by the United States Trade-Mark Association AT 187-189 COLLEGE ST., BURLINGTON, VT. AN ORGANIZATION FOR THE PROTECTION OF TRADE-MARKS AND TRADE-NAMES Vol. 9 The Trade-Mark Reporter 1919 1. 2. UNITED DRUG Co. v. THEODORE RECTANUS Co. United States Supreme Court December 9, 1918 TRADE-MARK-CHARACTER OF RIGHT. There is no property in a trade-mark, except as appurtenant to an established business or trade, in connection with which the mark is used. TRADE-MARKS AND UNFAIR COMPETITION. The law of trade-marks is part of the broader law of unfair competition. The function of a trade-mark is to protect the good-will of its user's business against injury arising from the sale of another's article as his. 3. TRADE-MARK-TERRITORIAL EXTENT. 4. The adoption of a trade-mark does not project the right to protection in advance of the extension of the trade, or confer rights in territory to which it may be desired thereafter to extend the trade. TRADE-MARK-BASIS OF PROPERTY. Property in trade-marks rests upon the laws of the several states, and depends upon them for protection, subject to the Congressional authority to regulate interstate and foreign commerce. 5. TRADE-MARK-STATE RIGHTS. 6. It seems that there is nothing to prevent a state from conferring on the first user within that state a right to a trade-mark that shall be exclusive in that state against an earlier user elsewhere. TRADE-MARK REGISTRATION-EFFECT. Neither the state registration nor the federal registration under the Act of 1881 of a mark used only in New England territory could enlarge the rights of its user beyond what they were at common law, as against one who had acquired adverse rights at common law before the registration. 7. TRADE-MARK REGISTRATION-EFFECT. Whether registration of a mark under the federal act of 1905 enlarges the common law rights of the registrant, query. · 8. TRADE-MARK PROPERTY-PRIORITY OF USE. The general rule is that priority of use determines the title to a mark, because priority of use makes the mark distinctive of the goods of the first user. The rule does not apply where the same mark .. simultaneously employed by different traders in good faith in different and distinct territories. In such a case, the rights of both parties must be preserved. 9. TRADE-MARKS-TERRITORIAL RIGHTS. The first user of a mark who had employed the mark in a limited territory only denied an injunction against a later user in good faith, in a territory which the former had failed to occupy during a long period of years. On certiorari to and appeal from the United States Circuit Court of Appeals for the Sixth Circuit, to review a decree which reversed that of the United States District Court in favor of the plaintiff, and remanded the case, with directions to dismiss the bill. Affirmed. For decree of the District Court, see 3 T. M. Rep. 444. decree of the Circuit Court of Appeals, see 6 T. M. Rep. 28. For Lawrence A. Janney, of Chicago, Ill., and Frederick L. Emery, of Boston, Mass., for petitioner and appellant. Clayton B. Blakey, of Louisville, Ky., for respondent and appellee. Mr. Justice PITNEY delivered the opinion of the Court. This was a suit in equity brought September 24, 1912, in the United States District Court for the Western District of Kentucky by the present petitioner, a Massachusetts corporation, against the respondent, a Kentucky corporation, together with certain individual citizens of the latter state, to restrain infringement of trade-mark and unfair competition. The District Court granted an injunction against the corporation defendant pursuant to the prayer of the bill. 206 Fed. 570 [3 T. M. Rep. 444]. The Circuit Court of Appeals reversed the decree and remanded the cause with directions to dismiss the bill. 226 Fed. 545, 141 C. C. A. 301 [6 T. M. Rep. 28]. An appeal was allowed by one of the judges of that court, and afterwards we allowed a writ of certiorari. Pursuant to a stipulation, the transcript of the record filed for the purposes of the appeal was treated as $1 1 a return to the writ. Under section 128, Judicial Code (Act of March 3, 1911, c. 231, 36 Stat. 1133), as amended by Act of January 28, 1. 15 (38 Stat. 803, c. 22, § 2; Comp. St. 1916, § 1120), the appeal must be dismissed, and the cause will be determined on the writ of certiorari. The essential facts are as follows: About the year 1877 Ellen M. Regis, a resident of Haverhill, Mass., began to compound and distribute in a small way a preparation for medicinal use in cases of dyspepsia and some other ailments, to which she applied as a distinguishing name the word "Rex"-derived from her surname. The word was put upon the boxes and packages in which the medicine was placed upon the market, after the usual manner of a trademark. At first alone, and afterwards in partnership with her son under the firm name of "E. M. Regis & Co.," she continued the business on a modest scale; in 1898 she recorded the word "Rex" as a trade-mark under the laws of Massachusetts (Acts 1895, p. 519, c. 462 § 1); in 1900 the firm procured its registration in the United States Patent Office under the Act of March 3, 1881 (21 Stat. 502, c. 138); in 1904 the Supreme Judicial Court of Massachusetts sustained their trade-mark right under the state law as against a concern that was selling medicinal preparations of the present petitioner under the designation of "Rexall Remedies" (Regis v. Jaynes, 185 Mass. 458, 70 N. E. 480); afterwards the firm established priority in the mark as against petitioner in a contested proceeding in the Patent Office; and subsequently, in the year 1911, petitioner purchased the business with the trade-mark right, and has carried it on in connection with its other business, which consists in the manufacture of medicinal preparations and their distribution and sale through retail drug stores, known as "Rexall stores," situate in the different states of the Union, four of them being in Louisville, Ky. Meanwhile, about the year 1883, Theodore Rectanus, a druggist in Louisville, familiarly known as "Rex," employed this word as a trade-mark for a medicinal preparation known as a "blood purifier." He continued this use to a considerable extent in Louisville and vicinity, spending money in advertising and building up a |