## Facts

- Coty manufactured perfumes and face powders and owned registered trademarks “Coty” and “L’Origan.”
- Prestonettes bought genuine Coty products on the open market and resold them after (a) rebottling Coty perfume into smaller bottles and (b) compressing Coty loose face powder into compacts by adding its own binder and packaging the compacts in metal cases.
- Prestonettes used labels referring to Coty’s marks to describe the contents and their origin.
- Coty sought to enjoin Prestonettes from using “Coty” and “L’Origan” on Prestonettes’ labels.
- The district court allowed limited use of Coty’s name on Prestonettes’ labels if accompanied by prominent, uniform-text disclaimers stating Prestonettes was not connected with Coty and that the products were independently rebottled or compounded; for compacts, the label also had to disclose the percentages of Coty powder and Prestonettes’ binder.
- The pleadings did not allege that Prestonettes adulterated or deteriorated Coty’s products; the dispute was treated as a legal question.
- The court of appeals reversed and entered an absolute preliminary injunction barring any use of Coty’s marks except on original packages, citing the products’ susceptibility to deterioration and adulteration and the burden on Coty to monitor resellers.
- The Supreme Court granted review.

## Issues

1. Whether a trademark owner may prohibit a purchaser of genuine goods from repackaging or rebottling them and using the mark on the purchaser’s own labels to describe truthfully the goods’ source and the purchaser’s role, when the use is not deceptive.
2. Whether the delicate or adulterable nature of goods expands trademark rights to forbid otherwise truthful, nonmisleading downstream labeling.

## Decision

- The Supreme Court unanimously reversed the court of appeals and reinstated the district court’s disclaimer-based decree.
- Coty could not prevent Prestonettes from using Coty’s marks on Prestonettes’ labels to state the true relation of Coty’s products to the goods offered, so long as the use was not deceptive.
- The susceptibility of the goods to spoilage or adulteration did not create any additional trademark-based right to bar truthful labeling.
- The district court’s specific labeling conditions (clear statements of independence and non-affiliation, uniform prominence, and content disclosure for the compounded powder) were permissible means to prevent consumer deception.

## Legal Principles

- Trademark law does not confer a right “in gross” to control all uses of a mark; it primarily prevents passing off one producer’s goods as another’s.
- A purchaser who resells genuine trademarked goods, even after repackaging or adding ingredients, may use the mark to identify the trademarked component or source if the use is truthful and not presented in a manner likely to mislead consumers.
- Clear disclaimers and prominent, non-misleading presentation can permit referential use of a mark while protecting the public from confusion about affiliation, sponsorship, or responsibility for repackaging.
- The fact that goods are delicate or easily adulterated does not, by itself, expand trademark rights to suppress truthful, nondeceptive resale descriptions.

## Conclusion

The Court held that trademark ownership does not allow suppression of accurate, nondeceptive labeling by a reseller who repackages genuine goods, and it approved restrictive label disclaimers as a means to prevent confusion while permitting truthful identification of the trademarked source.


Prestonettes, Inc. v. Coty, 264 U.S. 359 (1924)