Coca-Cola Co. v. Snow Crest Beverages

• Decision Date: 14 March 1946
• Docket Number: Civil Action No. 3141.
• Citation: 64 F. Supp. 980
• Court: U.S. District Court — District of Massachusetts
• Parties: COCA-COLA CO. v. SNOW CREST BEVERAGES, Inc.

64 F. Supp. 980

COCA-COLA CO. v. SNOW CREST BEVERAGES, Inc.

Civil Action No. 3141.

District Court, D. Massachusetts.

March 14, 1946.

COPYRIGHT MATERIAL OMITTED

Hugh D. McLellan, John T. Noonan, Herrick, Smith, Donald, Farley & Ketchum, and William J. Hession, all of Boston, Mass., and Pope F. Brock, of Atlanta, Ga., for plaintiff.

Arthur D. Thomson, Nutter, McClennen & Fish, and Arthur E. Whittemore, all of Boston, Mass., for defendant.

WYZANSKI, District Judge.

Fdg. 1. In this action plaintiff complains of defendant's alleged unfair competition and infringement of plaintiff's trade-mark "Coca-Cola." The complaint refers to plaintiff's registrations at the United States Patent Office, but does not specifically refer to the Massachusetts registration and does not aver that defendant has impinged on plaintiff's rights under the United States Trade-Mark Acts, compiled in 15 U.S.C.A. c. 3, § 81 et seq., or the Massachusetts Trade-Mark statute, Mass. G.L.(Ter.Ed.) c. 110, particularly §§ 7, 8.

Conc. 1. The complaint is adequate under the Rules of Civil Procedure to raise the issue of infringement of plaintiff's federal statutory as well as its common law rights in its mark. Compare Form 17 appended to Rule 84 of the Rules of Civil Procedure, 28 U.S.C.A. following section 723c. It is unnecessary to consider whether the complaint is also adequate to raise the issue of infringement of plaintiff's Massachusetts statutory rights, inasmuch as the registration of a trade name in accordance with the Massachusetts trade-mark act does not confer any rights in addition to common law rights. Blair's Foodland v. Shuman's Foodland, 311 Mass. 172, 176, 40 N.E.2d 303.

Fdg. 2. Plaintiff is The Coca-Cola Company, a Delaware corporation. It is the owner of the trade-mark "Coca-Cola" registered in the United States Patent Office in the years 1893, 1905, 1925, 1928 (twice) and 1945, and registered in the Commonwealth of Massachusetts in the year 1919. For many years plaintiff has manufactured and sold in interstate commerce under the name of Coca-Cola a soft drink syrup and the beverage of a dark brown color made from the syrup. It has spent millions of dollars in advertising its product under the name Coca-Cola and has created a large public demand for it. In view of the admitted value of its mark there is involved in this controversy more than $3,000 exclusive of interest and costs.

Fdg. 3. Plaintiff sells Coca-Cola in two ways. It sells syrup to jobbers who resell to soda fountain operators who mix the syrup with carbonated water and dispense the combination by the glass. That method is of minor significance in this case. It also sells syrup to six so-called "parent bottlers," each having exclusive resale rights in a particular section of the United States, and these parent bottlers resell to local bottlers having franchises in their respective territories. A local bottler mixes the syrup with carbonated water, packages it in distinctive 6-ounce bottles into the glass of which has been blown the trade-mark Coca-Cola in script, and sells the bottled product to retail outlets including stores, bars, taverns and restaurants. The local bottler usually sells to the retail outlet at 80 cents per case of 24 bottles of 6 fluid ounces each. In New England the parent bottler is The New England Coca-Cola Bottling Company, and in Massachusetts one of the seven local bottlers with franchises is The Coca-Cola Bottling Company of Boston. Both of those companies are wholly owned subsidiaries of plaintiff.

Fdg. 4. In recent war-time years due to the shortage of sugar and other supplies plaintiff has been unable to fill the demand for its product. Therefore, it has resorted to a self-imposed system of rationing its product. This rationing has left a vacuum in the cola business.

Fdg. 5. Defendant is Snow Crest Beverages, Inc., a Massachusetts corporation. It manufactures and sells, and in recent years has manufactured and sold in interstate commerce (R. 479, 548, 549) under the name of "Polar Cola," a beverage of dark brown color made from a cola type of syrup and carbonated water. Defendant currently sells its product chiefly to bars and taverns in 28-ounce bottles at 85 cents per case of 12 bottles. Defendant currently calls its product "Cubola" and sells only in Massachusetts but it intends to revive the name "Polar Cola" and to sell in interstate commerce. Before coming to a statement of the precise respects in which plaintiff claims defendant competes unfairly and infringes plaintiff's trade-mark, it is material to go back some years and recite the history of defendant's enterprise.

Fdg. 6. Shortly before 1927 Nathan Berkowitz purchased and operated an unincorporated business then known as Snow Crest Beverage Company. About 1930 (R. 419) Berkowitz made arrangements for the incorporation of the business. Thereafter Berkowitz and Edward Rachins each acquired and continues to own one-half of the corporate stock, except for qualifying shares for other directors.

Fdg. 7. From 1923 to 1929 the unincorporated Snow Crest Beverage Company manufactured only carbonated beverages containing pure fruit flavors and sold them under the name "Snow Crest" in quart or 7½-ounce sizes. Beginning with 1929 it manufactured in addition carbonated beverages containing artificial flavors and sold them under the name "Polar Cub" in quart, 12-ounce and 7½-ounce sizes. Upon incorporation, defendant took over both these lines of business. During this 1923-1929 period and subsequently, defendant has advertised the names "Snow Crest" and "Polar Cub" through the usual media and has built up for them a special association signifying products of defendant.

Fdg. 8. 1935 was the first year in which defendant produced a cola type of beverage (R. 427). Its cola type of beverage contained flavor from the cola nut blended with natural flavors, sugar, dextrose carbonated water and caramel color (Ex. 6). It called this product originally "Sno Kola" and later "Sno Cola." The product brought very little business to defendant, the sales never reaching so high a figure as 500 cases annually in the years 1935 through 1942 (R. 438, 439).

Fdg. 9. In 1937 the defendant (while not discontinuing its sales of Sno-Cola) put out the same cola product under the name first of "Polar Kola" and then of "Polar Cola" and marketed it in 7-ounce, 7½- ounce, 12-ounce and quart bottles (R. 442). For these bottles defendant used a crown displaying the name Polar Kola or Polar Cola in white block letters on a narrow red band and above the name a picture of a cub bear, which was defendant's symbol in its Polar Cub line of artificial fruit beverages. In addition, for the 12-ounce bottle defendant used a label displaying the words "Delicious," "Refreshing" and "Double Size." The adjectives "Delicious" and "Refreshing" were words which plaintiff had for many years used to describe its Coca-Cola. "Double Size" was a description which, in view of the wide market for Coca-Cola, the normal buyer of soft drinks would interpret as "double the size of a Coca-Cola bottle."

Fdg. 10. In 1940 defendant began to bottle its Polar Cola in a distinctive 28-ounce fluted bottle of the type it had previously used in marketing some of its other products, such as "Tom Collins Mixer," "Whiskey Sour Mixer" and "Big 8 Mixer." Defendant affixed to the fluted 28-ounce bottle and to the 7-ounce, 7½-ounce and 12-ounce bottles labels showing a picture of a bear in an arctic scene and displaying the words "Delicious" and "Refreshing." In addition, the label for the 7-ounce bottle shows the notation "individual size"; the label for the 12-ounce bottle, "double size"; the label for the 28-ounce bottle, "family size." All the bottles carried the type of Polar Cola crown referred to in the preceding paragraph.

Fdg. 11. By early 1943 defendant discontinued all the Polar Cola sales except those in the 28-ounce bottles. And since 1944 defendant has sold these 28-ounce bottles virtually only to the bar and tavern trade (R. 437, 470, 527). But as soon as sugar and other supplies become available defendant intends to resume its sales of bottles to retail stores (R. 485). Until 1944 each of these bottles had a Polar Cola cap and carried a label with (1) the trademark Polar Cola in large white lettering which approaches script, on a red background, (2) in small letters the name of Snow Crest Beverages as bottler, (3) in small letters a description of the contents, and (4) a prominent picture of an owl next to the slogan "Get Wise-Giant Size" (Ex. 6). Since December 1944 each of these bottles had a Cubola cap and carried a label which (1) emphasizes an arctic scene, (2) has the trade-mark Polar Cub in white block letters on a blue background, (3) displays as an insert a cub bear holding a red bottle, and (4) recites the phrase "sparkling beverages," the name of defendant and a brief description of the chemical contents (Ex. 13).

Fdg. 12. The growth of defendant's enterprise having been portrayed in broad strokes, it is appropriate to turn now to the details concerning the three aspects of defendant's business in which plaintiff asserts that defendant impinges on its rights. The least important is the sale of bottles of Polar Cola by defendant to retail stores which resell to ultimate consumers the same bottles of Polar Cola. More important is the sale of bottles of Polar Cola by defendant to bars, taverns, restaurants and hotels which dispense to patrons of such establishments either glasses of straight Polar Cola or glasses containing a mixture of Polar Cola and whiskey or rum. And of greatest importance is defendant's use of the name Polar Cola or Polar Kola.

Fdg. 13. The only significant testimony relating to sales by defendant to retail stores covers transactions which occurred at defendant's factory in 1944 and on an earlier occasion in November 1940.

Fdg. 14. In the summer of 1944 plaintiff engaged investigators including two...