In the 1923 case Prestonettes, Inc. v. Coty, the U.S Supreme Court ruled in favor of François Coty's perfume company against a competitor who was repackaging and reselling his products under their own name. The court held that although patent laws did not protect Coty’s product from being resold by others after its first sale (the doctrine of exhaustion), trademark law could be used to prevent such resale if it would likely cause consumer confusion about the source or quality of goods - which was found to be true in this case due to alterations made during repackaging process by Prestonettes, Inc., thereby damaging Coty's reputation for quality control over its product. This decision established an important precedent regarding the intersection between patent and trademark rights.

In the dissenting opinion for Prestonettes, Inc. v. Coty in 1923, Justice Holmes argued that the defendant's actions did not constitute trademark infringement because they were transparent about repackaging and reselling the plaintiff's product under their own name. He believed that as long as consumers knew what they were buying - a re-bottled version of an original perfume - there was no deception or harm done to the original manufacturer’s reputation. Furthermore, he asserted that once a company sells its goods without restrictions on resale, it relinquishes control over how those goods are subsequently used or sold by others. Therefore, according to his interpretation of property rights and free trade principles, Prestonettes should be allowed to continue its business practices without legal interference from Coty.