Dixi-Cola Laboratories v. Coca-Cola Co.

• Citation: 117 F.2d 352
• Decision Date: 11 January 1941
• Docket Number: No. 4672.,4672.
• Parties: DIXI-COLA LABORATORIES, Inc., et al. v. COCA-COLA CO.
• Court: United States Courts of Appeals. United States Court of Appeals (4th Circuit)

117 F.2d 352 (1941)

DIXI-COLA LABORATORIES, Inc., et al. v. COCA-COLA CO.

No. 4672.

Circuit Court of Appeals, Fourth Circuit.

January 11, 1941.

Joseph S. Mead, of Birmingham, Ala., and W. Hamilton Whiteford, of Baltimore, Md. (Mead & Moebes, of Birmingham, Ala., and Due, Nickerson & Whiteford, of Baltimore, Md., on the brief), for appellants.

Arthur T. Vanderbilt, of Newark, N. J. (Mullikin, Stockbridge & Waters, of Baltimore, Md., Herman Shulman, Milton Handler, and Benjamin Algase, all of New York City, Theodore C. Waters and Hershey, Donaldson, Williams & Stanley, all of Baltimore, Md., Willis Battle, of Columbus, Ga., Ellis W. Leavenworth, of New York City, and Roger B. Williams, of Baltimore, Md., on the brief), for Pepsi-Cola Co., Life Savers Corporation, and Nehi Corporation, as amici curiae.

Hilary W. Gans, of Baltimore, Md., and Harry D. Nims, of New York City (Brown & Brune and Charles Ruzicka, all of Baltimore, Md., Robert B. Troutman, of Atlanta, Ga., and Percy E. Williamson, Jr., of New York City, on the brief), for appellee.

Before PARKER, SOPER, and DOBIE, Circuit Judges.

SOPER, Circuit Judge.

The Coca-Cola Company, a Delaware corporation, is undoubtedly entitled to relief in this case of trade-mark infringement and unfair competition. Fraudulent conduct on the part of the Dixi-Cola Laboratories, Inc., a Maryland corporation, and certain individuals resident in Maryland and trading as Marbert's, Inc., and Apola Extract and Syrup Corporation, has been established. The only question seriously disputed, albeit an important one, is the extent of the relief to which the plaintiff is entitled.

The plaintiff is the owner of the trademark "Coca-Cola" for a syrup to be used with carbonated water as a beverage. The defendants make and sell a concentrate and a syrup to be used in the production of a similar beverage under the names, MarBert the Distinctive Cola and Dixi-Cola. The defendants do not use the word "coca"; but they claim the right to use the word "cola" in the combinations mentioned. The evidence shows that they have also used other terms, such as Apola Cola and Lola-Kola, but as to them they now make no defense. The plaintiff concedes that the names Dixi-Cola and MarBert the Distinctive Cola are not so similar to the name Coca-Cola, that a purchaser of the beverage known as Dixi-Cola or MarBert the Distinctive Cola would be led to believe that he was buying the beverage Coca-Cola, but the plaintiff nevertheless charges infringement on the ground that the use of the word "cola" in defendants' trade-marks or trade-names leads the public to believe that their products originate with the plaintiff.

The decree of the District Court sustains this contention, forbidding the defendants to continue the use of names containing the word "cola", or to use Coca-Cola or any other name which includes either the word "coca" or "cola". The defendants are also enjoined from the performance of various acts designed to promote the passing off of their product as that of the plaintiff, and are specifically prohibited from giving to their merchandise, not sold to consumers in bottles, a color resembling the well known dark brown color of the Coca-Cola beverage, when defendants know, or in the exercise of reasonable care should know, that the purchaser does not intend to dispense the goods to customers in bottles, or intends to use bottles with some deceiving element, enabling the goods to be passed off as the plaintiff's product. The defendants, however, are given permission, under certain distinguishing safeguards, to state on their containers and labels, or in advertisements, if it should be a fact, that their products contain an extract of coca leaves or cola nuts.

The broad claim of the plaintiff to the exclusive use of the word "cola" in a trade-mark or trade-name is based upon the contention that Coca-Cola is a technical common-law trade-mark, adopted as a fanciful and arbitrary word by the first producer of the beverage in 1886. The plaintiff also relies on five registrations of the mark in the United States Patent Office, one under the Act of March 3, 1881, 21 Stat. 502, and four under the Act of February 20, 1905, 33 Stat. 724, 15 U.S.C.A. § 81 et seq. The District Judge concluded that these registrations were valid, but it is not necessary for us to decide the point here for, as the judge also held, the substantive rights under a trademark are not dependent upon or affected by registration, and its secondary, as distinguished from its primary significance, is still open to question. Thaddeus Davids Co. v. Davids Mfg. Co., 233 U.S. 461, 34 S.Ct. 648, 58 L.Ed. 1046, Ann.Cas.1915B, 322; Trade-Mark Cases, 1879, 100 U.S. 82, 92, 25 L.Ed. 550; American Trading Co. v. Heacock Co., 1932, 285 U.S. 247, 52 S.Ct. 387, 76 L.Ed. 740; Anheuser-Busch v. Cohen, D.C.Md.1930, 37 F.2d 393, 396; Beckwith's Estate, Inc. v. Commissioner, 1920, 252 U.S. 538, 543, 40 S. Ct. 414, 64 L.Ed. 705; American Steel Foundries v. Robertson, 1926, 269 U.S. 372, 381, 46 S.Ct. 160, 70 L.Ed. 317; United Drug Co. v. Rectanus Co., 1918, 248 U.S. 90, 99, 39 S.Ct. 48, 63 L.Ed. 141.

A vigorous contest has arisen in this case as to whether the name Coca-Cola is in reality a technical trade-mark, entitled to the widest protection, or is a descriptive name which through long years of use and extensive advertisement has acquired a secondary significance. So far as the validity of the trade-mark and the right of the plaintiff to prevent its use as a whole by any competitor are concerned, the issue is unimportant. It was held in Coca-Cola Co. v. Koke Co., 1920, 254 U.S. 143, 41 S.Ct. 113, 65 L.Ed. 189, that "whatever may have been its original weakness, the mark for years has acquired a secondary significance and has indicated the plaintiff's product alone"; and it was held by this court the next year in Coca-Cola Co. v. Old Dominion Beverage Corp., 4 Cir., 271 F. 600, 601, certiorari denied 256 U.S. 703, 41 S.Ct. 624, 65 L.Ed. 1179 that as the plaintiff's trade-mark had been duly registered under the ten-year proviso of the Act of February 20, 1905, it is "immaterial that it may once have been descriptive or that to a degree it may be so still". See, also, Coca-Cola Co. v. Gay-Ola Co., 6 Cir., 200 F. 720; Id., 6 Cir., 211 F. 942; Nashville Syrup Co. v. Coca Cola Co., 6 Cir., 215 F. 527, Ann.Cas.1915 B, 358; Coca-Cola Co. v. Bennett, 8 Cir., 238 F. 513; Coca-Cola Co. v. Chero-Cola Co., 51 App.D.C. 27, 273 F. 755; Steinreich v. Coca-Cola Co., Cust. & Pat.App., 67 F.2d 498.

The decisions in trade-mark cases seem to show that some difference exists between the protection given to trade-marks and that given to trade-names, using these terms in the significance in which they are employed in the Restatement of Torts, §§ 715, 716, to indicate, respectively, arbitrary marks or coined words adopted as technical trade marks, and descriptive marks which have acquired a secondary significance. In some cases it is said that a descriptive name which has acquired a secondary significance may be used by a competitor to designate his own product, provided that in doing so he unmistakably distinguishes it from that of the prior user of the name, while in other cases it is said that the use of such a word to denominate the competitor's product should be enjoined. Compare the original opinion in Barton v. Rex-Oil Co., 3 Cir., 2 F.2d 402, 40 A.L.R. 424, with the opinion in the same case on rehearing in 29 F.2d 474. See, also, Elgin Watch Co. v. Illinois Watch Case Co., 179 U.S. 665, 21 S.Ct. 270, 45 L.Ed. 365; Thaddeus Davids Co. v. Davids Mfg. Co., 233 U.S. 461, 34 S.Ct. 648, 58 L.Ed. 1046, Ann.Cas.1915B, 322; Fawcett Publications v. Popular Mechanics Co., 3 Cir., 80 F.2d 194; Richmond Remedies Co. v. Dr. Miles Medical Co., 8 Cir., 16 F.2d 598; Vacuum Oil Co. v. Climax Refining Co., 6 Cir., 120 F. 254; Trinidad Asphalt Co. v. Standard Paint Co., 8 Cir., 163 F. 977, affirmed 220 U.S. 446, 31 S.Ct. 456, 55 L.Ed. 536. In reality, there is no important difference between a trade-name and a trade-mark with respect to the protection afforded by the courts to the exclusive right of the owner to use it to denominate his goods. See, Restatement of Torts, § 717 and comment (a); Handler and Pickett on Trade Marks and Trade Names, 30 Col.L.Rev. 168.

It is certainly beyond dispute that the word "Coca-Cola" is the exclusive property of the Coca-Cola Company. The evidence in the pending case shows that what was said of the name in Coca-Cola Co. v. Koke Co., 254 U.S. 143, 41 S.Ct. 113, 65 L.Ed. 189, and Coca-Cola Co. v. Old Dominion Beverage Corp., supra, is equally true today. There has been no let-up in the popular demand for the drink or in the extent of its advertising. On the contrary, both have greatly increased. In 1920 the gallons of syrup sold were 18,656,445 and the advertising expense $2,330,710.40, while in 1938 the gallons sold were 48,508,414, and the advertising expense $7,122,863.31. No one else can lawfully use the word "Coca-Cola" for a trade-mark, even though it originally may have been a descriptive name.

The plaintiff, however, is not content with this measure of protection. It insists in addition that no one shall use the word "cola" in a trade-mark, even in connection with a prefix that prevents all confusion with the name Coca-Cola. The reason given is that the word is so closely associated with Coca-Cola in the public mind that any drink, bearing the word as part of its name, will be thought to proceed from the same source. Forty-one witnesses from Baltimore, Springfield and Birmingham testified that when they saw goods labeled by a name containing the suffix "cola", they were led to believe, not that the goods were Coca-Cola, but that they originated with the Coca-Cola Company. Hence, it is said, the defendants have appropriated the result of the plaintiff's efforts and expenditures, and imperiled the reputation of the Coca-Cola Company and...