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Schering Corp. v. Sun Ray Drug Co.

filed: July 8, 1963.

SCHERING CORP.
v.
SUN RAY DRUG CO., AND CONSOLIDATED SUN RAY, INC.



Author: Kalodner

Before BIGGS, Chief Judge and KALODNER and FORMAN, Circuit Judges.

Opinion of the Court

BY KALODNER, Circuit Judge: This appeal from the District Court's Order granting a preliminary injunction restraining defendant from selling Coricidin, plaintiff's trademarked product, below its fair trade price, in unfair competition as that term is defined in the Pennsylvania Fair Trade Act,*fn1 presents two issues:

(1) Did the District Court err in finding that the requisite jurisdictional amount of $10,000 has been established?

(2) Did the District Court abuse its discretion in granting a preliminary injunction?

The following findings of fact were made by the District Court following hearings had on plaintiff's prayer for a preliminary injunction:

1. Plaintiff is a New Jersey corporation with its principal office and place of business in Bloomfield, New Jersey. It is not registered to do business in Pennsylvania.

2. Defendant, Sun Ray Drug Co.,*fn2 is a Pennsylvania corporation with its principal office and place of business in Philadelphia, Pennsylvania, operating one hundred and fifty stores.

3. Plaintiff is, and has been since at least 1935, engaged in the business of manufacturing and selling drugs, medicines, pharmaceuticals and ethical products.

4. Plaintiff has expended large sums of money in promoting and advertising its products under its name and registered trademarks and has established a valuable reputation and good will for such products and the trademarks under which they are produced and sold.

5. Plaintiff's advertising program consists of advertising in trade journals which are circulated among pharmacies and other retailers of its products, among wholesalers of its products and among hospitals and physicians. It also consists of providing pharmacies with point-of-sale displays of its products and efforts on the part of its detail men (who are salesmen) to promote the sale and use of its products through physicians, pharmacies and the like. It has also engaged, and is presently engaging, in advertising and promotional campaign on television in a test market served by an Indiana television station. The amounts expended nationally by the plaintiff in its advertising and promotional campaigns have been at the rate of approximately $5,000,000 annually for the five full years ending with the year 1961, and its national advertising and promotional expense during the year 1962 is running at approximately the same rate. The plaintiff's expenditures for advertising and promoting its "Coricidin" line of products during the same periods have been at the annual rate of approximately $750,000.

6. The annual rate of the plaintiffs gross sales of its products, all of which are identified by its name and trademarks, is approximately $80,000,000 of which approximately $40,000,000 represents domestic gross sales in the United States and approximately $10,000,000 represents domestic gross sales of the plaintiff's "Coricidin" products.

7. The value of the plaintiff's good will is substantial and the amount in controversy in this action is in excess of $10,000.

8. The sale of the plaintiff's products bearing the plaintiff's trademarks below their established fair trade prices will materially and ...


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