Capri Sun GmbH v. American Beverage Corporation
| Decision Date | 31 March 2022 |
| Docket Number | 19 Civ. 1422 (PAE) (DCF) |
| Citation | 595 F.Supp.3d 83 |
| Parties | CAPRI SUN GMBH, Plaintiff, v. AMERICAN BEVERAGE CORPORATION, Defendant. |
| Court | U.S. District Court — Southern District of New York |
Jamie Nicole Leipzig, Jonathan Webster Thomas, Margaret Lee Wheeler-Frothingham, A. John P. Mancini, Mayer Brown LLP, New York, NY, for Plaintiff.
Dawn L. Rudenko, Holland & Knight LLP, Stamford, CT, Joshua Krumholz, Mark T. Goracke, Holland & Knight, L.L.P., Boston, MA, for Defendant.
This case involves a trademark dispute over the shape of foil pouches that hold fruit juice. Plaintiff Capri Sun GmbH ("Capri Sun") has a trademarked pouch (the "Pouch Trademark" or "Pouch Mark"). It principally alleges that defendant American Beverage Corporation ("ABC"), after terminating a licensing agreement (the "SLA") with Capri Sun that had authorized ABC to make use of Capri Sun's Pouch Mark in connection with the sale of its fruit juices, continued to manufacture, sell, and license fruit-juice pouches that were near-replicas of—and confusingly similar to—Capri Sun's Pouch Mark.
Capri Sun brings 12 claims: for (i) breach of the SLA, under New York law; (ii) federal trademark infringement under 15 U.S.C. § 1114 ; (iii) federal unfair competition and false association with the Pouch Mark under 15 U.S.C. § 1125(a) ; (iv) federal trade-dress infringement under 15 U.S.C. § 1125(a) ; (v) federal unfair competition and false association with Capri Sun's trade dress under 15 U.S.C. § 1125(a) ; (vi) federal trademark dilution under 15 U.S.C. § 1125(c) ; (vii) trademark infringement under New York common law; (viii) unfair competition with the Pouch Mark under New York common law; (ix) trade-dress infringement under New York common law; (x) unfair competition with Capri Sun's trade dress under New York common law, and (xi) dilution of the Pouch Mark under New York General Business Law ("NYGBL") § 360-l ; and (xii) dilution of Capri Sun's trade dress under NYGBL § 360-l . With discovery complete, each party has moved for summary judgment on all claims. Capri Sun has further moved to exclude testimony of two of ABC's experts (Hal Poret and Dr. Erich Joachimsthaler) and ABC has so moved with respect to one of Capri Sun's experts (Dr. Joel Steckel). ABC has also moved to preclude Capri Sun from pursuing as a remedy for ABC's alleged trademark infringement and trademark dilution, disgorgement of ABC's profits derived from these illegalities.
For the reasons that follow, the Court denies Capri Sun's summary judgment motion in full; grants in part and denies in part ABC's summary judgment motion; denies Capri Sun's Daubert motion as to Poret; denies, save as to a minor point, ABC's Daubert motion as to Dr. Steckel; grants in part and denies in part Capri Sun's Daubert motion as to Dr. Joachimsthaler; and grants ABC's motion to limit Capri Sun's recoverable damages.
Capri Sun is a Gesellschaft mit beschränkter Haftung (limited liability company) organized under the laws of, and headquartered in, Germany. JSUF ¶ 1. Until December 17, 2018, Capri Sun's name was Deutsche SiSi-Werke Betriebs GmbH ("SiSi"). Id. ¶ 29. Capri Sun's predecessor-in-interest and parent is Rudolf Wild International GmbH & Co. KG (formerly named Zick-Zack-Werk Rudolf Wild) ("Wild"). Id. ¶¶ 2, 5, 27, 30, 32.
ABC is a corporation organized and existing under Delaware law, with its principal place of business in Pennsylvania. Id. ¶ 2. ABC's predecessor-in-interest was Faribault Foods, Inc. ("Faribault"). Id. ¶¶ 257–259.
Importantly, as reviewed in detail infra , Faribault was a defendant in an earlier lawsuit (the "Faribault Lawsuit") in which Capri Sun alleged that Faribault was infringing SiSi's rights in and to the Pouch Trademark. Id. ¶ 221. On July 1, 2016, Capri Sun and Faribault executed the SLA to resolve that lawsuit, under which Faribault received a license to use the Pouch Mark but was required to pay royalties to do so. Id. ¶ 222. In October 2016, in conjunction with ABC's purchase of certain of Faribault's beverage-business assets, Faribault assigned its rights and obligations under the SLA to ABC. Id. ¶ 257.
ABC manufactures beverage pouches for various brands that individually brand and dress those pouches. Id. ¶¶ 276, 279, 281. At issue in this litigation are 24 of those pouches (the "Accused Pouches"). Id. ¶ 290. ABC has one branded pouch product—Green Beginnings—that it directly sells to HEB, a Texas retailer, and which is one of the 24 pouches at issue. Id. ¶ 278.
On July 11, 1985, Wild applied for a registration for a trademark of a "pouch design" for "fruit drinks" with the United States Patent and Trademark Office ("PTO"). JSUF ¶ 3. On November 25, 1986, the application was registered on the principal register as U.S. Trademark Registration No. 1,418,517 (the " ‘517 Registration"). Id. ¶ 20. The ‘517 Registration includes an image of the Pouch's design. Id. ¶ 21. It looks like this:
The ‘517 Registration is incontestable. Id. ¶ 25. Capri Sun currently owns the ‘517 Registration, which covers the Pouch Trademark for "fruit juice drinks containing water." Id. ¶¶ 22, 24.
The Pouch Mark does not describe the dimensions of the pouch; the parties dispute its exact description. See Pl. Counter 56.1 ¶ 13. It is, however, not disputed that the pouches sold under the Pouch Mark hold 6 ounces of juice and, when flat and unfilled, are 100 millimeters wide, 150 millimeters tall. Pl. 56.1 ¶ 86; JSUF ¶¶ 43, 321.
Beginning in 1969, Capri Sun first sold orange-flavored pouched juice drinks in Germany. Pl. 56.1 ¶ 2. It has continuously sold pouched drinks for more than 50 years. Id. ¶ 3.
Within the United States, since 1991, Kraft General Foods, Inc. ("Kraft") has held an exclusive license as to products branded with the Capri Sun trademark in the Pouch Mark's pouch shape. JSUF ¶¶ 32–33, 36, 136. That license derives from a stock purchase agreement: On April 11, 1990, Wild granted an exclusive license to the Pouch Mark in the United States to non-party Capri Sun, Inc., a domestic concern. Id. ¶¶ 30, 32–33. In November 1991, Kraft purchased Capri Sun, Inc., from Wild pursuant to a stock purchase agreement, and with it, the license. Id. ¶ 36. Although that license is exclusive as to products in the Pouch Mark's pouch shape that are branded with the Capri Sun trademark, it is non-exclusive as to products in the Pouch Mark's pouch shape that are not branded with the Capri Sun trademark. Id. ¶¶ 136–137.
According to the ‘517 Registration, the Pouch Mark was first used in the United States on August 31, 1978. Id. ¶ 23. Capri Sun's primary customer base for the Pouch Mark are children and their parents. Id. ¶ 44. Two representative Capri Sun pouch products, as currently sold, look like this:
The parties represent that the Capri Sun brand has offered product lines named "Original," "Organic," "100% Juice," "Fruit Refreshers," "Fruit & Veggie," "Roarin’ Waters," and "Sport." Id. ¶ 42. Capri Sun's "Original" line alone now features flavors such as lemonade, wild cherry, grape, strawberry, strawberry kiwi, red berry, tropical punch, mountain cooler, coastal cooler, pacific cooler, surfer cooler, splash cooler—and, of course, orange. Id. ¶ 50. In 2020, Capri Sun tested, but did not continue, a product line offering filtered water in its Pouch. See id. ¶ 68–70.
Since September 2001, Kraft—in addition to selling the Capri Sun brand—has sold juice pouch products—called "Jammers"—in the Pouch Mark pursuant to a license agreement with Capri Sun. Id. ¶ 138. Jammers is, however, the only authorized product that Capri Sun has licensed to use the Pouch Mark that is outside the Capri Sun brand. On August 20, 2001, shortly before Jammers sales began, Capri Sun's owner, Hans-Peter Wild, wrote a letter to Dave Johnson—Kraft's vice president, and president of beverages, desserts and cereals—emphasizing that, although Def. 56.1 ¶ 40.
According to a Nielsen report, Capri Sun's sales for Capri Sun-branded products in the Pouch Mark were $751 million in 2012; $690.4 million in 2013; $686.9 million in 2014; $647.2 million in 2015; and approximately $500 million in 2016. JSUF ¶¶ 81, 83; Pl. 56.1 ¶¶ 49–52, 54–55. Capri Sun's 2016 market share in the kids single-serve beverages market was 22.8%, higher than that of any other brand. JSUF ¶ 81.
Capri Sun-branded pouches are sold in cartons of 10, 30, and 40, but never in individual pouches. Id. ¶¶ 45–46. Neither the pouches nor the Pouch Mark is depicted on the cartons. See id. ¶¶ 47, 53, 55. As such, consumers do not see the Capri Sun Pouch or Pouch Mark at the point of sale when selecting among different pouch and non-pouch beverages. See id. ¶¶ 47, 54–59.
According to a report titled "Children's Drink F.A.C.T.S. 2019" that traces its data to the report's authors and to Nielsen, Capri Sun's annual advertising spend between 2013 and 2018 across all its sub-brands was consistently between $19.8 million and $20.1 million. Id. ¶ 77. In those ads, the Pouch often appears prominently. For example, in 2008, Capri Sun launched an ad campaign—which won the prestigious Gold Effie advertising award in 2010—entitled "Respect the Pouch." Id. ¶¶ 71–72, 74.2 In August 2009, one year after the campaign's airing, 49% of children recognized the tagline "Respect the Pouch"—second only to McDonald's "I'm lovin’ it." Dkt 79-22 at 5. In 2019, Capri Sun launched the "Hold My Pouch" campaign, whose commercials prominently featured Capri Sun Pouches, JSUF ¶ 75. The Pouch appears in some form in more than 50 video commercials. See id. ¶¶ 85–135. Other places in which consumers encounter the Pouch or Pouch Mark are Capri...
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