The Court of Appeals of the District of Columbia had no jurisdiction of trademark cases under sec. 3 of the law of 1881.17 Federal jurisdiction in cases of unfair competition must of course be predicated upon the general rules fixing the jurisdiction of the federal courts, so that those courts can not entertain such an action arising between citizens of the same state except in so far as the respondent's wrongful acts affect commerce with foreign nations or the Indian tribes; at least that is the express holding of the Circuit Court of Appeals for the Seventh Circuit.18 While federal jurisdiction attaches to a suit between citizens of the same state based upon infringement of a trademark registered under the Act of 1905, a charge of unfair competition joined therewith can not be entertained if the case fails as to the trademark, and that part of the bill will be dismissed.19 But if the jurisdiction thus acquired is not lost by reason of the charge of infringement of the trademark failing, the court will have jurisdiction to enjoin "all wrongful acts in connection with the infringement which augment and aggravate the wrong. 20 § 172. Jurisdiction of the state courts.-The state courts have a jurisdiction concurrent with that of the federal courts in trademark cases.21 It may, at times, be advisable for a 16 Fed. Rep. 436-443, where it was held that the service of an agent of a foreign corporation was binding, the infringement having been perpetrated in the district where the action was instituted. 17-Einstein v. Sawhill, 65 Off. Gaz. 1918. 18-Illinois Watch Case Co. v. Elgin Nat. Watch Co., 94 Fed. Rep. 667, 672; 35 C. C. A. 237; affirmed, 179 U. S. 665; 45 L. Ed. 365. 19-Planten v. Gedney, 140 C. C. A. 1; 224 Fed. Rep. 382, 386; reversing Planten v. Gedney, 211 Fed. Rep. 281; Sprigg v. Fisher, 222 Fed. Rep. 964, 967. in 20-Van Valkenburgh, Jacoway v. Young, 228 Fed. Rep. 630, 633. 21-Small v. Sanders, 118 Ind. 105; 20 N. E. Rep. 296. It is well settled law that the jurisdiction of state and federal courts over suits for infringement of trademarks is concurrent. The act of March 3, 1881, conferring jurisdiction upon the courts of the United States, in no way impaired the jurisdiction of the state courts. In re Keasbey & Mattison Co., 160 U. S. 221; 40 L. Ed. 402; Reeder v. Brodt, (C. P.) 4 Ohio N. P. 265; 6 Ohio Dec. 248. non-resident plaintiff who has secured state registration for his mark or label to sue in the state court in preference to the federal court; this will be determined by the character of the matter for which state registration has been secured. Several of the states have by statute extended the definition of trademark to include tickets, labels, wrappers, and other wrappings or packages not properly trademark, and frequently it will be a benefit to a complainant to avail himself of such statutory provisions.22 The courts of every state of the Union have, with the exception of California,23 always been open to the owners of trademarks seeking redress and protection against piracy, without requiring state registration as a prerequisite. § 173. Jurisdiction of the Federal Trade Commission.-In the present work we are interested in the recently formed Federal Trade Commission only to the extent that it is, by its enabling act, given jurisdiction over issues of unfair competition. The term "unfair competition" had been incorporated in our legal vocabulary long before the enactment of the law creating that commission, and had an established meaning among lawyers, definite though elastic. The act referred to condemned "unfair methods of competition in commerce" as unlawful, and empowered the commission "to prevent persons, partnerships, or corporations, except banks and common carriers subject to the acts to regulate commerce, from using unfair methods of competition in commerce." As to what it meant by the term "unfair methods," Congress was silent. The Supreme Court of the United States has said "The words 'unfair methods of competition' are not defined by the statute, and their exact meaning is in dispute. It is for the courts, not the commission, ultimately to determine, as a matter of law, what they include. They are clearly inapplicable to practices never heretofore regarded as opposed to good morals because characterized by deception, bad faith, fraud, or 22-"The phrase trademark, as used in this chapter, includes every description of word, letter, device, emblem, stamp, imprint, brand, printed ticket, label or wrapper usually affixed by any mechanic, manufacturer, druggist, merchant or tradesman, to denote any goods to be imported, manufactured, produced, compounded or sold by him, other than any name, word or ex pression generally denoting any goods of some particular class or description or the designation or name for any mill, hotel, factory or other business." $ 366, Penal Code of New York, 1893, Montana Code, 1895, vol. 1, § 3160. 23 Whittier v. Dietz, 66 Cal. 78. This exception to the rule has since been removed by statutory enact ment. oppression, or as against public policy because of their dangerous tendency unduly to hinder competition or create monopoly." 23a Accordingly, the various proceedings under the act are of very little general value, and are of authority only in cases involving the same character of "unfair methods of competition." Thus where the commission had ordered that a defendant, "its officers and agents, cease and desist from refusing to sell cotton ties unless the purchasers agree to buy from them corresponding amounts of bagging," the order was set aside as improvident,23b while the fixing of re-sale prices by refusal to sell to price-cutters was met by a "cease and desist" order which was approved by the supreme court.23c Perhaps the broadest language of the cases is that which brings within the act any agreement "to hinder or obstruct the free and natural flow of commerce in interstate trade." 23d Naturally, a roving commission given to a non-judicial tribunal to prosecute trade practices whose fairness might be called in question has led to some astounding results. In separate proceedings against thirty or more refiners and wholesalers of petroleum products, the commission ordered the defendants to desist from leasing and loaning storage tanks to their customers, on condition that the equipment be used only with gasoline supplied by the lessor. Four circuit courts of appeals reviewed and condemned the order, and the supreme court affirmed them with the following admonition to the commission: "The powers of the commission are limited by the statutes. It has no general authority to compel competitors to a common level, to interfere with ordinary business methods, or to prescribe arbitrary standards for those engaged in the conflict for advantage called 'competition.' The great purpose of both statutes was to advance the public interest by securing fair opportunity for the play of the contending forces ordinarily engendered by an honest desire for gain. And to this end it is essential that those who adventure their time, skill, and capital should have large freedom of action in the conduct of their own affairs."' 23e Aside from the case of Beech-Nut Packing Co. (257 U. S. 441), 23a-Federal Trade Commission v. Gratz, 253 U. S. 421, 427, 64 L. Ed. 996. 23b-Federal Trade Commission v. Gratz, 253 U. S. 421, 429, 64 L. Ed. 996. 23c-Federal Trade Commission v. Beechnut Packing Co., 257 U. S. 441, 66 L. Ed. 307. 23d-Southern Hardware Jobbers' Association v. Federal Trade Com mission, 290 Fed. Rep. 773, 779, C. 230-Mr. Justice McReynolds in Fed. Trade Com. v. Sinclair Refining Co., 261 U. S. 463, 67 L. Ed. 746. the decisions have uniformly set aside orders of the Trade Commission which interfered with the right of an owner of property to sell his goods as he pleased and to whom he pleased.231 Neither the Sherman Act, the Clayton Act or the Federal Trade Commission Act would seem to warrant interference with those rights. "We find in the statute no intent on the part of Congress, even if it has the power, to restrain an owner of property from selling it at any price that is acceptable to him or from giving it away.' 23g "Before the Sherman Act it was the law that a trader might reject the offer of a proposing buyer, for any reason that appealed to him; it might be because he did not like the other's business methods, or because he had some personal difference with him, political, racial, or social. That was purely his own affair, with which nobody else had any concern. Neither the Sherman Act, nor any decision of the supreme court construing the same, nor the Clayton Act, has changed the law in this particular. We have not yet reached the stage where the selection of a trader's customers is made for him by the government.'' 23h The right of the Federal Trade Commission to exercise inquisitorial power over the steel manufacturing industry has been denied upon the ground that its jurisdiction is limited to interstate commerce, and can not extend to manufacture and production. 231 Fraudulent advertising.-In several cases the commission has dealt with misrepresentations as to quality or ingredients, contained in advertisements.231 Mandamus.-On a petition for mandamus seeking the production of books and papers in which the commission was the petitioner, Judge Manton denied the application upon these grounds. "To grant the relief prayed for by the petitioner Compare Fed. Trade Com. V. Curtis Pub. Co., 260 U. S. 568, 67 L. Ed. 408;-"Effective competition requires that traders have large freedom of action when conducting their own affairs. Success alone does not show reprehensible methods although it may increase or render insuperable the difficulties which rivals must face." McReynolds, J. 23f-The dissenting opinions of four justices are forcible. See 257 U. S. 456, 459. 23g-Sears, Roebuck & Co. v. Fed. Trade Com., 307, 312. 169 C. C. A. 323, 328, 6 A. L. R. 358, C. C. A. 7. 23h-Lacombe, J., in Great Atl. & Pac. Tea Co. v. Cream of Wheat Co., 227 Fed. Rep. 46, 49, 141 C. C. A. 594, 597, C. C. A. 2. And to the same effect see Mennen Co. v. Fed. Trade Com., 288 Fed. Rep. 774, 781, C. C. A. 2. 231-Fed. Trade Com. v. Claire Furnace Co., 285 Fed. Rep. 936, C. A. D. C. 231-Fed. Trade Com. v. Winsted Hosiery Co., 258 U. S. 483, 66 L. Ed. 729; Royal Baking Powder Co. v. Fed. Trade Com., 281 Fed. Rep. 744, C. C. A. 2. would be to permit an unreasonable search and seizure of papers in violation of the Fourth Amendment. It was not the intention of Congress to grant such unlimited examination and inspection by the legislation in question, nor, indeed, did Congress have authority to do so under the commerce clause of the constitution. 23k Staying proceedings.-As the commission merely exercises administrative and not judicial powers, the courts have declined to interfere with its proceedings. Injunctions to halt the tak ing of testimony, and applications to circuit courts of appeals for certiorari to require the commission to certify its preliminary orders for review, have alike been denied.231 The proceedings of the commission are instituted by the commission itself. The action is entitled "Federal Trade Commission v. (the defendant)," and the rules adopted by the commission provide that the party seeking to have a complaint issued shall make an application there for in writing, containing a short and simple statement of the facts constituting the alleged offense, and giving the names and addresses of the complaining party and the party complained against. The application is not served upon the defendant, who instead is served with the complaint drawn by the commission. The commission is then in the position of a prosecuting officer, who issues the complaint in his own name as complainant, and proceeds to try the cause himself. The rules provide that an answer to the complaint shall be made within thirty days. after service, which service may be had either by personal service or by registered mail. It will be noted on examining the rules (printed in the appendix of this book) that the defendant must answer; indeed, a provision for a demurrer would seem to be idle when the complaint is drawn by the same high authority that is to try the issues. Does this unique tribunal, to act at once as plaintiff, prosecuting officer and trier of the facts, afford the defendant "due process of law?" The judgments and orders of the commission are ineffective until reviewed by the circuit court of appeals of any circuit where the defendant resides or where "the method of competition in question was used." Its findings of facts may be reversed if not supported by the testimony, and the original order may be modified or set aside. The judgment of the court of appeals is subject to review by the supreme court only upon certiorari, as provided by section 240, the Judi 23k-Fed. Trade Com. v. P. Lorillard Co., 283 Fed. Rep. 999, 1007. V. 231-Chamber of Commerce Fed. Trade Com., 280 Fed. Rep. 45, C. C. A. 8. |