United Drug Company v. Theodore Rectanus Company

248 U.S. 90 (1918)

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Nature of the Case

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Facts

In 1877 Ellen M. Regis, a resident of Haverhill, Massachusetts, 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. In 1898 she recorded the word 'Rex' as a trademark under the laws of Massachusetts. In 1900 the firm procured its registration in the United States Patent Office. In the year 1911, P 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,' situated in the different States of the Union, four of them being in Louisville, Kentucky. In 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 its vicinity. He was entirely ignorant of P's use of the mark. In1906 he sold his business, including the right to the use of the word, to Company (D); and the use of the mark by him and afterward by D was continuous from about the year 1883 until the filing of the bill in the year 1912. P's first use of the word 'Rex' in Louisville or vicinity was in April 1912, when two shipments of 'Rex Dyspepsia Tablets,' aggregating 150 boxes and valued at $ 22.50, were sent to one of the 'Rexall' stores in that city. P was notified in June 1911 by one of its Louisville distributors that D was using the word 'Rex' to designate its medicinal preparations. The court found that both parties used the mark in perfect good faith, neither side having any knowledge or notice of what was being done by the other. The District Court held that because the adoption of the mark by Mrs. Regis antedated its adoption by Rectanus, P's right to the exclusive use of the word in connection with medicinal preparations intended for dyspepsia and kindred diseases of the stomach and digestive organs must be sustained, but without accounting for profits or assessment of damages for unfair trade. It also found that during D's use, Mrs. Regis had done nothing, either by sales agencies or by advertising, to make her medicine or its mark known outside of the New England States, saving sporadic sales in territory adjacent to those States, and had made no effort whatever to extend the trade to Kentucky, she and her successors were bound to know that, misled by their silence and inaction, others might act, as Rectanus and his successors did act, upon the assumption that the field was open, and therefore were estopped to ask for an injunction against the continued use of the mark in Louisville and vicinity by D. The court granted P exclusive use of the Rex mark as she was 6 years prior in usage. D appealed. The appeals court reversed. The court granted P exclusive use of the Rex mark as she was 6 years prior in usage. The Rectanus Company appealed. The court of appeals held that P was not entitled to an injunction against D because Regis had not attempted to make the Rex mark known outside of New England and could not expect that companies in other regions would be aware of her use. The Supreme Court granted certiorari.