Lapas attēli
PDF
ePub

425; 50 L. Ed. 710); and Diamond Match Co. v. Saginaw Match Co. ((C. C. A.) 142 F. 727)."

In Radio Corporation of America v. Decca Records (51 F. Supp. 493) the court said, at page 495:

"The color of the label is not functional qua color, as has been held in respect of matches with two colors, one on the head and one on the tip where they are to be struck. Cf. Diamond Match Co. v. Saginaw Match Co. (6 Cir., 142 F. 727, 729, 730).

"It seems to me, however, that it cannot properly be contended that a colored round label, affixed to the circular center of a circular disk record, is the use of color in the form of a design, as it must be to constitute a trade-mark. Cf. Leschen & Sons Rope Co. v. Broderick & Bascom Rope Co. (201 U. S. 166, 171; 26 S. Ct. 425; 50 L. Ed. 710). The circular shape of this center is inescapable. All that has happened is that a functional part of the record has been colored, not that a design has been achieved.

"This renders void the plaintiff's trade-marks, for color qua color may not be a trade-mark."

In In re Security Engineering Co., Inc. (113 F. (2d) 494) the Court of Customs and Patent Appeals said, at page 495, that:

"It is the well-settled law that for a mark to be entitled to registration it should be one which the law recognizes as being capable of distinguishing the goods of its owner from those of another.

"It is equally well settled that the validity of a mark and its right to registration may not depend upon color alone. Color may be an important feature of a valid and useful trade-mark, but color or colors alone when applied to the article as a whole, except under circumstances hereinafter particularized will not constitute a valid mark."

In International Braid Co. v. Thomas French and Sons (150 F. (2d) 142) the Court of Customs and Patent Appeals said, at page 143, that:

"Furthermore, the law is well settled that a mark, the distinguishing feature of which is partly identified by the use of a design in color, may be registered, provided, however, that the designated color is distinctive and specific. On the other hand, the law prohibits the registration of a mark which provides for the use of any color as its distinguishing feature; for the reason not only that such a mark possesses no.defined feature which would tend to identify the origin of the goods, but also that the registration of such a mark would endow its owner with an implied monopoly of all the colors of the spectrum. Leschen & Sons Rope Co. v. Broderick & Bascom Rope Co. (201 U. S. 166; 26 S. Ct. 425; 50 L. Ed. 710); Lufkin Rule Co. v. Master Rule Mfg. Co. (40 F. 2d 991; 17 C. C. P. A. Patents, 1227); In re Johns-Manville, Inc. (55 App. D. C. 142; 2 F. 2d 844); Samson Cordage Works v. Puritan Cordage Mills (6 Cir., 211 F. 603; L. R. A., 1915 F. 1107); In re Gotham Silk Hosiery Co., Inc. (5$7 App. D. C. 266; 20 F. 2d 282).”

In view of the foregoing, it is quite clear that the color yellow or of any other color is incapable of being a trade-mark unless such color or colors form part of a distinctive design which otherwise is capable of registration. It will be noted that even where registration of a design incorporating colors is permissible, no exclusive property right in the color is thereby obtained.

It is interesting to note in this connection that butter is not the only yellow food that is consumed by man. Yellow appears in many foods which man has consumed for years. For that matter, butter is not the only yellow fat that man has consumed. While some butter people like to talk about butter being mentioned in the Bible, an investigation into the historical facts discloses that after man domesticated the cow, he consumed cow's milk, but for some time did not make of such milk, butter for his own consumption. In fact, there is evidence to show that the first use made of butter was as a grease with which wrestlers in ancient times anointed their bodies so as to aid them in their athletic contests.

However, man did eat yellow fats other than butter, such as beef fats and chicken fat. These have been the subject of human consumption for many years. For that matter, when margarine was first made and sold in the 1870's, it was made exclusively from animal fats, and from such fats the margarine derived a natural yellow color.

Yellow margarine is not something which is new today. As already stated, it was first yellow naturally, and over the period of years some yellow margarine has been made and sold.

The witness from the Food and Drug Administration described very clearly how naturally yellow margarine was in pretty common use prior to 1931, and

that the oleomargarine tax law was amended in 1931 to impose a 10-cents-perpound tax on naturally yellow margarine as well as artificially colored margarine, which, in turn, reduced the amount of yellow margarine made to a very small quantity.

Accordingly, history shows that butter has never had any exclusivity for the color yellow in the food field and not even in the fat field.

Upon consideration, it becomes apparent that this is in no way whatsoever a trade-mark point or one involving an exclusive right. It is simply a matter of color in foods which, in turn, automatically means that it comes within the provisions of the Federal Food, Drug, and Cosmetic Act.

As is known, the original Federal law in this field was the food and drug law of 1906. Starting in the 1930's, the Congress spent several years in a consideration of a revision of the food and drug law, which culminated in a very comprehensive measure enacted in 1938 and called the Federal Food, Drug, and Cosmetic Act. This followed very extensive hearings in both Houses, lasting over a period of many years. The subject of the coloration of foods was fully considered, and the Congress acted upon it. We find the following provision in this act, being section 403 (k):

"SEC. 403. A food shall be deemed to be misbranded

[blocks in formation]

"(k) If it bears or contains any artificial flavoring, artificial coloring, or chemical preservative, unless it bears labeling stating that fact: Provided, That to the extent that compliance with the requirements of this paragraph is impracticable, exemptions shall be established by regulations promulgated by the Administrator. The provisions of this paragraph and paragraph (g) and (i) with respect to artificial coloring shall not apply in the case of butter, cheese, or ice cream."

[ocr errors]

It is obvious, therefore, that Congress has enacted that color may be added to food-and with no limitations on the use of any particular color for any particular food-just as long as there is a label declaration that color has been added. As is obvious from this provision, the exemption originally procured from the Congress in 1923 with respect to butter was continued in this act.

Furthermore, under section 401 of the Federal Food, Drug, and Cosmetic Act, the food, oleomargarine, was standardized by the Federal Security Administrator and, as required by the act, he first conducted lengthy and extensive hearings. The oleomargarine standard was promulgated in 1941 and was one of the first standards of identity issued under the Federal Food, Drug, and Cosmetic Act. In the standard, which has the force and effect of law, the Administrator lists coloring as an optional ingredient. The butter interests were present at these hearings and noted their appearance. Obviously, the fact that in standardizing oleomargarine under the Federal Food, Drug, and Cosmetic Act, the Administrator lists coloring as a permitted ingredient is very clear and conclusive evidence that there is nothing false and misleading in having yellow oleomargarine and that it is in keeping with all proper considerations dealing with the manufacture, selling, and labeling of foods. Of course, under the act, as well as under the oleomargarine standard, when color is added to oleomargarine, the label must clearly and conspicuously declare the presence of added color.

MEMORANDUM ON THE USE OF THE COLOR YELLOW BY THE BUTTER INDUSTRY PREPARED BY THE NATIONAL COOPERATIVE MILK PRODUCERS FEDERATION FOR THE FINANCE COMMITTEE OF THE UNITED STATES SENATE

The chairman of the Senate Finance Committee has requested the National Cooperative Milk Producers Federation to submit this memorandum for the record in connection with the hearings on H. R. 2245.

In his indirect testimony before the Senate Finance Committee on May 18, 1948, John Brandt, president of the National Cooperative Milk Producers Federation, stated that the characteristic color of yellow is the trade-mark of the butter industry.

This was intended as a statement of a broad general principal and not as a reference to a trade-mark in the technical, legal connotation.

The butter industry has long been an entity in the field of business enterprise. This business, functionally, is a complex combination of human talent and industry, cooperative spirit of management and employees, machines and materials, patents, privileges, licenses, franchises, and advertising devices. However, the most important single component in the make-up of this business enterprise is

an incorporeal value-the net result of all the activities of the functional unitthe good will of the consumer.

The smallest factory, located on a parcel of nearly worthless land, may, nevertheless, possess good will of inestimable value.

Economically, good will determines the competitive position of a business in the market place; as a matter of accounting, it is an essential element to be considered in arriving at the valuation of a business; legally, it represents a pecuniary interest recognized as property, and, as such, should be protected from unfair and dishonest competition.

The necessity of protecting the good will of an enterprise and of preventing. competitors from appropriating a harvest which they have not sown is fundamental-it is but an application of the American principle of fair play.

The philosophy of fair dealing in competing enterprises contains, in addition to the materialistic interest of the business concerned, the idealistic interest of protecting the public from deception.

The butter industry has for many years been building up the good will of the American public toward yellow butter. No individual has done more to enlist this good will and to insure a superior product in return therefore than John. Brandt.

Not content to simulate the taste-through the addition of artificial butter flavoring, vitamin content, texture, melting point, packaging, and labeling of the dairy product-the oleomargarine industry has, of all the manifold colors of the spectrum, selected butter yellow as the one color best suited for its purpose the manifest purpose of substituting its product for butter in the alreadyestablished butter market.

As evidence of the recognition by Congress that the claim of the dairy industry to the color of yellow is not without merit and that some measure of protection and control is warranted, the following brief historical sketch is submitted.

As early as 1870 an imitation product compounded of low-priced oils and fats was introduced in France as a spread for bread. This spurious product imitated not only the color, but the flavor, melting point, and other characteristics of butter.

In the following decade the United States was deluged with this hybrid concoction to the point where the States of New York, Pennsylvania, Delaware, and Maryland enacted legislation to protect their citizens.

Congress became cognizant of the inroads this substitute product was making in 1886, enacted a Federal law, placing on oleomargarine a 2-cent-per-pound tax to insure that its manufacture and sale would be subject to Federal supervision. That this act was inadequate protection to the public and the dairy farmer is now a historical fact. The Congress in its effort to afford protection to the genuine product had overlooked one factor. That factor was that the one characteristic which readily distinguished between the genuine product and the imitation, i. e., color, had been overlooked in the drafting of the law. As a result widespread abuses were rampant; the 2-cent tax was summarily paid and much oleomargarine was sold as butter. Thirty-two States, alarmed over this situation, had passed anticolor laws by 1902. The Congress, stirred into action by the acute situation, passed the Brout law in that year, providing for a 10-centper-pound tax on colored oleomargarine and a one-half-cent-per-pound tax on the uncolored product.

It is apparent, therefore, that by 1902 Congress had come to realize the importance of granting some measure of protection to the dairy farmer. It was cognizant of the all-out effort of the oleomargarine industry not only to imitate the labeling, packaging, and advertising features of the butter producers, but to simulate all the physical characteristics of the genuine product as well. As further evidence of the intent of Congress to accord the dairy farmer a preemptive right to the color of yellow, we have congressional enactment as recent as 1931. At that time certain oleomargarine manufacturers had attempted to evade the prohibition against artificial coloring contained in the 1902 law by the use of palm oil in the manufacture of their product. This device gave to oleomargarine a yellowish color that could not be deemed under the act to be artificial coloring. Evasion was also achieved by mixing sulfur with cottonseed oil.

Incensed at this effort to simulate the characteristic color of butter and at the same time to evade the tax, the Congress, in 1913, enacted a law designed to restore the color of yellow to butter by providing for the 10-cent tax to apply to oleo colored yellow, artificially or otherwise.

Respectfully submitted.

HARRY J. SCHORNIKOW.

The CHAIRMAN. Senator Fulbright, would you mind exchanging this memorandum with Mr. Holman?

And Mr. Holman, would you mind exchanging with Senator Fulbright whatever memo you get up on the same subject?

Mr. HOLMAN. I will be very glad to.

The CHAIRMAN. The contention of Senator Fulbright is that butter has no trade-mark right in the use of yellow color.

We will now hear from Mr. R. G. Lytle, general manager of the North Carolina Milk Producers Federation.

Will you identify yourself, please, Mr. Lytle, to the reporter, and proceed?

STATEMENT OF R. G. LYTLE, GENERAL MANAGER, NORTH CAROLINA MILK PRODUCERS FEDERATION, GREENSBORO, N. C.

Mr. LYTLE. I am R. G. Lytle, general manager of the North Carolina Milk Producers Federation, with headquarters at Greensboro, N. C.

The dairy farmers of North Carolina wish to present an appeal to this committee to pause in the rush of trying to repeal the tax on oleo in order to study the situation. There was in years gone by undoubted reason for rigid Federal regulation to prevent fraud and deceit in the oleo industry. Perhaps that situation has changed and some more changes may be needed in the present oleo law. To completely remove the present regulation, however, with nothing in its place would strike a blow at both the consumer and the dairy farmer. The dairymen of the Nation have spent millions of dollars to build up an acceptance and desire by the consumer for butter. To repeal the tax and not provide some safeguard regulations would allow the oleo interests to move into the thousands of public eating places. They could offer their product as butter and thereby steal the hard-won markets from our butter industry. It would be unthinkable that Congress would want to take a position unfair to all. To say that oleo can move into the market without proper regulation seems to us to be grossly unfair to both dairymen and consumers.

If the Congress feels that some change from the present law is necessary then an interim committee should be appointed to study carefully where the middle ground really is. Appointment of a special committee to study and report by a later date would avoid the risk involved in hasty action now.

To pass the present bill would strike a blow at the budding new industry in North Carolina. Our dairy production increased by about 5 percent last year and we are working hard to push it even higher this year. The grass that is being sown, the additional fertility going back to our depleted soils, the regular income to our farmers, and the improved diet for our people are all good things that need encouragement. To say to the dairy people that your money and effort to increase the sale of butter is going to be offset by the repeal of regulation necessary to prevent deception and fraud would strike a blow.

Today in North Carolina we have surplus milk in some plants, milk that isn't needed in bottles. It is in too small quantities to transfer. We can, however, make the butterfat into butter. But what oulook is there for butter if the oleo salesman can offer his product in a manner where it is not clearly labeled for the benefit of the public?

Even though we have a small seasonal surplus now, North Carolina last year imported 60,000,000 pounds of milk from other States to put into bottles. Currently, milk from some areas is being offered at lower prices than we can afford to produce it for. If the present oleo tax were repealed and no other adequate regulations provided for, the bottom would be knocked out of the butter market. Outside milk producers would be even more anxious to find a market in our State at the expense of our producers.

I feel sure that at this time Congress would be doing a great injustice to repeal the present law without some substitute regulation. Today, as never before, Congress needs to try to see both sides and strike toward a fair condition for all. The rights of individuals are today very important, and allowing oleo unrestricted access to the butter market without regulation to prevent deception and fraud certainly doesn't safeguard the individual rights of milk producers or consumers of the Nation.

The CHAIRMAN. Thank you very much, Mr. Lytle.
Senator LUCAS. One question, Mr. Chairman.

On the first page of your manuscript you state:

To repeal the tax and not provide some safeguarding regulations would allow the oleo interests to move into the thousands of public eating places.

Do you have any regulations that you think would safeguard the industry that you would like to submit to the committee?

Mr. LYTLE. Senator, I do not have such regulations, and I doubt whether I would be capable of preparing such regulations. But I know that within the dairy industry, if given an opportunity to prepare them, someone, through the industry, can and will.

Senator LUCAS. Well, now, this question has been debated around here for a good many years. Ever since I have been in Congress this question has been before us in one form or another, at some time. And it does seem to me that when you make this kind of a statement, in view of the long struggle that the dairy crowd has had with the oleomargarine crowd, you should have this before the committee.

What you want, as I understand it here, is for us to make an investigation ourselves.

Mr. LYTLE. That would be our first recommendation on it.
Senator LUCAS. You say:

They could offer their product as butter and thereby steal the hard-won markets from our butter industry.

Now, I do not know very many people in the margarine industry. I know more people in the dairy industry. Do you think that the margarine industry is that callous, as to go in and deliberately substitute margarine for butter?

Mr. LYTLE. Well, the reports this morning, in some of the other testimony, indicated that it has been done.

Senator LUCAS. I can understand, maybe, how a restaurant keeper now and then, some small fellow, who was unscrupulous, might do it. But I would hate to think that anyone was in the margarine industry who would deliberately sell his margarine for butter. And I do not believe they would.

Mr. LYTLE. We have legal cases, I believe, which can be produced, of prosecutions on record where they have done that.

« iepriekšējāTurpināt »