297 N.Y. 11 | NY | 1947
[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *13 Plaintiff manufactures and distributes high-grade perfumes and cosmetics which are sold in fair and open competition with other similar products. Among the registered trade-marks owned and used by it are the words "Guerlain" and "Shalimar". Pursuant to the Feld-Crawford Act (L. 1935, ch. 976, as amd.; now General Business Law, art. XXIV-A), plaintiff and certain of its retailers entered into so-called "fair trade contracts" which set, inter alia, a minimum resale price *16 of $1.60, plus retail sales tax, for plaintiff's "Shalimar" perfume in quantities of "one dram or less".
Defendant Nips, Inc., whose entire business consists of rebottling perfumes, buys plaintiff's perfumes in the retail market and rebottles them in small glass ampules holding 1/70 of a dram. The ampules of "Shalimar" are individually packed in little paper containers bearing the label:
"NIPS
Perfumes
Genuine French Extracts
Guerlain's Shalimar
Rebottled by Nips, Inc., N Y
Wholly Independent of
Guerlain".
The perfume thus rebottled is sold to a number of variety and chain stores, among them defendant Woolworth Co., which resells to the ultimate consumer for ten cents a package.
In 1938, plaintiff advised both defendants of its fair trade contracts and requested defendant Woolworth to stop selling its products at less than the established minimum resale price. Woolworth refused, and the sales at ten cents a package continued. Consequently, plaintiff seeks injunctive relief under the Fair Trade Act.
Section 1 of that statute (now General Business Law, §
Defendants seek to escape the effect of the statute by urging that in distributing and selling the ampules they are dealing with a commodity other than and different from the product covered *17
by plaintiff's fair trade contracts. That claim, lacking substance, ignores reality and the dictates of common sense. The ampule contains perfume — of that there can be no possible doubt — and the label explicitly announces that it is "Guerlain's Shalimar". It is a less quantity than that contained in the original bottle, but still it is perfume — plaintiff's perfume — and it is the perfume itself which the purchaser desires and buys, not just the "patented applicator" in which the perfume is rebottled by defendant. Were it otherwise, there would, of course, be no need to identify on the label the specific kind or brand of perfume contained in the ampule. The present case is far removed from those involving dresses made from trade-marked cloth (Mallinson Fabrics Corp. v. Macy Co., Inc.,
Defendants likewise contend that the Feld-Crawford Act was aimed solely at price cutting and therefore does not cover such a situation as the present where the aggregate amount charged for the number of ampules necessary to make up one dram of Guerlain's Shalimar is $7, far more than the minimum price of $1.60 set by plaintiff. While it is true that the statute prevents price cutting, its "primary aim", the Supreme Court of the United States has observed — in discussing the virtually identical Illinois Fair Trade Act — "is to protect the property, namely, the good will, of the producer which he still owns. The price restriction is adopted as an appropriate means to that perfectly legitimate end, and not as an end in itself." (Old DearbornDistributing Co. v. Seagram-Distillers Corp.,
Finally, defendants urge that the Feld-Crawford Act does not apply to rebottled goods bearing a label of the type approved in the Prestonettes case. (Prestonettes, Inc., v. Coty,
The statute was manifestly aimed and designed to protect the good will of the owner or producer from injury when his trade-mark or name is employed in the resale of goods originally owned or produced by him. As Mr. Justice SUTHERLAND, speaking for the Supreme Court, wrote in the Old Dearborn case (299 U.S.,supra, at p. 195): "Section 2 of the act [enacted in Illinois] does not prevent a purchaser of the commodity bearing the mark from selling the commodity alone at any price he pleases. It interferes only when he sells with the aid of the good will of the vendor; and it interferes then only to protect that good will against injury. It proceeds upon the theory that the sale of identified goods at less than the price fixed by the owner of the mark or brand is an assault upon the good will, and constitutes what the statute denominates `unfair competition.'"
That legislative purpose — to protect the vendor's good will — frames the issue before us: is the disposition of defendants' ampules being accomplished with the aid of plaintiff's good will? To us, the answer is clear. In employing the words *19 "Guerlain's Shalimar", in placing them on the label, defendants are using plaintiff's good will — as symbolized by those words — to facilitate sales. They are not merely describing the contents of the ampule, but are, in practical effect,identifying the product as plaintiff's, and to that extent they are violating the plain mandate of the Feld-Crawford Act.
It may well be that the reference by defendant Nips on its label to plaintiff's mark and name does not constitute an infringement — as held in the Prestonettes case (
In conclusion, then — defendants are engaged in the distribution, display and sale of a commodity which bears the brand and name of the producer and owner and which is being resold for less than the minimum price specified in fair trade contracts. Such conduct, constituting as we have said, a violation of the Feld-Crawford Act, is properly restrained by injunctive relief. A similar determination has been reached in other States. (Lentheric, Inc., v. F.W. Woolworth Co.,
The judgment should be affirmed, with costs.
LOUGHRAN, Ch. J., LEWIS, CONWAY, DESMOND, THACHER and DYE, JJ., concur.
Judgment affirmed. *20