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Smith v. Chanel, Inc. - 402 F.2d 562 (9th Cir. 1968)

Rule:

One who has copied an unpatented product sold under a trademark may use the trademark in his advertising to identify the product he has copied. Such advertising may not be enjoined under either the Lanham Act, 15 U.S.C.S. § 1125(a), or the common law of unfair competition, so long as it does not contain misrepresentations or create a reasonable likelihood that purchasers will be confused as to the source, identity, or sponsorship of the advertiser's product.

Facts:

Appellant perfume seller advertised a cheaper fragrance as a duplicate of appellee trademark owners’ fragrance. Appellees filed suit. The district court granted appellees a preliminary injunction prohibiting appellant from making any reference to the owners' product in the promotion or sale of the seller's product. The appellate court reversed the district court decision and remanded the case for further proceedings.

Issue:

Could appellant perfume seller be enjoined from making any reference to appellee owners' product in the promotion or sale of its own product, a duplicate of appellees' product?

Answer:

No.

Conclusion:

Appellant perfume seller's advertising could not be enjoined under either the Lanham Act, 15 U.S.C.S. § 1125(a), or the common law of unfair competition because it did not contain misrepresentations or create a reasonable likelihood that purchasers would be confused as to the source, identity, or sponsorship of appellants' product. Also, appellee trademark owners' reputation was not directly at stake because the advertisement made it clear that the product appellant offered was his own, and if it proved to be inferior, appellant and not appellees would bear the burden of consumer disapproval.

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