Full opinion text
MEMORANDUM OF DECISION CURRAN, District Judge. The G. Heileman Brewing Company, Inc. and the Miller Brewing Company, plaintiffs in the above-captioned consolidated cases, compete with defendant Anheuser-Busch, Inc. in the business of brewing and selling beer. Hoping to repeat Miller’s success in marketing low calorie LITE beer, Anheuser-Busch developed and began to market a beer with low alcohol content which it called “LA.” When Heileman announced plans to use the LA name on its own low alcohol beer, Anheuser-Busch demanded that it cease and desist. Shortly thereafter, Heileman, later joined by Miller, filed suit asking this court to declare that, by using the LA mark, they are not engaging in trademark infringement or unfair trade practices. The plaintiffs claim that Anheuser-Busch, by attempting to prevent competitors from using the LA name, has engaged in unfair trade practices and has attempted to monopolize the low alcohol beer market. I. PRETRIAL PROCEEDINGS Several days after filing its complaint, Heileman brought a motion for a temporary restraining order asking this court to enjoin all proceedings in a mirror-image lawsuit which Anheuser-Busch had filed against Heileman in the United States District Court for the Southern District of Illinois. In part, because the Illinois case was filed several hours after Heileman’s action, the court granted Heileman’s motion. See Temporary Restraining Order of April 24,1984. Heileman then moved for a preliminary injunction, while AnheuserBusch moved to vacate the restraining order and to dismiss the complaint. On May 12, 1984, following a hearing, the court denied Anheuser-Busch’s motion, but granted Heileman preliminary relief, ordering that: Defendant is hereby ENJOINED from proceeding with its claims against Heileman in the United States District Court for the Southern District of Illinois and from commencing any other action involving the same claims or arising out of the same transactions or occurrences, pending final judgment, including any appeal, in this action. Order of May 12, 1984, at 6. After the preliminary injunction was in effect, the defendant moved for an order temporarily restraining Heileman from using the term “LA” in its advertising until after the issuance of a decision in a related case pending in the Eastern District of Missouri in which Anheuser-Busch was suing to enjoin another competitor, the Stroh Brewery Company, from using the LA mark. See Anheuser-Busch, Inc. v. Stroh Brewery Company, 587 F.Supp. 330 (E.D.Mo.), aff'd, 750 F.2d 631 (8th Cir.1984). After a hearing, this court denied the Anheuser-Busch motion on May 21, 1984. With its preliminary motions denied, Anheuser-Busch filed its answer and asserted a counterclaim for trademark infringement, unfair competition and trademark dilution. The defendant also moved for a preliminary injunction preventing Heileman from using the name “LA” during the pendency of this action. This motion was held open until trial. Meanwhile, on June 4,1984, the Miller Brewing Company filed a parallel action against Anheuser-Busch which was consolidated with Heileman’s case for all purposes. See Decision and Order of August 21, 1984. II. CLAIMS AND ISSUES By the time the pleadings closed, Heileman, asserting jurisdiction under 15 U.S.C. §§ 15 and 26 and 28 U.S.C. §§ 1332(a), 1337 and 1338, had alleged four causes of action against Anheuser-Busch: Count I: seeking injunctive relief and a declaratory judgment of noninfringement under the trademark laws; Count II: seeking injunctive relief and a declaratory judgment that it is not unfairly competing with Anheuser-Busch under federal law, Wisconsin statutory law, or the common law; Count III: seeking damages, claiming that Anheuser-Busch is engaging in unfair competition under 15 U.S.C. § 1125(a) and the common law; Count IV: seeking treble damages, claiming that Anheuser-Busch is attempting to monopolize the low alcohol beer market in the United States in violation of 15 U.S.C. § 2. Based on these claims, Heileman seeks a declaration and judgment as follows: 1. Declaring: (a) Plaintiff’s use of “BLATZ L.A.”, “CARLING BLACK LABEL L.A.”, “OLD STYLE L.A.”, “SCHMIDT L.A.”, “LONE STAR L.A.”, and “RANIER L.A.” on its low alcohol beers does not infringe any rights of or constitute unfair competition with defendant; (b) Plaintiff’s use of the description [sic] and generic terms “low alcohol”, “LA” or “L.A.” is not in violation of any right of defendant; (c) The term “L.A.” is a generic and descriptive term properly denominating and describing beers, particularly those beers having a low alcohol or lesser alcoholic content than regular beer; and (d) Plaintiff’s use of the term “BLATZ L.A.”, “CARLING BLACK LABEL L.A.”, “OLD STYLE L.A.”, “SCHMIDT L.A.”, “LONE STAR L.A.”, or “RANI-ER L.A.” is not confusingly similar to, or in conflict with, the use of the word “L.A.” and/or “LA” as asserted to be the mark(s) of defendant. 2. Ordering: (a)In accordance with 15 U.S.C. §§ 1119 and 1056, that defendant disclaim the descriptive and generic term “L.A.” and/or “LA” as forming any part of its registration to issue on said application Serial No. 461,853 filed January 20, 1984 and Serial No. 462,371 filed January 23, 1984; (b) That all or a portion of the trademark registration applications Serial No. 461,853 filed January 20, 1983 and Serial No. 462,371 filed January 23, 1984 be cancelled; and (c) That defendant advise the trade that it no longer will threaten suit or make demands against persons using the generic and descriptive term “L.A.” and/or “LA” to denominate and describe low alcohol beer, or otherwise assert purported rights to the terms “low alcohol”, “LA” or “L.A.” for low alcohol beer. 3. Preliminarily and permanently enjoining defendant, its officers, agents, servants, employees, representatives, successors and assigns, and all persons in active concern or participation with them, and any and all persons acting by, through or under authority from defendant, either separately or jointly, from: (a)in any way interfering or threatening to interfere with use by plaintiff or its distributors or retailers of the generic and descriptive term “L.A.” to denominate and describe low alcohol beer, particularly its beer sold in association with the labels illustrated herein as “BLATZ”, “CARLING BLACK LABEL”, “OLD STYLE”, “SCHMIDT”, “LONE STAR” and “RANIER” labels; (c) interfering with plaintiff’s use of the abbreviation “L.A.” to describe its low alcohol beers, or from otherwise engaging in unlawful acts complained of herein. 4. Awarding to Plaintiff: (a) any and all damages it has or will sustain by reason of defendant’s aforesaid unfair competition; (b) the sum of $500,000 as punitive damages for defendant’s deliberate and willful unfair competition; (c) the costs of this action, including reasonable attorneys’ fees pursuant to 15 U.S.C. § 1117; (d) treble the amount of damages sustained by plaintiff as the proximate result of defendant’s aforesaid violations of the antitrust laws, including costs and reasonable attorneys’ fees incurred by plaintiff; and (e) such other and further relief as this court may deem just and equitable. Amended Complaint [of G. Heileman Brewing Company, Inc.] at 12-15. Miller Brewing Company’s complaint raises similar claims and asks for the following relief: (a) For a declaration that “LA,” or its equivalents, as used for low alcohol beer, is an unprotectable designation, that A-B has no protectable rights therein, and that Miller is free to use the same as it sees fit. (b) For an order permanently enjoining A-B, and any person or party in privity or concert with it, from claiming, seeking (by registration or otherwise), asserting, or attempting to enforce any rights in “LA,” or its equivalents, as against Miller or its customers, or otherwise engaging in the unlawful acts complained of. (c) For an award to Miller of its damages, trebled, all profits of A-B attributable to its unlawful acts, costs and attorneys’ fees. (d) For such other and further relief as this court may deem just or equitable. Complaint [of Miller Brewing Company] at 5. Anheuser-Busch answered both complaints and filed counterclaims against both plaintiffs. Alleging jurisdiction under 15 U.S.C. § 1121 and 28 U.S.C. §§ 1332 and 1338, the counterclaimant asserts causes of action for trademark infringement and unfair competition, arising under 15 U.S.C. § 1125(a) and the common law, and for trademark dilution, arising under the laws of Illinois and “various other states,” asking that: 1.Counterdefendant, its officers, agents, servants, employees, attorneys and all others in active concert or participation with counterdefendant, be enjoined and restrained, during the pendency of this action and permanently thereafter, from: (a)using, in the advertising, promotion or sale of counterdefendant’s beer, counterclaimant’s LA trademark or any color-able imitation thereof which is likely to dilute the distinctiveness of counterclaim-ant’s LA trademark, or counterclaimant’s distinctive advertising for its LA beer; (b) using, in the advertising, promotion or sale of counterdefendant’s beer, counterclaimant’s LA trademark or any color-able imitation thereof which is likely to be mistaken or confused with counter-claimant’s LA trademark; and (c) doing any other acts that are likely to cause confusion, mistake or deception with counterclaimant or counterclaim-ant’s business, or that are likely to cause counterclaimant’s LA trademark to lose its distinctiveness by becoming a generic designation for a type of beer, or that are likely to destroy the commercial value of counterclaimant’s LA trademark or the business and good will represented and symbolized by said trademark. 2. Counterdefendant be required to deliver up for destruction, in accordance with the court’s directions, all labels, signs, prints, packages, wrappers, displays and advertisements bearing the LA trademark, and all plates, molds, matrices and other means of making the same. 3. Counterdefendant be required to account for and pay to counterclaimant all profits derived by counterdefendant from its aforesaid wrongful use of LA. 4. Counterdefendant be required to pay counterclaimant any and all damages it has or will sustain by reason of counterdefendant’s aforesaid acts. 5. Counterdefendant be required to pay to counterclaimant a sum of money sufficient to enable counterclaimant to have effective corrective advertising to overcome the dilution of counterclaim-ant’s LA trademark and distinctive advertising in each market in which counterdefendant has used LA or has advertised that LA is a generic or descriptive term for low alcohol beer. 6. Counterdefendant be required to pay to counterclaimant punitive damages in an amount sufficient to deter counter-defendant from further unfair competition, infringement or dilution of counter-claimant’s LA trademark in the future. 7. Counterdefendant be required to pay to counterclaimant the costs of this action, together with counterclaimant’s reasonable attorneys’ fees. 8. Counterclaimant have such other and further relief as this court deems just and equitable. Answer to Amended Complaint and Amended Counterclaim at 13-15. III. TRIAL A trial on the merits of these two cases was heard by the court, sitting without a jury, for nine days, with the following witnesses testifying: Mortimer Brenner: plaintiffs’ expert witness; consultant to the brewing industry; Michael J. Roarty: executive vice president of Anheuser-Busch, Inc.; director of marketing; spokesperson for Anheuser-Busch’s LA beer; Russell G. Cleary: president and chairman of the board of the G. Heileman Brewing Company, Inc.; John S. Isherwood: senior executive vice president of operations for the G. Heileman Brewing Company, Inc.; John S. Pedace: executive vice president of marketing for the G. Heileman Brewing Company, Inc.; Henry Ostberg: plaintiffs’ expert witness; president of Admar Research Company, Inc.; John A. Bunge: plaintiffs’ expert witness; president of Legal Marketing Research, Inc.; John R. Nevin: plaintiffs’ expert witness; professor of business at the University of Wisconsin Graduate School of Business; Victor F. Jmbimbo, Jr.: brand manager of new products for the Miller Brewing Company; Dennis P. Long: at the time of trial, president and chief operating officer of Anheuser-Busch, Inc.; Arch M. Ahem: associate general counsel of Anheuser-Busch Companies, Inc.; Yoram Wind: defendant’s expert witness; Lauder Professor and Professor of Marketing and Management at the Wharton School, University of Pennsylvania. The following three witnesses did not appear at trial, but portions of their deposition testimony were read during trial: James R. Buell, Jr.: Anheuser-Busch director of new product planning and development; Mark C. Lamping: Anheuser-Busch product manager for LA; David R. Wood: president of Interbrand Corporation, a company which developed brand names for AnheuserBusch’s low alcohol beer. In addition, almost 700 exhibits were offered by the parties and, after the close of testimony, the parties designated for inclusion in the transcript several sets of interrogatory responses plus 250 pages of deposition testimony from the following additional witnesses who did not appear at trial: Robert A. Toledo: vice president, brand management, Miller Brewing Company; Jon B. Reynolds: marketing services manager, G. Heileman Brewing Company, Inc.; Donald R. O’Brien: director of advertising, G. Heileman Brewing Company, Inc.; Thomas Godwin: director of brand development, G. Heileman Brewing Company, Inc.; Thomas J. Myers: vice president, brand management, G. Heileman Brewing Company, Inc.; James G. Martin: vice president of marketing, Ranier Brewing Company; Donald S. McDonald: vice president and senior counsel, Anheuser-Busch; Charles W. Wirtel: head of beer planning department, Anheuser-Busch; John F. Bruemmer: senior vice president of D’Arcy MacManus Masius, an advertising agency retained by Anheuser-Busch; Paul J. Siemer: executive vice president of Fleishman-Hillard, Inc., a public relations firm retained by AnheuserBusch; Alvin L. Kacin: former chairman of D’Arcy MacManus Masius, an advertising agency retained by AnheuserBusch; August A. Busch III: president and chairman of Anheuser-Busch Companies, Inc. Finally, the plaintiffs offered additional deposition excerpts which are not included in the transcript. Besides eleven witnesses already identified above, the plaintiffs’ deposition witnesses include: William J. Morgan: account executive for D’Arcy MacManus Masius, an advertising agency retained by Anheuser-Busch; James L. Morice: executive vice-president of Fleishman-Hillard, Inc., a public relations firm retained by Anheuser-Busch; James M. Palumbo: employee of D’Arcy MacManus Masius, an advertising agency retained by Anheuser-Busch; Zanvel A. Zack: director of creative services within the merchandising department of Anheuser-Busch. Having now considered the testimony and exhibits received at trial as well as the posttrial submissions, the court sets forth its Findings of Fact separately from its Conclusions of Law pursuant to Federal Rule of Civil Procedure 52. IV. UNCONTESTED FACTS In their final pretrial report the parties stipulated to the following facts, which the court adopts and incorporates into this decision: 1. Plaintiff G. Heileman Brewing Company, Inc. (“Heileman”) is a corporation organized and existing under the laws of the State of Wisconsin, having its principal place of business at 100 Harbor-view Plaza, LaCrosse, Wisconsin 54601. 2. Plaintiff Miller Brewing Company (“Miller”) is a Wisconsin corporation with its principal place of business at 3939 West Highland Boulevard, Milwaukee, Wisconsin. 3. Defendant, Anheuser-Busch, Inc. (“Busch”) is a corporation organized and existing under the laws of the State of Missouri, having its principal place of business at 1 Busch Place, St. Louis, Missouri 63118. Defendant is registered to do business and conducts business in Wisconsin and in the Eastern District of Wisconsin. 6. Busch, Miller and Heileman have for many years been engaged in the business of brewing, packaging, marketing, distributing and selling brewed fermented malt beverages, including beer, and are direct competitors in that business throughout the United States. 7. The Bureau of Alcohol, Tobacco and Firearms (BATF) of the U.S. Government regulates labeling of alcoholic malt beverages pursuant to 27 CFR Part 7. 8. Early in 1981, August A. Busch III (“Mr. Busch”), Busch’s Chairman and Chief Executive Officer, toured various breweries in Australia, including the Tooth brewery, and learned of the success of its low alcohol beer. 9. At a meeting in September 1983, Busch’s Beer Planning Group presented a Phase II New Venture Analysis recommending that Busch produce a 1.7% alcohol beer. 10. On November 21, 1983, Busch filed applications with BATF for approval of three beer labels having the letters “L.A.”, L.A.B.”, “L.A.D.”, respectively. ____ 12. Busch’s President and Chief Operating Officer, Dennis P. Long, and its Executive Vice President, Michael J. Roarty, were selected as spokespersons within Busch to handle media inquiries and to be available for interviews regarding its new product. 13. On February 16,1984, Busch filed applications with BATF for approval of four beer labels having the letters “R.A.,” “X.L.A.,” “U.L.A.,” and “N.A.” 14. On March 16, 1984 Busch conducted a kickoff meeting at the Clarion Hotel in St. Louis, Missouri for those wholesalers who would be participating in the test marketing of Busch’s new beer. 15. On March 29, 1984, Heileman issued a press release announcing its intent to introduce two low alcohol beers in April 1984, called “BLATZ” L.A. and “BLACK LABEL” L.A. 16. On April 18, 1984 Busch filed separate suits against The Stroh Brewery Company and Heileman for an injunction against their use of “LA” or “L.A.” on beer. Earlier that same day, Heileman brought this action for, inter alia, a declaratory judgment that the letters “LA” were a generic description for a type or category of beer and inherently not protectible as a trademark. 17. On May 11, 1984, Busch conducted a teleconference via satellite originating from the Chase Hotel in St. Louis, Missouri in which Busch announced the rollout of its new product to all Busch’s U.S. wholesalers and distributors. 18. Busch is the largest brewer in the United States, with annual revenues in excess of $5 billion. In 1983, Busch sold approximately 60.5 million barrels of beer. Miller, the second largest brewer in the U.S., sold approximately 37.7 million barrels of beer that year. Heileman sold approximately 17.5 million barrels of beer in 1983, making it the fourth largest U.S. brewer. U.S. beer sales totalled 180.5 million barrels in 1983. 19. The two names initially presented to Miller as brand names for its 1.7% alcohol beer product were SHARP’S and BARKING DOG. 20. In March, 1984, Miller decided to use Sharp’s LA for its 1.7% alcohol beer. 21. On August 13, 1984, Miller began marketing a 1.7% alcohol beer with LA and the “Sharp’s” name in test markets in Atlanta, Georgia, Columbus, Ohio, Houston, Texas, Springfield, Illinois and San Diego, California. Presently Miller is not marketing Sharp’s L.A. in any other markets. V. FINDINGS OF FACT In addition to the foregoing uncontroverted facts, the following facts have been established by a preponderance of the evidence or a higher burden, where applicable. A. PARTIES 1. Plaintiff and counterclaim defendant G. Heileman Brewing Company, Inc. is a corporation organized and existing under the laws of the State of Wisconsin. It has its principal place of business at 100 Harborview Plaza, LaCrosse, Wisconsin 54601. 2. Plaintiff and counterclaim defendant Miller Brewing Company is a corporation organized and existing under the laws of the State of Wisconsin. It has its principal place of business at 3939 Highland Boulevard, Milwaukee, Wisconsin. 3. Defendant and counterclaimant Anheuser-Busch, Inc. is a corporation organized and existing under the laws of the State of Missouri. It has its principal place of business at 1 Busch Place, St. Louis, Missouri 63118. The defendant is registered to do business and conducts business in Wisconsin and in the Eastern District of Wisconsin. 4. For many years the parties have been engaged in the business of brewing, packaging, marketing, distributing and selling brewed fermented malt beverages, including beer, and are direct competitors in that business throughout the United States. B. LOW ALCOHOL BEER 5. Low alcohol beer was launched in Australia in 1979. Among the low alcohol beers sold in Australia have been Tooth LA, South Australian LA, Courage LA, and Carling LA. See Trial Exhibits 74, 77, 100, 101, 102, 103, 400, 401, 426, 427. See also Transcript at 41-43, 68, 82-85,109-10, 240, 944-48, 959, 2132-34. 6. The United States Bureau of Alcohol, Tobacco and Firearms (BATF) regulates the labeling and advertising of alcoholic malt beverages pursuant to the Federal Alcohol Administration Act (FAA), 27 U.S.C. §§ 201-211, and the regulations implementing the FAA, particularly 7 C.F.R. § 7. See Trial Exhibit 63. See also Transcript at 1357-59. Beer cannot be shipped in commerce unless the BATF has approved the label. See Transcript at 1358. 7. The BATF has defined low alcohol beer as a beer containing less than 2.5% alcohol by volume and less than 2% alcohol by weight. Nee Trial Exhibits 63, 762. See also Transcript at 49-50, 103, 245, 294, 2152. Regular malt beverages contain 3.5-5.0% alcohol by volume. See Trial Exhibits 63, 762. 8. Low alcohol beers contain less alcohol than regular malt beverages and they can also contain fewer calories. See Transcript at 49-50, 102, 245, 294, 332, 412, 435, 1311, 2063, 2073-74. 9. Low alcohol beer can be produced in a number of ways: (1) by diluting conventional beer with water; (2) by removing the alcohol through distillation, vacuum distillation, or reverse osmosis; or (3) by following the usual brewing process using a slightly reduced bill of materials and altering the time and temperatures to reduce the amount of fermentable sugars available to the yeast to use during the fermentation part of the process, thus limiting the formation of alcohol. See Transcript at 411. See also Transcript at 48-49, 1313. 10. Prior to April 27, 1984, the BATF, acting pursuant to its interpretation of the FAA, would not approve beer labeling or advertising describing a product as having a low or reduced alcoholic content. See Transcript at 58-59, 297-99, 434, 951, 984-85, 1226-35, 1294. 11. Under the Twenty-First Amendment to the United States Constitution, the states may choose to adopt the FAA or they may choose to enact their own regulations of alcoholic beverages. See Transcript at 2154-59. 12. Prior to April 27, 1984, seventeen states did not permit advertising the alcoholic strength or weakness of beer. See, e.g., Trial Exhibit 65. See also Transcript at 370, 2155-59. 13. The laws of some states which did not adopt the FAA allowed advertising the alcoholic weakness of beer. See Transcript at 984-85, 2154. Thus, in 1983, the Hudepohl Brewery marketed reduced alcohol beer under the PACE trademark in Ohio and the Christian Schmidt Brewing Company marketed a reduced alcohol beer under the BREAK trademark in Pennsylvania. See Transcript at 294, 369-72, 385-86, 976-92, 2134-35, 2234. See also Trial Exhibit 24. The labels and advertising of these two beers used the description “reduced alcohol.” See Trial Exhibits 701, 702, 702A, 704, 704A, 705 and 706. Neither brewery used the term “LA.” See Transcript at 372, 991. No other brewers in the United States were marketing low alcohol beer prior to December of 1983. See Transcript at 369-76, 427-28, 495-96, 923, 976-92, 1164, 1179-80, 1191, 1308, 1329, 2060, 2117, 2132, 2135, 2161, 2233-34. C. UNFAIR COMPETITION (1) Adoption of LA Mark (a) Anheuser-Busch 14. In 1981, August A. Busch III, the president and chief executive officer of Anheuser-Busch Companies, studied the production and marketing of low alcohol beer while traveling in Australia. See Transcript at 240-42, 2212-13. 15. Sometime after returning from Australia, Mr. Busch directed his company to begin research and development of a low alcohol beer. See Transcript at 126, 129, 242, 1360-63. See also Trial Exhibit 300. 16. In September of 1983, AnheuserBusch engaged the Interbrand Corporation to develop and test potential names for a low alcohol beer. See Transcript at 140, 262, 1095. 17. On November 21, 1983, AnheuserBusch obtained BATF approval for beer labels using the names “L.A.,” “L.A.B.,” and “L.A.D.” See Trial Exhibits 44, 55, 280, 760. See also Transcript at 169, 993-94, 1213, 1363-65, 1475-85. There is no evidence that the BATF was aware that these labels might be used on low alcohol beer products. See Transcript at 169-70, 1343-45, 1478-84, 2216. See also Trial Exhibit 526. 18. On November 28, 1983, Interbrand submitted a report recommending against marketing a low alcohol beer as a line extension of an existing brand. Inter-brand believed that, in the long run, a line extension would weaken the parent brand, particularly if the new product was not successful. The company also pointed out that a new “breakthrough” product, which would be heavily advertised in the hope that it would become the leading seller in its category, should not be presented as an extension of an existing brand. Instead, Interbrand recommended “power branding,” using a single brand name stressing the unique quality of the product. See Trial Exhibits 20, 113, 114. See Transcript at 180-81, 2148-49. 19. On December 20, 1983, Interbrand submitted its final brand name report and recommendations. See Transcript at 179, 236-37, 2169. See Trial Exhibits 12, 116, 116A. Interbrand warned AnheuserBusch that using “LA” as a brand name would lead to problems: Our problem with the use of L.A. as a stand-alone brand name is that it clearly and obviously stands for low alcohol, and as such has two major problems: *it would not, in all likelihood, be protectible since it clearly and obviously stands for low alcohol, and as such is clearly an abbreviation of the generic decriptor. * Since products in the segment can all claim low alcohol, it is reasonable to assume that the category will be known as, and referred to as, the low, low alcohol or L.A. category. And since A-B will not be the only entrant there would be ample opportunity for confusion, switching, etc. Trial Exhibit 12. 20. Based on the Interbrand research, James Buell, director of new product planning and development, issued a report recommending rejection of the line extension names and recommending a corporate source approach using the name “L.A. from Anheuser-Busch.” See Trial Exhibits 18, 18A, 18B, 87. See also Transcript at 144-45, 151-52. 21. Within a month, Mr. Busch decided to adopt the name “LA from AnheuserBusch.” See Trial Exhibits 19, 304. See also Transcript at 170, 203, 249-50, 993, 995-96, 1140, 2179, 2215-18. 22. On January 20, 1984, AnheuserBusch issued a press release announcing its new product. The release stated that: The new product, which will be called “L.A. from Anheuser-Busch,” has an alcohol content of approximately half that of regular beer. “L.A. from AnheuserBusch” will be covered by all laws regulating the sale of alcoholic beverages, offering customers of legal drinking age a light alcohol product with the full taste of beer. Trial Exhibit 22. See also Transcript at 202-04, 264, 996, 1146-47, 1236-37; Trial Exhibit 303. 23. At the outset Anheuser-Busch encountered problems planning a marketing strategy for LA because, on one hand, it was trying to use LA as an arbitrary or suggestive trademark, while, on the other hand, it needed to describe the unique low alcohol characteristic of the new type of beer to consumers without running afoul of state, federal and television network regulations forbidding the advertising of alcoholic weakness. See Transcript at 1102-03, 1139, 1216-35, 2152-59. See also Trial Exhibits 12, 50, 51, 52, 53, 64, 65, 244, 396. 24. Anheuser-Busch retained Fleischman-Hillard, Inc., a public relations firm, to develop public awareness of LA. See Transcript at 156, 203, 267-68, 1183-87, 1211-12, 1237, 1239-44, 253, 254, 256, 257, 259, 262, 264, 265, 268, 271, 272, 274, 275, 336, 337, 338, 343, 355. 25. Many of the popular news media (often aided by interviews or background briefings with employees of Fleischman-Hillard or Anheuser-Busch) reported that “LA” means “low,” “less,” or “light” alcohol. See, e.g., Trial Exhibits 194, 246, 330, 332, 333, 457, 458, 460, 462, 463, 464, 465, 466, 470, 472, 473, 474, 477, 479; Transcript at 264-74, 996-1001, 1183-87. 26. Although Anheuser-Busch executives reviewed many of these articles for accuracy, there is no evidence that Anheuser-Busch took any steps to discourage or correct this publicity equating “LA” with “low alcohol.” See Transcript at 264-74, 1084-86, 1211-13, 1237-84, 2196-2204, 2218-19. 27. On February 16, 1984, after beginning its efforts to publicize its LA beer, Anheuser-Busch filed applications for BATF approval of labels containing the names: “X.L.A.,” “U.L.A.,” “R.A.,” and “N.A.” On February 22, 1984, the BATF approved these names “for trademark purposes only,” meaning that the initials could not be used as labels for beer. See Trial Exhibits 55, 298, 529. See also Transcript at 171-72, 1213-15, 1487-1505. 28. Anheuser-Busch, through its attorney Donald S. McDonald, made an effort to persuade the BATF to change its interpretation of the FAA to permit labels and advertising to describe beer as being low in alcoholic content. See Transcript at 1228, 1294-1301, 2153-54. See also Trial Exhibits 59, 64. 29. On March 7, 1984, the Stroh Brewery Company obtained BATF approval for two beer labels: SCHAEFER LA and OLD MILWAUKEE LA. See Transcript at 301. See also Anheuser-Busch, Inc. v. Stroh Brewery Company, 587 F.Supp. 330, 333 (E.D.Mo.), aff'd., 750 F.2d 631 (8th Cir.1984). Shortly thereafter, Stroh announced plans to market a low alcohol beer labeled with the LA mark. See Transcript at 210, 434, 2111-12. 30. On March 13, 1984, AnheuserBusch filed applications for BATF approval of labels for a beer can and beer bottle bearing the LA mark. These applications were approved on March 13, 1984. See Trial Exhibits 296, 761. 31. On March 16, 1984, AnheuserBusch filed an application for BATF approval of a label for draught beer bearing the LA mark. This label was approved on March 21, 1984. See Trial Exhibit 297. 32. On April 27, 1984, the BATF issued a circular announcing that it now interpreted 27 U.S.C. § 205(e) and (f) as not prohibiting the labeling and advertising of alcoholic weakness. The circular provided that: ... the Bureau has determined that statements of low or reduced alcohol content when used with malt beverage products containing less than 2.5 percent alcohol by volume are not misleading. Since the alcohol content of regular malt beverages falls within the range of 3.5 to 5.0 percent alcohol by volume, malt beverage products containing less than 2.5 percent content by volume have a substantially lower alcohol content and may accurately be described as low alcohol or reduced alcohol malt beverages. Trial Exhibits 63, 762. See also Transcript at 58-59, 1300-03. 33. After the BATF issued this circular, affected states changed their laws and regulations to allow descriptive references to low alcohol on beer labeling and advertising. By the time of trial, all the states had made these revisions. See Transcript at 2156-59. (b) Heileman 34. In early 1982, Heileman (aware of the Australian experience) began to develop a low alcohol beer. See Transcript at 291-93, 407-10, 2036, 2229. 35. In March of 1984, Heileman decided to use brand or line extensions, e.g., BLATZ LA, BLATZ II, in positioning its low alcohol beer. See Transcript at 281-83, 325-28, 330-33, 344-46, 356-59, 2037-39, 2076, 2114-15. 36. With knowledge of the AnheuserBusch LA product, of the Stroh Brewery Company’s announced plans to market SCHAEFER LA, and of the BATF approval of the Anheuser-Busch and Stroh labels, Heileman announced on March 29, 1984, that it would market low alcohol beers under labels using its house marks with “L.A.” as a category descriptor, e.g., CAR-LING BLACK LABEL L.A. and BLATZ L.A. See Transcript at 291-309, 328-38, 343, 359-79, 385-91, 425-37, 493-96, 2037-55, 2057-64, 2076-81, 2108-17, 2229. See also Trial Exhibits 514, 515, 521. (c) Miller 37. In March of 1984, Miller began to develop a low alcohol beer. Victor Imbimbo, brand manager of new products for the Miller Brewing Company, traveled to Australia to study the low alcohol beer market there. See Transcript at 931-39, 2010-13, 2126, 2132-34, 2237. 38. After consultation with its advertising agency, Leo Burnett, Miller adopted a single product mark, “Sharp’s,” combined with “L.A.” as a category descriptor, as the name for its low alcohol beer. At the time this name was selected, Miller was aware of Anheuser-Busch’s low alcohol product and of the BATF labeling decisions. See Transcript at 940-48, 2012-20, 2024-25, 2124-41, 2232-42. See also Trial Exhibit 748. (2) Use of LA Mark 39. On March 16, 1984, AnheuserBusch began continuous use of the LA mark in commerce by shipping its low alcohol beer with LA labels affixed to wholesalers. See Transcript at 1013-18, 1158, 1454-55. 40. On April 2, 1984, Anheuser-Busch began retail sales of its LA beer in twelve test markets in Arizona, California, Florida, Georgia, Iowa, Nebraska, North Carolina, Ohio, Oregon, Rhode Island, Washington and Wisconsin. See Transcript at 207-08, 1014, 1017-18, 1027, 1205, 1229, 1454-55. See also Trial Exhibits 713, 714, 767 (received except for first three pages). 41. On May 21, 1984, Anheuser-Busch began shipping LA beer to retail outlets in twenty additional states: Alabama, Arkansas, Illinois, Kansas, Kentucky, Louisiana, Maryland, Michigan, Mississippi, Missouri, Nevada, New Jersey, New York, Oklahoma, South Carolina, Tennessee, Texas, Vermont, Virginia, West Virginia and the District of Columbia. See Transcript at 1018, 2174. See Trial Exhibit 714. 42. By the time of trial, AnheuserBusch was selling LA beer in all states except Connecticut. See Transcript at 1043-44. See also Trial Exhibit 714. 43. In April of 1984, Heileman began to use the “LA” mark on beer shipped and sold in interstate commerce. On April 19, 1984, Heileman shipped two half-barrels of BLATZ LA from Illinois to LaCrosse, Wisconsin. On April 24, 1984, cans of Heileman’s low alcohol beer, affixed with labels bearing the mark BLATZ LA, were shipped from a brewery in Belleville, Illinois and sold to retailers in Wisconsin. See Transcript at 334, 363-66, 392-93, 414, 438-41, 467-68. See also Trial Exhibit 379. 44. In May of 1984, Heileman began selling its low alcohol beer in California. By June of 1984, Heileman was selling its low alcohol beers in Illinois, Maryland, Minnesota, Montana, North Dakota and Washington. See Transcript at 365-66, 467-79. See also Trial Exhibit 379. 45. By the time of trial, Heileman was using the LA mark on beer sold throughout “most of the United States.” See Transcript at 446, 466. 46. Miller began to use the mark Sharp’s LA on beer shipped and sold in interstate commerce on August 13, 1984. See Transcript at 2007. 47. By the time of trial, Miller was selling Sharp’s LA at retail outlets in five test markets: Atlanta, Georgia; Houston, Texas; Columbus, Ohio; Springfield, Illinois; and San Diego, California. See Transcript at 2007. 48. Anheuser-Busch has met its burden of proving by a preponderance of the evidence that it was the first or senior user of the “LA” mark on beer sold in Wisconsin and at least thirty-one other states. (3) Trademark Registration Applications 49. On January 20, 1984, AnheuserBusch filed application No. 461853 with the federal Patent and Trademark Office to register “LA” as a trademark. See Trial Exhibit 315. See also Transcript at 1485-87, 1508. 50. On January 23, 1984, AnheuserBusch filed application No. 462371 with the federal Patent and Trademark Office to register “L.A.” as a trademark. See Trial Exhibits 299, 387. See also Transcript at 1506. 51. On February 9, 1984, AnheuserBusch filed an application with the federal Patent and Trademark Office to register “L.A.B.” as a trademark. See Trial Exhibits 49, 388. See also Transcript at 1507. 52. On February 9, 1984, AnheuserBusch filed an application with the federal Patent and Trademark Office to register “L.A.D.” as a trademark. See Trial Exhibit 389. See also Transcript at 1507. 53. On May 11, 1984, Anheuser-Busch filed an application with the federal Patent and Trademark Office to register “LA” and an accompanying trade dress design as a trademark. See Trial Exhibits 319, 530. See also Transcript at 1510-13. 54. On May 23, 1984, the federal Patent and Trademark Office rejected the applications to register “L.A.” and “LA,” on the ground that the initials designated “Los Angeles.” See Trial Exhibits 316, 318, 387. See also Transcript at 1508-10. 55. At the time of trial Anheuser-Busch had not succeeded in obtaining a federal trademark registration for “L.A.B.,” “L.A. D.,” “L.A.,” or “LA”. Anheuser-Busch had not withdrawn any of the applications which had not yet been rejected by the Patent and Trademark Office. See Transcript at 1514. 56. There is no evidence in the record that Heileman attempted to obtain federal trademark registration for “L.A.” or “LA.” 57. There is no evidence in the record that Miller attempted to obtain federal trademark registration for “L.A.,” “LA,” or “Sharp’s LA.” (4) Strength of Mark 58. Before Anheuser-Busch began to market its low alcohol beer in interstate commerce in 1984, this type of beer was not being produced or sold in the United States except in two local markets. See Transcript at 369-76, 427-28, 495-96, 923, 976-92, 1164, 1179-80, 1191, 1308, 1329, 2060, 2117, 2132, 2135, 2161, 2233-34. 59. Due to BATF policy in effect prior to April 27, 1984, consumers in most states had not been exposed to beer advertising or labels describing the alcoholic weakness of beer. See Transcript at 58-59, 297-99, 434, 984-85, 1226-35. 60. Prior to April of 1984, beer consumers used no generic or common descriptive name for low alcohol beer — a product that did not exist, except in two local markets. See Transcript at 427-28, 488, 923,1308-09, 1603, 1609-12, 1628-29, 2060-62, 2078-80, 2132, 2218. See also Trial Exhibits 773, 774. 61. Anheuser-Busch has met its burden of proving by a preponderance of the evidence that LA was not a generic name for a type of beer when it began to market LA; when its competitors Heileman and Miller began to market their low alcohol beers; or by the time of trial. See Transcript at 1515-1874. See also Trial Exhibits 773, 774. 62. Anheuser-Busch copied the name “LA” from Australian beers such as Tooth LA. See Transcript at 2214-15, 2217. In Australia, the name “LA” is used to signify low or light alcohol beers. See Transcript at 51-54, 68, 109-16, 240-42, 944-48, 959, 2212-13. See also Trial Exhibits 74, 77, 100, 101, 102, 103, 400, 401, 426, 427. 63. After adopting and using the LA mark, Anheuser-Busch made superficial efforts to avoid genericizing the name LA and to use the name LA as a trademark. See Transcript at 158, 1027, 1224, 1244, 2223. 64. Although Anheuser-Busch personnel equated “LA” with low alcohol in communiques within the company and in some advertising and point-of-sale materials, it later attempted to disclaim the initialism by removing the periods from the letters; by testifying that the letters have no meaning; by changing its advertising message from “low alcohol” to “half the alcohol”; and by trying to promote the term “reduced alcohol” as the category descriptor for the new beer. See Transcript at 64, 100, 158-65, 169-70, 236-39, 247, 491-502, 1072, 1089-91, 1096-98, 1110, 1116-17, 1131-33, 1141, 1161, 1183-89, 1191-96, 1198-99, 1202-03, 1213-15, 1236-44, 1283, 1287-88, 1293, 1306-09, 2165, 2218-21, 2224. See also Trial Exhibits 10, 12, 39, 43, 50, 52, 53, 73, 76, 156, 243, 278, 301, 396, 397, 398, 442A, 442B, 442C, 442D, 521, 523, 723. 65. Anheuser-Busch was motivated to deny that “L” and “A” are initials for low alcohol because of BATF interpretation of advertising and labeling regulations prior to April 27, 1984, and because it was attempting to protect “LA” as a trademark. See Transcript at 1166-67, 1213-15, 1226-35, 2216, 2223. 66. When introducing its new beer to consumers, Anheuser-Busch engaged in a publicity campaign in which it tacitly encouraged public relations and advertising agencies it had retained as well as media reporters and others unconnected with the company to describe LA to consumers as low, less or light in alcohol. See Transcript at 264-74 (and exhibits received therein), 432-33, 888-93 (and exhibits received therein), 1071-73 (and exhibits received therein), 1084-86, 1089-91, 1149-55, 1184, 1233-84 (and exhibits received therein), 2191, 2196-2204, 2206-07, 2218-19. See also Trial Exhibits 194, 278, 333, 456, 459, 463, 523. 67. Ordinary consumers, as well as secondary sources such as the news media, who have been exposed to LA beer in the context of its trade dress, packaging and advertising, perceive the initials “L” “A” as descriptive of beer containing low, light or less alcohol than regular beer. See Transcript at 334, 530-31, 673-74, 703-04, 708-12, 924, 1170-72, 1685, 2063, 2078, 2228, 2235, 2243. See also Trial Exhibits 194, 333, 435, 436, 456, 459, 463, 774. 68. Based on the evidence adduced at trial and having evaluated the credibility of the witnesses, the court finds that Anheuser-Busch’s contention that the letters “L” “A” have no direct meaning when used in association with beer is not credible. 69. Regardless of whether the name LA is written with or without periods, it is pronounced as the initials “L” and “A”. These initials directly denote the words “low alcohol” (or synonyms such as “less alcohol” or “light in alcohol”) which describe the unique characteristic that distinguishes the beer at issue from other beers. 70. Because the “LA” mark conveys to the relevant public an immediate idea of the unique, low alcohol characteristic of the beer to which it is affixed, the court finds that “LA” is not an arbitrary or suggestive name as applied to beer. 71. “LA," the initials for words which describe the alcoholic weakness of beer, is a merely descriptive term for beer. 72. The court finds that AnheuserBusch has failed to meet its heavy burden of proving that, by the time Heileman and Miller began to use the LA mark, it had used the LA name so long and so extensively in the same markets that significant numbers of consumers believed that the LA product emanated from a single source. In other words, based on the following subsidiary findings, the court finds that Anheuser-Busch has failed to prove that its merely descriptive LA mark had acquired secondary meaning at any time relevant to these actions: (a) Anheuser-Busch had been continuously and exclusively using the LA mark for beer for approximately one month when Heileman began to use the LA mark. See Transcript at 207-08, 334, 365, 392, 440-41, 467, 1014, 1017-18, 1027, 1229, 1454-55. See also Trial Exhibits 379, 713, 714, 767. (b) Anheuser-Busch had been continuously, but not exclusively, using the LA mark on beer sold in commerce for approximately four and one-half months when Miller began to use the LA mark. See Transcript at 207-08, 1014, 1017-18, 1027,1229,1454-55, 2007. See also Trial Exhibits 713, 714, 767. (c) Anheuser-Busch extensively advertised and publicized its LA beer in all media covering national, regional and local markets. Through August of 1984, Anheuser-Busch spent approximately $17,000,000.00 advertising its LA beer. In addition, Anheuser-Busch had committed $9,500,000.00 for permanent and paper point of sale materials. See Transcript at 1019-22, 1026-51, 1086-91. See also Trial Exhibits 723, 724, 725, 728, 729, 730, 733. (d) By the time of trial Heileman had spent approximately $1,650,000.00 advertising its LA beers, plus an additional $80,000.00 for point-of-sale displays. See Transcript at 444, 460-65, 2068. See also Trial Exhibit 399. (e) By the time of trial Miller had spent approximately one and one half million dollars developing a market for its low alcohol beer. See Transcript at 950, 2006-10. (f) At the time of trial AnheuserBusch had sold approximately 200,000 barrels of its LA beer. One barrel is equivalent to 13,777 cases of twenty-four units of 12-ounce beers. Through August of 1984, Anheuser-Busch’s sales of LA grossed approximately $20,000,-000.00. See Transcript at 1051-52. See also Trial Exhibit 714. (g) At the time of trial Heileman had sold approximately 60,000 barrels of its LA beers. See Transcript at 2068. (h) At the time of trial AnheuserBusch was marketing its LA beer in all states except Connecticut. See Transcript at 1043-44. Heileman was marketing its LA beers under seven house marks in “most” states. See Id. at 446, 466. And Miller was marketing its Sharp’s LA in five test markets in Georgia, Texas, Ohio, Illinois and California. See Id. at 2007. Within these markets the LA beers are all sold through the same channels. See Id. at 95, 342, 486, 1315. (i) A majority of consumers who have been introduced to the LA mark on beer in the context of its trade dress, packaging and advertising recognize that LA describes the beer as containing low, light, or less alcohol. See Transcript at 334, 530-31, 673-74, 703-04, 708-12, 924, 1171, 1685, 2063, 2078, 2228, 2235, 2243. See Trial Exhibits 435, 436, 774. 73. Anheuser-Busch has failed to meet its burden of proving by a preponderance of the evidence that LA, as applied to beer, is a valid, legally protectible common-law trademark. 74. The court finds that “LA” is a merely descriptive mark for beer which had not acquired secondary meaning by the time Heileman or Miller began to use the mark on beer. (5) Likelihood of Confusion 75.Based on the following factors, the court finds that there is no significant likelihood that consumers will confuse “LA” from Anheuser-Busch with the LA beers sold by Heileman and Miller: (a) The LA marks used by AnheuserBusch, Heileman and Miller are virtually identical on the levels of sight, sound and meaning. The only differences are the type fonts of the initials and the use of periods by Heileman. See, e.g., Trial Exhibits 210, 407, 410, 413, 416, 419, 422, 428, 429, 707, 708. See also Transcript at 1141. (b) Heileman prominently displays its established house marks with L.A. as a category descriptor on all its low alcohol beers. See Trial Exhibits 407, 410, 413, 416, 419, 422. See also Transcript at 331. (c) Miller prominently displays the single brand name “Sharp’s” with LA as a category descriptor on its low alcohol beer. See Trial Exhibits 428, 429. (d) Anheuser-Busch displays the corporate source designating phrase “from Anheuser-Busch” on its LA beer. See Trial Exhibits 210, 707. (e) “LA” is a weak mark in that the court has found that it is merely descriptive and has not acquired secondary meaning. (f) The LA beers of Anheuser-Busch, Heileman and Miller are marketed through the same channels of trade; advertised through the same media; compete for the same customers; and fulfill the same function. See Transcript at 61, 94-99, 103-04, 342, 420-22, 442-43, 484-86, 723-25, 728-30, 1311-19, 2084-85, 2116. (g) Anheuser-Busch, Heileman and Miller positioned their LA beers in the premium price category. See Transcript at 96-98, 485, 1148, 1311, 1329. (h) While beer is a low priced item, consumers use some degree of care and attention when making a beer purchase because of brand loyalty. See Transcript at 903, 1203. (i) Although Heileman and Miller adopted the name LA only after they learned that Anheuser-Busch had adopted the name and only after they learned that Anheuser-Busch had received BATF approval for its “L.A.” label, Heileman and Miller did not copy the LA mark with the intent to deceive the public into falsely believing that their LA beers emanate from Anheuser-Busch. They adopted and used the LA mark to convey the purpose and unique, low alcohol characteristic of their beers. See Transcript at 325-33, 345-48, 433-37, 446-48, 2131, 2138-40, 2236, 2246. (j) Anheuser-Busch produced no evidence of actual confusion among consumers after Heileman began to use the LA mark in April of 1984, or after Miller began to use the mark in August of 1984. Cf. Transcript at 346-48, 446, 904-09. (k) Survey evidence indicates that fewer than five percent of consumers are likely to be confused about the source of the parties’ LA beers. See Transcript at 717-34. See also Trial Exhibit 440. (6) Liability 76. Anheuser-Busch Incorporated has not met its burden of proving by a preponderance of the evidence that the G. Heileman Brewing Company, Inc., by using the LA mark, has engaged in trademark infringement or any other acts of unfair competition. 77. Anheuser-Busch Incorporated has not met its burden of proving by a preponderance of the evidence that the Miller Brewing Company, by using the LA mark, has engaged in trademark infringement or any other acts of unfair competition. D. TRADEMARK DILUTION 78. As among the parties, AnheuserBusch was the first to adopt and use the LA mark on beer sold in commerce in Illinois. See Trial Exhibits 379, 714. See also Transcript at 365-66, 467-79, 2007. 79. Based on the following factors, the court finds that the LA mark used by Anheuser-Busch on beer is not distinctive: (a) The LA mark is not arbitrary. The court has found that LA is a merely descriptive mark which had not acquired secondary meaning in Illinois or any other state by the time the plaintiffs began to use it. (b) Anheuser-Busch began to use the LA mark in Illinois in May of 1984, followed by Heileman in June of 1984, and by Miller in August of 1984. See Trial Exhibits 379, 714. See also Transcript at 365-66, 467-79, 2007. (c) By the time of trial, AnheuserBusch had spent approximately $27,000,-000.00 advertising its LA beer. See Transcript at 1019-22, 1026-51, 1086-91. See also Trial Exhibits 723, 724, 725, 728, 729, 730, 733. However, there is no evidence showing what share of this advertising was directed toward Illinois. (d) Anheuser-Busch, Heileman and Miller are all major brewers with national reputations. 80. The LA marks used by Heileman and Miller are virtually identical to the LA mark used by Anheuser-Busch. In addition, Heileman and Miller each spent over one and one half million dollars advertising their LA beers in states including Illinois. See Transcript at 444, 460-65, 950, 2006-10, 2068. See also Trial Exhibit 399. Nevertheless, LA is a weak mark, incapable of being diluted. 81. Anheuser-Busch, Heileman and Miller are competitors and their LA beers are directly competing products. See Transcript at 1203, 1313-18, 1327, 2032, 2086. The court has found that, by using the LA mark, Heileman and Miller did not engage in trademark infringement or unfair competition. 82. Anheuser-Busch Incorporated has not met its burden of proving by a preponderance of the evidence that the G. Heileman Brewing Company, Inc. diluted the LA mark used by Anheuser-Busch. 83. Anheuser-Busch Incorporated has not met its burden of proving by a preponderance of the evidence that the Miller Brewing Company diluted the LA mark used by Anheuser-Busch. E. ATTEMPT TO MONOPOLIZE (1) Elements of Claim SPECIFIC INTENT: 84. Although Anheuser-Busch personnel frequently spoke of plans to “preempt” the LA beer market, the court finds that Heileman and Miller have failed to prove by a preponderance of the evidence that Anheuser-Busch had specific intent to control prices or to restrain competition unreasonably. ANTICOMPETITIVE OR PREDATORY CONDUCT: 85. On April 2, 1984, Anheuser-Busch sent Heileman a letter stating that: The March 30, 1984 edition of THE WALL STREET JOURNAL reported an announcement by G. Heileman Brewing Company that in April it will begin producing two low-alcohol beers, to be marketed as Blatz L.A. and Black Label L.A. In 1983, our subsidiary, AnheuserBusch, Inc., adopted and used, and is continuing to use, LA as its trademark for its new brand of beer. We therefore request that the G. Heileman Brewing Company refrain from any future use of LA in connection with any of its products. Please know that if you fail to comply strictly with this request, we will take all legal steps necessary to protect our rights in the name of our new brand of beer. Complaint [of G. Heileman Brewing Company, Inc.] at Exhibit J. See also Transcript at 2116-17. 86. Heileman filed the instant complaint against Anheuser-Busch at 10:26 A.M. on April 18, 1984, according to the file stamp on the complaint. Later that same day Anheuser-Busch filed a mirror-image lawsuit against Heileman in the United States District Court for the Southern District of Illinois. See Affidavit of Peggy L. Jones (April 26, 1984). 87. Anheuser-Busch filed a counterclaim for trademark infringement against Heileman on May 24, 1984. See Answer and Counterclaim [of Anheuser-Busch Incorporated]. 88. Anheuser-Busch made no oral or written demand to Miller to cease and desist or refrain from using or making plans to use the LA mark prior to the time Miller filed its lawsuit against Anheuser-Busch. See Transcript at 2029. 89. Anheuser-Busch filed a counterclaim for trademark infringement against Miller on August 24, 1984, after Miller had begun to use the LA mark on beer sold in commerce on August 13, 1984. See Answer and Counterclaim [of AnheuserBusch Incorporated]. See also Transcript at 2007. 90. On April 18, 1984, Anheuser-Busch filed a trademark infringement action against another competitor, the Stroh Brewery Company, which had announced plans to use the LA mark. After finding that the LA mark was suggestive and deserving of trademark protection, the United States District Court for the Eastern District of Missouri enjoined Stroh from using the LA mark in the United States and its territories and possessions. See Transcript at 368, 1057,1305-06. See also AnheuserBusch, Inc. v. Stroh Brewery Company, 587 F.Supp. 330 (E.D.Mo.), aff'd, 750 F.2d 631 (8th Cir.1984). 91. Based on Anheuser-Busch’s vigorous prosecution of its case against Stroh and of its counterclaims in the instant lawsuits, the court finds that Anheuser-Busch was primarily motivated by a desire to obtain court-ordered relief rather than by a desire to achieve anticompetitive goals merely through the filing and maintenance of lawsuits. See Transcript at 1306. 92. Heileman and Miller have failed to prove by clear and convincing evidence, or even by a preponderance of the evidence, that Anheuser-Busch made its cease and desist demand to Heileman in bad faith or that it engaged in any sham litigation over the LA mark. 93. Heileman and Miller have failed to prove by a preponderance of the evidence that Anheuser-Busch, by attempting to register LA as a trademark or by using judicial process, engaged in anticompetitive or predatory conduct. DANGEROUS PROBABILITY OF SUCCESS: 94. The court finds that the United States is the geographic market relevant to the plaintiffs’ attempt to monopolize claims because, at the time of trial, AnheuserBusch was distributing its LA beer in all states except Connecticut; Heileman was distributing its regional LA beers in most states; and Miller was planning to distribute its Sharp’s LA nationally. Therefore, the United States is the market area in which the seller operates and purchasers can practicably turn to competitors for supplies. See Transcript at 88-89, 446, 1043. See also Trial Exhibits 379, 714. 95. Based upon the following factors, the court finds that Heileman and Miller have not met their burden of establishing the existence of a relevant product sub-market in low alcohol beer: (a)Although there is some evidence that the beer industry recognized low alcohol beer as a distinct economic subcategory or segment, see, e.g., Transcript at 884, 2226, no consumer submarket in low alcohol beer had been established at the time of trial. A preponderance of the evidence shows that low alcohol beer was, at best, an emerging segment. See Transcript at 156-57, 280, 500, 881, 883-84, 1098-99, 1137, 1164, 1169, 1179-83, 1191-92, 1201, 1328, 1329, 1332, 1346, 2132, 2161-63, 2174-75, 2178, 2199-2202, 2221. See also Trial Exhibit 205. (b) The production facilities, customers, pricing structure, and channels of distribution are the same for low alcohol beer as for many other types of beer. See Transcript at 61, 94-96, 103-04, 342, 420-22, 442-43, 484-86, 723-25, 728-30, 733, 1311-19, 2084-85, 2116. See also Trial Exhibit 835. (c) Other beverages, which contain less alcohol than regular beer or no alcohol, are close substitutes for low alcohol beer. See Transcript at 99, 2034-35, 2117-20. (d) Light beer is reasonably interchangeable with LA beer. Light and LA are both sold at premium retail prices. See Transcript at 1311,1329. Both products are intended to be used to reduce or moderate unwanted effects of drinking regular beer. See Transcript at 293-94, 999-1001, 1111, 1157. Most, if not all, light beers contain less alcohol than regular beers, even though they may not contain as little alcohol as low alcohol beers. Most low alcohol beers contain fewer calories than regular beers. See Transcript at 50-51, 102, 245, 297, 411-12, 435, 533-34, 1329-30, 2063-69, 2073-74, 2122, 2152, 2178, 2193, 2228. But see Transcript at 297, 883. (e) Low alcohol beer is not so unique or dominant in the market that there is no practical substitute for it. See Transcript at 99, 1318, 2034-35. 96. Based on the findings numbered 95(aHe) above, the court finds that, at a minimum, the relevant product market consists of all beers containing less alcohol than regular beer. 97. Based on the following factors, the court finds that it was not possible for Anheuser-Busch to achieve the monopoly power to control prices or exclude competition from the relevant market at the time the alleged anticompetitive events occurred: (a) At the time of trial AnheuserBusch had sold approximately 200,000 barrels of LA beer, while Heileman has sold approximately 60,000 barrels of its L.A. beers. See Transcript at 1051-52, 2068. No sales figures were presented for Miller’s low alcohol beer sales, however Miller had captured a 52-55% share of the light beer market. See Transcript at 2210. See also Transcript at 60, 286, 438. At the time of trial light beer sales comprised twenty percent of the total beer market. See Transcript at 286, 2199. Low alcohol beer sales were estimated to comprise less than one percent of total beer sales. See Transcript at 2199. Other competitors were selling beer with less alcohol than regular beer, but the record contains no evidence of their actual numbers or market shares. See Transcript at 380-85, 890-91, 1056-58. See also Trial Exhibits 734, 735. (b) The record contains no evidence of Anheuser-Busch’s capacity to control prices. (c) Although the Stroh Brewing Company was enjoined from using the LA mark, there is no evidence that Stroh or any other competitor was excluded from the relevant market or from selling beer with a low alcoholic content. (2) Liability 98. The G. Heileman Brewing Company, Inc. has not met its burden of proving by a preponderance of the evidence that it suffered an antitrust injury stemming from any predatory or anticompetitive conduct of Anheuser-Busch Incorporated or that Anheuser-Busch attempted to monopolize any relevant market of the beer industry by attempting to register trademarks or by filing or threatening to file lawsuits asserting t