Miller Brewing Co. v. G. Heileman Brewing Co., Inc.
| Citation | 427 F. Supp. 1192 |
| Decision Date | 21 January 1977 |
| Docket Number | No. 76-C-584.,76-C-584. |
| Parties | MILLER BREWING COMPANY, Plaintiff, v. G. HEILEMAN BREWING CO., INC., Defendant. |
| Court | U.S. District Court — Western District of Wisconsin |
COPYRIGHT MATERIAL OMITTED
John D. Winner, Winner, McCallum & Hendee, Madison, Wis., Anthony Fletcher, Conboy, Hewitt, O'Brien & Boardman, New York City, Allen W. Leiser, Quarles & Brady, Milwaukee, Wis., for plaintiff.
James Van Santen, Hill, Gross, Simpson, Van Santen, Steadman, Chiara & Simpson, Chicago, Ill., Steven E. Keane and John S. Skilton, Foley & Lardner, Milwaukee, Wis., for defendant.
This is an action for trademark infringement, false designation of origin, and unfair competition by plaintiff (Miller). Miller seeks a preliminary injunction to prevent defendant's (Heileman's) continued sale, advertising, and distribution of beer under a brand name incorporating the word "LIGHT," the word "LITE," or any colorable imitation of either word. For the purposes of this motion only, I make the findings of fact set forth hereinafter under the heading "Facts."
Jurisdiction exists for the trademark infringement cause of action under 15 U.S. C.A. § 1121 (1974) and 28 U.S.C.A. § 1338(a) (1976).
Miller and Heileman are brewers and sellers of beer. Miller distributes its beer nationally; Heileman, in several regions. As of the end of 1975, Miller was the nation's fourth largest brewer, selling 12.8 million barrels of beer in 1975; Heileman was seventh, selling 4.5 million barrels of beer.
About May 1967, Meister Brau, Inc. (Meister Brau), a Chicago brewer, began brewing and selling a reduced calorie beer which it sold under the trademark (MEISTER BRAU) LITE.
In November 1968, Meister Brau applied to register LITE as a trademark for beer on the principal register in the United States Patent Office. The Patent Office initially refused registration under 15 U.S.C. § 1052(e) on the ground that LITE was "merely descriptive" and might cause confusion with similarly registered trademarks of other non-beer products. Meister Brau overcame this objection by demonstrating to the satisfaction of the Patent Office that the mark had acquired a "distinctiveness" in the commerce of beer and thus was entitled to registration under id. § 1052(f). The evidence supporting this finding of distinctiveness consisted of affidavits by Meister Brau executives showing sales of over 60 million bottles and cans of this brand of beer, extensive advertising of the brand on television and in the print media, and letters from five competing beer producers recognizing LITE as a distinct brand name cultivated by Meister Brau.1
On the basis of Meister Brau's showing, the Patent Office approved three registrations on the principal register for beer with no available carbohydrates.
Reg. No. Date Trademark
905,236 Dec. 29, 1970 LITE label (Color blue)
929,276 Feb. 15, 1972 Meister Brau Lite
design (color blue)
929,277 Feb. 15, 1972 LITE design (no color)2
Meister Brau continued producing and marketing LITE beer during the time these trademark registrations were pending, changing the labeling by 1971 to eliminate the Meister Brau designation above LITE. In 1970 and 1971, Meister Brau sold over 75,000 and 65,000 barrels of LITE, respectively.
Facing bankruptcy in 1972, Meister Brau sold several of its recipes, trademarks and other indicia of good will to Miller. Included in the sale was the assignment of Meister Brau's entire interest in its LITE trademarks and the registrations thereof, and the good will. Miller continued the brand in the core of the Meister Brau marketing area, with its and Meister Brau's (earlier) sales exceeding 55,000 barrels in 1972, and Miller's sales exceeding 50,000 barrels in 1973 and 40,000 barrels in 1974.
Concurrently, Miller re-examined the LITE brand and its marketing, concluding a broader market might exist if several aspects of the brand could be improved. First was taste; Miller believed it could improve the taste quality of LITE, and after a year or more of experimentation, adopted a modified recipe for LITE. Second was packaging; a revised more vigorous label was designed. Third was advertising; a new, straightforward, "more masculinely" oriented campaign was developed.
Miller tested its revised recipe, packaging and advertising approach, found them successful, expanded its marketing of LITE (replacing the former packaging with the new in the old Meister Brau marketing areas in 1974) and by early 1975 was distributing the brand nationally. The label Miller adopted had the word "LITE" in the most prominent position, the words "A Fine Pilsner Beer" in a somewhat less prominent position, and the Miller name in relatively very small letters.
Miller introduced the revised LITE in four markets in July of 1973, selling over 50,000 barrels (and spending over $500,000 advertising the brand). More than a dozen more markets were added during 1974; sales exceeded 400,000 barrels, advertising expenses, $4,000,000. With national distribution and advertising in 1975, sales exceeded two and one-half million barrels, advertising expenses, $10,000,000. In 1976, more than four million barrels were expected to be sold with more than $12,000,000 to be spent on advertising.
The effect of this advertising has been that between December, 1975 and March, 1976, a substantial percentage of beer drinkers perceived LITE (43%), Miller LITE (11%), or LITE from or by Miller (1%) as a distinct brand name indicative of a low-calorie or less-filling beer.3
In August, 1975, The Peter Hand Brewing Company, a small brewery in Chicago, launched a reduced calorie beer under a label which included the words: "Peter Hand"; "A Special Pilsner extra Light Beer"; "Smoother Less-Filling." The word "Light" was by far the most prominent word on the label, much more prominent than the Peter Hand designation. An overwhelming majority4 of beer-drinking consumers who were allowed to view three different cans of beer—including Peter Hand (extra) Light—for 15 seconds each, identified the Peter Hand product as "LIGHT" or "LITE" and not as a Peter Hand product when asked to identify the beers which they had just seen but were no longer in view. Suit has been brought by Miller against Peter Hand for trademark infringement and is pending in the United States District Court for the Northern District of Illinois.
In November, 1975, the Jos. Schlitz Brewing Company, the nation's second largest brewer, launched a reduced calorie beer bearing a generally yellow label that displayed the word "Light" in by far the most prominent position. The words "Schlitz," "Beer," and "Special Lager" were in the proximity of the word "Light" but were considerably less prominent. There have been numerous examples of actual confusion on the part of consumers between "LITE" and (Schlitz) "Light." Suit was brought by Miller against Schlitz and is pending in the United States District Court for the Eastern District of Wisconsin.
Now, Heileman has introduced a reduced calorie beer in five scattered test markets bearing a label (Exhibit E to the complaint herein) which also prominently displays the word "LIGHT." While this word appears on the "House of Heileman" seal and the word "Heileman" appears three times in the immediate vicinity of the word "LIGHT," the word "LIGHT" is by far the most prominent and eye-catching word on the label. Heileman has expended considerable resources in preparation for the introduction of its low-calorie beer under the "LIGHT" label:
Production Costs
Cases produced through November 11, 1976 $113,007.00
Beer in tanks 8,405.00
Manufacturing Supplies in Inventory as of November 11, 1976
Cans 29,352.00
Can Trays 1,157.00
Tray Die Changes 404.00
Can Die Changes 400.00
Media Advertising
Television production 18,500.00
Print production 3,500.00
Purchase of television time 114,938.00
Purchase of print space 23,932.00
Point of Sale Advertising
Embossagraph Company 100,558.00
Inland Printing Company 9,710.00
___________
Total $423,863.00
Heileman has been engaged for some time, and intends to continue to engage, in the production and sale of other brands of beer, notably "Old Style" and "Special Export." Unless enjoined, Heileman will proceed to market its "Light" beer under its mark in competition with Miller's "LITE."
The respective beers of plaintiff and defendant which bear the trademarks in dispute are similar products, and the parties will be attempting to sell them to the same consuming public through the same general channels of distribution, employing the same general means and media for advertising and promotion. Beer is a relatively inexpensive commodity (as compared with automobiles, clothing, or household furnishings and appliances, for example) and expenditures for it are likely to be made by consumers with less care than expenditures for more expensive items. Although prior to purchase, purchasers of packages of beer in retail stores may see the rival beers in their respective containers, side by side or in close proximity, this will often not be true. It will seldom be true of purchasers of single glasses, bottles, or cans of beer in taverns, restaurants, and night clubs, where orders are placed orally by the customers to the bartenders or waiters. That "LITE" and "LIGHT" are...
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