Sears, Roebuck & Co. v. Stiffel Co.

Rule of Law:

Under the Supremacy Clause, federal patent laws preempt state unfair competition laws that prohibit or penalize the copying of an unpatented and uncopyrighted article.

Facts:

• Stiffel Company designed and began successfully selling a unique lighting fixture known as a 'pole lamp.'
• Stiffel initially obtained both design and mechanical patents for its pole lamp.
• Shortly after Stiffel's lamp became a commercial success, Sears, Roebuck & Co. began marketing and selling a substantially identical lamp.
• Sears sold its lamp at a retail price approximately equal to Stiffel's wholesale price.
• Evidence showed that some customers were confused about the source of the lamps, with some asking Stiffel if its lamps differed from Sears' and others complaining to Stiffel after discovering Sears' lower price for a nearly identical product.
• Sears did not attach identifying tags to its lamps, although the cartons they were delivered in were labeled.

Procedural Posture:

• Stiffel Company sued Sears, Roebuck & Co. in the U.S. District Court for the Northern District of Illinois, alleging patent infringement and unfair competition under Illinois law.
• The District Court, as the trial court, held that Stiffel's patents were invalid for lack of invention.
• Despite invalidating the patents, the District Court found Sears guilty of unfair competition because its lamp was a 'substantially exact copy' likely to cause consumer confusion.
• The District Court enjoined Sears from selling the lamps and ordered an accounting for damages.
• Sears, as the appellant, appealed the unfair competition ruling to the U.S. Court of Appeals for the Seventh Circuit.
• The Court of Appeals, an intermediate appellate court, affirmed the trial court's judgment, holding that a likelihood of confusion as to the source was sufficient to establish unfair competition under Illinois law.
• The U.S. Supreme Court granted certiorari to review the decision of the Court of Appeals.