SOCIETE DES PRODUITS NESTLE v. Casa Helvetia, Inc.
| Decision Date | 15 November 1991 |
| Docket Number | No. Civ. 91-1103CCC.,Civ. 91-1103CCC. |
| Citation | 777 F. Supp. 161 |
| Parties | SOCIETE DES PRODUITS NESTLE, S.A. Nestle Puerto Rico, Inc., Plaintiffs, v. CASA HELVETIA, INC., Helen Bette, Ivonne Bette de Sanchez, Frank Bette, Defendants. |
| Court | U.S. District Court — District of Puerto Rico |
César T. Alcover-Acosta, Fiddler, González & Rodriguez, for plaintiffs.
Wilma E. Reverón-Collazo, Acevedo & Reverón, for defendants.
This is an action for trademark infringement and unfair competition filed by Societe Des Produits Nestle, S.A. (Nestlé S.P.N.) registered owner of PERUGINA trademarks for chocolate candy in the United States and Puerto Rico, and its wholly owned subsidiary Nestlé Puerto Rico, Inc. (Nestlé P.R.), the exclusive distributor in Puerto Rico, against Casa Helvetia, Inc. and its officers Helen Bette, Ivonne Bette de Sánchez and Frank Bette. Plaintiffs' chocolates are manufactured in Italy. It is plaintiffs' contention that Casa Helvetia's importation and distribution of PERUGINA chocolates from Venezuela infringes on the United States and Puerto Rico registered trademarks and the exclusivity of Nestlé P.R. right of distributorship. The Venezuelan chocolates are genuine PERUGINA candies purchased from Distribuidora Nacional de Alimentos La Universal S.A., Nestlé S.P.N.'s licensee appointed and authorized to produce and distribute in Venezuela candies bearing the various PERUGINA trademarks.
The plaintiffs have alleged federal claims under the Lanham Act, 15 U.S.C. § 1051, et seq., as well as pendent claims under the laws of Puerto Rico. The specific federal claims are delineated in three counts as follows. In Count I, which is characterized as a trademark infringement and is brought pursuant to 15 USC § 1114(1)1 the plaintiffs allege that:
5.3 Defendants have infringed Nestlé S.P.N.'s trademarks in commerce by means of importation, distribution and offer for sale and sale in Puerto Rico of the Venezuelan product, namely, goods materially different in character from the PERUGINA candies. Such acts are likely to cause confusion, mistake and deception among actual and potential consumers of PERUGINA candies.
Under Count II of the amended complaint, which plaintiffs designate as a claim of unfair competition under 15 USC § 1125(a),2 it is alleged that:
Count VI raises a claim under 15 USC § 11243 for importation of a materially different product.
Defendants responded with a counterclaim under Puerto Rico Law 75 of June 24, 1964, 10 LPRA § 278, et seq., for termination of their exclusive dealership contract without just cause.
A consolidated hearing on the preliminary and permanent injunction was held March 18 and 20, 1991. The Court ordered the parties to file simultaneous briefs by April 19, 1991.
Testimony and exhibits of the various chocolate products revealed the following:
Vivian Riera, product manager for marketing at Nestlé P.R., testified that premium chocolate candies, as opposed to mass products, are distributed in selected stores; are refined and sophisticated. She opined that the PERUGINA-Italy is a premium product because of its components, presentation of the package, such as boxes lined with gold or silver trays and sophisticated shapes, allegedly indicators of quality.
In comparing the PERUGINA BACI from Italy with the PERUGINA BACI from Venezuela, Riera stated that there are similarities in color. Both have PERUGINA logo and the same logo type, both have Pegasus symbols and have a picture of the product on the back of the box. The boxes themselves, however, are different; chocolates PERUGINA BACI from Italy are priced at $12.99, while the Venezuelan counterpart sells for $7.50 for the same quantity. The Italian product is described on the box in English and French; the Venezuelan one is inscribed in Spanish and English. The PERUGINA BACI Venezuela product is clearly identified as having been made in Venezuela by the manufacturers mentioned above, while Nestlé S.P.N. is identified as a product of Italy. Other differences pointed out were the fact that PERUGINA BACI Italy's box has a glossy waxed finish with a silver tray which is lacking in the Venezuelan BACI which has a transparent tray.
Riera went on to testify that BACI-Venezuela is chocolate made from domestic beans, while the chocolate in Italian BACI came from Ecuadorian and African beans. The Italian BACI is made from cooked sugar syrup while the Venezuelan BACI use normal crystal sugar. The Italian product has five per cent more milk fat to prolong shelf life. The Venezuelan BACI uses imported hazelnut while the Italian BACI uses fresh hazelnuts.4
The witness gave similar testimony regarding two PERUGINA TRADEMARK chocolate assortments — one trademarked Mitré Confesseur; the other a larger box with similar assortments. In each case similarities and differences in the boxes, wrappings, shapes of the candies were pointed out, emphasizing the "gold," "silver" and "glossy" of the Italian PERUGINA products as opposed to the ordinariness of the Venezuelan PERUGINA. Notwithstanding the facts that the Venezuelan products are genuine PERUGINA products manufactured under authorization from Nestlé S.P.N. and that there was no testimony as to whether or not the Venezuelan products met any required quality standards, the witnesses' testimony on the products, her choice of comparisons and demeanor in testifying left the court with the definite impression that plaintiffs were inferring that the authorized Venezuelan PERUGINA were an inferior chocolate in commonplace packaging.
The Court has closely examined the individual chocolates. Apart from the differences in the boxes, wrappers and trays, the appearance of the individual chocolates, wrapped and unwrapped were almost undistinguishable. The BACI chocolates themselves outside and inside appeared identical. The Italian assorted chocolates did come in a greater variety of shapes than their Venezuelan counterparts.
On July 10, 1991 we asked plaintiffs to file a reply brief addressing Nestlé S.P.N.'s right to protection under the Lanham Act for trademark infringement and Nestlé P.R.'s standing as what appeared to be a mere distributor. Nestlé S.P.N. met its burden with the appropriate information. Nestlé P.R. cited various cases to support its contention that as an exclusive distributor it may prosecute an action under 15 U.S.C. § 1125(a).
Section 1125(a), however, is designed to protect against "false designation of origin, or any false description or representation." Plaintiff's own evidence belies the existence of a cause of action under this section. It is undisputed that the Venezuelan manufacturer is licensed to produce the PERUGINA products. Each such box admitted into evidence is clearly labeled, in both English and Spanish, as being made in Venezuela by Alimentos under a license granted by PERUGINA SPA Italy. The Italian PERUGINA boxes have a similar identification detailing their production in Italy. None of the boxes make any mention of Nestlé SPN or Nestlé PR. Thus, the ultimate consumer would probably have no knowledge of Nestlé's relationship to PERUGINA as a source of the chocolates. In the absence of any false designation of origin or false or misleading description of fact or false or misleading representation of fact, we find that plaintiffs have failed to state a claim under 15 U.S.C. Section 1125(a).5
Likewise Section 1114(1) presents problems for the plaintiff in pertinent part:
It is uncontested that Alimentos uses the PERUGINA trademarks with the consent of Registrant/Nestlé SPN. If Alimentos is violating its license agreement by exporting outside the area defined in a restrictive territorial clause that may create a breach of contract cause of action against Alimentos but does not turn an otherwise genuine PERUGINA product into a counterfeit one or a colorable imitation.
Francisco Cruzado-Medina, merchandise manager from Farmacias Moscoso, testified that he has purchased PERUGINA products from both parties, that he purchased from Casa Helvetia because they offered the chocolates at a better price. He also stated that he did identify the source of either product to those stores when sending them out. On cross-examination he testified that defendant Ivette Bette had told him that the PERUGINA BACI she carried were from Venezuela. Cruz-Medina indicated that he had no knowledge of any complaints about the PERUGINA originating in Venezuela from consumers or any returns.
Defendant Helen Bette testified that she has been selling Venezuelan PERUGINA since a distributor from Venezuela came to Puerto Rico and offered the line of products to her. She had him send her samples and found them comparable to the Italian PERUGINA. She stated that she has never received any...
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Societe Des Produits Nestle, S.A. v. Casa Helvetia, Inc.
...merits, see Fed.R.Civ.P. 65(a)(2), and, after taking testimony, ruled in the defendants' favor. See Societe Des Produits Nestle, S.A. v. Casa Helvetia, Inc., 777 F.Supp. 161 (D.P.R.1991). It held that the differences between the Italian-made and Venezuelan-made candies did not warrant injun......
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