FINDINGS AND RECOMMENDATION ON REHEARING

STATEMENT

The Commission promulgated its findings in this investigation on October 27, 1933. Being dissatisfied with the findings insofar as they relate to the lighters held not to infringe complainant's patent and also to the subject of simulation, complainant on November 11, 1933, requested a rehearing. On November 17, 1933, the Commission granted complainant's request, with a view to permitting complainant to introduce new evidence in the proceeding, and set November 28, 1933, as the date for the rehearing. Notice of this rehearing was cabled to Japan and the information also sent that if parties in Japan wished to attend the rehearing and could not do so because of lack of time, the rehearing would be postponed upon request received on or before November 25, 1933. No request for postponement was received.

At the rehearing on November 28, 1933, complainant introduced evidence in support of its contention that the lighters found by the Commission not to infringe its patent did in fact infringe the patent, and also that it was entitled to relief on the score of simulation. The Commission requested that it be furnished with advertising cuts respecting Ronson lighters published during the past year and also with names of persons who sent cigar lighters (not Ronsons) to Art Metal Works, Inc., for repairs. Art Metal Works, Inc., submitted copies of advertising cuts for the fall of 1933, saying that these constituted all the advertising for the year. These were received as exhibit 60. A partial list, together with letters, of persons who had sent lighters other than Ronsons to the Art Metal Works, Inc., for repairs was also sent. This was received as exhibit 61. This list does not appear to include any imported cigar lighters, so that the only evidence that an owner of an imported lighter similar to those involved before the Commission sent such lighter to Art Metal Works, Inc., for repair is that concerning exhibit 14. Copies of correspondence between the Dayton Co., of Minneapolis, Minn., and complainant, together with an affidavit identifying the Dayton Co.'s letter of August 23, 1933, are exhibit 62.

FINDINGS

PATENT INFRINGEMENT

On the question of whether exhibits 10, 14, 20, and 21 were operated by manual pressure, complainant's expert witness (Dr. Johnson) presented an enlarged model of the mechanism and demonstrated that by the insertion of a block of wood between the pin in the slot of the finger piece and the end of the slot, in order to preve sion of the spring in the finger piece beyond the point

was compressed by the closing of the snuffer, it was necessary to apply the manual pressure on the finger piece during the entire opening process. A similar experiment was conducted on one of the lighters involved, and it was apparent that by so preventing expansion of the spring beyond the point above mentioned the lighter was unquestionably operated by manual pressure. Dr. Johnson testified that by inserting this block of wood to prevent expansion of the spring he was not altering the essential mechanism of the lighter.

The Commission does not agree with this conclusion. We think that by removing the spring pressure from the operation of the lighter, its essential mechanism was altered. The lighter is designed to be operated by the power of the spring, stored up both by the closing of the snuffer and by the initial opening movement.

Dr. Johnson also disagreed with the finding of the Commission that "the arms or shafts of exhibit 10, however, do not transmit, except in a limited and inconsequential manner, the movement of the finger piece to the snuffer." Dr. Johnson testified that he did not see any other part of the mechanism that could possibly transmit the movement of the finger piece to the snuffer. What the Commission meant by this finding is that the movement of the finger piece that was transmitted to the snuffer was solely such movement as caused the release of the snuffer from engagement with the finger piece and permitted the expansion of the spring; in other words, that it is the force of the spring that is transmitted to the snuffer in the actual lighting operation. It is true that in the initial movement of the finger piece, which causes a slight lifting of the snuffer and also a slight turning of the abradant wheel, manual pressure is the only pressure operating to cause these movements. However, so far as the actual function of turning the abradant wheel over the pyrophoric element with sufficient speed to cause sparks to be thrown toward the wick and thereby cause the lighting of the wick, the spring is the sole force. In our view, such movement of the wheel as is caused by the initial disengaging operation may be dismissed as negligible so far as creating sparks is concerned. Because of our view that there is no manual pressure furnishing power for the actual lighting operation, the Commission deems it unnecessary to consider whether the shafts and pin connections between the snuffer and the finger piece are the equivalent of a rack and gear. In this connection, reference might be made to the testimony of Mr. Neal, on page 153 of the transcript of the hearings. Nor need we discuss the contention that the spring in the finger piece is a spring tending to force said finger piece upward within the meaning of certain claims of the patent.

Since the promulgation of our findings in this investigation the decision of the United States District Court for the Eastern District of New York, in the case involving the Trig-a-lite lighter mentioned in our findings, was published in 4 Fed. Supp. 303. The court adhered to its views expressed in its ruling denying the preliminary injunction. We are informed that the case is now pending on appeal in the Circuit Court of Appeals. The Commission in its findings did not intend to draw an analogy between the Trig-a-lite lighter and the exhibits here in question, other than to the nt of the general principle that where the lighter is operate oring rather than

by manual pressure it does not infringe the patent. The Commission does not regard the lighter mechanism of the Evans automatic lighter (exhibit 48) as analogous to the mechanism of exhibits 10, 14, 20, and 21. This Evans lighter is operated by manual pressure with the assistance of a spring. The imported lighters here in question dispense with manual operation in the actual lighting function.

What has been said with respect to exhibits 10, 14, 20, and 21, on the question of infringement, applies to exhibit 56. Complainant admits that exhibit 50 does not infringe its patent.

SIMULATION

In its findings promulgated on October 27, 1933, the Commission made no finding of unfair competition on the score of simulation, because it was not satisfied that Art Metal Works, Inc., was entitled to a monoply on the designs of its lighters. We furthermore stated that exhibits 10, 14, 20, and 21, which were found not to infringe the patent, "do not simulate complainant's lighters closely enough to warrant a finding of unfair competition on that score.

On the first of these propositions, evidence given at the rehearing and submitted thereafter at the Commission's request satisfies the Commission that complainant has acquired a valuable goodwill in the design of its cigar-lighter mechanism. Complainant has extensively advertised its products, emphasizing a pictorial representation and characterizing the operation of its lighters in certain distinctive ways. The fact that numerous owners of cigar lighters not of complainant's manufacture but having an appearance somewhat similar to complainant's lighters have sent lighters to complainant for repairs is further evidence of the goodwill established by complainant.

At the hearing on September 19, 1933, Witness Harris, secretarytreasurer of Art Metal Works, Inc., testified that in all the advertising to the consumer the phrase "A flip and its lit; release and its out" appears. He elaborated with the statement that "The point. I am trying to make, if I may enlarge on it, is that in 1926 when we put this entirely different type of lighter on the market, we realized the only chance of success was to show how it differed from those that had gone before and we emphasized its one-finger, onemotion feature by the words 'A flip and its lit; release and its out.' That is typical of all our advertising in every way that appears here in these books." At the rehearing and in subsequent correspondence, complainant's counsel has sought to convince the Commission that the phrase "A flip and its lit; release and its out" is not necessarily an essential feature of the advertising but that it is incidental. In the advertising cuts for the fall of 1933, submitted by complainant, this phrase appears in every advertisement in magazines reaching the consuming public. Not only is the phrase prominently displayed. but it appears directly next to the picture of the lighter. The Commission is inclined to agree with Witness Harris that this phrase is an essential and distinguishing feature in its advertisments and not merely incidental.

A purchaser, having become familiar with the Ronson lighters through the aforementioned advertisements, on seeing a lighter such as exhibit 10, 14, 20, or 21 in a store window, with the snuffer in closed position, might be misled into believing that it was a Ronson lighter. On entering the store, however, he would undoubtedly make at least a casual examination of the lighter, including a test of its workability. Immediately on pressing the finger piece and releasing the pressure therefrom, he would notice that the snuffer did not return to the closed position by the release and that the flame was accordingly not extinguished. This must put any ordinary purchaser on notice that the article does not conform to that which he saw advertised, and surely such purchaser would examine the lighter further to ascertain whether it was marked "Ronson or with some similar identification, particularly in view of the fact that these same advertisements further admonish the reader "Insist on a genuine Ronson lighter! Avoid inferior infringing imitations!" Not having found any marking on the lighter to show that it is a genuine Ronson, we doubt that any purchaser would be deceived. into believing he was purchasing a Ronson. The Commission does not believe that a company may obtain a valuable goodwill by advertising and then consistently disavow the outstanding features of that advertising while at the same time relying on the goodwill created thereby.

None of the imported lighters coming to the attention of the Commission has any identification of origin thereon which would confuse the ordinary purchaser into believing that the lighter was a product of Art Metal Works, Inc., or/and a Ronson lighter.

The decision of the New York court in Art Metals Works, Inc., v. Cunningham Products Corporation and Another, 137 Misc. (N.Y.) 429, is predicated, so far as the lighter mechanism is concerned, on the one-finger, one-motion principle of complainant's lighters, which principle was present in defendant's lighters in that case but is not present in exhibits 10, 14, 20, and 21.

The foregoing concerns only simulation respecting the lighter mechanism and what has been said concerning the exhibits mentioned applies equally to exhibits 50 and 56, submitted at the rehearing.

Referring now to complainant's allegations of unfair competition on the score of simulation of receptacles or containers, it is noted that no claim is made of unfair competition of the receptacle in the pocket lighter type (Transcript, p. 194). In the case of exhibits 14, 50, and 56, complainant alleges unfair competition in simulation of the receptacle or container. Exhibit 14 is a combination cigar lighter and cigarette case claimed to simulate exhibit 31. Exhibit 50 is a table cigar lighter, having a receptacle in the form of a golf ball with a conical base, claimed to simulate exhibit 55. Exhibit 56 is a table lighter, having a receptacle in the form of a shiny sphere, claimed to simulate exhibit 57. It appears from the testimony that these particular combinations were designed and marketed by complainant for 3 or more years before the imported exhibits came on the market. It is doubtful whether the public had come to recognize any combination such as exhibits 31, 55, and 57 (of the approximately 2,000 models made by complainant) as being exclusive products of

Art Metal Works, Inc., from the point of view of the container or receptacle rather than of the lighter mechanism. Much stress was laid upon exhibit 31 and the similarity of exhibit 14, even to fine details, to exhibit 31. However, the idea of decorating cigarette cases by engine turning was old long before exhibit 31 was produced by complainant. The same may be said of the decoration of the inside of these two exhibits. Merchandising in a velvet-lined box of polished-surface articles to be carried on the person did not originate with exhibit 31.

The Commission is unable to find that Art Metal Works, Inc., has established a goodwill in the receptacle or container part of the combination of exhibits 31, 55, and 57, or in the entire combinations, such as is entitled to protection against unfair methods of competition. It is possible that the designs of exhibits 14, 50, and 56 were copied from these three Ronson lighters and the Commission recognizes that it is practically impossible for complainant to prove this; indeed, in view of the fact that a lighter similar to exhibit 31 was sent to Japan some time before exhibit 14 appeared on the market in the United States, a presumption has arisen that at least the cigarette case part of exhibit 14 was copied from a combination similar to exhibit 31. We do not believe the public has come to recognize a lighter having the appearance of exhibit 31 as being the exclusive product of Art Metal Works, Inc., and therefore do not feel justified in recommending exclusion from entry on a presumption of fraudulent imitation. Our view is strengthened by the fact that no identifying marking appears on exhibit 14, to mislead purchasers into the belief that they are obtaining a Ronson Lytacase (exhibit 31). On the contrary it is marked "Made in Japan."

While price disparity is not of itself a defense against a charge of unfair methods of competition on the score of simulation, the fact that lighters similar to exhibit 14 have been sold at retail for $1 (as shown by correspondence between Art Metal Works, Inc., and the Dayton Co., of Minneapolis, exhibit 62) and that the Ronson Lytacase sells for $10 each (exhibit 15), further supports the conclusion that the casual purchaser would not likely be deceived into believing exhibit 14 to be a Ronson Lytacase.

In view of the Commission's findings respecting the goodwill of the Ronson Co. in the lighter mechanism, the Commission finds that exhibits 8, 11, 13, 16, 18, 19, 23, 29, and 33 unfairly simulate complainant's lighters, and that the importation and sale in the United States of such lighters constitute unfair methods of competition within the meaning of section 337. All these lighters embody the one-finger, one-motion principle of operation which formed the basis of the decision in Art Metal Works, Inc. v. Cunningham Products Corporation and Another, supra, insofar as that decision related to the lighter mechanism. These imported lighters also bear a marked resemblance to the lighters which complainant has extensively advertised and in which complainant has acquired a valuable goodwill. The Commission further finds that the importation and sale in the United States of such simulating lighters have substantially injured and, if permitted to continue, will continue to render substantial injury to the industry of complainant within the meaning of section 337.