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Canadian Club Corp. v. Canada Dry Ginger Ale Inc.

August 12, 1932

CANADIAN CLUB CORPORATION
v.
CANADA DRY GINGER ALE, INC.; CANADA DRY GINGER ALE, INC., V. CANADIAN CLUB CORPORATION.



Appeal from the District Court of the United States for the Eastern District of Pennsylvania; Oliver B. Dickinson, Judge.

Author: Woolley

Before BUFFINGTON, WOOLLEY, and THOMPSON, Circuit Judges.

WOOLLEY, Circuit Judge.

After hearing on bill and on an answer setting up a counterclaim, the court entered a decree dismissing the bill and awarding relief on the counterclaim. Both parties appealed; the complainant on the theory that the decree is wholly wrong; the respondent because the decree, right so far as it goes, does not afford adequate relief. As these are more separate appeals than cross-appeals, we shall dispose of them separately.

Appeal of Canadian Club Corporation.

Canadian Club Corporation filed a bill against Canada Dry Ginger Ale, Inc., for infringement of its registered trade mark "Canadian" and "Canadian Club" by using the expression "Canada Dry," and generally for unfair competition in passing off its carbonated beverages, particularly ginger ale, for those of the complainant.

The substance of this case has been discussed so many times in so many courts that a recital in this opinion of all that has gone before is not necessary. Our sole duty is to pass upon the decree and, if valid, to see that it is adequate.

The complainant failed to prove ownership of the trade mark because of the judicial fact that title of its predecessor to the mark foruse in the manufacture and sale of carbonated beverages had been determined against it. Canadian Club Beverage Co. v. Canadian Club Corporation, 268 Mass. 561, 168 N.E. 106; Canadian Club Corporation v. Canada Dry Ginger Ale, Inc. (C.C.A.) 45 F.2d 964. It also failed to prove its allegations of unfair competition by the respondent, and, accordingly, compelled fact findings by the trial court (on the bill) that the respondent has not, in marketing its product,made use of the trade names "Canadian" or "Canadian Club" otherwise than by the use of the trade name "Canada Dry"; that it has not palmed off its product for that of the complainant and has not been guilty of any acts of unfair competition. On these found facts the court gave its conclusions of law that the respondent has the right in law to use, in marketing its product, the name "Canada Dry" and the other designated names or marks which it has used, and that, in consequence, the bill should be dismissed for want of equity.

That part of the decree which dismisses the complainant's bill will be affirmed.

Appeal of Canada Dry Ginger Ale, Inc.

The counterclaim of the respondent, Canada Dry Ginger Ale, Inc., is the nature of a cross-bill, yet it asks for more than full relief as to matters charged in the original bill. Though of common origin, it should be observed that by this cross-bill the company brought a distinct suit against the Canadian Club Corporation. Continuing to speak of the parties as they stood below, on the cross-bill and supporting affidavits the District Court entered a decree granting a preliminary injunction against the complainant which, on appeal, this court affirmed. Canadian Club Corporation v. Canada Dry Ginger Ale, Inc., 46 F.2d 964. On remand, the case was tried and the court entered a decree directing that: "The preliminary injunction issued by way of cross-bill is hereby made permanent." The preliminary injunction thus transmuted into a permanent injunction, restrained the Canadian Club Corporation, its officers, etc., "from using in connection with the manufacture, advertising, offering for sale, or sale of carbonated beverages the words "Canadian Club," or "Canadian Club Dry Ginger Ale," and also from licensing other persons to use said words in connection with the manufacture and sale of said beverages; from threatening or intimidating the customers of Canada Dry Ginger Ale, Inc. (the cross-plaintiff); from dealing in Canadian Club Ginger Ale or other carbonated beverages, and from otherwise infringing the trade mark "Canadian Club" applied to carbonated beverages of the said Canada Dry Ginger Ale, Inc."

The decree for a preliminary injunction was on the motion of the solicitor for the Canadian Club Corporation a re-settlement of a like decree broader in terms previously made. Notwithstanding the insistence of the solicitor for respondent that the final decree should be as broad as the court's findings of fact and conclusions of law, to only of which it excepted, the learned trial court thought that the decision of this court on appeal from its decree for a preliminary injunction was the law of the case and felt that in granting relief it was limited to the terms of the preliminary injunction which this court had approved.

We are of opinion tht the learned trial court was not restricted in awarding relief on a permanent injunction by this court's affirmance of its decree for a preliminary injunction. 46 F.2d 964. Our decision on the appeal from the decree granting a preliminary injunction was not an adjudication of the questions of fact involved on final hearing yet to be had. Puritan Cordage Mills v. Sampson Cordage Works (C.C.A.) 241 F. 671; Louisville & N. R. Co. v. Kentucky Commission (D.C.) 214 F. 465; De Forest Radio T. & T. Co. v. Westinghouse Electric & Mfg. Co. (D.C.) 13 F.2d 1014. It was a decision only on the showing made by affidavits. Our approval of the preliminary injunction, issued only for the sake of security, did not determine a substantive right of either party on the merits of the case; nor did it foreclose the trial court on final hearing from coming to some other conclusion. Waterbury Buckle Co. v. G.E. Prentice Mfg. Co. (D.C.) 294 F.930; Drew v. Harman, 146 Eng. Rep. 620. We are constrained therefore to re-form the decree so that it shall afford relief commensurate with the court's findings of ...


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