Summary of Smith v. Chanel, U.S. District Ct., 9th Circ. (1968)
Parties: PL is appellant copycat, while DF is appellee original creator of Chanel #5.
Cause of action/remedy sought: Equitable injunction vs. Appellant to prevent selling its product as the same as Chanel #5.
Procedural History: Appellant sought review of a District Court (trial) that granted a preliminary injunction prohibiting sellers from making reference to the appellee’s perfume. Reversed in this court.
Facts: Appellant used same formula as appellee and sold it at a drastically lower price, claiming it was the same as Chanel #5.
Issue(s): Under property law, may a company recreate and subsequently sell a product and make reference to that same product?
Holding: Yes. A perfume company could claim in ads that its product was the equivalent of the more expensive Chanel No. 5.
Court’s Rationale/Reasoning: Since appellee’s perfume was unpatented, appellants had the right to copy it. There was strong public interest in their doing so, for imitation is the life blood of competition. It is true that it costs a lot for Chanel to produce its brand of perfume, and that on its face that another company is essentially getting a free ride in being able to reproduce its materials. However, “appellees are not entitled to monopolize the public’s desire for the unpatented product, even though they themselves created at great effort and expense.” This is essentially serving a public interest as a company can sell similar goods at comparable prices.
Rule: In the absence of such a monopoly as a patent confers, any persons may reproduce the articles, if they can, and may sell them under the representation that they are the same article, if they exclude the notion that they are the plaintiff’s goods.
Did court avoid issues?: No.