"use" the trade-mark within the meaning of sec. 19 of the
"Trade-mark and Design Act."
APPEAL from the judgment of the Exchequer Court of Canada
dismissing the plaintiffs' action.
The action was brought for
infringement of plaintiffs' trade-mark. The material facts are stated in the
above head-note.
The action was dismissed by the Exchequer Court and the
following reasons assigned.
CASSELS J.—This action is brought by the plaintiffs to
restrain the defendants from infringing the trademark
[Page 441]
of the plaintiffs. The plaintiff company is an incorporated
company having its head office at the City of New York, in the State of New
York, one of the United States of America. The defendants are an incorporation
with their head office at Ottawa, in the Dominion of Canada.
The contention of the
plaintiffs is shortly as follows: Apparently in the United States patents were
issued to them which covered not merely the process patent but also the tank in
which the product of the process was stored. In Canada the only patent which
the plaintiffs have is a patent for the process. There was no patent in Canada
protecting the tank.
The Prest-o-Lite Company
are manufacturers and distributors of acetylene gas for lighting automobiles
and other vehicles. The plaintiffs stores its gas in portable steel cylinders
lined with asbestos, which absorbs a quantity of acetone which in turn is
saturated with acetylene gas
introduced under pressure, the outflow
for consumption being valve controlled.
It is conceded that the
defendants have by virtue of the second section of chapter 103, of the statutes
of 1913, the right to manufacture use or sell the, process product in Canada.
Their rights in- this respect are not contested. It is also conceded
by the plaintiffs that the tanks manufactured and sold by them have become the
property of the purchasers; and it was stated by Mr. Chrysler, on the argument
of the case, that the purchasers might utilize these tanks in any manner in
which they chose, provided the trade-mark "Prest-o-Lite" was removed
from the tanks. In other words, if it were feasible to remove the trademark,
plaintiffs concede that the defendants have a perfect right to fill the tank
with acetylene manufactured by them and to sell the same.
[Page 442]
The contention, however, is
that the defendants have no right to fill the gas into tanks containing the
trade-mark of the plaintiffs, and to sell them to others with the trade-mark
"Prest-o-Lite" on the tank.
Two classes of cases arise.
One is cases in which the purchasers from the Prest-o-Lite Company in the
United States take their tanks to the defendants to be refilled. This comprises
the larger number of what the plaintiffs contend are infringements of their
trademark. The other class of cases, is cases in which the defendants purchase
the tanks out and out with the name Prest-o-Lite on them, refill them and sell
them to others or give them in exchange for empty tanks for a consideration.
The plaintiffs' contention is that the defendants are
infringers of their trade-mark.
Since the argument I have
gone very carefully through all the authorities cited to me, and numerous other
authorities, and have come to the conclusion that the plaintiffs' action fails.
The cases are so numerous and the principles so clearly settled that it would
be useless labour to comment in detail on these authorities.
It has to be clearly
understood that the Exchequer Court has no jurisdiction in what are called
"passing off" cases. The jurisdiction is limited purely to questions
of infringement of trade-mark. This is conceded by counsel for the plaintiffs.
It is also, as I have stated, conceded that the defendants have an absolute
right to use the process and sell the product described in the Canadian patent.
It is proved before me clearly that in no case, except one or
two of trifling importance, have the defendants ever refilled any of the tanks
and let them go from their premises without the word "Prest-o-Lite"
being completely covered over.
[Page 443]
A notice is posted over the
word "Prest-o-Lite" this notice showing on its face that the tank was
refilled by the Ottawa Company.
The contention is that the
defendants have covered them over with a substance which might be removed by a
wrong-doer. In point of fact no evidence has been adduced to shew any such
erasures of the covering placed on the tanks by the defendants, and I am not
prepared to adopt the reasoning of some of the American authorities cited
before me, in which comment is made upon the fact that the wrapper placed over the"
word "Prest-o-Lite" is capable of being removed.
As I have said, it has to
be kept clearly in mind this is not the case of "passing off" or
wrongfully attempting to steal the trade of the plaintiffs.
In the cases in the United States
it is quite evident that the courts were influenced by the fact that the
defendants were endeavouring to steal the plaintiffs' trade.
In one case, the Searchlight
Gas Co. v. Prest-o-Lite Co.,
before the Circuit Court of Appeals, Baker J., at page 696, uses the following
language:— "Appellee is entitled to have its lifeblood saved from leeches
and its nest from cuckoos."
The judges in these cases do
dwell upon trademark, but it is so mixed up with the passing off, that
evidently from a perusal °of these particular cases the court was much
influenced by the fraud of the defendants in seeking to rob the plaintiffs of
the benefit of their trade. There is nothing in the case before me
corresponding in any way to the facts of these cases.
The defendants as far as they can effectually covered the word
"Prest-o-Lite" when refilling the tanks, and sending them out of their
premises. There is no evidence
[Page 444]
whatsoever of any
combination between the parties bringing the tanks to be refilled and the
defendant company. Under the patent law there may be cases where a defendant
may become what is commonly known as a contributory infringer. The term is a
misnomer. If the circumstances are such that it is proved the party connives
with another to defraud the patentee he becomes an infringer—but to be an
infringer he must be a party to inducing another to break a contract or
inducing him to infringe a patent. The law on the subject is very fully
discussed by the late Mr. Justice Burbidge, in the case of The Copeland
Chatterson Co. v. Hatton.
This case was taken to the Supreme Court of Canada, and the judgment of the
Exchequer Court was affirmed. The question there discussed was the right of a
patentee to enter into a bargain for the use of a patented article. The point
of contributory infringement does not seem to have been discussed, but
evidently the views of the learned Judge were sustained.
In the case before me there is no pretence whatever of any
dealings on the part of the defendants similar to the dealings in the Copeland
Chatterson Case, referred to. I find no law under the "Trade-mark
Acts" which refers to contributory infringement.
It has to be borne in mind
that the case before me is not brought for infringement of a patent. Some point
is made that some of the tanks which were brought to the defendant or filled by
the defendant, had the word "patented" on them. No doubt these were
American tanks, and probably very rightly had this stamp upon them. It is of no
consequence, and has no bearing as far as I can see on the case before me.
In the Ontario Courts, the
case of Prest-o-Lite
[Page 445]
Co. v. London Engine
Supplies Co.,
came up before Chief Justice Falconbridge.
This case was taken to the Court of Appeal. On the appeal the reasons of the
Appellate Division are set out in (Dec. 22nd, 1916). As far as the
reasons would shew this case rested to a very great extent on
passing off. The contention was that there was unfair
competition. I have looked at the pleadings in this case, and the claim of the
plaintiff was not confined to passing off but the plaintiffs in that action
also relied upon the infringements of their trademark "Prest-o-Lite."
I am unable to bring my mind to a conclusion, that what the
defendants have done, having regard to the circumstances as detailed in the
evidence, amounts to an infringement of the plaintiffs' trade-mark. One or two
trifling instances have occurred in which the defendants may have sold the tank
filled by them without obliterating the name. There is considerable doubt about
this. In any event the amount is trifling.
No claim has been pressed that the tanks have not been sold
out and out. Any notice such as set out in the defence is a notice under the
American patents not in force in Canada.
It was argued by Mr.
Sinclair that the word "Prest-o-Lite" is not the subject matter of a
trademark, but that it became the generic name of the article sold. I cannot
agree with this contention. The trade-mark was adopted for use by a company
other than the company which had the patents under which the tanks and the
compound in question were manufactured. It was the trade-mark first used by a
company with another name, this company subsequently changing its corporate
name into the name
[Page 446]
of the Prest-o-Lite Company. It is open to argument that the
name may not be susceptible of a valid trademark under the principles laid down
in the case of Kirstein v. Cohen.
My own personal view is that it is a valid trade-mark and not governed by
the principles decided in the Kirstein Case. It is, however, unnecessary
t6 follow up this line of thought, as after the best consideration I can give
to the case I am of the opinion that the plaintiffs are not entitled to succeed
for the reasons I have given.
The action is dismissed with costs.
Chrysler K.C. for the appellants. The defendants used the plaintiffs'
trade-mark within the meaning of sec. 19 of the Act. See Bechstein v. Barker[6] ; Monro
v. Hunter[7]; Upmann
v. Forester[8].
Proof that any purchaser
from or through defendants was deceived is unnecessary. Millington v. Fox; Cellular
Clothing Co. v. Maxton;
Boston Rubber Shoe Co. v. Boston Rubber Co..
See also Gannert v.
Rupert;
Prest-o-Lite Co. y. Davis,
at page 350; Prest-o-Lite Co. v. Searchlight.
R. V. Sinclair .K.C. for the respondents. The tanks bought from appellants became the
property of the defendants who can fill and sell them with the trade-mark on so
long as the purchaser is not deceived. Welch
v. Knott;
Prest-o-Lite Co. v. Auto Acetylene Co. ;
Kerly on Trade-marks (2 ed.) p. 369; Barret v. Gomm ;
and United Tobacco Cos. v. Crook,
were also referred to.
[Page 447]
THE CHIEF JUSTICE
(dissenting).—The case is unusual in that the tanks in respect of which the
claim for infringement of trade-mark is brought, are not only things of
intrinsic value but of themselves of far more value than their contents, whilst
most, at any rate, of the decisions in similar cases deal with vessels or
containers of little or no value in themselves, such as aerated water bottles
with the trade-mark of the maker of the water embossed or blown in the glass.
The difference does not, however, affect the principles on which the ease
turns.
Two classes of cases arise.
One is that in which the individual owner of the tank takes it to be refilled.
This he has a perfect right to do and the respondents putting their label over
the trade-mark are justified in refilling it. No one can be deceived here and
the respondents cannot be said to be using the trade-mark in disposing of their
goods. The other class comprises the transactions in which the respondents
purchase the tanks and refill and sell or give them in exchange for empty tanks
for a consideration, which is the same thing, the empty tank being only part of
the consideration given; and also those in which they refill tanks for owners
of garages who dispose of them in a similar way to those making use of their
establishments. The cases in this latter class constitute, I think, an infringement
of the trade-mark.
It is well established that
regard must be had to the possibility of the ultimate purchaser being deceived
and such deception will be restrained even though the original purchaser is not
deceived.
No man is entitled to represent his goods as being the goods
of another man, and no man is permitted to use any mark, sign or symbol,
device, or other means, whereby, without making a direct false representation
himself to a purchaser who purchases from him, he enables such purchaser to tell
a lie or to make a false representation to somebody else who is the ultimate
customer.
[Page 448]
Per James L.J. in Singer Manufacturing Co. v. Loog; adopted by Lord
Macnaghten in Reddaway v. Banham.
If a man does that, the natural consequence of which (although
it does not deceive the person with whom he deals, and is therefore no
misrepresentation to him) is to enable that other person to deceive and pass
off his goods as somebody else's, for that he is answerable.
Per Cotton L.J. in Singer Mfg. Co. v. Loog at
page 422.
It is clear that when the
respondents sell the tanks which they have purchased and refilled to keepers of
garages or others, particularly dealers, of course, or fill them for such
persons they put it out of their own power to answer for the ultimate purchaser
not being deceived as to the goods he is purchasing bearing the appellants'
trade-mark.
In this connection it is
insufficient that the respondents place their own label over the trade-mark. It
was held by North J., in Allan v. Richards,
that:
If the defendant chose to buy second hand bottles bearing a
trade-name and fill them with the same liquid as the owner of the name was in
the habit of filling them with, the defendant was not in a position to resist
an injunction if. applied for. The affixing of the defendant's own label did
not affect the question, for the label might get removed in a variety of likely
ways, for instance, if the bottles were. plunged in ice. If the label under
such circumstances were to come off, there would be nothing to prevent the
public from believing they were purchasing in the bottles stamped with the
plaintiff's name ginger beer manufactured by the plaintiff. The injunction must
therefore be granted.
But even if the putting on
of the respondents' label were to. be considered sufficient in the case of a
sale to an individual it affords no guarantee whatever in the case of dealings
with dealers who might well systematically remove the labels before selling the
tanks to the ultimate purchasers.
[Page 449]
In my opinion, however, the
practice of buying up the appellants' tanks and refilling them for sale is
unfair to them in any case. Let us suppose that the tanks were refilled with an
inferior quality of gas; that I dare say is not the case in the present instance
but it might well be so in others; it would be very injurious to the reputation
of the appellants' tanks that a number of them should be about filled with a
gas that could not be relied on; the public cannot be supposed to know the
explanation of the difference between the tanks as originally filled and those
same tanks still bearing the trade-mark but refilled either improperly or with
an inferior gas by some other firm.
In the judgment appealed
from it is said that
the cases in which the purchasers from the Prest-o-Lite
Company in the United States take their tanks to the defendants to be refilled
comprise the larger number of what the plaintiffs (appellants) contend are
infringements of their trade-mark.
If this is not meant to
include dealers there is a dispute as to the facts because the appellants in
their factum say,
according to the evidence the greater number of transactions
are between the respondent company and the dealers.
It is unnecessary, however, to go into the evidence on this
point as the case should, in my opinion, go back to the Exchequer Court for
re-consideration and determination upon the principle above indicated.
DAVIES J.—For the reasons
given by Mr. Justice Sir Walter Cassels in the Exchequer Court I am of opinion
that this appeal should be dismissed with costs.
IDINGTON J.—The appellant complains that its trade-mark, duly
registered, and engraved upon tanks which it has sold without restriction as to
their future
[Page 450]
use, has been infringed. by the respondent refilling same for
the respective owners thereof with its acetylene and charging therefor, or by
exchanging the like tanks (which it had duly acquired) after filling same with
acetylene for others brought to it empty.
Stress is laid in argument
upon the fact that the tanks in question bore the engraving of appellant's
trade-mark although that was carefully covered over by something intended to
hide it which had an inscription thereon declaring the fact-of
the refilling having been effected with acetone and acetylene of the
respondent's manufacture.
Is it- conceivable that any one would attempt the
maintenance of such an action if, for example, alcohol or buttermilk had been
used instead of gas for refilling such a tank merely, as a convenient vessel
for carrying such or the like materials upon sale thereof?
I suggest such an improbable contention merely to illustrate
and make clear the issue raised.
The nature of the offence against both law and honest dealing
has to be considered in applying the "Trade-mark and Designs Act"
which was enacted to furnish those concerned with a more efficient remedy
against transgressors in that regard than had been obtainable at common law or
in equity.
The action rests upon section 19 of the Act, which is as follows:-
19. An action or suit may be maintained by any proprietor of a
trade-mark against any person who uses the registered trade-mark of such
proprietor or any fraudulent imitation thereof, or who sells any article
bearing such trademark, or any imitation thereof, or contained in any package
of such proprietor or purporting to be his, contrary to the provisions of this
Act.
It seems to me impossible to hold, under the facts in evidence
and in face of the express declaration inscribed on the label used in such
transaction by
[Page 451]
respondents, which could not
escape a purchaser's notice, that there was any use by it of appellants'
trade-mark. It is not pretended there was "any fraudulent imitation
thereof."
It is conceivable that if
the label had been shewn to be of a kind easily removed by accident or design
and the transactions were of such goods for the purpose of resale, then the
case might have been brought within the principle enunciated by Lord Westbury
in Edelsten v. Edelsten,
at page 199.
There are many ways in which
to my mind, by subterfuges such as are not supported herein by evidence or
pretended in argument to exist, that the respondents might have executed the
like transactions to those in question herein in such ways and manners as to
offend against the Act. We need not speculate regarding these possibilities but
simply say on the particular facts presented herein and arguments presented,
that there has been no offence against the provisions of the Act of such a kind
as to support this action, and therefore the appeal should be dismissed with costs.
DUFF J. (dissenting)—I think
this appeal should be allowed. There was, I think, by the respondent a
"use" of the trade-mark and I think it cannot be denied that. the
cylinders bore the trade-mark within the meaning of the statute.
The key to the solution of
the question presented seems to be this: The fact that the cylinders handed out
by the respondent company in exchange for others were complete Prest-o-Lite
cylinders exchangeable at the Prest-o-Lite agencies and capable of
identification as such, can by no means be regarded as a negligible
[Page 452]
circumstance in this trading
that the respondent company carries on. One must ask one's self the question:
Would the customers of the respondent company accept cylinders which, being
minus the trademark, would not be exchangeable at the Prest-o-Lite Company's
agencies? To ask that question is to answer it. The trade-mark is not
obliterated, it is not intended to be obliterated; the device resorted to
deceives nobody, is intended to deceive nobody and would defeat its purpose if
it deceived anybody. The cylinder bears the trade-mark, is known to bear the
trade-mark and has its value largely because it bears the trademark, and the
trade-mark is used in that sense and is, I think, within the meaning of the
statute. The appellant company is entitled to succeed.
ANGLIN J.—After
consideration of the numerous cases cited at bar I am, with respect; of the
opinion that the judgment in appeal is right and should be upheld. There is
direct and irreconcilable conflict between United States authorities, such as Prest-o-Lite
Co. v. Heiden,
and Searchlight Gas Co. v. Prest-o-Lite Co.,
and such English cases as Welch v. Knott.
The defendants completely
covered the plaintiffs' trade-mark on each tank filled by them with an adhesive
label, which stated in conspicuous characters that the tank had been refilled
by them. This label was so securely fastened to the metal case with shellac
that it was: not removable by water and could only be taken off deliberately by
scraping with a knife or other instrument; Barrett v. Gomm. The defendants did
all that they could reasonably be expected
[Page 453]
to do to prevent any use of
the trade-mark prejudicial to the plaintiffs. The tanks when they left their
hands could have deceived nobody. They cannot be held responsible for any
fraudulent removal of labels, so carefully designed and attached, by persons
subsequently handling the tanks. There is no evidence of any such removal in
the record. The case at bar is clearly distinguishable from Rose v. Loftus, and Thwaites v.
McEvilly,
where the embossed names of the plaintiffs were not covered by the labels
pasted on the necks of the bottles, which were, moreover, easily removable. The
bottles as sent out by the defendants in those cases might readily be sold as
containing the plaintiffs' goods. I agree with the views expressed by Hopley J.
in United Tobacco Cos. v. Crook,
cited by counsel for the respondent.
Appeal dismissed with
costs.
Solicitors for the appellants: Chrysler & Higgerty.
Solicitor for the respondents: R. V. Sinclair.
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