VERYFINE PRODUCTS, INC., v. Colon Bros., Inc.

• Decision Date: 31 August 1992
• Docket Number: Civ. No. 92-1197 (JP).
• Parties: VERYFINE PRODUCTS, INC., Plaintiff, v. COLÓN BROTHERS, INC., Defendant.
• Court: U.S. District Court — District of Puerto Rico

799 F. Supp. 240

VERYFINE PRODUCTS, INC., Plaintiff, v. COLÓN BROTHERS, INC., Defendant.

Civ. No. 92-1197 (JP).

United States District Court, D. Puerto Rico.

August 31, 1992.

COPYRIGHT MATERIAL OMITTED

Pedro J. Santa Sánchez, O'Neill & Borges, Hato Rey, P.R., Robert M. Mendillo, Gary L. Kemp, Casner & Edwards, Boston, Mass., for plaintiff.

John F. Nevares, Saldaña, Rey, Morán & Alvarado, Santurce, P.R., Francisco M. López Romo, Old San Juan, P.R., for defendant.

OPINION AND ORDER

PIERAS, District Judge.

Plaintiff Veryfine Products, Inc. ("Veryfine") has filed the instant case under the provisions of the Lanham Act, 15 U.S.C. §§ 1051-1127, seeking equitable and monetary relief against defendant Colón Brothers, Inc. ("Colón"). Veryfine alleges that certain fruit juices and fruit juice drinks which Colón is selling in 10-oz. bottles in Puerto Rico and elsewhere in the Caribbean under the "Coloso" brand, have labels which display graphic designs which are nearly identical to and a colorable variation of Veryfine's grapefruit design, orange design, pineapple-orange design and pineapple design trademarks, which have been registered with the U.S. Patent and Trademark Office. The Coloso products of which Veryfine complains are its bottled grapefruit juice, orange juice, pineapple-orange drink, pineapple juice and pineapple-guava drink. Veryfine claims that Colón's use of the Coloso fruit designs on the mentioned fruit juices and fruit product lines is likely to cause confusion or mistake or deception among purchasers as to the source or origin of its goods. Veryfine claims that Colón's conduct constitutes prohibited infringement of Veryfine's trademarks. Veryfine further claims that Colón has appropriated additional elements of Veryfine's trade dress for its 10-oz. fruit juice and fruit juice drinks which constitute a false designation of origin. Veryfine avers that said conduct is likely to deceive customers and prospective customers into believing that Colón's single-serve grapefruit juice, orange juice, pineapple-orange juice, pineapple juice and pineapple-guava juice products are those of Veryfine. Veryfine claims that Colón's conduct violates Section 43 of the Lanham Act, 15 U.S.C. § 1125(a). Claims of unfair competition under Puerto Rico law and common law trademark infringement are also asserted in the complaint.

The defendant contends that the fruit graphic design and the trade dresses of the Colón "Coloso" brand, 10-ounce bottled fruit juices and drinks are clearly distinctive and different from those utilized by Veryfine in its 10-ounce, bottled fruit juices and drinks, precluding any likelihood of confusion, mistake and/or deception between the Colón and Veryfine fruit juice and drink products and/or their source of origin.

In its complaint, Veryfine prayed for the issuance of a preliminary injunction and a permanent injunction, restraining Colón and others from infringement of Veryfine's trademarks, from dilution of Veryfine's trademark rights, from false designation of origin of Colón products, from injuring Veryfine's business reputation and from unfairly competing with Veryfine's trade practices. Veryfine also prays that Colón be required to account to Veryfine for Colón's profits and to pay the damages suffered by Veryfine as a result of Colón's acts, as well as for an award of treble damages. Veryfine further prays that Colón be ordered to surrender for destruction all products, name plates, labels, packaging, advertisements and other materials constituting infringement of Veryfine's designation of origin and infringement of Veryfine's U.S. trademark registrations, as well as for imposition of attorneys' fees and costs. This Court has subject matter jurisdiction pursuant to 15 U.S.C. § 1121 and 28 U.S.C. §§ 1331, 1338(a) and 1338(b). In addition, this Court has jurisdiction under 28 U.S.C. § 1332(a), as there is diversity of citizenship between the parties and the amount in controversy exceeds the sum of Fifty Thousand Dollars ($50,000.00), exclusive of interest and costs.

Pursuant to Fed.R.Civ.P. 52(a), and after a consolidated preliminary and permanent injunction hearing held on July 10-11, 1992, the Court now makes the following findings of fact and conclusions of law.

I. FINDINGS OF FACT

1. Plaintiff, Veryfine Products, Inc. ("Veryfine"), is a family-owned Massachusetts corporation that has been in business since 1900.¹

2. Veryfine sells approximately 25 flavors of fruit juices and fruit drinks, primarily packaged in 10-oz., 16-oz., and 32-oz. glass bottles, and 11-½-oz. aluminum cans. Veryfine sells its products to distributors, who in turn sell to outlets that sell the drinks to consumers one at a time (i.e. single-serve market).

3. Veryfine's exclusive distributor in Puerto Rico is Food & Spirits Distributing Corporation ("Food & Spirits"), a division of Bacardi Corporation.

4. The Veryfine name has been used since the early 1900's and has been in very wide use since the late 1950's.

5. In 1975, Veryfine was called New England Apple Products Company Incorporated. Its primary market was in the New England states. Its main products were cider vinegar, apple juice, apple cider, and a line of apple sauces. Veryfine had approximately 100 employees and annual sales of about $7 million.

6. In 1975, Veryfine underwent two radical changes in its business. The first was that Veryfine, in conjunction with its principal glass supplier at the time, Owens-Illinois, refined a 10-oz. soft drink package for its fruit juice products. Veryfine introduced eight flavors of juices and juice drinks in its 10-oz. package. Veryfine was the first company to sell juice and juice drinks in 10-oz. bottles. It is the 10-oz. glass bottle packages of Veryfine and Colón Brothers, Inc. which are at issue in this action.

7. The second change was that Veryfine dramatically altered the trade dress of its products. Veryfine went from an old, New England-looking label to a revolutionary, stylized graphic look. This extended not only to Veryfine's single-serve products (the 10-oz. glass bottles), but also its large size apple juice, apple sauce, and vinegar.

8. In changing its trade dress, Veryfine eliminated the previous graphic look in its product line. Veryfine decided to create a more unified look for its entire product line. This was done by the Saleme Design ("Saleme") firm of Newton Falls, Massachusetts. Saleme was then and continues to be one of the leading package graphics and corporate identity design firms in the United States.

9. Saleme developed a bold brand name using "Cooper Bold Typeface." For Veryfine's corporate identity and its package graphics, Saleme created a stylized fruit logo for its apple juice, and, other fruit graphics applicable to its other flavors. This new logo extended not only to bottle labels, but all aspects of Veryfine's business, i.e., its fleet of delivery trucks, stationery, checks, pens, and promotional support materials. It appeared virtually everywhere that the Veryfine name appeared. In essence, Veryfine developed a new unified corporate logo. In 1976, "Fleet Owners" magazine gave an award to Veryfine for the new logo on its trucks.

10. As a result of creating the 10-oz. bottle business and developing a new corporate logo, Veryfine went from sales of $7 million in 1975 to over $200 million in sales in 1991. Moreover, it went from being a regional company to an international one selling in all 50 states, Puerto Rico, many of the Caribbean Islands, the Pacific Rim, and a few other export markets. Not only did Veryfine increase its business dramatically, it revolutionized the juice business by creating the 10-oz. juice market.

11. Veryfine's worldwide sales were $190 million in 1989, $205 million in 1990, and over $220 million in 1991. Veryfine has been selling in Puerto Rico since approximately 1983; it is one of Veryfine's best markets. Its Puerto Rico sales were $2.5 million in 1989; $3.5 million in 1990; and $4.5 million in 1991.

12. Veryfine products are available in various outlets throughout the United States: supermarkets, convenience stores, gas stations with convenience stores, tens of thousands of vending machines, drug stores, discount stores, business cafeterias, and lunch trucks. In many markets Veryfine is available virtually anywhere one can buy something cold to drink. Veryfine's distribution pattern in Puerto Rico is similar to its distribution pattern in the mainland United States: supermarkets, small stores, vending machines, and cafeterias.

13. The consumer cost of a single-serve bottle of Veryfine beverage in Puerto Rico ranges from $0.50 in supermarkets to $1.00 in airports and other high-priced venues. The wholesale price of a case of 10-oz. drinks ranges from $10-$15.

14. The juice business in the United States involves annual sales of over $11 billion. Veryfine is the eighth largest fruit juice company in the country.

15. Concerning the 10-oz. single-serve market, Veryfine created the market and since 1975 numerous competitors have followed Veryfine into this market. Veryfine has dozens of competitors in the United States. In supermarkets Veryfine is the leading 10-oz. brand sold in the country. It has twice the market share of Tropicana, which is its next closest competitor. In convenience stores, Veryfine has a 40% share of the 10-oz. juice market, which gives it approximately a 10 share point lead over its nearest competitor, Tropicana. Veryfine has the greatest sales volume of all juice brands sold through vending machines.

16. Veryfine has numerous competitors in Puerto Rico as well. Veryfine is the leading seller of single-serve juices and drinks on the island by almost a 2-1 margin over Welch's, which is the second ranked brand.

17. Veryfine has traditionally engaged in expensive and successful advertising campaigns. It has historically used television as the principal medium to advertise its products in the United States and...