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06/27/52 SHAKESPEARE COMPANY v. LIPPMAN'S TOOL SHOP

June 27, 1952

SHAKESPEARE COMPANY
v.
LIPPMAN'S TOOL SHOP SPORTING GOODS COMPANY.



Appeal from Wayne; Murphy (George B.), J. (Calendar No. 45,272.)

SYLLABUS BY THE COURT

1. TRADE-MARKS AND TRADE NAMES -- STATUTES -- FAIR-TRADE AGREEMENTS -- NONSIGNERS.

State statute declaring that advertising, offering for sale or selling of a commodity which bears the trade-mark, brand, or name of the producer or owner and which is in fair and open competition with commodities of the same general class at a price that is less than that set by the producer or vendor is unfair competition and actionable at the suit of any person damaged thereby is unconstitutional as applied to persons who have not signed a so-called fair-trade agreement whereby they agree to abide by the producer's minimum prices on the products, since it constitutes a deprivation of property without due process of law (Const 1908, art 2, § 16; CL 1948, § 445.151 et seq.).

2. TRADE-MARKS AND TRADE NAMES -- FUNCTION.

Trade-marks and brand names, together with the good will attendant thereon, are protected in certain respects by act of Congress the function of a trade-mark being to designate the goods as the product of a particular manufacturer or trader and to protect his good will against the sale of another's product as his; to prevent confusion of the public regarding the origin of goods of competing vendors (15 USCA, § 1051 et seq.).

3. CONSTITUTIONAL LAW -- FAIR-TRADE AGREEMENTS -- MONOPOLY.

Whether price-fixing arrangement is vertical or horizontal, important as bearing on question of whether a monopoly, trust or restraint of trade exists, is of no consequence in determining whether fair-trade statute bears any reasonable relation to public health, safety, morals or the general welfare (CL 1948, § 445.151 et seq.).

4. TRADE-MARKS AND TRADE NAMES -- FAIR-TRADE AGREEMENTS -- CUTRATE SALES.

Trade-mark rights of trade-mark owner are not breached by sale of commodity at less than price set by owner, where sold by party who had not signed so-called fair-trade agreement to sell at price set by manufacturer (CL 1948, § 445.151 et seq.).

5. TRADE-MARKS AND TRADE NAMES -- BUSINESS AFFECTED WITH PUBLIC INTEREST -- PRICE-FIXING -- GOOD WILL.

The business of manufacturing and selling trade--marked fishing tackle is not affected with a public interest, hence the State legislature may not interfere with the right of a party to fix the price at which the owner of such property may sell it merely to protect the good will of the manufacturer.

6. TRADE-MARKS AND TRADE NAMES -- PRICE-FIXING AGREEMENTS -- INTERSTATE COMMERCE -- SIGNERS.

Price-fixing agreements involving or affecting interstate commerce applicable to signers thereof are legal, where permitted under local law (26 Stat 209; 50 Stat 693; CL 1948, § 445.151 et seq.).

7. TRADE-MARKS AND TRADE NAMES -- PRICE-FIXING AGREEMENTS -- INTERSTATE COMMERCE -- NONSIGNERS.

Price-fixing agreements involving or affecting interstate commerce do not restrain nonsigners from cut-rate sales even when such agreements are permitted by local law (26 Stat 209; 50 Stat 693; CL 1948, § 445.151 et seq.).

REFERENCES FOR POINTS IN

[1, 4, 5, 7] 52 Am Jur, Trademarks, Tradenames, and Trade Practices § 177.

[1, 4, 5, 7] Right of manufacturer, producer, or wholesaler to control resale price. 125 ALR 1335.

[1, 4, 5, 7] Comment Note. -- Application of State "fair trade" law to nonsigning reseller as violation of Federal anti-trust laws. 19 ALR2d 1139.

[2] 72 Am Jur, Trademarks, Tradenames, and Trade Practices §§ 2, 3.

[6] 36 Am Jur. Monopolies, Combinations, and Restaint of ...


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