L. E. Waterman Co. v. Modern Pen Co.

Background

The dispute was between the L. E. Waterman Company, an established maker of fountain pens, and the Modern Pen Company, a later competitor that used the Waterman name on pens. The original company sued, saying the rival's use of the name misled customers and amounted to unfair competition. Lower courts issued rulings and a final decree limited how the Modern Pen Company could use the Waterman name.

Reasoning

The Court addressed whether the later company could use the Waterman name when that use tended to confuse the public. Finding that the defendant had used the name in a way likely to mislead, the Court nevertheless concluded that a partnership and agreement with Arthur A. Waterman gave the defendant a sufficient license to use his name in a restricted way. The decree required the defendant to use 'Arthur A. Waterman & Co.' instead of 'A. A. Waterman & Co.' and to place the words 'not connected with the L. E. Waterman Co.' in equally large and conspicuous letters to prevent fraud. The Court affirmed the decree and denied the plaintiff's request for a broader ban.

Real world impact

The decision lets a later company keep using a founder's name when there is an agreement transferring rights, but forces clear labeling to avoid customer confusion. It protects consumers from being misled while recognizing that name transfers and licenses can give limited rights to use a personal name. The ruling is not a blanket rule about every name transfer and leaves open further questions about sham transfers or different facts.

Dissents or concurrances

Justice Pitney dissented on the plaintiff's appeal, calling the partnership agreement a sham and arguing the Modern Pen Company should have been completely barred from using 'Waterman.'