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join the use of geographical and descriptive words, which are the common property of all persons, and which cannot be monopolized by any one as a trade-mark, when no other means are employed to produce confusion of goods save the use of such words that is to say, when the packages or articles to which such words are applied are not put up in such a way as to occasion deception, and no deception is practiced except by the use of geographical or descriptive words that are public property-then I dissent from the foregoing statement of the law, as I did in the case of Shaver v. Heller & Merz Co., when it was first enunciated, and for the reasons stated in that dissent. In all other respects I concur in the foregoing opinion, and in the affirmance of the decree of the lower court.

INTERSTATE COMMERCE COMMISSION v. SOUTHERN RY. CO.

(Circuit Court of Appeals, Fourth Circuit. May 5, 1903.)
No. 467.

1. CARRIERS-INTERSTATE COMMERCE LAW-UNJUST DISCRIMINATION IN RATES. Where the rates charged by a railroad to a particular point are not unreasonable in themselves, the fact that lower rates are charged for a longer haul to other points does not create an unjust discrimination against such point, in violation of the interstate commerce law, where such lower rates are due to active legitimate competition.

Appeal from the Circuit Court of the United States for the Western District of Virginia.

For opinion below, see 117 Fed. 741.

L. A. Shaver, for appellant.

Ed. Baxter (Fairfax Harrison, on the brief), for appellee.

Before GOFF, Circuit Judge, and PURNELL and BOYD, District Judges.

BOYD, District Judge. This is a suit brought by the Interstate Commerce Commission at the instance of certain citizens of the city of Danville, Va., against the Southern Railway Company, on account of alleged discrimination in freight rates against the said city. Facts sufficient for an understanding of the questions involved are stated in the opinion.

In the beginning a petition was filed by the Danville complainants before the commission, and thereupon an investigation was had and an order made by the commission requiring the railway company to reduce its rates on sundry classes of freight to Danville, and on tobacco shipped from Danville to points in the west. The railway company declined to obey the order of the commission, and this suit was brought. The grounds upon which the complaint is based are substantially that the through rates from the west via Lynchburg to Danville are greater than the rate to Lynchburg, and that the rate to Richmond via Lynchburg is less than that to Danville, although the latter place is nearer to the shipping points than Richmond. The principal grievance complained of against the railroad is the rate charged by the Southern Railway for freight between

Lynchburg and Danville. Lynchburg and Richmond are both reached by three railway systems, viz., the Southern, the Norfolk & Western, and the Chesapeake & Ohio railways. Prior to 1886 there were four independent railroads operated to Danville, but in that year three of them passed under the control of the Richmond & Danville Railroad Company. In 1894 the last-named railroad company was succeeded by the Southern Railway Company, which acquired control of all of the property of the Richmond & Danville Company, and in 1899 the Southern purchased the Atlantic & Danville, which was the remaining railroad running into Danville. On account of the several lines reaching Richmond and Lynchburg, and from the fact that these lines, by reason of their location, do business as carriers from the same points in the west, there is active competition at both Lynchburg and Richmond, which has produced exceedingly low freight rates. From the testimony, it appears that the Chesapeake & Ohio Railroad, which competes with the trunk lines, and which complies with the interstate commerce act by charging no more for the short than the long haul, is primarily responsible for these rates. The rates given Danville are very much higher than those given Lynchburg and Richmond. From the record we gather the following instances, which will show the difference in the rates charged on 100 pounds of freight from the points named to Lynchburg, to Richmond, and to Danville.

Rates in cents per 100 pounds to Lynchburg and Danville:
Class 1. Class 2. Class 3.

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The Southern Railway does not share in the competitive through rate from the west to Lynchburg, Richmond, and Norfolk charged by the other railways named, and the water competition from New Orleans is shown by the evidence to have direct effect upon the rates to Norfolk and Richmond. It is the settled law that a railroad company is not bound to carry beyond its own lines, and there are numerous decisions at circuit that there is nothing in the interstate commerce act to compel connecting railroads to form through rates or to join in making through rates. In the case of E. T., V. & G. R. Co. v. Interstate Commerce Commission, 181 U. S. 1, 21 Sup. Ct. 516, 45 L. Ed. 719, it is held that:

"The only principle by which it is possible to enforce the whole statute is the construction adopted by the previous opinions of this court; that is, that

122 F.-51

competition which is real and substantial, and exercises a potential influence on rates to a particular point, brings into play the dissimilarity of circumstances and conditions provided by the statute, and justifies the lesser charge to the more distant and competitive point than the nearer and noncompetitive place, and that this right is not destroyed by the mere fact that incidentally the lesser charge to the competitive point may seemingly give a preference to that point, and the greater rate to the noncompetitive point may apparently engender a discrimination against it. We say seemingly on the one hand and apparently on the other, because in the supposed cases the preference is not 'undue' or the discrimination 'unjust.' This is clearly so when it is considered that the lesser charge upon which both the assumption of preference and discrimination is predicated is sanctioned by the statute, which causes the competition to give rise to the right to make such lesser charge."

The commission, in its report as appears in the record, says:

"In some of the discrimination, at least, against Danville, other lines, particularly carriers north of the Ohio river, share. The same thing may be true of water carriers from Eastern cities to Norfolk."

So far as the facts in this case show, the Southern is impartial as between Cincinnati and Louisville traffic, and also that to and from Chicago and St. Louis, and is not responsible for the apparent discrimination against Danville. We cannot present this case in a more intelligent manner than by reproducing from the very learned and comprehensive opinion of the judge below the following:

"The evidence in this case leaves no room for doubt that the competition at Lynchburg (as well as at Richmond) is real and substantial; that it comes about mainly, if not entirely, from conditions not within the control of the defendant in transporting freight to and from Lynchburg and Richmond. It follows that, in reaching a conclusion in this case adverse to the defendant, the rates to and from Danville must be held unreasonable in and of themselves. If reasonable, they cannot be held to subject Danville to an undue prejudice, or to give Lynchburg an undue preference, merely because the Lynchburg rates are considerably lower.

"A strong argument is made by counsel for complainant based on the proposition that the defendant, in purchasing the Atlantic & Danville road in 1899, violated the 'anti-trust act' (Act July 2, 1890, c. 647, 26 Stat. 209 [U. 9. Comp. St. 1901, p. 3200]), and consequently seeks to take advantage of its own wrong in treating Danville as a noncompetitive point. In applying the doctrine here invoked, I am met with the evidence that the rates are now no higher than they were when the Southern and the Atlantic & Danville were independent and competing roads. The evidence is that, while there was competition in soliciting business between the two companies, this competition did not reduce the rates. The fact that the Danville rates were as low as the Lynchburg and Richmond rates prior to 1886 does not affect the question. This was prior to the passage of the anti-trust act, and prior to the reduction in rates by the Norfolk & Western and Chesapeake & Ohio. The wrong, therefore, that is charged to the defendant is the purchase of the Atlantic & Danville road. But, as the rates are as low now as they were at the time of the purchase, it does not appear that the defendant has taken any inequitable advantage of the purchase."

It being, therefore, ascertained that the low rates to Lynchburg and Richmond are due to active, legitimate competition, and that the local rates charged by the Southern Railway Company from Lynchburg to Danville are not within themselves unreasonable, we are of the opinion that the principles of law as above stated apply, and the judgment of the Circuit Court is affirmed.

AMERICAN STREET CAR ADVERTISING CO. v. JONES et al.

(Circuit Court, N. D. New York. May 13, 1903.)

No. 6,865.

1. PATENTS-CONSTRUCTION OF CLAIMS-ADVERTISING RACKS FOR STREET CARS. The Randall patent No. 380,696, for an advertising rack for street cars, discloses invention, and is valid, and is not so limited by the language of claim 1, making an element of the combination of such claim "screws or equivalent devices for connecting the rack to the car," as to restrict it to racks separately made and removably attached, but it covers as well racks constructed in all respects in accordance therewith, but "built in" to the car when it is made.

2. SAME-SUIT FOR CANCELLATION OF LICENSE-EQUITY JURISDICTION.

A suit in equity may be maintained for the cancellation of a license which went into effect and was recognized by the parties, and to obtain an accounting for royalties thereunder.

3. SAME-LICENSES-DURATION.

A license not expressly limited in duration continues in force until the patent expires or the license is forfeited, unless sooner terminated by mutual consent; and, so long as the licensee continues to manufacture the patented article, he is presumed to do so under the license, and is liable for royalties thereunder.

4. SAME-SUIT FOR ROYALTIES-LACHES.

Defendants paid royalties under a parol license until 1889. In 1895 the patentee assigned the patent to complainant, which had no knowledge of the license until 1900, when the patentee assigned to it his claim for past royalties, and, on refusal of defendants to pay, it at once commenced suit for an accounting. The patentee having died, complainant could not show why suit had not sooner been brought by him, nor did defendants, who had continued to manufacture the patented article, show such reason, or that they were misled by his failure to sue. Held, that under such circumstances complainant was not barred by laches from maintaining the suit.

In Equity.

The bill in equity filed in this cause asks that a license alleged to have been granted by Isaac H. Randall, the then owner of the patent in question herein, for the use of such patent, be terminated by the decree of this court; that the defendants be compelled to render an account setting forth the number of cars which they have made or caused to be made since the 8th day of August, 1889, containing advertising racks made under said license, however the same may have been incorporated in the said cars; that the defendants be compelled to pay to the complainant all the unpaid royalty, earned under said license and unpaid, at the rate of $3 per car (which he now asks to make $5 per car). The bill also demands such other and further relief as may seem meet under the facts proved.

Edward S. Beach, for complainant.

Charles G. Coe, for defendants.

RAY, District Judge. The complainant is the owner by due assignment and transfer of letters patent No. 380,696, dated April 10, 1888, for an advertising rack, granted to one Isaac H. Randall. The defendants are engaged at Watervliet, N. Y., in making and selling street cars which contain, as complainant alleges, the patented invention constructionally as to claim 1, contributively as to claim 2, of such patent.

The complainant alleges that defendants are making and selling under a parol royalty-bearing license granted by Randall, the patentee, to the defendants in the fall of 1888, and also alleges that the license has been in force continuously since that time, and is still in force. There are varieties of these patented advertising racks, one being the rack spoken of as "built in" racks because incorporated in a way into the side of the car, rather than attached thereto by hooks, screws, or nails, or otherwise; while another is spoken of as "removable" racks, being those so attached to the sides of the car. The complainant contends that all are, in fact, removable racks, and within the patent, and covered by the license; while the defendants contend that the "built in" racks are not covered by either the patent or license; and also contend that the license was only for the construction of about 20 cars, and terminated with their construction, and that the royalties have been paid in full, except as to a few cars containing removable racks, upon which the royalty would be about $80. Randall, in writing, duly assigned his back damages or claim for royalties to complainant June 12, 1900, and same was duly recorded. The granting of the alleged license is denied in the answer, but the defendant John H. Jones, when examined by the complainant's counsel, testified: "Q. Randall consented to your use of his said patented invention [referring to the patent in question] in cars made and sold by you, did he not, on payment of a royalty or patent fee by you to him? A. Yes."

For the purpose of establishing the existence of the license alleged, a large number of letters were put in evidence that passed between Randall and the defendants relating to the use of these racks in street cars, the royalty charged and to be paid, and also showing payments. It is not necessary, and would not be profitable, to recite these letters, or the evidence relating thereto. This court is satisfied from the evidence that the license alleged has been proved by a fair preponderance of evidence, and that same has not been legally revoked or ended, and that defendants have continued to construct street cars containing this advertising rack ever since the license was given. The real and important claim of the defendants is, and for a long time has been, that these so-called "built-in" racks are not within or covered by the patent in question, and that the defendants have not been and are not liable to pay royalty on cars containing them. In support of this contention defendants refer to the terms of the patent itself, and assert that it is so limited that it does not cover these racks when built in. They also refer to a decision of the United States Circuit Court of Appeals for the First Circuit, decided October term, 1897, between Newton Street Railway Company, defendant (appellant) and American Street Car Advertising Company, complainant (appellee) (32 C. C. A. 122, 88 Fed. 795), on appeal from the Circuit Court for the District of Massachusetts, in which this question. was in issue in reference to claim I of this very patent, and in which that court, reversing the Circuit Court, held:

"While we entertain doubts whether the complainant's device involves invention or patentability. yet, admitting that both were found in it, the patent must be held so close and narrow that it is not infringed by a structure that

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