## Facts

- Ellen M. Regis began using the mark “Rex” around 1877 for a medicinal preparation sold from Massachusetts, and continued using it in connection with her business.
- Regis recorded “Rex” as a trademark in Massachusetts (1898) and registered it in the U.S. Patent Office (1900).
- In 1911, United Drug Co. acquired Regis’s business and asserted trademark rights in “Rex” as part of its broader “Rexall” enterprise.
- Independently, in 1883, Theodore Rectanus, a Louisville, Kentucky druggist, began using “Rex” in good faith and without knowledge of Regis’s use, selling in Louisville and nearby areas.
- Over decades, Rectanus and its successor built substantial local goodwill and a valuable business under “Rex” in the Louisville territory.
- Regis’s and United Drug’s sales had not extended to Kentucky during the period Rectanus developed its local market.
- In 1912, after acquiring Regis’s rights, United Drug attempted to enter the Louisville market and sued to enjoin Rectanus for trademark infringement and unfair competition.

## Issues

1. Whether a senior common-law trademark user may, upon later expanding into a new territory, enjoin a geographically remote junior user who adopted the same mark in good faith where the senior user’s trade had not previously extended.
2. Whether trademark adoption or registration gives nationwide exclusionary rights independent of the actual geographic scope of the mark’s associated goodwill.

## Decision

- The Supreme Court affirmed the dismissal of United Drug’s suit, leaving Rectanus free to continue using “Rex” in its established Louisville territory.
- The Court held that United Drug, entering the Louisville market after Rectanus had built local goodwill through innocent use, had no equitable basis to oust Rectanus and was estopped from obtaining injunctive relief.
- The Court rejected the view that earlier adoption or registration alone allowed United Drug to displace a good-faith remote user in a market the senior user had not previously served.

## Legal Principles

- Trademark rights are not rights in gross; they exist only as appurtenant to an established business and to protect the goodwill created by that business.
- Trademark protection does not extend in advance of actual market expansion; rights grow from use and recognition in particular territories.
- A good-faith, geographically remote junior user may acquire protectable rights in its local territory when it adopts the mark without notice of the senior user and builds goodwill there.
- Equitable relief may be denied on estoppel principles when the senior user seeks to enter the junior user’s established market with notice of the junior’s longstanding local use.
- Registration and prior recognition of a mark do not, by themselves, create a universal nationwide monopoly against innocent remote users where no prior goodwill existed.

## Conclusion

Because Rectanus adopted and used “Rex” in good faith and built local goodwill in Kentucky before Regis or United Drug entered that market, the senior user’s prior adoption and registration did not permit it to enjoin Rectanus in the Louisville territory; trademark rights followed actual trade and goodwill, and equity barred displacement of the established remote user.


United Drug Co. v. Theodore Rectanus Co., 248 U.S. 90 (1918)