## Facts

- R. G. Smith, doing business as Ta’Ron, Inc., and International Fragrances, Inc. manufactured and sold perfume fragrances, including “Second Chance.”
- “Second Chance” was intended to copy the scent of Chanel, Inc.’s well-known perfume “Chanel No. 5,” whose fragrance formula was not patented.
- Smith ran a single advertisement in *Specialty Salesmen*, a trade journal aimed at wholesale purchasers.
- The advertisement claimed Ta’Ron perfumes “duplicate 100% perfect the exact scent of the world’s finest and most expensive perfumes and colognes.”
- The ad challenged readers to compare products through a “Blindfold Test,” including the line: “We dare you to try to detect any difference between Chanel #5 (25.00) and Ta’Ron’s 2nd Chance. $7.00.”
- An order form accompanying the ad listed Ta’Ron scents alongside the famous fragrances they purportedly duplicated; below “Second Chance” appeared “*(Chanel #5),” with an asterisk referencing “Registered Trade Name of Original Fragrance House.”
- Chanel sued, alleging trademark infringement and related unfair competition based on Smith’s use of “Chanel No. 5” in the advertisement.
- In the district court, Chanel conceded that Smith had the right to copy the unpatented fragrance formula and, for purposes of the proceeding, assumed Smith’s product was equivalent to Chanel’s.
- Chanel also disclaimed any claim that Smith’s packaging or labeling misled consumers; Smith’s packaging differed from Chanel’s and said “Second Chance Perfume by Ta’Ron.”
- The district court granted a preliminary injunction broadly barring any reference to “Chanel No. 5” in the advertising or sale of “Second Chance,” reasoning that Smith was benefiting from Chanel’s goodwill.
- Smith appealed the preliminary injunction to the Ninth Circuit.

## Issues

1. Whether a seller who lawfully copies an unpatented product may use the trademark name of the original product in advertising to identify what it copied, where the use does not misstate source, sponsorship, or affiliation.
2. Whether a preliminary injunction may bar all reference to “Chanel No. 5” absent a showing of likely confusion or deception.

## Decision

- The Ninth Circuit reversed the order granting the preliminary injunction and remanded for further proceedings.
- The court held that using a competitor’s trademark to identify the competitor’s product, as part of a truthful claim that the defendant’s product duplicates that product, is not automatically unlawful.
- Because Chanel conceded lawful copying and disclaimed confusing packaging or labeling, the record did not justify an across-the-board ban on any reference to “Chanel No. 5.”
- The court reasoned that trademark law protects against likely confusion and deceptive practices, not against the competitive effect of truthful comparison involving an unpatented product.

## Legal Principles

- Unpatented products may be copied; trademark law cannot be used to obtain an effective monopoly over an unpatented product by blocking truthful identification of what is being copied.
- A competitor may refer to another’s trademark to identify the other’s product in comparative advertising when the reference is truthful and does not create likely confusion about source, sponsorship, affiliation, or approval.
- Trademark rights are not “rights in gross” that prohibit all mention by competitors; the focus remains consumer confusion and deception.
- A court may enjoin false or misleading statements (including false claims of equivalence) or uses that imply sponsorship or affiliation, but broad relief requires a record supporting likely confusion or deception.

## Conclusion

The Ninth Circuit reversed the preliminary injunction because Chanel’s concessions removed any showing of likely confusion, and trademark law does not forbid a lawful copier from truthfully naming the benchmark product to explain what it copied; any restraint must target misleading claims or confusion, not truthful identification and comparison.


Smith v. Chanel, Inc., 402 F.2d 562 (1968)