Coca-Cola Co. v. Snow Crest Beverages

Decision Date10 June 1947
Docket NumberNo. 4196.,4196.
PartiesCOCA-COLA CO. v. SNOW CREST BEVERAGES, Inc.
CourtU.S. Court of Appeals — First Circuit

Pope F. Brock, of Atlanta, Ga. (Hugh D. McLellan, John T. Noonan, Henry L. Mason, Jr., and Herrick, Smith, Donald, Farley & Ketchum, all of Boston, Mass., and Frank Troutman and Daphne Robert, both of Atlanta, Ga., on the brief), for appellant.

Arthur E. Whittemore, of Boston, Mass. (Arthur D. Thomson and Joseph P. Healey, both of Boston, Mass., on the brief), for appellee.

Before MAGRUDER, MAHONEY, and WOODBURY, Circuit Judges.

WOODBURY, Circuit Judge.

This is an appeal from a decree dismissing a complaint alleging infringement of a registered trade-mark and unfair competition. Federal jurisdiction therefore rests upon 15 U.S.C.A. § 97 as to both grounds alleged in support of the cause of action asserted, i. e., interference with the plaintiff's exclusive right to use its registered trade-mark. See Armstrong Co. v. NuEnamel Corp., 305 U.S. 315, 324, 325, 59 S.Ct. 191, 83 L.Ed. 195. Furthermore, as will appear from our statement of the facts, federal jurisdiction over the ground of unfair competition may also be rested upon diversity of citizenship and amount in controversy.

The plaintiff-appellant, The Coca-Cola Company, a Delaware corporation, is the owner of the trade-mark "Coca-Cola," registered in the United States Patent Office in the years 1893, 1905, 1925, twice in 1928 and again in 1945. It also registered its mark in Massachusetts in 1919. For a great many years it has manufactured and sold in interstate commerce the soft drink syrup from which its familiar dark reddish-brown beverage is made. The tens of millions of dollars it has spent over the years in advertising its product under the name "Coca-Cola" have created an enormous public demand for the beverage.1 Obviously, as the court below found, the value of its mark is far in excess of $3,000.

The plaintiff sells the syrup which it manufactures in two ways. It sells approximately 20% of its product to independent wholesalers or jobbers who sell it to soda fountain operators who in turn mix the syrup with carbonated water and dispense the beverage by the glass. Its business in this "fountain syrup" as it is called is without significance in the case at bar. It sells the major part of its syrup to six so-called "parent bottlers",2 each of which has exclusive resale rights in a particular territory, and these in turn resell to local bottlers having exclusive franchises in their respective sub-territories.3 These local bottlers mix the syrup with carbonated water, package the combination in distinctive 6 oz., somewhat hourglass shaped, bottles into the glass of which the trade-mark "Coca-Cola" in script is blown, and sell the bottled product to retail outlets such as stores, bars, taverns, restaurants, etc. For over 20 years the plaintiff has made extensive use of the phrase "Delicious and Refreshing" in its advertising.

The defendant-appellee, Snow Crest Beverages, Inc., is a Massachusetts corporation which was organized in 1930 for the purpose of incorporating a business carried on since 1923 by one Berkowitz under the name Snow Crest Beverage Company. Originally Berkowitz manufactured only pure fruit flavored carbonated beverages which he sold in 7½ oz. and quart size bottles under the trade name "Snow Crest". In 1929 he began to manufacture artificial flavored carbonated beverages which he sold in 7½ oz., 12 oz. and quart bottles under the trade name "Polar Cub". Berkowitz, and subsequently the defendant corporation, advertised its names, "Snow Crest" and "Polar Cub", through the usual media with the result that there has been built up a special association of these names with the defendant's products.

In 1935 the defendant added a cola type beverage to its line which is apparently indistinguishable from the plaintiff's Coca-Cola either by taste or color. It originally called this drink "Sno Kola", which it soon changed to "Sno Cola", and in 1937, without giving up this latter name, it began to put this beverage out also as "Polar Kola", changed a little later to "Polar Cola". It marketed this beverage in 7 oz., 7½ oz., 12 oz. and quart bottles, and on all of these bottles it used a crown, or cap, displaying the name "Polar Kola", later "Polar Cola", in white block letters on a narrow red band under a representation of a polar bear cub, which was the symbol it had long used in connection with its Polar Cub line of artificial fruit flavored beverages.

On its bottles it also affixed a paper label, predominately blue, white and orange in color, bearing a representation of a polar bear cub in an Arctic scene under the words "Polar Cola" in block letters. Upon these labels the beverage was described as consisting of flavor from the cola nut blended with natural flavors, cane sugar, carbonated water and caramel, and on them appeared the words "Delicious Refreshing". The label on the 7 oz. bottle carried the notation "individual size", that on its 12 oz. bottle "double size", and that on its largest size bottle "family size". The court below found that in view of the wide market for Coca-Cola the legend "double size" on the label of the defendant's 12 oz. bottle would be interpreted by the ordinary buyer of soft drinks to mean "double the size of a Coca-Cola bottle."

In 1940 the defendant began to bottle its Polar Cola in distinctive 28 oz. bottles of the same type that it had previously used in marketing some of its other products, and early in 1943 it discontinued all sales of Polar Cola except in bottles of this size and special type. Since 1944 it has sold these 28 oz. bottles virtually only to the bar and tavern trade in Massachusetts. It intends, however, as soon as sugar and other supplies become available, to resume its sales in smaller bottles to retail stores and to expand its business into interstate commerce.

Until 1944 the defendant's 28 oz. bottles were closed with the Polar Cola cap already described and carried a paper label displaying (1) the name Polar Cola in large white lettering approaching script in appearance on a red background, (2) the defendant's name as bottler in small letters, (3) a description of the contents, also in small letters, and (4) a prominent representation of an owl winking one eye next to the slogan "Get Wise — Giant Size". Since December 1944 it has used caps and labels on its bottles which by no stretch of the imagination could be said to have any resemblance to anything appearing in the plaintiff's advertisements, and it has called its beverage "Polar Cub" on the label and "Cubola" on the cap. It has retained the name "Polar Cola" on its trucks, however, and it says that the change in labeling of December 1944 was only to test consumer reaction. Furthermore, it is found as a fact that the defendant intends to revive the name "Polar Cola" for its product. This case, therefore, has not become moot since the defendant not only asserts but also intends to exercise what it claims to be its right to market its product in the way complained of whenever it may see fit to do so.

As already appears, the wrong complained of — interference with the plaintiff's exclusive right to use its mark "Coca-Cola" — is grounded upon allegations both of trade-mark infringement and unfair competition. Specifically the plaintiff contends that the defendant's name "Polar Cola" infringes its registered trade-mark "Coca-Cola"; that the defendant's use of the name "Polar Cola" constitutes unfair competition with the plaintiff; that the defendant's product, with its connivance and assistance, has been and is being widely passed off by retail dealers to consumers on orders for the plaintiff's product; that the defendant without satisfactory reason or excuse has imitated the plaintiff's "getup" and the general appearance of its product; and that, by printing "Delicious Refreshing" on its labels the defendant has made use of the predominant parts of one of the plaintiff's well known trade slogans. We shall consider these contentions in the order enumerated after disposing of three matters of general application.

In the first place there is no question in this case with respect to the applicable law. Opposing counsel agree and the court below held, in conformity with its ruling in National Fruit Product Co. v. Dwinell-Wright Co., D.C., 47 F.Supp. 499, "that on the particular types of issues here involved there is no difference in the federal statutory rule, the federal commonlaw rule, the Massachusetts statutory rule and the Massachusetts common-law rule." Furthermore, it seems to be conceded, as it must be, that the legal test of trademark infringement is the same as the legal test of unfair competition and basically that test is the likelihood of consumer confusion as to the source of the goods. Dwinell-Wright Co. v. National Fruit Product Co., 1 Cir., 140 F.2d 618, 622, 623; Mishawaka Rubber & Woolen Mfg. Co. v. Panther-Panco Rubber Co., 1 Cir., 153 F. 2d 662, 665, certiorari denied 329 U.S. ___, 67 S.Ct. 64. That is to say, the test to determine whether the defendant has violated the plaintiff's right to the exclusive use of its mark is to inquire whether the defendant has carried on its business in such a way as to make it likely that ordinary purchasers of its goods would confuse them with those of the plaintiff. And we have held in this circuit that this ultimate question of the likelihood of consumer confusion as to source is one of fact. Thomas Kerfoot & Co., Ltd., v. Louis K. Liggett Co., 1 Cir., 67 F.2d 214, 215; Dwinell-Wright Co. v. National Fruit Product Co., supra, 140 F.2d 618, 623, and cases cited. In accord see also Warner & Co. v. Lilly & Co., 265 U.S. 526, 529, 44 S.Ct. 615, 68 L.Ed. 1161; Skinner Mfg. Co. v. Kellogg Sales Co., 8 Cir., 143 F.2d 895, 899; Magazine Publishers, Inc., v. Ziff-Davis Pub. Co., 2 Cir., 147 F.2d 182, 185. Cf., however, LaTouraine Coffee Co. v....

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