Sears, Roebuck & Company v. Stiffel Company

PETITIONER:Sears, Roebuck & Company
RESPONDENT:Stiffel Company
LOCATION:United States District Court for the Eastern District of Louisiana

DOCKET NO.: 108
DECIDED BY: Warren Court (1962-1965)
LOWER COURT: United States Court of Appeals for the Seventh Circuit

CITATION: 376 US 225 (1964)
ARGUED: Jan 16, 1964
DECIDED: Mar 09, 1964

Facts of the case

Question

  • Oral Argument – January 16, 1964 (Part 1)
  • Audio Transcription for Oral Argument – January 16, 1964 (Part 1) in Sears, Roebuck & Company v. Stiffel Company

    Audio Transcription for Oral Argument – January 16, 1964 (Part 2) in Sears, Roebuck & Company v. Stiffel Company

    Will Freeman:

    — the Court.

    Just before recess, I said to this Court that both of the patents below or the patents were held invalid is being within the public domain and yet the Court following the Illinois law or what — how it interpreted the Illinois law, found that Sears was guilty of unfair competition.

    In the sale of pole lamps which were a copy of that which was in the public domain.

    There was some evidence of two buyers.

    One, a buyer from Marshall Field, one of the large department stores in Chicago and the other is Smithe Company, furniture dealers, likewise a very high grade store, that someone had seen a cut of a similar lamp in the Sears catalog, listed at some $19 plus, whereas they had bought lamps from Sears at some $40 or $39.95.

    The same was true with respect to the Smithe situation, except in that case, the complaining customer of Smithe’s had seen one of the lamps in a Sears store.

    That was the sum and substance of the evidence with respect to similarity and confusion by any customer.

    It was ranked hearsay because the buyers were saying what had happened.

    One of the buyers from Sear — from Marshall Field wanted to know how to explain to the customer that there was this difference between a $19 plus product and a $39 plus product.

    And we find in the record at page 91 a complete explanation by the vice president of the respondent, a Mr. Philips and I’m just going to read with the Court’s permission, the third paragraph of the letter of explanation.

    “As you know, it is common practice for many manufacturers to copy expensive designs and sell to retailers at reduced cost by reducing the quality through poorer materials and inferior labor.”

    Now, the granting of the perpetual monopoly to Mr. Stiffel gives him the opportunity of continuing to maintain his $40 plus price and precludes anybody that wants to buy a product at less money that will — will serve the same purpose, it may not be finished quite as well.

    But on the other hand, I think the public should be given the privilege of determining for themselves whether they want to buy a $20 item or buy a $40 item.

    (Inaudible)

    Will Freeman:

    No.

    I’m coming to that, Your Honor.

    The injunction states and I’m reading now from page 68 of the record, which is item 3 in the final judgment.

    “Defendant and its agents, representatives and employees are hereby enjoined from unfairly competing with plaintiff by selling or attempting to sell pole lamps identical to or confusingly similar to plaintiff’s Exhibits 3 and 10.”

    Now to me, that means that Sears is precluded from selling a copy.

    Just in so many words, that’s the only thing that can be unfair, if it is legally unfair, and our position is that it is not.

    Now —

    (Inaudible)

    Will Freeman:

    It — yes, it does.

    Any pole lamp that’s a copy —

    (Inaudible)

    Will Freeman:

    That’s a copy, yes.

    Now, it’s my position that even if Sears put a large tag on it or a neon light sign saying, “This is manufactured by, sold as a product of Sears”, so far as the wording of this injunction is concerned, the commandment of this judgment is that we cannot sell a copy.

    And anytime under state law that you are precluded from selling a copy, you are then stepping in to the federal patent system because you are giving to the Stiffel Company more than what they could have gotten had their design patent been valid.

    (Inaudible)

    Byron R. White:

    (Inaudible)

    Will Freeman:

    Or confusingly similar.

    Byron R. White:

    (Inaudible)

    Will Freeman:

    That is correct.

    Byron R. White:

    (Inaudible)

    Will Freeman:

    Either — either one.

    Byron R. White:

    (Inaudible)

    Will Freeman:

    That is correct.

    Another is — with — there isn’t any secondary meaning in this case your Honor, none whatsoever.

    We’re just precluded from selling a copy.

    And I say —

    Byron R. White:

    Or anything that’s close to it.

    Will Freeman:

    Or — or anything that’s close to it.

    Now —

    Byron R. White:

    (Inaudible)

    Will Freeman:

    Yes, it — that doesn’t have to be an identical one, part per part, piece per piece, just so — if I saw one here or that someone — and saw another one.

    Byron R. White:

    (Inaudible)

    Will Freeman:

    That is correct.

    We are enjoined from doing that not for a period of years as would be true in a design patent, we would have been enjoined for 14 years had the design patent been valid.

    The design patent was held invalid because a pole lamp, as such was already in the public domain.

    Byron R. White:

    (Inaudible)

    Will Freeman:

    If they are correct in what has been done in this case, we are barred from selling a pole lamp confusingly similar to or identical with —

    Byron R. White:

    Even after (Inaudible)

    Will Freeman:

    Even after we’re all long gone, to mean it would last for eternity.

    They have what I would call a perpetual monopoly.

    Judge Learned Hand, in one of his decisions in a case where some silk material was copied, made the statement that this would be the equivalent of giving to the first to come on the market a patent right, a common law patent right, that would last forever.

    Now, the State cannot do that because the federal — under the Constitution, “Congress can determine when it gives one the right to exclude others from copying or making one confusingly similar.”

    That right was given to Congress or by — by — it was given by our Constitution to Congress and that has been our patent scheme for over a 150 years.

    Now, our — conceding for a moment that the Sears lamp sold by Sears in a Sears store and has advertised, or listed in its catalog, did not have a tag on it.

    Much has been said in this case by the respondent that Sears’ product was not tagged.

    I am sure no one would want a thing of beauty that should put in your living room or in your bedroom with a nameplate put on, “Manufactured by or sold through Sears.”

    Will Freeman:

    Now, it’s strange in this case, the Court of Appeal — there was no finding in the lower court that there was a tag omitted or there was no nameplate on, no finding of secondary meaning.

    And yet our Court of Appeals for the Seventh Circuit took upon themselves to say, “There was no tag on the Sears pole lamp.”

    Now, I’ll concede that on the pole lamp itself, there was no tag but the container in which the Sears lamp was shipped to the respondent, it had a label on it saying, “Manufactured by.”

    And yet in this particular case, respondent here says, “Sears didn’t put their name on it nor the name of the manufacturer.”

    And yet on the very page that they referred to in this record, four or five lines above, the vice president of the Stiffel Company said that when he received the lamp, he knew who the manufacturer was because he took the label off of the container in which the lamp was shipped to them.

    Byron R. White:

    Are you suggesting that you can copy but you can’t sell it without taking what precautions you can to keep —

    Will Freeman:

    I’m not even — I’m not even going that far, yes, sir, as a — Your Honor.

    As a matter of law, I feel that I have a right to copy —

    Byron R. White:

    And you — and —

    Will Freeman:

    — provided it has not been patented or copyrighted or given some kind of a monopoly which was granted by the United States Government.

    Byron R. White:

    Let’s assume that you make something that’s absolutely identical to another — to the products someone — someone else is selling and it is confusingly similar in the sense that it — it — it’s not only identical but other — the people who are buying it might think it’s — it couldn’t possibly held as being yours or somebody else’s.

    Do you say that you’re not required to put your name on the — on — on the —

    Will Freeman:

    On a shipping box.

    Byron R. White:

    — the — the item or anything else.

    Will Freeman:

    No.

    I’m saying your Honor that you can’t pass off your product as the product of another.

    Byron R. White:

    Well —

    Will Freeman:

    You can’t palm it off.

    Byron R. White:

    I agree with that.

    Will Freeman:

    There was no palming off in this case at all.

    Byron R. White:

    I agree with that but you’re not — you’re a — you’re manufacturing and selling at retail pole lamps.

    Will Freeman:

    Right.

    Byron R. White:

    A customer comes into your — in — into this — in — into the store and — because I want that lamp.

    You don’t palm it off as anybody else’s or say a word.

    And — but he does think it was made by — by Stiffel.

    Now, you say you’ve got the right to do that even — and you don’t have to put a name on it, you don’t have to identify the source or origin or anything, isn’t that your point?

    Will Freeman:

    Unless there’s a showing that there has been confusion.

    Byron R. White:

    Well, there’s plenty of showing that and he asked the costumer, “If you think you’re getting Stiffel’s lamps?”

    “Yes, I thought I was getting Stiffel’s lamp.”

    Will Freeman:

    But there isn’t any proof in our case of that whatsoever.

    Byron R. White:

    Yes, but it’s — but let’s assume there was.

    And the only thing that you — and the only thing that — that happened was that you made an identical lamp, didn’t put your name on it, and some costumer bought it, thinking he was buying Stiffel’s.

    Now the — it — it was — the only reason he did is because that it looks — it looks like it.

    It’s because you copied it.

    Will Freeman:

    Well, (Voice Overlap) —

    Byron R. White:

    He could’ve have asked — he could’ve have asked, “Are these Stiffel, the lamp?”

    He would’ve said, “No.”

    But he didn’t (Voice Overlap) —

    Will Freeman:

    He would’ve asked.

    He would’ve been told no.

    Byron R. White:

    That’s right.

    Will Freeman:

    He bought it in a Sears store.

    He knew he was getting Sears —

    Byron R. White:

    Yes, but —

    Will Freeman:

    — back of it.

    Byron R. White:

    Yes, but Sears sells products and manufacturers a lot of different things.

    Will Freeman:

    That is correct and Sears stand back of their product.

    Byron R. White:

    Oh sure but — but he didn’t ask anything and he didn’t — and they — and Sears didn’t tell him anything.

    He just said, “I wanted that one.”

    But as a matter fact, he thought he was buying Stiffel.

    Now — that — let’s assume — let’s assume that case was here.

    Will Freeman:

    If — if that case were here and someone just walked in and said, “I want that lamp.”

    I would say that is not dealing unfairly.

    Hugo L. Black:

    (Inaudible) you got a perfect right to copy it.

    The other man has no governmental protection of any kind that would keep somebody from copying unless he has a patent, trademark, copyright, something granted him by law.

    Will Freeman:

    That is correct.

    In other words —

    Hugo L. Black:

    And if you can’t be accused — they can’t accuse you of deceiving somebody simply because you copied any kind of a commodity that they — they make.

    You say that’s not enough.

    Will Freeman:

    I say that as far as they might compel us under state law to label so that there would be a clear identification that this is the product.

    Will Freeman:

    This Court has many times said that you can copy a patented product after the patent has expired and you can’t rely on unfair competition or anything else to extend the monopoly but you have to do so fairly.

    Now, if it is unfair to merely copy, although we say it is not.

    It is only unfair if you used some skullduggery, and I used that word here, palming off or the product that acquired some of kind of a significant meaning but that’s not involved in this case at all.

    Hugo L. Black:

    What you are saying is, as I understand it, that a State has a right to pass laws making it an offense or — sub — subjecting him on the damages, cheating and defrauding.

    Will Freeman:

    Risk, yes.

    Hugo L. Black:

    You mean, with reference to your goods and making somebody think if you are — you are selling them goods made by somebody else.

    Will Freeman:

    That is correct.

    They have that power.

    Hugo L. Black:

    And if you are complete — but that’s — that’s completely away from the —

    Will Freeman:

    That’s not the issue —

    Hugo L. Black:

    — idea of monopoly by a patent and copyrights.

    Will Freeman:

    Right.

    Now incidentally, in the copyright case that was referred to earlier in the preceding case, I’m just tempted to say what Mr. Ooms didn’t point out, that in the copyright case, it too was a limited monopoly granted by the United States Government and not something issued by the State or made by the State.

    I was in that case in this Court, Your Honors.

    Now the Court of Appeals made a comparison of the two products and we’ll concede that they are very, very similar.

    There isn’t any question about that at all.

    Now, our position is that the Court of Appeals for the Seventh Circuit said that you’d no longer need palming off.

    You don’t have to acquire a secondary meaning.

    If somebody is confused that — and you have copied, that is sufficient to make out a case to enjoin the defendant, Sears in this case, from making and selling a copy.

    Byron R. White:

    (Inaudible)

    Will Freeman:

    It is very unique with you — with the State of Illinois.

    I know of no other state that goes so far as to grant the equivalent of a common law patent or monopoly, especially a monopoly that requires no prerequisites as to meeting the standard of invention as laid down by this Court in the AMP case and other cases that had followed.

    When you grant a patent monopoly, you give — you give to that individual a monopoly on the basis that when the patent expires, all the good will and everything disclosed in that patent is free to be used by anyone that wants to use it.

    Now, in this particular case, they did ask for a United States patent.

    Byron R. White:

    (Inaudible) question of validity of a general state law that says, “Any items sold at retail must have the name of the manufacturer on it”?

    Will Freeman:

    None whatsoever.

    Byron R. White:

    And if you, the very act of copying and making something identical is — is an act which creates some possibility of confusion and of — the mind of a buyer who doesn’t ask any questions.

    And you don’t put your name on it, you could, but you could dispel the — that confusion.

    I’d suppose that — that a general state law like that would have the act — would have the result of — of — which you say can’t be — can’t be placed —

    Will Freeman:

    No, it would not, Your Honor.

    Will Freeman:

    A — a state law that would require labeling as you have indicated would merely require — this is the product of Sears.

    Byron R. White:

    Right.

    Will Freeman:

    But this —

    Byron R. White:

    Well then why — why couldn’t this part of the law of unfair (Inaudible)?

    Why is part of the law of unfair competition, can’t Illinois say that it’s unfair competition unless —

    Will Freeman:

    It could say that —

    Byron R. White:

    — somebody puts his name on it and — and takes the opportunity to avoid the possible confusion.

    Will Freeman:

    But they haven’t said it in this case.

    That isn’t the Illinois law.

    Byron R. White:

    Right.

    Will Freeman:

    But they could’ve said it and I would then say to Your Honor that I think that law would be good.

    Byron R. White:

    Okay.

    Will Freeman:

    They can lay down rules and regulations so long as they do not conflict with what Congress alone by our Constitution has been given the right to convey to certain individuals in order to exclude others from copying.

    Byron R. White:

    (Inaudible)

    Will Freeman:

    That is correct.

    They — they could do that.

    In this case though, we’re not required to do anything, we’re just enjoined from making a copy, period.

    Hugo L. Black:

    (Inaudible)

    Will Freeman:

    What?

    Hugo L. Black:

    Is (Voice Overlap) —

    Will Freeman:

    No —

    Hugo L. Black:

    — a statute (Voice Overlap) —

    Will Freeman:

    No, this is —

    Hugo L. Black:

    — legislature?

    Will Freeman:

    This is by case law and the case law in Illinois all originate under trademark law.

    Hugo L. Black:

    Has the —

    Will Freeman:

    (Inaudible)

    Hugo L. Black:

    Has the legislature ever passed a law like this?

    Will Freeman:

    No, not that I know of, Your Honor.

    Now, our Seventh Circuit turned to what they call old-fashioned honesty and they went to trademark law.

    Will Freeman:

    Now, they have injected and moved trademark law into design patent law.

    And when they do that, they then move in to that which is exclusive, the States gave up the right to grant patents for monopolies a long, long time ago and it’s only by our Court of Appeals moving from trademark law.

    Now, trademark law doesn’t keep you from making a product at all, it just means you can’t use that particular name, the product is still available.

    But in this case, the product is not available so far as this injunction is concerned regardless of what name or how large the tag is on the product that it is a Sears —

    William J. Brennan, Jr.:

    Incidentally, what then was (Inaudible)

    Will Freeman:

    There was a container in which the product was shipped the day the manufacturer’s name of — as the manufacturer —

    William J. Brennan, Jr.:

    But the floor samples didn’t indicate any —

    Will Freeman:

    What’s that?

    William J. Brennan, Jr.:

    The floor samples.

    Will Freeman:

    The — I can’t say but there — we can’t question that. But there’s no finding by the District Court as to that at all and — and it’s —

    William J. Brennan, Jr.:

    And no evidence on the (Inaudible)

    Will Freeman:

    (Inaudible) there was evidence but the lamp — that when the defendant got it, the lamp was bought in Greensboro, North Carolina, shipped to the defendant in Chicago and when the defendant got it, there was no tag on it.

    (Inaudible)

    Will Freeman:

    Plaintiff, it was shipped to plaintiff, Your Honors, I misspoken.

    Now, in conclusion, as I said, the States relinquished their power in patent matters and they gave that to the Federal Government.

    Whenever you have something that’s between state law and federal law, the state law must yield.

    This Court held that in a recent case, Sperry versus the State of Florida, but that has been the pronouncement of this Court in many, many cases.

    When a patent monopoly ends, the product is free for the public to use.

    That’s one of the conditions of the granting of a monopoly for a limited period of time.

    In this case, the monopoly lasts forever.

    Now, in a recent case by the Court of Customs and Patent Appeals, they wouldn’t grant a trademark to someone because they said it might preclude others from copying and as far as copying is concerned, you can do that as long as you do it by fair means.

    And it’s our position that the only complaint that you have in this case is a matter of price.

    Now, the Seventh Circuit Court of Appeals following state law cannot grant an injunction that is the equivalent of a perpetual monopoly.

    That is exactly what was done in this case and I respectfully submit that the decision of the court below — below in granting to Stiffel a perpetual monopoly, should be reversed.

    Earl Warren:

    Mr. Horton.

    Warren C. Horton:

    Mr. Chief Justice, Honorable Associate Justices. Appearing for the Stiffel Company, the respondent here, I should like to emphasize or to assert really some matters of fact which are not mentioned by my opponent.

    The Stiffel Company, at the time that it first brought out its pole lamp, which is plaintiff’s Exhibit 3.

    Certainly, in which they thought it was a new product, it was its own design and it did show that at the furniture show in Chicago in January 1956.

    The Sears Company stated, by their own executives who testified that they observed — they watched the advent of the pole lamp with great interest and when they saw, that they thought that it was moving in a mass market direction, they decided to move in.

    Now, the manner in which Sears moved in was to take a picture of plaintiff’s — Stiffel’s pole and take it to a manufacturer in Philadelphia and have him make what was almost an exact replica of the Stiffel pole lamp.

    Warren C. Horton:

    In this structure, there are of course functional elements, the elements which make the lamps operate, the switches, the connections between the sections, the springs at the top which hold it to the ceiling.

    But there are also a good many decorative features which are not functional features, such as the particular handle, the size, the shape of that, the shape and size of the metal, the — even the perforations on the metal which are strictly decorative.

    Sears copied all those items exactly.

    Arthur J. Goldberg:

    (Inaudible)

    Warren C. Horton:

    Well, I have to look at the label, Your Honor.

    But this one is Sears.

    I know it because it — it isn’t the real (Inaudible)

    (Inaudible)

    Warren C. Horton:

    The one in my left, Sears, one in my right hand is the Stiffel.

    (Inaudible)

    Warren C. Horton:

    This one, which I am now holding is the Stiffel product and the one which Mr. (Inaudible) is holding is the Sears.

    Potter Stewart:

    Now, there is a difference in their base or something like that?

    Warren C. Horton:

    No, sir, the same.

    Potter Stewart:

    I thought in the opinion of the Court of Appeals or somewhere, they thought —

    Hugo L. Black:

    (Inaudible)

    Warren C. Horton:

    No, sir.

    Hugo L. Black:

    How does that base (Inaudible)

    Warren C. Horton:

    That base is put in there and screwed in so that it can be screwed down and adjusted to make the pole tight against the floor.

    Potter Stewart:

    And there’s a spring on the top.

    Arthur J. Goldberg:

    (Inaudible)

    Warren C. Horton:

    Well, it screws into or out of this lay — a lower extension of the pole.

    Tom C. Clark:

    What makes it stand up?

    Potter Stewart:

    A spring.

    Warren C. Horton:

    At the top section, that is under its compression springs and you push that up against the ceiling and — of the room —

    Arthur J. Goldberg:

    (Inaudible)

    Warren C. Horton:

    And compress that spring a little and let it down and it’s then held in place.

    And if you need some further adjustment, why, you can adjust the screw button up or down in order to make it tighter.

    Hugo L. Black:

    What was supposed to be the new feature of it when the patent was (Inaudible)

    Warren C. Horton:

    It — we don’t know of any be — before it which had separate sections so that it could be dismounted and shipped —

    Hugo L. Black:

    Another pole?

    Warren C. Horton:

    — and in which the wiring was completely concealed within the pole and not looped out to the individual lamps.

    Hugo L. Black:

    But you know a lot of poles in that section.

    Warren C. Horton:

    Oh yes, poles which were used for —

    Hugo L. Black:

    (Voice Overlap)

    Warren C. Horton:

    — other purposes.

    Hugo L. Black:

    And a lot of wirings have been put inside the pole.

    Warren C. Horton:

    I have —

    Hugo L. Black:

    (Voice Overlap)

    Warren C. Horton:

    That completely concealed like this.

    Hugo L. Black:

    I mean, is there anything really new about it?

    Warren C. Horton:

    We thought there was and the Patent Office thought so but —

    Hugo L. Black:

    That was — that was what it was?

    Warren C. Horton:

    Yes.

    Hugo L. Black:

    That’s all?

    Warren C. Horton:

    Yes.

    And the Patent Office held that it was patentable and issued two patents of it, one, a mechanical patent and one, a design patent on the appearance of the pole.

    Potter Stewart:

    I think — but the Court held that it — it was not patentable and that’s no longer an issue here.

    Warren C. Horton:

    And — that’s correct.

    It does have this — a bearing however.

    Petitioner says that the courts below held the patents in suit to be invalid and then granted to the plaintiff, the same relief under the guise of unfair competition, that is not wholly correct.

    Before the trial court, there were 10 models of lamps made by or for Sears and sold by Sears which were charged to infringe both the mechanical patent and the design patent in suit.

    The Court found that in fact all 10 models did in fact infringe both patents if they were valid, but said that both patents were invalid for lack of invention over the art which was found.

    Now, in demanding the injunction against unfairly competing, the injunction ran only against one of those 10 models made for and sold by Sears.

    So that as a matter of fact, 9 out 10 of the accused structures before the Court are not enjoined or restrained in any way.

    Sears is perfectly free to make them, insofar as I know, it still does.

    Byron R. White:

    (Inaudible)

    Warren C. Horton:

    They were an issue in the case.

    Byron R. White:

    (Inaudible)

    Warren C. Horton:

    There was no — they were not made in the manner of direct copying from a product of the Stiffel Company.

    Byron R. White:

    They’re not objectively — weren’t they copies, is that what you’re saying now?

    Warren C. Horton:

    Yes sir.

    They were — they were slightly different in shades, or slightly —

    Byron R. White:

    Or are you saying that nobody got confused?

    Warren C. Horton:

    Well, Your Honor, I should say that there was no evidence presented as to any confusion or any copying as to those other nine models.

    Byron R. White:

    But — but is — is it — but there was about the 10th?

    Warren C. Horton:

    There was about the 10th.

    Byron R. White:

    That’s really —

    Warren C. Horton:

    This one —

    Byron R. White:

    — what you think distinguishes — it’s not because that the other nine weren’t just —

    Warren C. Horton:

    Well we thought —

    Byron R. White:

    — weren’t close enough copies.

    Warren C. Horton:

    They were close enough copies so that the Court said that if the patents were valid, they would infringe both patents including the design patent but if the patents weren’t valid and therefore, they did not infringe.

    So that, it is not true however to say that the Court under the guise of unfair competition granted the same relief which the plaintiff sought under the patents which were held invalid.

    After the Stiffel Company had decided to move in with this copy of the Stiffel lamp pole, the — the Stiffel Company purchased two of the poles like plaintiff’s Exhibit 10 and purchased them in Greensboro, North Carolina.

    Now, the testimony in the record is absolute, at page 28, that there was no marking and no labeling of that pole nor the package.

    They — there were — there was one of them —

    (Inaudible)

    Warren C. Horton:

    Sir?

    (Inaudible)

    Here, alright —

    Warren C. Horton:

    As it — as it left the manufacturer or in the hands of Sears.

    William J. Brennan, Jr.:

    I see.

    Neither on floor sample or?

    Warren C. Horton:

    Neither on the floor samples or any way.

    That inside the package, the only thing which was there besides the physical object itself, was the instruction sheet which appears at page 93 of the record in which itself is absolutely anonymous and bears no name whatsoever, either of the manufacturer or of Sears.

    Now, in the — the testimony that there was no such labeling was at no way disputed, countered in any way by the Sears people, they were there at the trial, they did not deny it or question it in any way.

    It has been our position in this case that the issues which are raised before the Court in this case — or it could be a more complex than are the actual issues in the case.

    William J. Brennan, Jr.:

    (Inaudible) on page 28 —

    Warren C. Horton:

    Yes sir.

    William J. Brennan, Jr.:

    — whoever that witness was, I found out who manufactured the Sears lamp because I took the label off the carton in the Sears pole lamp payment.

    Warren C. Horton:

    That was the shipping label.

    Now, that — that was a shipping label from Randolph Metals to the Sears, Roebuck store in Greensboro, North Carolina.

    Now, the person who knew that was the Stiffel Company.

    The Stiffel Company of course knew that it had not made the product for Sears.

    And being in the lamp manufacturing business, it knew who Randolph Metal Company was.

    But that certainly would not apply to an ordinary customer, member — ordinary member of the public and — and in no way was the product itself marked nor was there any — any marking on — on the product or inside the box with the product which would state its origin either by from the manufacturer or from Sears.

    Now, both courts below did find that there was actual confusion as to origin of the goods which were sold by Sears and that there was likelihood a confusion.

    Hugo L. Black:

    (Inaudible)

    Warren C. Horton:

    I think if It were a close enough copy Your Honor, I think that that’s certainly would be true.

    Hugo L. Black:

    So the mere copying then of a commodity that’s not patented or is not copyrighted.

    Warren C. Horton:

    I cannot see the —

    Hugo L. Black:

    I’m not saying you’re not right but what I’m asking is if —

    Warren C. Horton:

    No.

    Hugo L. Black:

    — if that’s not what you’re arguing.

    Warren C. Horton:

    Well, I am — I am but I want — to do what?

    To associate it with the patents.

    And — and the reason is, that this Court has established what the standards should be in that — in this action and it seems to me that that’s a — the real crux of this thing as in the — the Court held —

    Hugo L. Black:

    What is the real crux?

    Warren C. Horton:

    It’s a matter of failure to mark, and to identify the product as to source.

    Now —

    Hugo L. Black:

    But if they had done that, would it be alright?

    Warren C. Horton:

    If they had done that, then I think that they would undoubtedly have been able to go back to the Court and get a modification of the injunction or get it lifted.

    Hugo L. Black:

    Modification of — what would you have — would you still claim that they had sold it with their own mark on it?

    Warren C. Horton:

    If they did it, well —

    Hugo L. Black:

    That they had violated the fair trade law in Illinois?

    Warren C. Horton:

    No, sir.

    There is no fair trade law in Illinois.

    Hugo L. Black:

    I mean of the — the unfair competition.

    Warren C. Horton:

    No, sir.

    I would say that they would — they had not.

    Hugo L. Black:

    You would say that they have a right, perfect right then to copy yours verbatim, functional and nonfunctional so long as they put their name on their product.

    Warren C. Horton:

    Clearly identify the source.

    Now, I say that because the patents are no longer enforceable against Sears.

    Byron R. White:

    (Inaudible)

    Warren C. Horton:

    No, I do not.

    Byron R. White:

    (Inaudible)

    Warren C. Horton:

    Yes, but that he has not done them, that they have not agreed to do it.

    Byron R. White:

    (Inaudible)

    Warren C. Horton:

    I say that’s the law.

    Byron R. White:

    (Inaudible)

    Warren C. Horton:

    And that has been decided by both courts below in the same way that they did not mark.

    Arthur J. Goldberg:

    (Inaudible)

    Warren C. Horton:

    From unfair competition in the copying of the product and the unfair competition includes us an element be fair to mark as the source.

    Arthur J. Goldberg:

    (Inaudible)

    Warren C. Horton:

    Yes, sir.

    Arthur J. Goldberg:

    (Inaudible)

    Warren C. Horton:

    Well I say that they’ve got —

    Arthur J. Goldberg:

    (Inaudible)

    Warren C. Horton:

    I say they’ve got a right to go to the Court any time and ask for a modification of the injunction, if they have done something like that which makes their action then within the fair definition.

    Arthur J. Goldberg:

    Yes, but you’re saying — are you saying that you have the injunction the same as the Court of Appeals.

    Warren C. Horton:

    Yes, sir.

    And —

    Arthur J. Goldberg:

    An injunction it seems to me goes farther than that than what you just said was necessary.

    Warren C. Horton:

    Well, I think an element of the unfair competition that was found and which is part of the injunctive order in the decree is that the unfair competition.

    And I say that the failure to mark and identify as the source is an element of that as found in the Court.

    William J. Brennan, Jr.:

    Well is this the — and this is like —

    Warren C. Horton:

    And as found by the Court of Appeals.

    William J. Brennan, Jr.:

    Is this the only difference between — then your adversary says that even though he never marked the extent of any injunctive relief, would there have been relief requiring him to mark them?

    That’s what he says.

    You say, “No”, because he never marked them.

    William J. Brennan, Jr.:

    The court would justify it in enjoining him from copying it all and someday when he starts marking, he’d come back and get the injunction modified.

    Warren C. Horton:

    He doesn’t say —

    William J. Brennan, Jr.:

    (Voice Overlap) to be about all the difference —

    Warren C. Horton:

    He seems to say that today.

    He does not say so in his briefs in this case.

    And it seems to me that the whole thing is controlled by this — to this Court’s decision in Singer Manufacturing versus June Manufacturing company in 163 U.S. 169 and which principle was followed by this Court in Kellogg versus the National Biscuit Company, 305 U.S. 111.

    Now, if we assume —

    William O. Douglas:

    And you have an accounting, don’t you?

    Warren C. Horton:

    Sir?

    William O. Douglas:

    You do have an accounting account here, don’t you?

    Warren C. Horton:

    Yes sir.

    William O. Douglas:

    So that wasn’t solved (Inaudible) of that, would it?

    Warren C. Horton:

    That would involve a question as to what they did actually sell without labeling and on the strength of its confusing similarity with the Stiffel Company’s goods.

    (Inaudible)

    Warren C. Horton:

    Well, there is some confusion as to that but you can get the profit needs from the unfair competition or the damage sustained in which the defendant — the plaintiff can prove, which is a very difficult —

    Hugo L. Black:

    In other words, you can get all the profit sales as made on the sale of those lamps.

    Warren C. Horton:

    Of that one particular model.

    And I — I might say —

    Hugo L. Black:

    (Voice Overlap)

    Warren C. Horton:

    — that they take — they say that there are only 2500 of them.

    Hugo L. Black:

    Anything else besides just the profit?

    Warren C. Horton:

    I don’t believe so, sir.

    Hugo L. Black:

    Attorney’s fee?

    Warren C. Horton:

    No, sir.

    Hugo L. Black:

    Illinois (Voice Overlap)?

    Warren C. Horton:

    Not under Illinois statutes.

    Hugo L. Black:

    (Inaudible)

    Warren C. Horton:

    No.

    Not under any Illinois statutes.

    Hugo L. Black:

    Is — does the statute give him any of this?

    Warren C. Horton:

    No, sir.

    I say there is no — no provision for obtaining the attorney’s fees (Voice Overlap).

    Hugo L. Black:

    Is there any statutory provisions by any of this case?

    Warren C. Horton:

    Only in patent cases.

    Hugo L. Black:

    Only in patent cases.

    Warren C. Horton:

    Yes sir.

    Hugo L. Black:

    So the damage isn’t — not — not fixed as they are — are liable by any statute, it’s up to the Court.

    Warren C. Horton:

    Yes, that’s correct.

    And the — it is up to the court.

    In the — it seems to me that the Stiffel Company who’s — ought not to be in any worse position than if it had enjoyed its patents for their full term and they had expired.

    Actually, it didn’t at all but in the Singer case where the patents had expired, the defendant was making an exact copy of the Singer sewing machine.

    And it — the Court said — this Court said that it has — the general public had a right to copy the subject matter of an expired patent.

    Therefore, they have that right but that it had to be done fairly and there had to be such indications that the thing manufactured is the work of the one making it, as well unmistakably, inform the public of that fact but we think that’s controlling here.

    The same principle was applied by this Court in the Kellogg case versus National Biscuit Company, where they said that surely they had the right to copy the subject matter of an expired patent but they must do so fairly.

    And fairness requires that it’d be done in a manner which reasonably distinguishes its product from that of the plaintiff.

    We think that that is the rule which is applicable here and that it’s only real issue in this case.

    Will Freeman:

    First —

    Earl Warren:

    Mr. Freeman.

    Will Freeman:

    Counsel for Stiffel said, “There was a shipping label on the container and no one would be expected to read it and know who the manufacturer was.

    I find no such statement in the record.

    I do find, where the — Mr. Philips of the Stiffel Company said, “I found out who manufactured the Sears lamp because I took the label off.”

    It doesn’t say it’s a shipping label or what it is.

    It’s the label with the manufacturer’s name.

    Now, insofar as Sears is concerned with respect to a — going back for a modified injunction permitting us to put labels on.

    Let’s assume for a moment that Sears does absolutely nothing.

    It doesn’t sell this particular lamp, it just does nothing.

    The precedent still stands that one who copies in the State of Illinois can be enjoined perpetually from so doing.

    That’s the injunction and insofar as counsel for Stiffel is concerned, they agree as a matter of law that once a patent has expired, you can copy the subject matter of the patent.

    And they attempt to distinguish on page 12 of their brief where they say, “Sears copied the product.”

    But if Your Honors will look at a copy of the design patent which we find at page 71 of this record, you will find that the design patent in the product are one and the same, so we’re quibbling over words.

    Will Freeman:

    So long as you copy the design patent, is — which has been held invalid, you can be enjoined.

    Now, that’s exactly what this injunction means.

    It means we can’t sell a copy or one confusingly similar thereto.

    This case should be reversed.

    Supposing this case gone back to the direction that the injunction be modified to require (Inaudible) a label?

    Will Freeman:

    Well I think it’s just a waste of time, Your Honor.

    It can go back.

    I can’t tell this Court what to do.

    I can plead with them.

    (Inaudible)

    Will Freeman:

    Well it’s — it’s the only State so far as I know and we’ve done a lot research.

    This goes much further than any other State, insofar as what you have to do.

    Well, there’d be nothing (Inaudible)

    Will Freeman:

    No.

    No Your Honor.

    One was ordered?

    Will Freeman:

    What was that?

    One was the order?

    Will Freeman:

    One was ordered but held in advance pending the outcome of the Court of Appeals of this case.

    Thank you.

    Tom C. Clark:

    I thought your claim was preempted (Inaudible)

    Will Freeman:

    Our position is that so far as the State is concerned, it can do nothing that it’s in conflict with the patent statutes which are exclusively within the domain of the Federal Government.

    And what it has done here, what the Court of Appeals for the Seventh Circuit has done has set up the equivalent of a perpetual patent instead of giving one that requires certain constitutional prerequisites, what constitutes invention.

    And thereafter, saying that, “When the patent expires for any cause that it is free and within the public domain.”

    The — the court below found the subject matter to be in the public domain so Mr. Stiffel never got any rights to start with.

    Hugo L. Black:

    (Inaudible)

    Will Freeman:

    Thank you.

    Hugo L. Black:

    (Inaudible)

    Will Freeman:

    No, I’m not saying we should’ve labeled it at all.

    I think the broad position — sure you cannot compete unfairly as Mr. Justice White pointed out with which we wholeheartedly agree.

    Will Freeman:

    But the act of merely copying and nothing more is not the kind of a thing that constitutes unfair competition for which the State of Illinois — following the State of Illinois law, a patent monopoly or the equivalent of the patent monopoly can be granted for eternity.

    William J. Brennan, Jr.:

    (Inaudible) to suggest that the State of Illinois could not require you to identify it as a Sears’ item.

    Will Freeman:

    They — they can set up certain rules within — yes, because —

    William J. Brennan, Jr.:

    So you don’t go so far as to say that the State, notwithstanding your preemption argument, has no power or whatever.

    You say the power is limited to requiring you to identify the items someway.

    Will Freeman:

    The state could do that, Your Honor.

    William J. Brennan, Jr.:

    If that’s all they did?

    Will Freeman:

    If that’s all they did, we — it would not preempt anything of the Federal Government.

    William J. Brennan, Jr.:

    Well, if the rule in the Illinois was that if you copy and — if you copy somebody, you’ve got to identify you’re the source.

    And a — grant and — and you copied, and you didn’t identify and the injunction that was issued simply enjoins you from copying and not identifying, you wouldn’t be here.

    Will Freeman:

    That is right.