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PARKE, DAVIS & CO. v. AMALGAMATED HEALTH & DRUG PL

March 6, 1962

PARKE, DAVIS & COMPANY, Plaintiff,
v.
AMALGAMATED HEALTH & DRUG PLAN, INC., and 11 Union Pharmacy, Inc., Defendants



The opinion of the court was delivered by: LEVET

The plaintiff, Parke, Davis & Company, moves for a preliminary injunction in the above-entitled cause, which is an action for violation of the Fair Trade Act of the State of New York, General Business Law, McKinney's Consol. Laws, c. 20, 369-a et seq. Affidavits were submitted by both sides. The defendants requested a hearing, and pursuant to such request a hearing was held at which plaintiff produced witnesses who were examined by plaintiff and cross-examined by the defendants. The defendants offered no testimony.

From the affidavits and from the testimony and for the purposes of this application for a preliminary injunction, I find as follows:

 1. Plaintiff is engaged in the manufacture, production, sale and distribution of ethical drugs, medicines, preparations and other commodities.

 2. Each product manufactured and sold by plaintiff bears one or more of its trademarks, such as 'ABDEC,' 'MYADEC,' and 'PALADAC,' affixed to the products themselves and to cartons in which such products are packaged. 'ABDEC,' 'MYADEC,' and 'PALADAC' are manufactured and sold by plaintiff.

 3. For some years plaintiff has been engaged in an extensive and continuous program of advertising on local and national levels. Plaintiff's identifying trademarks have become favorably known to the trade and commonly accepted by the public as products of high quality.

 4. Retail druggists rely upon plaintiff's good will and promotional activities to move plaintiff's products from their shelves. Plaintiff, in turn, relies upon the retailers as an effective link in the chain of distribution for its products to the public. The preservation of plaintiff's good will is essential to its success. The value of plaintiff's good will is in excess of $ 10,000.

 5. Plaintiff has, when necessary, brought enforcement suits to eliminate price violations in the Metropolitan Area of New York City.

 6. The defendants have been notified of the stipulated minimum retail resale prices for plaintiff's products and were particularly warned by letters of March 3, 1961 and June 30, 1961 of their price-cutting activities.

 7. Defendants, nevertheless, have offered for sale, and have sold, products bearing palintiff's trademarks at prices below those established by plaintiff with retail druggists in the City of New York, as follows:

 (a) On May 31, 1961, one Frances Rosenthal, a professional shopper employed by Ralph T. Piper, purchased at the said store at 11 East 17 Street, New York City, 100 MYADEC vitamin capsules for a price of $ 5.75, whereas the fair trade price for said item was $ 9.67. (See testimony of Frances Rosenthal and stipulation, pp. 122, 123, 124; Ex. 15)

 (b) On June 8, 1961, one Marion Baehr, a professional shopper employed by Ralph T. Piper, purchased at the said store at 11 East 17 Street, New York City, a 50 cc. bottle of ABDEC vitamin preparation drops for $ 2.65, whereas the fair trade price for said item was $ 3.51. (See testimony of Marion Baehr, pp. 101, 102, 103; Ex. 13)

 (c) On June 21, 1961, Frances Rosenthal a professional shopper employed by Ralph T. Piper, purchased at the said store at 11 East 17 Street, New York City, 100 MYADEC vitamin capsules for a price of $ 5.75, whereas the fair trade price for said item was $ 9.67. (See affidavit of Charles D. Snead, Jr., sworn to January 23, 1962, and testimony of Frances Rosenthal, pp. 122-124, stipulation p. 122; Ex. 16)

 (d) On August 8, 1961, one Elsie Klamroth, a professional shopper employed by Ralph T. Piper, purchased at the said store at 11 East 17 Street, New York City, a 50 cc. bottle of ABDEC vitamin preparation drops for $ 2.65, whereas the fair trade price for said item was $ 3.51. (See testimony of Elsie Klamroth, pp. 115, 116, 117; Ex. 14)

 (e) On August 15, 1961, Marion Baehr, a professional shopper employed by Ralph T. Piper, purchased at the said store at 11 East 17 Street, New York City, a 50 cc. bottle of ABDEC vitamin preparation drops for $ 2.65, whereas the fair trade price for said item was $ 3.51. (See testimony of Marion Baehr, pp. 100, 101; Ex. 12)

 (f) On August 21, 1961, Frances Rosenthal, a professional shopper employed by Ralph T. Piper, purchased at the said store at 11 East 17 Street, New York City, 100 MYADEC vitamin capsules for $ 5.75, whereas the fair trade price for said item was $ 9.67. (See testimony of Frances Rosenthal and stipulation, pp. 122, 123, 124; Ex. 17; affidavit of Snead, sworn to January 23, 1962, p. 4)

 (g) On November 8, 1961, at about 2:00 P.M., one Herbert Schneider, a professional shopper employed by Ralph T. Piper, purchased a 50 cc. bottle of ABDEC Drops vitamin preparation from one Joseph Messiana, a clerk at the said store at 11 East 17 Street, New York City, for the sum of $ 2.65, whereas the fair trade price for said item was $ 3.51. (See affidavit of Schneider, sworn to December 11, 1961; testimony of Schneider, pp. 42-46; Ex. 5)

 (h) On November 9, 1961, at approximately 1:30 P.M., one Mary E. Burke, a professional shopper employed by Ralph T. Piper, purchased a 50 cc. bottle of ABDEC Drops vitamin preparation from a clerk at the said store at 11 East 17 Street, New York City, for the sum of $ 2.65, whereas the fair trade price for said item was $ 3.51. (See testimony of ...


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