Citations
- 629 F. Supp. 200
Full opinion text
FINDINGS OF FACT AND CONCLUSIONS OF LAW
SCIRICA, District Judge.
Subsequent to filing a complaint for federal and common law unfair competition, plaintiff petitioned for a preliminary injunction forbidding use of the designation “Chocolate Fudge” in connection with the defendant’s diet chocolate fudge soda. At a hearing on the motion, each side presented testimony and expert evidence. On the basis of the following findings of fact and conclusions of law, I conclude that plaintiff’s motion should be denied.
I. FINDINGS OF FACT
1. Plaintiff, A.J. Canfield Company (“Canfield”), is a corporation having its principal place of business in Chicago, Illinois.
2. Defendant, Concord Beverage Company (“Concord”), is a Pennsylvania corporation having its principal office in Concordville, Pennsylvania.
3. Plaintiff has been in business since 1924 and, as a well-established major Chicago bottler which makes and sells soft drinks in the mid-west, has a six (6%) or seven (7%) percent share of the Chicago soft drink market, in which both national and local “private label” companies compete.
4. Defendant manufactures, bottles and sells soft drinks under the house mark “Vintage” in Pennsylvania, New Jersey, and New York.
5. Plaintiff produces a line of sugar-sweetened and artificially sweetened “diet” sodas. The diet line includes nine different flavors.
6. In the early 1970s plaintiff began marketing a low-calorie chocolate soda, which is artificially sweetened and flavored.
7. At approximately that time, plaintiff also began using the designation “chocolate fudge” for this new product.
8. From 1973 to 1984, plaintiffs annual sales of diet chocolate fudge soda fluctuated from a high in 1973 of 347,000 cases to a low in 1979 of 19,000. In 1984, plaintiff sold 51,000 cases.
9. The market for soft drinks is unstable; it can fluctuate significantly.
10. During the period 1973 to 1984, plaintiff after an initial expenditure in 1973 of approximately $250,000 for advertising, spent an annual average of $100,000 promoting its entire line of diet soda, which included chocolate fudge soda.
11. During this period, plaintiff also received some publicity about its diet chocolate fudge soda from a Chicago Tribune article that traced the drink’s development.
12. In 1984, plaintiff switched its entire line of diet soda to 100% Nutra-Sweet sweetener and spent nearly $400,000 advertising these diet sodas.
13. Through the first nine months of 1985, plaintiff spent approximately $305,-000 advertising diet chocolate fudge soda.
14. Plaintiff has employed a public relations firm since 1982 or 1983 and has established promotions that include bumper stickers and beach towels.
15. Prior to January 13, 1985, plaintiff’s soda line, including diet chocolate fudge soda, was sold primarily in Illinois, Indiana, Michigan and Wisconsin.
16. On January 13, 1985, the Chicago Tribune carried a column written by Bob Greene concerning plaintiff’s diet chocolate fudge soda. Greene compared plaintiff’s diet chocolate fudge soda to a hot fudge sundae and described how it had helped him maintain his diet by satisfying his desire for chocolate.
17. As a result of Bob Greene’s column, which is syndicated and appears in at least 80 newspapers, a tremendous demand was created for plaintiff’s diet chocolate fudge soda. Approximately 1.6 million cases of plaintiff’s diet chocolate fudge soda were sold in the first seven months of 1985. Another 2.1 million cases were produced by plaintiff’s licensees. Initially, plaintiff was unable to satisfy the demand for the soda, especially in areas outside of the mid-west where the product had never been sold.
18. Following the appearance of Bob Greene’s column, stories on plaintiff’s diet chocolate fudge soda were featured in various print media (e.g., The New York Times, Time Magazine, The Philadelphia Daily News, The Washington Post, People Magazine ) and,on various television shows (e.g., “CNN News Broadcast, ” “CBS Morning News,” “Good Morning America,” “PM Magazine”.)
19. Following the appearance of Bob Greene’s column, many bottling companies sought licenses for plaintiff’s diet chocolate fudge concentrate.
20. Among those interested in obtaining a license for plaintiff’s product was defendant’s president, Harold Honickman, who contacted plaintiff’s president in approximately February 1985.
21. At that time, Mr. Honickman informed plaintiff’s president that his company wanted to sell diet chocolate fudge soda, for which he had already received a large order, and he requested a license.
22. There was a second telephone conversation between Mr. Honickman and plaintiff’s president, but defendant received neither a licensing or franchise agreement. Defendant then prepared its own diet chocolate soda, which it also called diet “chocolate fudge” soda.
23. Plaintiff eventually granted eleven U.S. licenses to companies other than defendant.
24. Defendant’s familiarity with plaintiff’s product and his two attempts at procuring a license indicate that defendant intended to and did copy plaintiff’s designation.
25. In the late winter and spring of 1985, plaintiff granted licensing agreements for at least a portion of the area in which defendant distributed its soda products. These licensing agreements cover diet chocolate fudge soda and plaintiff’s other products.
26. For the first two months each licensee was granted an advertising allowance of 20