Scottish Court of Session Decisions

The estates of Messrs Ferguson, Lamont, & Company, marine insurance brokers, Royal Exchange Buildings, Glasgow, and of Charles Lamont, the only surviving partner of that firm, as such partner and as an individual, were sequestrated on 14th February 1889, and on 7th March Thomas Jackson, C.A., Glasgow, was appointed trustee on the sequestrated estates. Part of the estate which passed under the provisions of the Bankruptcy Act to the trustee, consisted of a patent, No. 3107, dated 4th August 1876, for “a new or improved compound for the preservation of animal and other substances, the same being applicable to other purposes.” This patent had been acquired by Charles Lamont by indenture, dated 17th March 1884, from the inventor, William Fisher Grier, for the sum of £65000, and he carried on the business of making andvendingthesaid preservation—known as “Glacialine”—under the name or style of “The Antitropic Company.”

On 25th June 1889 Thomas Jackson, the trustee in the sequestration, with consent of the creditors and commissioners, paid the sum of £800 to discharge a mortgage secured over the patent.

On 28th September 1889 Charles Lamont, who though still an undischarged bankrupt had started business in Glasgow as an insurance broker under the name of Ferguson, Lamont, & Company, issued a circular in these terms—“The Antiseptic Company Universal Food Preservative.— 63 St Vincent Street, Glasgow, 28th September 1889.—Manufactory, Port-Dundas, Glasgow.—Dear Sir,—Owing to private losses the business of the Antitropic Company of which I was sole proprietor has passed into other hands. Having made favourable purchases of material I am now in a position to supply the trade at a reduced price with a preservative which will be found identical in sample to the first quality of the Glacialine I have hitherto sold. By further effecting certain economies in manufacture and expenses, I am enabled to sell direct to the consumer and my late customers at prices 20 per cent. to 30 per cent, below former quotations. My experience in the manufacture of antiseptics over the past ten years is a guarantee of the purity and efficiency of our goods. Referring you to our quotations attached, and soliciting a continuance of your esteemed orders,—I am, Yours truly,— C. Lamont, late proprietor Antitropic Company.”

The present note of suspension and interdict was presented by Thomas Jackson, the trustee, early in October praying the Court, inter alia, to interdict the respondent from infringing the letters-patent already mentioned (purchased by the respondent from William Fisher Grier), or from making, using, or vending during the continuance of the letters-patent the invention described in the same, and in the specification filed in pursuance of the provisions thereof; and also from infringing the trade-mark advertised by the Antitropic Company, or from in any way infringing the complainer's right to the said trade-mark and the name “Glacialine.”

The complainer averred—“(Statement II.) The name ‘The Antiseptic Company’ is a colourable and fraudulent imitation of the name ‘The Antitropic Company,’ and by the use of it, and the offer to supply at a reduced price ‘a preservative which will be found identical in sample to the first quality of the Glacialine I have hitherto sold, the respondent intended to prejudice, and is in fact largely prejudicing, the complainer's interests as trustee foresaid. The respondent, moreover, is now offering for sale and selling, and is purporting to sell, the compound or material called Glacialine, which is made according to the manner described in the said letters-patent, and which is made by the respondent, or on his instructions, and not only without the consent but contrary to the express desire of the complainer, and in infringement of the said letters-patent. He is also selling the same as Glacialine in infringement of the complainer's rights in said trade-mark and in the name Glacialine. He also pretends to sell his preparation as being in fact the same as that manufactured by the complainer.”

The respondent answered—“Denied. Explained that the name ‘Antiseptic’ is a descriptive name which is peculiarly applicable to, and has for many years been used to designate, and is now commonly used to designate, the commodities which the respondent proposes to sell. These commodities are not described in or protected by the said letters-patent. Explained further, that the alleged invention described in the letters-patent was publicly disclosed, and was in common use prior to the date of the letters-patent. Inter alia, an invention substantially the same as that therein claimed is described in and is anticipated by Olsson, No. 1893, A.D. 1869. Further, substances containing the same ingredients, and applied to similar purposes as the substance described in Grier's patent, were manufactured and sold by W. Alway & Sons, White Lion Street, Pentonville, London; by F. Fredericks, Marlow Lodge, Oxford Road, Gunnersbury, London; and by Stevens & Company, 347 Kennington Road, London. Similar substances, used

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for similar purposes, were likewise common in the market, and were sold under the names of ‘Refrigerine,’ ‘Thionine,’ ‘Icea-line,’ and ‘Iceoline.’ Explained further (first) that the final specification appended to the said letters-patent is not in conformity with the provisional specification; (second) that the patentee has not in his said letters-patent sufficiently distinguished what is old and not claimed by him from what is new and claimed by him; and (third) that the final specification does not sufficiently disclose the method in which the said alleged invention is to be used and applied. The respondent and his creditors were well aware for some years past that the validity of Grier's patent could not be maintained. Reports from patent experts were obtained to that effect; and in consequence the respondent never at any time sought to prevent the infringement of the the said patent by the numerous firms who were selling in the market substances similar to that described in Grier's specification.”

The respondent, inter alia, pleaded—“(4) The letters-patent founded on are null and void, in respect (1st) that the alleged invention therein described was known and used prior to the date of the letters-patent; (2nd) that the patentee fails in his letters patent to distinguish what is old and not claimed from what is new and claimed; (3d) that the specification fails sufficiently to describe the method by which the alleged invention is to be used; and (4th) that the final specification is disconform to the provisional specification. (5) The alleged trade-mark is invalid, in respect that the name ‘Glacialine’ was well known and in common use long prior to the complainer's alleged registration.”

On 24th October the Lord Ordinary ( Kyllachy), having heard counsel, on caution passed a note and granted interim interdict against the respondent infringing the letters-patent in question, and against using the trade-mark referred to in the prayer of the note, and quoad ultra refused interim interdict.

On 4th December the Lord Ordinary pronounced the following interlocutor:— “The Lord Ordinary having heard counsel in the Procedure Roll on the motion of the suspender that the respondent be ordained to find caution for the expenses, refuses said motion; and on the motion of the suspender grants leave to reclaim: Finds the respondent entitled to the expenses of this discussion; modifies the same to the sum of £5, 5s., for which decerns against the suspender.

“ Opinion.—In this case of Jackson v. Lamont I have not found sufficient reason for ordering the defender to find caution for expenses. The case is no doubt special, and it may be that the defender's position is prima facie unfavourable, but it is, I think, the settled rule that a litigant shall not be required to find caution in respect of impecuniosity, or in respect of the prima facie aspect of his case, or indeed any other ground than that he has been divested of interest, or at least of all immediate interest, in the subject of the suit. That is the ground on which a pursuer who has been sequestrated or has executed a trust-deed is in general required to find caution; and is also, I apprehend, the ground, and the only ground, on which a bankrupt defender is sometimes (as in the case of Stevenson v. Lee, 13 R. 913, quoted by the pursuer) subjected to the same condition.

Now, here I am not able to say that the defender has not a sufficient and sufficiently immediate interest to try the present question. He is sought to be interdicted as he says from earning his livelihood, by using a certain invention which according to him is open to the public. In other words, he is sought to be interdicted from using, as a member of the public an alleged public right. In such circumstances it is I think certain that if his opponent were a third person and not his own trustee, he could not, although an undischarged bankrupt, be held divested of proper interest to defend. For although the earnings of an undischarged bankrupt may, I suppose, under some circumstances be claimable by his creditors, they certainly can only be so so far as not required for his own support, and the interest which the bankrupt thus retains must always, I think, be sufficient for the purposes of such a question as this. And if this be so where the bankrupt is being sued by a third party, I do not see that it makes any difference that the pursuer here is the defender's trustee, and that the patent which is said to be infringed belonged formerly to the defender himself. It is not the rule (rather the contrary) that a bankrupt is bound to find caution in actions between him and his creditors; and although it is true that the defender here is denying the validity of a patent which belonged to himself, and which his trustee acquired from him by virtue of his sequestration, still that only affects the merits, or rather the prima facie merits, of the defences; and even on that point it is perhaps right to observe that the defender at least avers that the patent had been given up as bad prior to his sequestration, and that the invention had, prior to the sequestration, been recognised as publici juris. On the whole, I refuse the pursuer's motion, with expenses; but as the point is new and perhaps narrow, I give leave to reclaim.”

The complainer reclaimed, and argued — The question of finding or not finding caution was in all cases a question for the discretion of the Court, and in this case caution should be required— Stevenson v. Lee, June 4, 1886, 13 R. 913. Where the undischarged bankrupt was pursuing an action he was generally required to find caution, even in actions for the vindication of character— Scott v. Roy, July 15, 1886, 13 R. 1173; Clarke v. Miller, January 16, 1884, 11 R. 418. The present was a case for requiring caution, because the bankrupt, though in form a defender, was attacking and trying to cut down an asset of the bankrupt estate. Prima facie, the position of the trustee was a favourable one, as had been shown by the Lord Ordinary granting interim interdict, while that of the bankrupt

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was a peculiarly unfavourable one. The case of Ritchie v. M'lntosh was not an authority on the present question. It was not a case arising in the sequestration but under a trust-deed, and it was averred on record that the creditors had all been paid.

Argued for the respondent—The motion of the complainer could not be sustained for a moment if there were no element of patent or trade-mark in the case. The bankrupt was merely seeking to vindicate a right of his own, not a part of the bankrupt estate. If successful he would reap the profit personally. In the case of Stevenson v. Lee the subject in dispute was a piece of property of which the bankrupt was divested, and to which the trustee had made up title, and which the bankrupt was still seeking to vindicate. The result of the authorities might be thus summed up. In all cases where the bankrupt was seeking to vindicate a personal right he was not obliged to find caution for expenses even though he were pursuer, much less if he were defender— Ritchie v. M'Intosh, June 2, 1881, 8 R. 747, per Lord Young; Thom v. Andrew, June 26, 1888, 15 R. 780.

At advising—