District Judge Dennis Saylor IV of the District of Massachusetts in Worcester issued the injunction on April 28 in Polar Corp. v. PepsiCo Inc.
The order gives PepsiCo. 21 days to stop selling its Polar Shock slush products in New York and New England. The products are distributed in convenience stores, quick-serve restaurants and sports and entertainment venues. According to the order, 8% of PepsiCo’s Polar Shock slush machines are in New England and New York.
In January, Polar Corp. sued PepsiCo and its subsidiary, the Concentrate Manufacturing Co. of Ireland, for trademark infringement and false designation of origin and unfair competition in violation of trademark law.
The 1,200-employee, Worcester-based Polar Corp. claims to be the nation’s largest independent bottler of nonalcoholic beverages.
Last year, Polar Corp. sold more than $70 million of Polar brand products and spent $7.2 million in advertising, according to court records. About 95% of the company’s products are sold in grocery stores. Most Polar Corp. sales are in New England, the Mid-Atlantic states and the Southeast, but the company’s largest markets are New York and Massachusetts.
Polar Corp. has used the “Polar” trademark since 1902 and its federal trademark registration for “Polar” was registered 100 years ago.
Polar Corp. also owns federal registrations for “Polar Pure” and the mark “Polar” accompanied by a design. Polar Corp. claims that it owns state trademark registrations in 16 states, which designate the “Polar” mark as covering soft drinks and carbonated beverages.
According to court papers, Concentrate Manufacturing filed U.S. trademark applications for six “Polar Shock” marks for noncarbonated, nonalcoholic, frozen, flavored beverages in March and April 2010. Last summer, PepsiCo and Concentrate Manufacturing began selling beverages labeled with those marks.
Polar Corp. opposed all six applications, but PepsiCo began a nationwide rollout of Polar Shock dispensing machines last summer. By March of this year, there were almost 8,000 Polar Shock machines in operation throughout the United States, mostly at convenience stores and quick-serve restaurants.
In November 2010, Concentrate Manufacturing filed four more U.S. trademark applications for “Polar Shock” marks.
In his ruling, Saylor concluded that there was a likelihood of consumer confusion on several fronts. Both companies’ logos, for example, incorporate white and multiple shades of blue. “The logos share some significant similarities in color scheme, geometry, and typeface,” he wrote.
Also, although slush drinks are different from sodas and flavored water, “some substantial percentage of the purchasing public would reasonably believe that the products came from the same source,” Saylor wrote.
Saylor ultimately found many reasons why consumers might mentally link the two companies’ products: “[T]he substantial overlap that exists between the parties’ channels of trade, their classes of prospective purchasers, and their advertising methods weighs in favor of finding a likelihood of confusion.”
Saylor wrote that while there’s “no proof of actual confusion on the record,” the Polar Shock machines were not distributed in bulk to New England until the fall of 2010, a few months before Polar Corp. filed the lawsuit. “This short period of time is insufficient to require evidence of actual confusion to prove likelihood of confusion,” he wrote.
When weighing the balance of harms, Saylor wrote that PepsiCo claims it would need to spend $1 million in rebranding costs if it couldn’t use the “Polar Shock” marks. On the plaintiff’s side, the value of its marks and the loss of distinctiveness of those marks would be most acute in New England and New York, Saylor wrote.
“The Court accordingly finds that in New England and New York, the likely harm to the plaintiff outweighs the harm to defendants arising from their inability to use the Polar Shock marks, but that the balance of equities requires the opposite result in the remaining states,” Saylor wrote.
PepsiCo’s lawyers at Houston-based Baker Botts did not respond to requests for comment. Daniel Cloherty, a partner at Boston-based Collora who is also representing PepsiCo in the case, referred questions to the company.
PepsiCo spokesman Joe Jacuzzi said the company’s policy is not to comment on cases in litigation.
“Polar is pleased that the court agreed that Pepsi’s unauthorized use of Polar’s brand to identify its new Polar Shock slush-type beverage product violated Polar’s hard-earned trademark rights and created a likelihood of consumer confusion in the marketplace,” said one of Polar Corp.’s lawyers on the case, Mark Meredith, a Providence, R.I., partner at Hinckley Allen Snyder.
The opinion is well written, but its conclusion is somewhat questionable, said Andrew Berger, an intellectual property counsel to New York-based Tannenbaum Helpern Syracuse & Hirschtritt, who isn’t involved in the case.
“When you look at the products themselves, you see that they’re substantially different,” Berger said. “Just because a soft drink manufacturer might produce this kind of product [the slush made by PepsiCo], it doesn’t mean the product is likely to be confused with the plaintiff’s products.”
Aside from the differences between the products, they’re sold in different ways and there’s no actual confusion, Berger said.
“The court sidesteps that issue,” Berger said. “There’s no evidence from anybody of any kind of confusion except the judge seems to think there might be. I’m not convinced the court reached the right result.”
Sheri Qualters can be contacted at email@example.com.