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The Pneumatic Tyre Company, Ld. v. The Puncture Proof Pueumatic
Tyre Company, Ld.

manufactured by the Plaintiffs if it had not been for the wrongful and unauthorised manufacture and sale by the Defendants.

The question I have now to consider is: Was that conclusion justified by the evidence; that is to say, is that a result at which he could reasonably arrive 5 acting upon the evidence? I confess I do not think he could. I see no ground for thinking that if Timberlake's evidence is true any very considerable number of those 1738 tyres would have been manufactured by the Plaintiffs at all. On the contrary, I arrive at the conclusion that a very insignificant number of them would have been manufactured by the Plaintiffs, and I arrive at that for 10 the reason that I accept-as the learned Judge did, and as the Master did—the evidence of Timberlake as being correct and reliable evidence, showing that these tyres were applied to an inferior grade of machines, and they were not applied under circumstances in which the higher-priced Dunlop tyres would have been applied.

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Then the matter comes before the learned Judge, and with the greater part of his judgment I find myself in entire agreement. He begins by saying: "If it is proved that the necessary consequence of an infringer's act is to damage "the reputation of the patented article or process, or to interfere with its "general and extended consumption or use, very substantial damages might be 20" recovered." I have already pointed out that that question is not here raised. Then he says after pointing out that there is no evidence of that kind—that what is here suggested is that the 1738 tyres to which the Plaintiffs' patent has been improperly applied, which have been sold by the Defendants, would have been sold by the Plaintiffs if it had not been so improperly applied. But he 25 arrives at the conclusion-relying largely on the evidence of Timberlake-that this is not so. He then proceeds to say that the Plaintiffs are entitled to damages; that it is fair to assume that it would have affected their businessto some degree, at all events; and that they were entitled, to some extent, to damages. Then he proceeds to consider it, and says:-" But the Defendants 30" admitted that, if they had not succeeded in selling the tyres they improperly "sold, their customers would very likely have bought in the place of machines "which used these tyres other machines fitted with other tyres made by licensees "of the Plaintiffs in which the Plaintiffs' patent was made use of, though in a "form and to an extent which made the tyres inferior to the high-priced 35"Dunlop tyres, and which were, like the Defendants' tyres, largely used for "the manufacture of second grade bicycles, and that upon such tyres the "Plaintiffs would get a royalty of 2s. 6d. apiece." I confess I see nothing in the evidence which justifies that view in point of fact; in my judgment, that is not the true measure of damages. I think that the true measure of damages 40 in the circumstances of the case, and the true principle upon which the damages are to be measured, was that stated by the Master; but I think that, in applying that measure of damages, he has arrived at figures which are quite unsupported and quite unwarranted on the face of the evidence that was given before him. What, then, is the Court under such circumstances to do? Upon the principle45 which I think erroneous-on which Mr. Justice Wills arrived at the computation of damage-he has given them 2671. 5s. Od.-I do not think the Court, in a case of this kind, is called upon to scrutinise too closely and too accurately how that extent of damage is made out. I agree that there ought to be with a liberal hand damages dealt as against a wrongdoer under circumstances of this kind; 50 but the essential principle must never be lost sight of-that it is not an action to punish the Defendants. It is an action to compensate the Plaintiffs. That is the object of the action. That states the case.

On the whole, I have arrived at the conclusion that, though I think the principle on which the learned Judge proceeded was not right, yet, looking at 55 the matter, as one in this connection must do, without any reliable and accurate

The Pneumatic Tyre Company, Ld. v. The Puncture Proof Pneumatic
Tyre Company, Ld.

guide, the figure he has named probably fairly-and perhaps liberally-represents the damage to the Plaintiffs, and I do not see any reason to disturb that finding. If it errs at all it seems to me to err on the side of liberality.

SMITH, L.J.-I am entirely of the same opinion. My Lord has covered the whole of this case; I agree in all that he has said; and I certainly come to 5 the conclusion that the measure of 2001. odd which my brother Wills has allowed to the Plaintiffs is certainly not unfavourable to them, having regard to what the Plaintiffs have proved to be their measure of damage in all the circumstances of the case.

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COLLINS, L.J.-I am of the same opinion. When one sees how my brother 10 Wills came to allow the amount which he did allow I do not think it involves any erroneous principle on his part, because I think that he is applying the principle which my Lord has laid down as the true principle, and that appears from the opening sentences of his judgment. He says:-"They have to show, therefore, "that they have sustained pecuniary loss, and, as far as the nature of the case 15 may permit, the amount of that loss." Then, having laid down that principle, and having excluded the measure which the Master in fact adopted-as he does on the evidence, he goes on to say that the Defendants, while setting up successfully that the evidence did not establish the measure which the Master adopted, admit that the Plaintiffs may have suffered damage to the extent 20 which would be represented by the 2s. 6d. apiece. He says this:-"The "Defendants admitted that if they had not succeeded in selling the tyre they "improperly sold their customers would very likely have bought in the place of "machines which used these tyres other machines fitted with other tyres made "by licensees of the Plaintiffs in which the Plaintiffs' patent was made use of, 25 "though in a form and to an extent which made the tyres inferior to the high"priced Dunlop tyres." Looking for some measure of damage as against the Defendants, who had themselves admitted this, and rather by way of indulgence to the Plaintiffs, he takes against the Defendants an admission which they have made that in actual money the Plaintiffs may be taken to have lost that amount, 30 and that is the reason-he is not seeking to apply that as the principle upon which damages should be assessed, but rather as giving them the benefit of something the Defendants were ready to admit is due.

Lord RUSSELL, C.J.-I think probably my brother COLLINS is right. The learned Judge certainly states correctly the principle upon which he intends to 35 proceed. Probably the explanation of the way in which he does proceed is as Lord Justice COLLINS stated-that he has taken that as an admission against themselves on the part of the Defendants. What I was desiring to point out was, that I think he was in error, in fact, in assuming that a license would have been given for the manufacture of these tyres.

The appeal was dismissed with costs.

The Royal Baking Powder Company v. Wright, Crossley & Co.

IN THE COURT OF APPEAL.

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Before THE MASTER OF THE ROLLS and LORDS JUSTICES RIGBY and
VAUGHAN WILLIAMS.

February 16th and 27th, 1899.

THE ROYAL BAKING POWDER COMPANY v. WRIGHT, CROSSLEY & CO.

Trade libel.-Alleged untrue statement. Alleged malice.-Appeal by Defendants. Admissibility of evidence to explain meaning of document.Construction of document.-Appeal allowed.

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In 1897, two Trade Marks, registered by the R. Company, of New York, were 10 expunged from the Register of Trade Marks by the order of the Court, at the instance of W., C. & Co. Both Trade Marks were labels containing prominently the words "Royal Baking Powder." Shortly afterwards W., C. & Co. issued a circular referring to the said order, which circular, and the statements of travellers and agents of W., C. & Co., were alleged by the R. Company to be 15 an intimation that the R. Company were not entitled to sell baking powder as Royal Baking Powder," and that W., C. & Co. intended to proceed against persons using the labels to stop the use of those words. The R. Company commenced an action to restrain W., C. & Co. from representing that the Plaintiffs were not entitled to sell their Royal Baking Powder in the United 20 Kingdom, and from maliciously threatening the customers of the Plaintiff's with legal proceedings in respect of their sales of the Plaintiffs' said baking powder. It was held at the trial, that the circular represented what was not true with regard to the Plaintiffs' Baking Powder and trade, and was issued not in good faith in support of a claim or right really made or intended to be exercised by the 25 Defendants, but maliciously, and had caused special and substantial damage to the Plaintiffs. An injunction was granted in the terms of the first part of the writ, and an inquiry as to damages was also granted, with costs up to and including judgment; the costs of the inquiry were reserved. The Defendants appealed.

The Royal Baking Powder Company v. Wright, Crossley & Co.

Held, on appeal, that there being no circumstances to suggest that the circular had a secondary meaning evidence to explain its meaning was inadmissible, and that the circular did not mean that the Defendants intended to proceed against persons selling the Plaintiffs' Baking Powder under the name "Royal "Baking Powder," and that the circular was not in any respect untrue. The 5 appeal was allowed with costs in both Courts, the costs of the inquiry to be costs in the action.

On the 6th of August 1887, The Royal Baking Powder Company, of 106, Wall Street, New York, U.S.A., registered a Trade Mark under No. 66,683, for baking powder, in Class 42; nine years' user before the 13th of August 1875, was 10 claimed for such Trade Mark. On the 6th of February 1888, the same Company registered a Trade Mark under No. 66,684, for baking powder, in Class 42, no prior use being claimed for the same. Both Trade Marks contained prominently the words "Royal Baking Powder."* On the 12th February 1897, Wright, Crossley & Co. gave notice of a motion to rectify the Register by expunging 15 the said Trade Marks, on a variety of grounds. On the motion coming on for hearing on the 9th of April 1897, before ROMER, J., The Royal Baking Powder Company did not appear, and an order was made expunging the two Trade Marks (In the Matter of the Trade Marks of the Royal Baking Powder Company, 14 R.P.C. 425). On the 20th of April 1897, Wright, Crossley & Co. 20 issued a circular, which was headed in red type, "Manufacturers of the "Original Royal Baking Powder, 'Lion' Brand," and ran as follows:

"ROYAL BAKING POWDER.

"Dear Sir,-We beg to call your attention to the following order of the "Chancery Court of the High Court of Justice, made by Mr. Justice Romer 25 on the 9th of April 1897 :—

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"In the High Court of Justice.-Chancery Division.

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Mr. Justice ROMER. (Friday, 9th day of April 1897.)

"Mr. CARRINGTON, Registrar. P. 320.

"In the Matter of the Registered Trade Marks numbered 66,683 and 66,684 30 "of THE ROYAL BAKING POWDER COMPANY, 106, Wall Street, New "York, U.S.A., and

"In the Matter of the Patents, Designs, and Trade Marks Acts, 1883-1888. Upon motion this day made unto this Court by Counsel for Messieurs "Wright, Crossley & Co., of 17, North John Street, in the City of Liverpool, 35 "and upon reading affidavits, &c. :

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"This Court doth order that the Register of Trade Marks be rectified by expunging therefrom Trade Marks Nos. 66,683 and 66,684, both in Class "No. 42. And it is ordered that notice of this order be given to the Comp"troller-General of Patents, Designs, and Trade Marks by serving a copy of 40 "this order upon the said Comptroller, or by leaving the same with a clerk "at the office of the said Comptroller, and at the same time producing the "duplicate of this order passed and entered.'

"We are compelled to give notice to the trade generally that it is our inten"tion to proceed against anybody selling any American baking powder in tins 45

These Trade Marks will be found in 14 R.P.C., at pages 425 and 426.

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The Royal Baking Powder Company v. Wright, Crossley & Co.

bearing either of the labels which have been struck off the Register by the "Court. The labels will be found on pages 452 and 453 of the Trade Marks 66 Journal, No. 524.

"We should be much obliged if you will assist us in our efforts to protect 5 "British traders by bringing to our notice any instance of the sale of American "baking powder in tins bearing either of the above labels."

On the 12th of May 1897, The Royal Baking Powder Company commenced an action against Wright, Crossley & Co. for an injunction to restrain the Defendants, their servants and agents, from maliciously representing that the 10 Plaintiffs were not entitled to sell their "Royal Baking Powder" in the United Kingdom of Great Britain and Ireland, and from maliciously threatening the customers of the Plaintiffs with legal proceedings in respect of their sales of the Plaintiffs' said baking powder. On the same day the Plaintiffs, by leave, gave notice of motion for an interlocutory injunction in the terms of the writ. 15 The motion was ordered to be placed in the witness-list, with leave to crossexamine the persons who had made affidavits, and to adduce further evidence. It was heard on the 26th, 27th, and 28th of April 1898, by Romer, J., who held that the circular represented what was not true with regard to the Plaintiffs' baking powder and trade, and was not issued in good faith in support of a claim 20 or right really made or intended to be exercised by the Defendants, but maliciously, and had caused special and substantial damage to the Plaintiffs. An injunction was granted in the terms of the first part of the writ, and an inquiry as to damages was also granted, with costs up to and including judgment, the costs of the inquiry being reserved.* The Defendants appealed.

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Neville, Q.C., and L. B. Sebastian (instructed by Field, Roscoe & Co., agents for Batesons, Warr and Wimshurst, of Liverpool) appeared for the Appellants; Warmington, Q.C., Levett, Q.C., and S. Dickinson (instructed by Janson, Cobb and Pearson) appeared for the Respondents.

Neville, Q.C., opened the Appellants' case, stating the facts, and continued.30 In such an action as this malice must be shown; White v. Mellin L.R., (1895), A.C. 154, and Halsey v. Brotherhood, L.R. 19, Ch. D. 386. [VAUGHAN WILLIAMS, L.J.-In an action for slander of title it must be shown that the statement is false and also malicious.] We could have taken proceedings in respect of the label actually used. A representation that a thing is a Trade 35 Mark is sufficient to constitute an offence under section 105 of the Patents, &c. Act, 1883, without the use of the word "Registered"; Lewis v. Goodbody, 67 L.T. 194. We did actually proceed under that section in respect of the label which the Plaintiffs used. But, in any case, it is sufficient now for the Defendants to show that their conduct was reasonable. They were not 40 bound to point out to the Plaintiffs how the labels could be set right. The inference of malice ought not to be drawn against the Defendants. What was in the circular was correct. Also we submit that there was no evidence of damage. The circular never stopped any sale which the Plaintiffs might legally have made. On the second mark in the "Trade Marks Journal" it is true that the words " Trade 45" Mark Registered" do not occur; but this mark was never used, and the matter is of little importance, but proceedings were in fact contemplated under the Merchandise Marks Act, 1887. [VAUGHAN WILLIAMS, L.J.-You do not here allege an exclusive title in yourselves in setting up that the occasion was privileged.] The Defendants have a right to defend their trade, and 50 have a right to set up that the occasion was privileged. There was nothing untrue in the circular; there was no inuendo. The Plaintiffs to succeed must show damage-White v. Mellin-and as to the second label, at any rate, there could be no damage. [The judgment was then read.]

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