Prestonettes, Inc. v. Coty - 264 U.S. 359, 44 S. Ct. 350 (1924)

Rule:

When a trademark is used in a way that does not deceive the public, the U.S. Supreme Court does not see such sanctity in the word as to prevent its being used to tell the truth.

Facts:

Plaintiff sued defendant to restrain the use of its trademark upon toilet powders and perfumes. Defendant purchased plaintiff's powder, subjected it to pressure, added a binder to give it coherence, and sold it in a metal case. Defendant also bought plaintiff's perfume and bottled and sold it in smaller bottles. The trial court entered a decree that permitted defendant to sell the rebottled perfume on the condition that it labeled the product with a disclaimer of any connection with respondent. The decree permitted defendant to make compacts from plaintiff's loose powder, provided the container was likewise labeled with disclaiming language. The circuit court reversed and entered an injunction, which precluded the use of the trademark except on the original packages as marked and sold. Defendant challenged the decision. 

Issue:

Could the defendant resell plaintiff’s products as modified? 

Answer:

Yes.

Conclusion:

The Supreme Court granted certiorari and held that defendant, by virtue of its ownership, had a right to compound, change, or divide the products it purchased and resell the products as modified. Accordingly, defendant could use plaintiff's trademark to say the trademarked product was part of what was offered by defendant as new and changed.