COCA-COLA CO. v. SNOW CREST BEVERAGES
162 F.2d 280 (1947)
SNOW CREST BEVERAGES, Inc.
Circuit Court of Appeals, First Circuit.
June 10, 1947.
Pope F. Brock, of Atlanta, Ga. (Hugh D. McLellan, John T. Noonan, Henry L. Mason, Jr., and Herrick, Smith, Donald, Farley & Ketchum, all of Boston, Mass., and Frank Troutman and Daphne Robert, both of Atlanta, Ga., on the brief), for appellant.
Arthur E. Whittemore, of Boston, Mass. (Arthur D. Thomson and Joseph P. Healey, both of Boston, Mass., on the brief), for appellee.
Before MAGRUDER, MAHONEY, and WOODBURY, Circuit Judges.
WOODBURY, Circuit Judge.
This is an appeal from a decree dismissing a complaint alleging infringement of a registered trade-mark and unfair competition. Federal jurisdiction therefore rests upon 15 U.S.C.A. § 97 as to both grounds alleged in support of the cause of action asserted, i. e., interference with the plaintiff's exclusive right to use its registered trade-mark. See Armstrong Co. v. NuEnamel Corp., 305 U.S. 315, 324, 325, 59 S.Ct. 191, 83 L.Ed. 195. Furthermore, as will appear from our statement of the facts, federal jurisdiction over the ground of unfair competition may also be rested upon diversity of citizenship and amount in controversy. The plaintiff-appellant, The Coca-Cola Company, a Delaware corporation, is the owner of the trade-mark "Coca-Cola," registered in the United States Patent Office in the years 1893, 1905, 1925, twice in 1928 and again in 1945. It also registered its mark in Massachusetts in 1919. For a great many years it has manufactured and sold in interstate commerce the soft drink syrup from which its familiar dark reddish-brown beverage is made. The tens of millions of dollars it has spent over the years in advertising its product under the name "Coca-Cola" have created an enormous public demand for the beverage.1 Obviously, as the court below found, the value of its mark is far in excess of $3,000. The plaintiff sells the syrup which it manufactures in two ways. It sells approximately 20% of its product to independent wholesalers or jobbers who sell it to soda fountain operators who in turn mix the syrup with carbonated water and dispense the beverage by the glass. Its business in this "fountain syrup" as it is called is without significance in the case at bar. It sells the major part of its syrup to six so-called "parent bottlers",2 each of which has exclusive resale rights in a particular territory, and these in turn resell to local bottlers having exclusive franchises in their respective sub-territories.3 These local bottlers mix the syrup with carbonated water, package the combination in distinctive 6 oz., somewhat hourglass shaped, bottles into the glass of which the trade-mark "Coca-Cola" in script is blown, and sell the bottled product to retail outlets
such as stores, bars, taverns, restaurants, etc. For over 20 years the plaintiff has made extensive use of the phrase "Delicious and Refreshing" in its advertising.
The defendant-appellee, Snow Crest Beverages, Inc., is a Massachusetts corporation which was organized in 1930 for the purpose of incorporating a business carried on since 1923 by one Berkowitz under the name Snow Crest Beverage Company. Originally Berkowitz manufactured only pure fruit flavored carbonated beverages which he sold in 7½ oz. and quart size bottles under the trade name "Snow Crest". In 1929 he began to manufacture artificial flavored carbonated beverages which he sold in 7½ oz., 12 oz. and quart bottles under the trade name "Polar Cub". Berkowitz, and subsequently the defendant corporation, advertised its names, "Snow Crest" and "Polar Cub", through the usual media with the result that there has been built up a special association of these names with the defendant's products.
In 1935 the defendant added a cola type beverage to its line which is apparently indistinguishable from the plaintiff's Coca-Cola either by taste or color. It originally called this drink "Sno Kola", which it soon changed to "Sno Cola", and in 1937, without giving up this latter name, it began to put this beverage out also as "Polar Kola", changed a little later to "Polar Cola". It marketed this beverage in 7 oz., 7½ oz., 12 oz. and quart bottles, and on all of these bottles it used a crown, or cap, displaying the name "Polar Kola", later "Polar Cola", in white block letters on a narrow red band under a representation of a polar bear cub, which was the symbol it had long used in connection with its Polar Cub line of artificial fruit flavored beverages.
On its bottles it also affixed a paper label, predominately blue, white and orange in color, bearing a representation of a polar bear cub in an Arctic scene under the words "Polar Cola" in block letters. Upon these labels the beverage was described as consisting of flavor from the cola nut blended with natural flavors, cane sugar, carbonated water and caramel, and on them appeared the words "Delicious Refreshing". The label on the 7 oz. bottle carried the notation "individual size", that on its 12 oz. bottle "double size", and that on its largest size bottle "family size". The court below found that in view of the wide market for Coca-Cola the legend "double size" on the label of the defendant's 12 oz. bottle would be interpreted by the ordinary buyer of soft drinks to mean "double the size of a Coca-Cola bottle."