Prestonettes, Inc. v. Coty

Background

A French maker of perfumes and face powders sold its genuine bottles and loose powder to a New York company that rebottled the perfume into smaller bottles and pressed the loose powder into compacts with a binder. The French company sued, claiming unlawful use of its registered trade marks on the repackaged goods. The District Court permitted the New York company to sell the altered products with a clear label saying it was not connected with the French maker and that the goods were rebottled or compounded from the maker’s original products. The Circuit Court of Appeals then issued a broad injunction forcing the marks to appear only on the maker’s original packages.

Reasoning

The Court considered whether a trade mark lets the owner forbid a buyer from truthfully saying that the owner’s product was an ingredient or was repackaged by the buyer. The Court explained that a trade mark protects against selling another’s product as if it were the owner’s, but it does not give a general right to bar truthful statements about an article’s source. The opinion noted the record did not show the buyer adulterated or injured the goods. Because the defendant could lawfully change or divide what it bought and could honestly describe those facts, the Court found the appeals court’s absolute ban went too far and reversed it, leaving the District Court’s labeling allowance in place.

Real world impact

The decision lets buyers who properly disclose their role rebottle or repackage genuine goods and use the original maker’s name in truthful, non-deceptive descriptions. It limits a trademark owner’s ability to obtain sweeping injunctions just because goods are delicate or could be spoiled, unless deception or adulteration is proved.