Coca-Cola Co. v. Stevenson

• Decision Date: 01 January 1920
• Docket Number: 47.
• Citation: 276 F. 1010
• Parties: COCA-COLA CO. v. STEVENSON et al.
• Court: U.S. District Court — Southern District of Illinois

276 F. 1010

COCA-COLA CO. v. STEVENSON et al.

No. 47.

United States District Court, S.D. Illinois, Southern Division.

January Term, 1920

The plaintiff and its predecessors had been engaged in the manufacture of a syrup for an aerated beverage and had caused the beverage itself to be bottled under direction and supervision by the plaintiff known as 'Coca-Cola,' since 1886. A vast sum of money had been expended in advertising the trade-mark 'Coca-Cola' as indicating plaintiff's syrup and the aerated beverage bottled therefrom. In the year 1916, $1,943,178.40 had been expended in bringing the syrup and the beverage manufactured and sold under the trade-mark 'Coca-Cola' to the attention of the trade in interstate commerce. The production of the syrup increased from 25 gallons in 1886 very rapidly until the annual output had, in 1916, reached 9,715,892 gallons; the trade-mark 'Coca-Cola' had become favorably and familiarly known everywhere; and the rights of the plaintiff were repeatedly affirmed by adjudications in the United States courts. The trade-mark was the subject-matter of two registrations in the United States Patent Office and prior thereto and since had been used by the plaintiff in interstate commerce.

On March 16, 1916, plaintiff made application to the Secretary of State of Illinois for the registration of its trade-mark 'Coca-Cola' under the provisions of the Revised Statutes of Illinois (Chapter 140), fully complying with all the terms and provisions of that statute. The application however, was rejected by the Secretary of State because of prior registrations by defendant John D. Fletcher, as follows:

'John D. Fletcher's Coca and Cola Carbonating Syrup, Chicago Illinois,' the same being inclosed in a red circular band and registered July 24, 1914. Also, the words,

'John D. Fletcher's Carbonated Syrup, A Genuine Coca and Cola Flavor,' the same being inclosed in a broad corrugated wheel or circular band of blue and registered October 6, 1914. Also,

Defendant Fletcher was formerly a resident of Nashville, Tenn., and on or about February 15, 1911, organized a corporation under the laws of Tennessee, under the name of Nashville Syrup Company. He was president, general manager, and one of the principal stockholders of the company. Prior to the registrations in Illinois, a bill of complaint was filed in the Circuit Court of the United States for the Middle District of Tennessee by the plaintiff against the Nashville Syrup Company, praying an injunction against the defendant for infringing plaintiff's trade-mark 'Coca-Cola.' Upon a hearing upon the pleadings in the case, on July 29, 1912, a final decree was entered perpetually enjoining the Nashville Syrup Company, its agent, servants or employes, from further infringing plaintiff's trade-mark. An appeal was prosecuted from the decree to the Circuit Court of Appeals for the Sixth Circuit, and on June 13, 1914, the decree of the Circuit Court was affirmed. Coca Cola Co. v. Nashville Syrup Co. (D.C.) 200 F. 157; Nashville Syrup Co. v. Coca Cola Co., 215 F. 527, 132 C.C.A. 39, Ann. Cas. 1915B, 358.

Fletcher knew of the suit and the adjudication in the United State Circuit Court in Tennessee and aided in the defense interposed to the bill. At the time he filed his several applications for registration of trade-marks in Illinois, defendant Fletcher knew that the trade-mark 'Coca-Cola' belonged to the plaintiff and referred to and meant to the trade plaintiff's syrup and the nonalcoholic beverages made therefrom under plaintiff's supervision, and that the use of the alleged trade-marks by Fletcher was unlawful and his acts and representations in procuring the registrations of his alleged trade-marks in Illinois, embodying the trade-mark 'Coca-Cola' in various forms, was a fraud upon plaintiff's rights.

The National Carbonating Syrup Company's rights to the trade-marks registered in Illinois were acquired through defendant Fletcher.

The applications of Fletcher for the registration of the trade-marks in question with the Secretary of State of Illinois were in due form of law. The statute authorizing the registration of trade-marks, labels, etc., required the applicant to make a showing under oath that he had the right to the use of the trade-marks, the registration of which he sought, and that no other person, firm, organization, union, or corporation had the right to such use either in the identical form or in any such near resemblance thereto as might be calculated to deceive. In making this representation required by the statute, defendant Fletcher disregarded plaintiff's rights to the trade-mark 'Coca-Cola.' The registrations procured were procured by reason of the representations made, and upon a hearing the court found that the representations were untrue and fraudulent, and that they are a cloud upon the title to plaintiff's property.

It was contended upon the part of defendants Fletcher and National Carbonating Syrup Company that the plaintiff was without remedy in equity on the ground of unclean hands, for the reason that at one time, many years ago, it had been convicted of marketing a syrup that contained slight traces of ingredients offensive to the pure food laws, and citing, after submission, the opinion of the Circuit Court of Appeals for the Ninth Circuit in Koke Co. of America v. Coca Cola Co., 255 F. 894, 167 C.C.A. 214; that plaintiff had no trade-mark rights in the name 'Coca-Cola' for either syrup or beverage; that the mark was appropriated by plaintiff for a beverage and never was applied; that it could have no common-law trade-mark because the name arose and was used to describe the ingredients in plaintiff's product, i.e., extracts of coca leaves and cola nuts, and being descriptive, even if registered by plaintiff under the Act of February 20, 1905, it would only remove it on the class of merchandise to which it had been appropriated by the declaration and actually used; the declaration appropriated the mark to the class known as beverages and as it was never used on beverages, the descriptive disability has never been removed; that whatever rights the plaintiff may have had in the trade-mark had become a nullity; that plaintiff's trade-mark never attained a secondary meaning as the name of plaintiff's product; that defendants have always acted in good faith; that their product is distinctively and truly flavored with coca and cola, which are common products of the soil; that defendants' product is Trico, and their trade-mark distinctive; that the state or any other sovereignty has the right to say how, when, and under what terms a mark may be used within the limits of that sovereignty; that plaintiff's product is not a beverage.

Defendant Secretary of State attacked the multifariousness of the bill.

Allen, Humphreys & Converse, of Springfield, Ill., and Frank F. Reed and Edward S. Rogers, both of Chicago, Ill., for plaintiff.

Graham & Graham, of Springfield, Ill., and Edward C. Henning, of Evansville, Ind., for defendants Fletcher and National Carbonating Syrup Co.

Andrew J. Brundage, Atty. Gen., of Illinois, and Clarence M. Boord, Asst. Atty. Gen., for defendant Secretary of State.

FITZHENRY, District Judge (after stating the facts as above).

The very recent decision of the Supreme Court in Coca-Cola Co. v.

Koke Co. of America et al., 254 U.S. 143, 41 S.Ct. 113, 65 L.Ed. . . ., has conclusively disposed of the defense of 'unclean hands' interposed by the defendants in this case, upon the authority of Koke Co. of America v. Coca-Cola Co., 255 F. 894, 167 C.C.A. 214 (C.C.A. 9th Cir.). While the exact question in that case is not presented here, yet the same principle is involved. It is claimed that none of the chemical elements suggested by the name 'Coca-Cola' were in fact to be found in plaintiff's syrup, and therefore it was a fraud upon the public. The language of the Supreme Court in disposing of that case is especially apt here:

'The name (Coca-Cola) now characterizes a beverage to be had at almost any soda fountain. It means a single thing coming from a single source, and well known to the community. It hardly would be too much to say that the drink characterizes the name as much as the name the drink. In other words, 'Coca-Cola' probably means to most persons the plaintiff's familiar product to be had everywhere rather than a compound of particular substances. Although the fact did not appear in United States v. Coca-Cola Co., 241 U.S. 265, we see no reason to doubt that, as we have said, it has acquired a secondary meaning in which perhaps the product is more emphasized than the producer, but to which the producer is entitled.'

This very recent decision of the United States Supreme Court settled many of the questions involved in this case. The opinion of the Circuit Court of Appeals of the Ninth Circuit which was reversed was submitted to this court for its consideration upon the issues raised here, by the personal and corporate defendants, upon the theory that the identical plaintiff in this case had been adjudicated in the Circuit Court of Appeals to be of such unclean hands that it should be denied all relief in equity. The opinion disposes of the question of ownership of the trade-mark and recognizes that it has acquired a secondary meaning in which perhaps the product is more emphasized than the producer, but to which the producer is entitled.

It is well established that equity has jurisdiction to: (1) Cancel fraudulent instruments affecting titles; (2) to quiet title (3) to remove a cloud on title; and (4) to enjoin clouding a title. If at the time of Fletcher's adoption and use of the trade-marks which he registered in Illinois the plaintiff had title to and was as far as possible, with this kind of...