Lamb Knit Goods Lawsuit

How Would You Decide?

HODGE PODGE

Joe Ganger

 

I had heard that Issac Lamb had left the local Lamb Knit because he was not happy. There was more trouble later on when a lawsuit was filed.

From “The Lawyers reports annotated”, Volumes 43-44: Lamb Knit-Goods Co v. Lamb Glove & Mitten Co.

“Montgomery, J., delivered the opinion of the court:

The complainant avers by its bill of complaint that it is a corporation, with its home offices in Colon, Michigan; that, prior to its organization, the defendant Issac W. Lamb had organized a company at Concord, Michigan, known as the Lamb Knitting Company,” and at the time of the complainant’s organization it acquired all of the property, business, and goodwill of the Lamb Knitting Company from Issac W. Lamb, and paid a valuable consideration therefore; that at the time of the organization of the complainant, Issac W. Lamb was interested in the organization of the company and raised a large amount of the capital stock; that the complainant assumed the name of the “Lamb Knitting-Goods Company,” with the knowledge and consent and at the desire of Issac W. Lamb; that the complainant was organized to conduct a business similar to that which had been previously conducted by the Lamb Knitting Company, which was the manufacture and sale of knitting goods, principally gloves and mittens; that these gloves and mittens had in the main been knitted with a peculiar stitch, and that from the connection of complainant’s name with said goods the peculiar stitch had become known as the “Lamb Stitch;” that gloves and mittens may be manufactured by the same machine with a different stitch, which will be equal to the complainant’s in durability; that the stitch used by the complainant is for the purpose of distinguishing complainant’s goods’ that after the organization of complainant, Issac W. Lamb was in its employ for a number of years as superintendent, but that he had become dissatisfied, and left complainant’s employ on the 8th of April, 1892; that thereafter he, with the assistance of others, organized a company known as the “Lamb Glove and Mitten Company,” at Perry, Michigan, and commenced to manufacture gloves and mittens knitted with the same peculiar stitch as that employed by the complainant; that the name adopted by the defendant company is similar to that adopted by the complainant, and that purchasers and dealers are deceived thereby, and buy the goods of the defendant believing them to be the goods of the complainant; that the business of the complainant has been damaged thereby. Complainant avers that it is entitled to the exclusive use of the word “Lamb” in connection with knit goods of any description, and to the word “Lamb” in its corporate name; that it has the exclusive right to use the peculiar stitch; and that for this reason the words “Lamb Knit” have become and are a valid trademark at common law. The bill prays an accounting and an injunction.

The answer admits that the complainant assumed the name of the “Lamb Knit-Goods Company,” with the knowledge and consent if Issac W. Lamb, but denies that the complainant is entitled to the exclusive use of the words “Lamb Knit” goods, or the use of the word “Lamb” in connection with other words indicating knit goods. The answer also admits that the complainant acquired all the property, business and goodwill of the Lamb Knitting Company, but avers that Lamb acted in the transaction, not for himself, but as an agent for the Lamb Knitting Company. The answer also admits that the defendant corporation organized with, and is conducting a business under, the name of the “Lamb Glove and Mitten Company,” but denies the allegation that this name is so similar to the complainant’s as to mislead purchasers and dealers. The answer further avers that the peculiar stitch adopted by the complainant has been in common use for many years; that the defendant Lamb was the inventor of a knitting machine upon which this stitch was made, under patents granted to him, to the Lamb Knitting-Machine Company of Rochester, New York, and the Lamb Knitting-Machine Company of Chicopee Falls, Massachusetts,” and that this last-named corporation is still doing business under the name of the “Lamb Manufacturing Company,” and is manufacturing Lamb knitting machines; that in 1868 defendant Lamb invented a machine for knitting many kinds of knit goods, and procured a patent thereon, and afterwards procured patents on various improvements; that in 1885 he issued printed directions for using the “New Lamb Knitter,” manufactured by the New Lamb Knitting Company of Jackson, Michigan; that a large number of persons purchased these machines; that a large number of persons and corporations which use these machines advertise such goods as made by the Lamb Knitters, and that the name of “Lamb” as applied to knitting machines, and the terms “Lamb Knit” and “Lamb Goods, “ have been in common use in this country, by a large number of different persons, firms, and corporations, for more than twenty years. The case was heard on pleadings and proofs, and the bill dismissed. Complainant appeals.

We are well satisfied that the complainant has not established its right to the exclusive use of the term “Lamb Knit.” The testimony shows that the goods manufactured on the Lamb machine were in common use many years before the organization of complainant company, and that to distinguish such goods from goods knitted on other machines they were designated as “Lamb Goods,” “Lamb Machine Goods” or “Lamb Knit Goods.” It also appears that the peculiar stitch which complainant claims the exclusive right to use was in common use before complainant adopted it.

The case narrows down to the single question whether the defendant infringed the rights of complainant by use of a corporate name so similar to that of complainant as to mislead the public, and, if so, what remedy ought to be applied. There can be no doubt that by the transfer to the complainant of the goodwill of the Lamb Knitting Company it was the intention of the defendant Lamb to grant the right to use his name in connection with the complainant’s business. In fact, he assisted in organizing the corporation, and became a stockholder in the complainant company. The statute (How.Anno.Stat. 4161) authorizes the formation of a corporation, and provides that no two companies shall use the same name or a name so similar as to be liable to mislead. It is contended that the defendant Lamb has entered into no express agreement not to use his own name, and that Mr. Lamb, in making a sale of the Lamb Knitting Company to the complainant, was acting on the behalf of the Concord company and that the Concord company could not, and Mr. Lamb did not, sell the exclusive right to use Mr. Lamb’s name nor undertake that he would not engage in any similar business elsewhere. It appears, however, that the proposition of complainant came from Mr. Lamb, and, as before stated, he is estopped from asserting that the company did not take its name rightfully.

 

The case was appealed and the Appellate Court said:

 

In the present case the testimony shows that dealers have been misled, and in view of the fact that the complainant’s business is largely the manufacture of gloves and mittens, and that the name “Lamb” is prominent in the corporate name, we think it is likely to mislead.

 

The decree will be reversed and a decree entered restraining the defendant from continuing the use of the corporate name “Lamb Glove & Mitten Company,” or any name in which the word “Lamb” appears, in connection with other words indicating a business similar to that of complainant. Subject to this restriction, defendant is at liberty to advertise its goods as made on the Lamb knitting machine.

 

The other Justices concur.