Coty, Inc. v. Leo Blume, Inc.

SWAN, Circuit Judge (after stating the facts as above). In the absence of any appearance by the appellees, we are left without light as to the theory upon which the individual defendant, Leo Blume, escaped an injunction restraining him from conduct which appears to be exactly what he had bound himself not to do by the above-quoted contract. He covenanted never to become connected with any business which includes rebottling or sale of Coty’s perfumes, excepting only their resale in original packages. He is an officer and salesman of the corporate defendant, whose business certainly includes selling plaintiff’s products as one ingredient of the “blend.” No reason occurs to us why his negative covenant is not valid and enforceable. He should be enjoined from violating it. As to the corporate defendant, the contract is not its 'obligation, and nothing is shown to indicate its assumption by Leo Blume, Inc. The bill alleges that the corporation is a mere dummy to cover the operations of the individual, but his affidavit denies this. If the corporation is to be subjected to a preliminary injunction, it must be on the basis of unfair competition or trade-mark infringement. In Prestonettes, Inc., v. Coty, 264 U. S. 359, 44 S. Ct. 350, 68 L. Ed. 731, it was held that the purchaser of a trade-marked article may combine it with other ingredients and sell the compound under a truthful label. Such conduct violates neither the rights of the owner of a registered trade-mark nor, without more, the rules of fair competition. After the Supreme Court decisioh, the District Court devised a label in the following form: “Prestonette, compounded by Prestonettes, Inc., N. Y., from ■— per cent. Coty’s (giving name of trade-mark) genuine face powder and-per cent. Prestonettes’ binder, wholly independent of Coty.” The court also ordered: “ * * * Every word of said statement to be in letters of the same size, color, type and general distinctiveness, and to be equally visible and prominent on the front of the bottle, package or the like, save that you, the said defendant, may make ‘Prestonette’ more prominent, if you so desire.” This decree was affirmed by this court in Coty, Inc., v. Prestonettes, Inc., 3 F.(2d) 984. It is true that the appeal was-brought by the plaintiff, who sought even broader protection, and that the defendant in that litigation raised no objection to the form of the decree; consequently our decision was not an actual holding that a repaeker or re-bottler, whose label refers to competitors’ products, must state the percentages of those products which have gone into his compound. But we think such a requirement entirely reasonable.. Buyers ought to know how much of the Coty perfume they are getting; that is a reasonable protection to plaintiff, as they may buy on the Coty name, and it is no burden on the seller, if he is honestly trying to sell the compound on its own merits. For *926 the same reasons it is also proper that no greater prominence should be given to the name “Coty” than to other words in the label which describe the compound, but the seller may make more prominent his own name, or that of the manufacturer “Blends-■co,” if he so desires. The plaintiff also argues that the word .“blend” does not truthfully describe the Blendsco compound (see Proctor & Gamble Co. v. Fed. Trade Comm., 11 F.(2d) 47 [C. C. A. 6]), and that the label should state that the product does not have the odor of Coty’s Bose Jacqueminot, because purchasers unfamiliar with that fragrance, but acquainted with its general reputation, might he deceived into thinking there was a resemblance in odor. See Warner & Co. v. Lilly & Co., 265 U. S. 526, 44 S. Ct. 615, 68 L. Ed. 1161. There is no evidence that purchasers have been so deceived. Some of the statements in advertisements attached to one of plaintiff’s affidavits tend to show an intent to so deceive, and, in our opinion, clearly violate rules of fair competition, but nothing is disclosed to connect the defendants with the publication of these advertisements, so as to require interference by preliminary injunction on that ground. The precise form -of the temporary injunction which should issue we do not feel called upon now to dictate. The order is reversed, and the suit remanded to the District Court for the entry •of a decree in conformity with this opinion.