Thursday, February 23, 2006
Maker of ‘Koke’ Invokes ‘Unclean Hands’ Defense
By ROGER M. GRACE
William Howard Taft is president, the Model “T” Ford is on the roads — with a 20 mph speed limit in several states — and “I Wonder Who’s Kissing Her Now” is a hit record. It’s 1909.
The Coca-Cola Company brought suit against the Koke Company of America, which in 1911 succeeded to the rights to “Koke” and “Dope.” U.S. District Judge William H. Sawtelle of Arizona granted an injunction. Sawtelle (later a member of the Ninth U.S. Circuit Court of Appeals) wrote:
“I find as a matter of fact from the evidence that the defendant Koke Company of America was organized for the purpose of manufacturing and selling a syrup in imitation of that produced by the plaintiff, and that it aided the persons, to whom it sold its product, in the substitution of its product for that of plaintiff, [and] that the name selected was chosen for the purpose of reaping the benefit of the advertising done by the plaintiff….”
The Koke Company appealed, arguing that even if it were an infringer, the courts should afford the Coca-Cola Company no relief because of its “unclean hands.” The Ninth Circuit was persuaded.
Writing for a three-judge panel in 1919, Judge Erskine Mayo Ross said:
“The evidence, we think, leaves no room for doubt that the appellee’s very extensive business conducted under the name ‘Coca-Cola’ is not entitled to protection at the hands of a court of equity: First, because it shows that in the beginning, and for many years thereafter, the coca of which its compound was in large part made contained the deadly drug cocaine, and the caffeine, which constituted the other main ingredient, was derived mainly, and, indeed, almost exclusively, not from cola nuts, but from tea leaves. Yet the labels with which the preparation was adorned contained pictures of coca leaves and cola nuts, and was widely advertised and sold, first, under the name of ‘Coca-Cola Syrup & Extract,’ next as ‘Coca-Cola Syrup,’ and finally as ‘Coca-Cola,’ as a ‘valuable brain tonic,’ an ‘ideal nerve tonic and stimulant,’ as a cure of ‘headache, neuralgia, hysteria, and melancholy,’ and ‘of nervous afflictions,’ under which representations a tremendous consumption was built up, and under which large numbers of the appellee’s customers still consume the mixture, although long prior to the bringing of the present suit the drug cocaine was practically eliminated from the drink, and the caffeine, of which it has since been mainly composed, still comes mainly, if not entirely, from other sources than the cola nut. We find such conduct on the part of the appellee to be, in fact, such deceptive, false, fraudulent, and unconscionable conduct as precludes a court of equity from affording it any relief.”
That decision would have been devastating to the Coca-Cola Company had the U.S. Supreme Court not reversed the following year.
As you might recall from a previous column, the high court in 1916 held that the question of whether “Coca-Cola” was descriptive of a concoction that included coca leaves and cola nuts, or had gained a secondary meaning, was a question of fact to be resolved by a jury. Without acknowledging that it was repudiating its former view, the court in 1920 held, as a matter of law, that “Coca-Cola” had acquired secondary meaning, so that no fraud was perpetrated should it be that there was no coca or cola in the syrup.
Justice Oliver Wendell Holmes wrote for a unanimous court, saying:
“The name now characterizes a beverage to be had at almost any soda fountain. It means a single thing coming from a single source, and well known to the community. It hardly would be too much to say that the drink characterizes the name as much as the name the drink. In other words ‘Coca-Cola’ probably means to most persons the plaintiff’s familiar product to be had everywhere rather than a compound of particular substances....[I]t has acquired a secondary meaning....”
Sawtelle had enjoined the Koke Company from using the word “Dope.” The Supreme Court ordered that the decree be modified to drop that prohibition. Holmes explained that the word “dope” is “one of the most featureless known even to the language of those who are incapable of discriminating speech,” continuing:
“In some places it would be used to call for Coca-Cola. It equally would have been used to call for anything else having about it a faint aureole of poison. It does not suggest Coca-Cola by similarity and whatever objections there may be to its use, objections which the plaintiff equally makes to its application to Coca-Cola, we see no ground on which the plaintiff can claim a personal right to exclude the defendant from using it.”
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