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WESTPHAL v. POLY CHEM. LABS.

September 14, 1936

PAUL WESTPHAL
v.
POLY CHEMICAL LABORATORIES, Inc., et al.



The opinion of the court was delivered by: FAKE

The issues here arise on a bill of complaint seeking injunctive relief for unfair competition and the violation of trademark rights. An accounting is also sought.

At the conclusion of the trial, the court dictated into the record the following findings of fact:

 "In the year 1881, Paul Westphal entered into the business of the manufacture and sale of a product known as Westphal's Auxiliator, and from that time down to the present day it has been bottled, labeled and placed in a carton substantially, if not entirely, the same.

 "The evidence discloses that large sums of money have been expended over the years in advertising and building up the good will of this product. It is not possible to state the exact sums of money which were spent in advertising, but the advertising was sufficient to make the product well known in this part of the United States, and the business prospered.

 "The defendant, Poly Chemical Laboratories, Inc., entered into the business of manufacturing and selling hair tonics in the year 1922, and among their products they sold a Foaming Hair Tonic of substantially the same color as that of Paul Westphal.

 "In the year 1923, William Hallet, who prior to that date had been engaged in the cigar business, entered into the manufacture and sale of hair tonic under the name of The Westphalia Company. His wife's parents were natives of Westphalia, in Germany, and he having become familiar with the use of the word 'Westphalia' in the family, conceived the idea of naming his company The Westphalia Company.

 "Subsequently, in the year 1929, he took into his employ one Eric Westphal and issued to him six shares of the capital stock of The Westphalia Manufacturing Company, which was organized in 1928, and thereafter he added to the labels used on the proprietary articles manufactured the words 'Westphal-Westphalia Manufacturing Company, Ltd.' This company was never what might be termed a very great success. In the beginning the business was conducted from the home of William Hallet, and some time later the corporation established a business headquarters at 6-8 West 18th Street, New York City.

 "During the time when Hallet was connected with this business, and in 1922, and thereafter until sometime in 1924, he was in the employ of the De Milo Company, which company was also engaged in the manufacture of proprietary articles such as the one with which we are concerned here, and the De Milo Company furnished Hallet with supplies or the necessary ingredients used by him in the business of The Westphalia Manufacturing Company, Ltd. Later he left the De Milo Company and went with one Thomas who was interested in the business of Paul Westphal Company, a partnership, in the year 1924. This Paul Westphal Company, the partnership, is not the plaintiff in this cause, but is a partnership founded by one Paul Westphal, a grandson of the original owner of Westphal's Auxiliator hair tonic business, and a competitor of plaintiff here.

 "Hallet left that employment in the year 1925 or 1926 and devoted his time to the business of The Westphalia Manufacturing Company, Ltd., until April 1931, when The Westphalia Manufacturing Company, Ltd. permitted and licensed Franconia Products, Inc. to use the name Westphal and Westphalia, upon payment to the said The Westphalia Manufacturing Company, Ltd. of a royalty of one percent of gross sales.

 "In August of 1931 Franconia Products, Inc., assigned all its right, title and interest of, in and to the aforesaid royalty agreement to Poly Chemical Laboratories, Inc., the defendant herein, at which time Hallet was taken into the employ of the defendant, Poly Chemical Laboratories, Inc.

 "About a year later the Poly Chemical Laboratories, Inc. purchased all of the outstanding capital stock of The Westphalia Manufacturing Company, Ltd., excepting the six shares which were outstanding in the name of Eric Westphal. A diligent search has been made for the purpose of locating the aforesaid Eric Westphal, by both the plaintiff and the defendant herein, but he has not been found, so we have no testimony as to his present whereabouts.

 "Mr. Hallet testified that Eric Westphal was associated with The Westphalia Manufacturing Company, Ltd. from 1929 to 1931, since which time he has neither seen him nor heard from him.

 "On November 18, 1931, the plaintiff herein addressed a communication to the defendant, complaining of the use by defendant of the name 'Westphal' in connection with defendant's business. A few days thereafter the defendant replied maintaining its right to use the word 'Westphal' in the form and manner used. To this letter the Plaintiff replied, refusing to accept the defendant's explanation and threatening suit.

 "On December 1, 1931, the defendant wrote as follows:

 "'Although still maintaining our right to the use of the name, however, in order to avoid any ill feeling we shall in the future strike out the word Westphal on the labels we have on hand and omit it from any new labels that we may print.

 "'We are enclosing labels showing the manner of our deletion.'

 "Shortly thereafter the defendant put a paster over the word 'Westphal', leaving only the words 'Westphalia Manufacturing Company, Ltd.'

 "On January 31, 1933, almost a year later, the plaintiff wrote the defendant as follows:

 "'Confirming our telephone conversation of this morning, will say that you entered into an agreement with us some time ago to the effect that you would discontinue the name Westphal from the label of your Westphalia preparations, and we have evidence to the effect that you have not done his and your statement that you knew that it should have been done but that the boy did not do it is not taken seriously by us. Therefore we will give you until Thursday morning, February 2nd, to have the label in our hands showing us in what way you have ...


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