Despite the millions Coca-Cola Co. began spending in a splashy global campaign last month to try to convince consumers that its flagship brand is "happiness in a bottle," a tiny brand called Cricket Cola already owns that tagline. Now, the little brand with print ads that shout "Hello Goliaths, Meet David" is demanding Coke get off the happiness bandwagon.
'I just don't think it's fair'
"It's uncanny. The coincidences were a little too much for us," said Mary Heron, co-founder and CEO of the company, which makes a gourmet cola made with green tea, kola nut and cane sugar (a diet version uses Splenda). "It's really diluting our marketing. I just don't think it's fair."
While the company hasn't trademarked the line, Ms. Heron claims her lawyer said Cricket's use of the line is now common law because it has been on bottles for two of its three years in existence. "Every bottle of Cricket Cola that people can take in their hands says that drinking [it] can make you happy and that it is happiness in a bottle," Ms. Heron said.
When Coke unveiled its global campaign and tagline, "Welcome to the Coke side of life," the marketer liberally stated the "happiness in a bottle" concept to describe the aim of its latest creative effort. In a statement, Coca-Cola said it doesn't use the phrase in its advertising. "The tagline for our new campaign is 'The Coke Side of Life,' which focuses on optimism, choosing a positive outlook and why people love to drink Coca-Cola."
Coke went on to say that "We do not believe there is any basis to Cricket Cola's claims that we have infringed its rights, and we are disappointed that it is using this opportunity to gain publicity and to create negative press around our campaign and brand. We will look into the issues and respond appropriately in a timely manner."
The Potomac, Md., company, through its lawyer, has sent a cease-and-desist letter to Coke and asked for yet-to-be-negotiated compensation for harming the fledgling brand. The letter, dated April 17, asserts that Cricket began using the happiness line 22 months ago on its packaging, in sales materials and advertising, and plans to use the line as it works to build distribution and sales of the soda. It gives Coke 14 days to respond or face a lawsuit.
Brand's marketing effort 'threatened'
"Cricket's marketing efforts -- and its ability to build a distinctive brand around the 'Happiness in a bottle' tag line -- is threatened and frankly can be destroyed by Coca-Cola's marketing power and use of that message in its current worldwide marketing campaign," the letter said. "Coca-Cola's conduct in that regard would support a finding of trademark infringement under [paragraph/section] 43(a) of the Lanham Act."
First bottled in San Francisco and distributed there and in the Washington, D.C., metro area, the brand now is being sold in Hawaii, North Carolina, South Carolina, Texas and Washington and is soon to begin distribution in France. Wolfgang Puck's Las Vegas restaurants carry it as does Midwestern sub chain Potbelly and Starbucks in British Columbia, Canada. Ms. Heron wouldn't disclose sales for the privately held company, but said it plans to expand distribution and shelf-keeping units in the near future.
The dispute is notable in that it tests the reverse confusion doctrine of the Lanham Act that is a favorite in David and Goliath situations, said Jane Shay Wald, partner-trademark practice at the law firm Irell & Manella.
Dreamwerks vs. DreamWorks
One such case was between a small science-fiction convention business called Dreamwerks that sued the movie studio DreamWorks for trademark infringement over concerns that people would think the convention business was copying the much larger film production company, even though it was first to market. Ms. Wald said Cricket Cola's case is unusual because the trademark office doesn't allow companies to submit press releases as evidence of trademark use in establishing a registration.
"But sometimes what happens in the real world and happens in the trademark office are different," she said. "There have been cases where the public has come to recognize a brand in a name that the company itself isn't even using." For example, in the 1960s, Volkswagen didn't like people calling its Beetle "the bug," but eventually was successful in getting rights to the nickname based on how the general public and the press were referring to the car. The same was true with IBM and "Big Blue” and Federal Express and "FedEx."
"It's not absolutely impossible that if the public starts thinking of a particular product with a nickname that it could affect its own rights and the rights of other people who have that nickname as their actual brand," she said. "If liability for trademark infringement can arise from a press release as opposed to an actual product, then advertisers have to be a lot more careful in what they say in ads because here would be a new problem."