Topp-Cola Company v. Coca-Cola Company

• Decision Date: 25 July 1960
• Citation: 185 F. Supp. 700
• Parties: TOPP-COLA COMPANY, a corporation, Plaintiff, v. COCA-COLA COMPANY, a corporation, Defendant.
• Court: U.S. District Court — Southern District of New York

185 F. Supp. 700

TOPP-COLA COMPANY, a corporation, Plaintiff, v. COCA-COLA COMPANY, a corporation, Defendant.

United States District Court S. D. New York.

July 25, 1960.

COPYRIGHT MATERIAL OMITTED

Burgess, Ryan & Hicks, New York City, for plaintiff, Cushman, Darby & Cushman, Washington, D. C., James L. Dooley, Washington, D. C., of counsel.

Gilbert H. Weil, and Alfred T. Lee, New York City, for defendant, Pope F. Brock, John D. Goodloe, Julius R. Lunsford, Jr., Atlanta, Ga., of counsel.

FREDERICK van PELT BRYAN, District Judge.

Plaintiff, a Georgia corporation, with its principal place of business in Savannah, Georgia, is the owner of the trademark Topp-Cola. Defendant, a Delaware corporation, with its principal place of business in New York, is the owner of the trademark Coca-Cola. Both marks are duly registered in the United States Patent Office under the Lanham Act, 15 U.S.C.A. § 1051 et seq. The present suit involving the marks of the respective parties arises primarily out of the following circumstances:

Plaintiff filed an application to register its mark under the Laws of the Commonwealth of Puerto Rico with the Secretary of State of that Commonwealth. Defendant, whose mark is already registered in Puerto Rico, has filed a notice of opposition¹ to plaintiff's registration, claiming that plaintiff's mark is so similar to defendant's mark

"* * * as to be likely to cause confusion in the mind of the public and to deceive purchasers * *."

and that

"* * * ordinary purchasers, seeing the word Topp-Cola applied to a non-alcoholic beverage similar to the one bearing the * * * (defendant's) * * * trademark Coca-Cola will be confused and deceived."

Plaintiff seeks a judgment (a) declaring that the mark Topp-Cola as applied to a cola beverage is not likely to cause confusion or to deceive purchasers, that purchasers are not likely to be confused as to the source or origin of beverages sold under the respective marks, and that Topp-Cola does not infringe upon the United States and Puerto Rican registrations of defendant's mark, and (b) enjoining defendant from further opposing plaintiff's application for registration in Puerto Rico. It also seeks other injunctive relief covering a range of defendant's activities which are alleged to interfere with "the legitimate expansion of plaintiff's cola beverage business."

Jurisdiction is alleged under the Lanham Act, 15 U.S.C.A. §§ 1119 and 1121, 28 U.S.C. § 1338, and under the diversity and declaratory judgment provisions of the Judicial Code, 28 U.S.C. §§ 1332 and 2201.

The case is before me on defendant's motion for summary judgment pursuant to Rule 56, F.R.Civ.P., 28 U.S.C.A.

The complaint makes for some confusion by lumping what appear to be two seperate and distinct claims in a single count.

In the first portion of the complaint plaintiff alleges that it uses its mark, Topp-Cola, in interstate commerce as the trademark for its cola flavored beverage; that the mark was registered under the Lanham Act after disclaimer as to the word "Cola"; that the registration is now in full force and effect; that plaintiff is engaged in a program of expanding its sales beyond the continental United States; and that defendant manufactures a soft drink similar to plaintiff's and has a Lanham Act registration on its mark "Coca-Cola".

The complaint then recites the proceedings taken in Puerto Rico to register plaintiff's mark and defendant's opposition to such registration. It alleges that the mark Topp-Cola is not so similar to the mark Coca-Cola as to confuse the public and deceive and confuse purchasers as to origin and that defendant "is well aware of * * * numerous judgments holding that the word `Cola' as applied to a cola type beverage is generic and in the public domain and is freely available for use in commerce which may be regulated by Congress * * *."

This part of the complaint concludes with the allegation that when defendant filed its opposition in the Puerto Rican proceeding it had "actual and constructive knowledge" of the Lanham Act registration of plaintiff's mark.

These allegations can be said to constitute a claim complete in itself. The relief sought on this claim is a declaratory judgment as to the lack of such similarity in the marks as to cause likelihood of confusion and deception and confusion as to source or origin and an injunction prohibiting opposition to plaintiff's Puerto Rican registration.

The balance of the complaint refers back to the allegations concerning the Puerto Rico proceedings and the other facts previously alleged but presents them in a rather different context. It is alleged that defendant filed its Notice of Opposition in Puerto Rico with the purpose and intent of

"* * * interfering with the legitimate expansion of the plaintiff's business in commerce which can be regulated by Congress, and in other commerce, and that this interference is part of a plan to hamper and frustrate competition in cola type beverages emanating from corporations domiciled in the United States and that the defendant is thereby attempting to restrain competition in the cola beverage industry in commerce which can be regulated by Congress, and in other commerce, and is thereby competing unfairly with the plaintiff to the plaintiff's damage."

It is claimed that defendant is engaged in a scheme, of which its opposition to the Puerto Rican registration of plaintiff's mark is a part, to harass plaintiff and other competitors with expensive and vexatious litigation respecting local use and registration of its trademark, and that this is a form of "economic duress" which will intimidate local bottlers and discourage them from "affiliating themselves with plaintiff's organization" and from selling plaintiff's beverage. The complaint concludes with the allegation that unless defendant is restrained from "such conduct" it will continue "to restrain competition" in domestic and other commerce by "opposing every effort of the plaintiff to obtain local registration of its trademark in the locations of its use."

Based on this additional and separate claim, plaintiff seeks to enjoin defendant from interfering with "the legitimate expansion of the plaintiff's cola beverage business" by asserting "privately or publicly" that Topp-Cola is an infringing mark and from opposing plaintiff's attempts to obtain local registration of its mark in "areas where said trademark is used or is to be used." There is also a prayer for treble damages and attorney's fees.

Defendant has answered denying that this court has jurisdiction by reason of diversity of citizenship, or over what it alleges to be the single controversy arising out of the application to register plaintiff's mark in Puerto Rico, or under the Federal Declaratory Judgments Act. It denies in substance that it has illegally interfered with plaintiff's rights in any way.

What I consider to be the two seperate claims alleged in the complaint will be considered separately.

Before doing so, however, it should be noted that although defendant denies that there is diversity of citizenship between the parties "in any substantial sense", there is diversity jurisdiction under 28 U.S.C. § 1332, quite apart from whether there is jurisdiction under the Lanham Act or under 28 U.S.C. §§ 1338 and 2201. It is not denied that plaintiff is a Georgia corporation with its principal place of business there and that defendant is a Delaware corporation with its principal place of business in New York.

Defendant's allegation that it has an office in Georgia and is amenable to service of process there does not exclude diversity jurisdiction in this court. Under the recent jurisdictional requirements of 28 U.S.C. § 1332(c) there would be lack of diversity only if defendant had its "principal" place of business in Georgia and it has admitted that its principal place of business is in New York. It also seems plain that the matter in controversy exceeds the value of $10,000 exclusive of interest and costs under § 1332.

1. The claim arising from defendant's opposition to Puerto Rican registration of plaintiff's mark.

In essence, plaintiff's claim on this branch of the case is based on the premise that defendant by filing the notice of opposition to registration of its mark Topp-Cola in Puerto Rico has charged that plaintiff's mark infringes defendant's mark Coca-Cola. Plaintiff asserts that there is no infringement and that it is entitled to declaratory judgment to that effect and injunctive relief.

The defendant takes the position, however, that the filing of its notice of opposition in Puerto Rico does not constitute a charge of infringement and does not give rise to a justiciable controversy upon which this court can render a declaratory judgment under the Declaratory Judgments Act or grant injunctive relief. It urges that the only proper forum in which the questions raised by its notice can be determined is before the Secretary of State of Puerto Rico in the course of the Puerto Rican administrative proceedings for trademark registration.

It is now well settled that the Lanham Act confers substantive rights upon the holder of a mark registered under it. Such rights are "uniform throughout the Union" and their interpretation is not limited by local law. S. C. Johnson & Son v. Johnson, 2 Cir., 175 F.2d 176.

The registrant has the right to exclusive use of its registered mark in "commerce", defined by the Act (15 U. S.C.A. § 1127) as "all commerce which may lawfully be regulated by Congress." This, of course, includes commerce in Puerto Rico though from a reading of the defendant's brief one would suppose that it is under the curious misapprehension that Puerto Rico is not included within the ambit of congressional power over commerce and is in fact to be treated as a foreign country. If the matter needs to be made any plainer it is only necessary to refer to the following language of § 1127:

"The intent of this chapter is to

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