Thursday, March 16, 2006
Coca-Cola Fails to Persuade Courts to Block ‘RC Cola’
By ROGER M. GRACE
Undaunted by the Fourth U.S. Circuit Court of Appeals’ rejection in January, 1941 of its contention that it possessed the exclusive right to use the word “cola” in the name of a soft drink, the Coca-Cola Company continued doggedly to pursue its action in the state of Delaware to establish that very right.
In its action in the Chancery Court, it sought to block Nehi Corporation from marketing “Royal Crown Cola.”
This was not the Coca Cola Company’s first battle with that company. Nehi had previously been known as the Chero-Cola Company, formed in 1912 by pharmacist Claud A. Hatcher of Columbus, Georgia. As related here a couple of weeks ago, the Coca-Coca Company succeeded in 1921 in gaining a reversal of the commissioner of patents’ decision to grant federal trademark registration of “Chero-Cola.” That name, the Court of Appeals of District of Columbia held, was apt to be confused with “Coca-Cola.”
Further litigation ensued between the companies which was settled by an agreement of October 30, 1923 under which, with a minor exception, the Chero-Cola Corporation would stop marketing a beverage called “Chero-Cola” or “Cherry-Kola” as of Jan. 1, 1928. (It continued to put out “Chero,” which it identified as “a perfect cola,” into the early 1940s.)
In 1926, Hatcher began selling Nehi-Cola. (He incorporated in Georgia in 1926 as Nehi, Inc., which was reincorporated in Delaware in 1938 as Nehi Corporation.)
The company founder died in 1933, and the following year, Nehi began marketing “Royal Crown Cola” (or “RC Cola”) and, in 1935 added “Par-T-Pak-Cola” to its line of products.
It was Royal Crown Cola—based on a formula that took six months to develop—that gained public favor.
The Coca-Cola Company brought its Delaware action against Nehi in 1939. The defendant got on the offensive with a nation-wide newspaper advertising campaign, starting in September of that year, bringing the litigation to the public’s attention. An ad declared:
“NO GREATER COMPLIMENT could be paid Royal Crown than the fact that a competitor has just challenged the right of Royal Crown to use the word cola. The courts will decide the legal issues on their merits.
“There are more than 200 cola drinks. But there’s only one Royal Crown. And Royal Crown is going to town. There are just two reasons: People prefer Royal Crown’s flavor (in 9 out of 10 attested taste-tests in city after city, Royal Crown has won hands down). And, people prefer two brimming glasses for one nickel.”
While Coke was offered in 6-ounce bottles for five-cents, RC was available for the same price in the pioneering 12-ounce bottle.
The ad continued:
“No matter what Americans buy, they expect more than one choice. And they feel entitled, whenever possible, to get twice as much for their money.”
The March 20, 1942 ruling in the case by Chancellor William Watson Harrington sparked an ad, placed in newspapers nationwide, bearing the REMINISCING (Column) “Court Decides IN FAVOR OF Royal Crown Cola.” The text of the ad began:
“That was the Court’s answer, just a few days ago, to each and every charge made against Royal Crown Cola by our largest competitor, who claimed the sole right to use the word ‘cola’ as part of the name of a drink.
“The Court recognized that cola has been used in various ways for many generations, and that the word ‘cola’ is the generic term for a type of beverages known as ‘cola drinks,’ of which there are many.”
The ad went on to say:
“To you, the Court’s decision means you can continue to buy whichever cola your taste prefers....
“To us, the decision means adjudication of our fair dealing, clean competition, and the fact that Royal Crown Cola is sold on merit alone.”
The Supreme Court of Delaware affirmed Harrington on Jan. 4, 1944, saying:
“The word ‘cola’, as applied to the name of a beverage, is now a generic name descriptive of a type of non-alcoholic drink produced by many manufacturers. It is a word in the public domain, incapable of exclusive appropriation, and apart from special circumstances, may be freely used denominatively, provided that the name as a whole is not deceptively similar to ‘Coca-Cola’.”
Copyright 2006, Metropolitan News Company
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