In the 1922 U.S. Supreme Court case, Magnum Import Company, Inc., v. Coty, the court ruled in favor of perfume manufacturer François Coty who sued Magnum Import Company for trademark infringement and unfair competition. The dispute arose when Magnum began importing and selling a cheaper version of Coty's popular "L'Origan" perfume under the same name but without disclosing that it was not from the original source or maker. The court found that this practice deceived customers into believing they were buying an authentic product directly from François Coty himself which constituted as false representation leading to unfair competition. Therefore, even though there was no patent on L'Origan’s formula allowing anyone to replicate it legally, using its exact name for marketing purposes violated trademark laws protecting brand identity and consumer trust.

In the dissenting opinion for Magnum Import Company, Inc., v. Coty in 1922, Justice McReynolds argued that the majority's decision was a departure from established principles of trademark law. He contended that trademarks were meant to protect consumers from deception and confusion about the origin of goods rather than serve as a tool for manufacturers to control distribution after sale. The justice asserted that once an article had been sold under a given trademark without restrictions, it should be free for resale by any purchaser under its original name without interference from the manufacturer or initial seller. In his view, allowing such post-sale controls would unjustly extend monopoly rights beyond what was necessary to prevent consumer deception and could potentially lead to abuses detrimental to public interest.