Coca-Cola victorious in dispute with local soda producer over SPRITE mark

Norway
  • Coca-Cola sought to prevent local soda producer from using JALLASPRITE and JALLAXXXXXX for its own lemon soda
  • Concerning JALLASPRITE, there were no grounds for injunction as only limited number of bottles were still in trade
  • Concerning JALLAXXXXXX, court found that defendant’s actions were in breach of good business practice

During the past year, The Coca-Cola Company has taken steps to stop a local soda producer from using the names JALLASPRITE and JALLAXXXXXX (the Xs indicate censorship) in the marketing, distribution and sale of its own lemon soda. In a recent decision, the Oslo District Court considered whether the use of JALLAXXXXXX was in breach of good business conduct and, therefore, of the Marketing Control Act. Due to the history and statements linked to the choice of this name, the court concluded that it was.

Facts

In February 2018 local soda producer O Mathisen AS (OM) launched a new lemon-flavoured soda under the trademark JALLASPRITE. Immediately after the launch, Coca-Cola wrote to OM, alleging infringement of its well-known trademark SPRITE and requiring that OM immediately stop such use. OM disputed Coca-Cola's claim and, after some correspondence between the parties, Coca-Cola took legal steps.

Despite Coca-Cola's efforts, OM was not willing to stop using JALLASPRITE. Consequently, in September Coca-Cola notified OM that it had initiated a lawsuit. Some days later, the press began writing about the dispute – more specifically, local paper Vårt Oslo ("Our Oslo"). The article stated: “The Coca-Cola Company want Jallasprite out of the market. They are now making threats to bring the local soda producer to court.” Later in September, the same paper wrote that OM would change the name to JALLAXXXXXX or JALLASITRON (‘lemon’), and OM informed Coca-Cola of this fact some days later.

On that day, the paper wrote a new article, describing how OM had "surrendered" to Coca-Cola, and stating that OM would now re-label already produced bottles. In the article, OM’s chairman and CEO also stated that "the six Xs shall replace each letter in the word ‘sprite’". However, five days later, in another article, OM explained how it chose this new name based on esthetical reasons and time pressure. Further, in October the paper published another article with the headline: "The world's largest soda producer Coca-Cola takes tiny JallaXXXXXX from Grønland in Oslo to court".

OM continued to dispute that JALLASPRITE constituted trademark infringement, despite having changed the name. In addition, OM had taken measures to minimise the risk of confusion, for example by asking its customers information on remaining stocks, in order to deliver substitute goods and stop the sales of JALLASPRITE-branded goods. On 5 November, the parties met for a court hearing at the Oslo District Court.

Decision

Regardless of OM's attempts to continue the use of JALLAXXXXXX, Coca-Cola argued that the use of JALLASPRITE, with or without a label, constituted trademark infringement and a breach of the standard of good business practice. This also applied to JALLAXXXXXX. Therefore, the court had to decide whether to prohibit OM from selling, distributing and marketing soda under the marks JALLASPRITE and/or JALLAXXXXXX.

Concerning JALLASPRITE, with or without a label, the court found that there were no grounds for an injunction. The court emphasised that there were only a limited number of bottles bearing the mark JALLASPRITE, covered and uncovered, that were still in trade. However, when it came to JALLAXXXXXX, the court was of a different opinion. Due to the history and concrete statements to the media by OM's chairman and CEO in connection to the choice of name, the court agreed with Coca-Cola that the use of JALLAXXXXXX constituted a breach of the standard for good business conduct.

Firstly, regarding the history, the court found it likely that the use of JALLASPRITE would entail trademark infringement. Therefore, OM's conduct was an unreasonable exploitation of the distinctive character and reputation of the mark. Secondly, the court pointed at the media attention that the case had attracted, mainly in Vårt Oslo, but also through links on larger online papers. The articles highlighted that Coca-Cola had taken on a local undertaking. This resulted in large PR gains for OM and negative publicity for Coca-Cola, the court stated. The court also pointed at the chairman's differing statements in the articles, and emphasised the fact that the chairman linked the Xs to SPRITE and that OM appeared to use the media in order to get publicity. OM had also, during the conflict, used a label that stated "sued", which substantiated the impression that OM had strategically used the dispute – and the fact that Coca-Cola enforced its well-known trademark – as an opportunity for publicity at the expense of the trademark owner. This impression continued in connection with the change of name, with OM creating a strong association between SPRITE and the Xs. The court considered that such actions were in breach of good business practice.

The court thus concluded that Coca-Cola’s main claim was probable. In addition, the court concluded, although somewhat doubtfully, that it was necessary to issue an interim injunction to prevent substantial damage or disadvantage to Coca-Cola.

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