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Baig v. Coca-Cola Co.

United States District Court, N.D. Illinois, Eastern Division

September 24, 2014

MIRZA N. BAIG AND BLUE SPRINGS WATER CO., Plaintiffs,
v.
THE COCA-COLA COMPANY, Defendant

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For Mirza N Baig, Blue Springs Water Co., Plaintiffs: William J. Sneckenberg, LEAD ATTORNEY, Sneckenberg, Thompson & Brody, LLP, Chicago, IL; Colin Thomas O'Brien, Mark Van Buren Partridge, Partridge IP Law P.C., Chicago, IL; James P. DuChateau, Johnson & Bell, Ltd., Chicago, IL.

For The Coca-Cola Company, Defendant: Jill Wasserman, LEAD ATTORNEY, PRO HAC VICE, Bruce W. Baber, PRO HAC VICE, King & Spalding LLP, Atlanta, GA; Eileen Marie Letts, Greene & Letts, Chicago, IL; Kathleen E Mccarthy, PRO HAC VICE, King & Spalding Llp, New York, NY.

For The Coca-Cola Company, Counter Claimant: Jill Wasserman, LEAD ATTORNEY, Bruce W. Baber, King & Spalding LLP, Atlanta, GA; Eileen Marie Letts, Greene & Letts, Chicago, IL; Kathleen E Mccarthy, King & Spalding Llp, New York, NY.

For Mirza N Baig, Blue Springs Water Co., Counter Defendants: Colin Thomas O'Brien, Mark Van Buren Partridge, Partridge IP Law P.C., Chicago, IL.

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MEMORANDUM OPINION AND ORDER

Hon. John Z. Lee, United States District Judge.

Plaintiffs Mirza Baig and Blue Springs Water Co. allege that Defendant The Coca-Cola Company has infringed upon Plaintiffs' trademark for " Naturally Zero" spring water through its use of the mark " ZERO" in connection with products such as " Sprite ZERO." Plaintiffs argue under U.S. trademark law and Canadian trademark law that Defendant's use of the " ZERO" mark results in reverse confusion to consumers. Defendant denies all wrongdoing and has counterclaimed seeking a declaratory judgment that, inter alia, it has neither infringed nor misappropriated any of Plaintiffs' trademark rights. Defendant now moves for summary judgment, arguing that Plaintiffs have abandoned their trademark for " Naturally Zero," and even if not, that the mark is not entitled to protection. For the reasons set forth below, the Court grants Defendant's motion, enters judgment in its favor on Count[s] I of Plaintiffs' Complaint, and dismisses Count II without prejudice.

Facts[1]

Plaintiff Mirza N. Baig (" Baig" ) was the principal, President, and sole owner of plaintiff Bluesprings Water Co. (" Bluesprings" ). Def.'s LR 56.1(a)(3) Stmt. ¶ 1. Bluesprings was a corporation organized under the laws of the State of Illinois; it is no longer in good standing with the Illinois Secretary of State office. Id. ¶ ¶ 2, 3. Defendant The Coca-Cola Company (" TCCC" ) is a manufacturer of sparkling beverages and sports drinks. Id. ¶ ¶ 4, 5.

Plaintiffs assert rights to the mark " Naturally Zero" for bottled water in the United States and Canada. Id. ¶ 8. Plaintiffs' claim is based upon their manufacture of bottled water in Canada and sales of such bottled water in the greater Chicago area and other nearby locations, all of which took place between 1998 and 2004. Id. ¶ ¶ 8, 23. Plaintiffs assert that Defendant's use of marks that include the word " ZERO," including COCA-COLA ZERO, COKE ZERO, and SPRITE ZERO, infringes upon Plaintiffs' rights in the " Naturally Zero" mark in the U.S. and Canada. Id. ¶ 9.

A. The " Naturally Zero" Product

During the 1990s, while working as a distributor for Crystal Canadian bottled water, Baig decided to create his own bottled water and conducted market research to see what other brands of bottled water were available. Id. ¶ 10. At his deposition, Baig testified that after one of his Crystal Canadian customers told Baig that he was charging too much for a product that had nothing in it, Baig looked at " the ingredients of the bottled water also, and then I just click into my mind the word zero, and I thought that it would be the perfect brand to promote the bottled water brand." Id. ¶ 11. Baig further testified that he selected the name " Naturally Zero" because the name communicated the " quality of the water, purity, no sugar, no calories, you know, a drink about nothing" and " highlight[ed] the quality of the product," and he decided to use the word " naturally" because " it comes from the nature" and " the water is the gift of nature." Id. ¶ 12. Russell Hopkins (" Hopkins" ), a retired beverage industry consultant who assisted

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Baig to develop the product, testified at his deposition that he believed that the name " Naturally Zero" was a good choice because " Zero" immediately communicated to consumers certain attributes of the water, such as the fact it had no calories, no additives, no sweeteners, and no harmful, artificial ingredients. Id. ¶ 13. Between 1998 and 2004, Baig imported from Canada bottled water bearing the label " Naturally Zero." Id. ¶ 14. The bottles prominently featured a logo design with a large numeral " 0" and the word " zero" on the labels. Id. ¶ 15; Pl.'s LR 56.1(b)(3)(B) Stmt. ¶ 15.

1. Naturally Zero Sales

Between 1998 and 2004, Baig primarily sold the Naturally Zero water door-to-door to gas stations located in the greater Chicago area during the summer months. Id. ¶ ¶ 16, 19. During this time period, Plaintiffs produced and sold about 500,000 bottles of Naturally Zero water, in 16.9 ounce, 20 ounce and 1 liter sizes. Id. ¶ 17. Additionally, between 2000 and 2003, wholesalers sold approximately twenty-five to thirty pallets of Naturally Zero water in the greater Chicago area. Id. ¶ 20. Baig estimates that his total gross sales of Naturally Zero water between 1998 and 2004 were less than $150,000.00. Id. ¶ 18.

Baig also sold limited amounts of Naturally Zero water outside of the Chicagoland area. From 2000 to 2003, Baig made two to three trips each year to the Milwaukee area, selling approximately 100 cases of water each trip. Id. ¶ 21. During that same time period, Baig made approximately 12 trips each year to sell Naturally Zero water to gas stations in Munster and Hobart, Indiana, selling approximately 12 to 15 cases each time. Pl.'s LR 56.1(b)(3)(B) Stmt. ¶ 22. While Baig does not contend that he sold Naturally Zero product anywhere else in the United States other than the Chicagoland area, Hobart and Munster, Indiana, and the Milwaukee, Wisconsin area, he testified that he believed that a distributor may have sold some product in Canada.[2] Id. ¶ 23. Plaintiffs have provided no documentation or other proof of any sales of Naturally Zero in Canada. Def.'s LR 56.1(a)(3) Stmt. ¶ 25; Pl.'s LR 56.1(b)(3)(B) Stmt. ¶ 25.

Plaintiffs admit that no Naturally Zero water has been sold since October 3, 2004. Def.'s LR 56.1(a)(3) Stmt. ¶ 48. Moreover, since October 2004, no remaining inventory of Naturally Zero water has been maintained. Id. ¶ 49. No Naturally Zero water has been bottled since the spring of 2004. Id. ¶ 50.

Plaintiffs made no attempts to resume sales of Naturally Zero until 2010. Id. ¶ 55. At that time, Plaintiffs either entered into negotiations or an agreement (the parties are in dispute as to this point) with an individual in Chicago named Robert Corr regarding launching a line of soft drink products named " Naturally Zero Cola." Id. ; Pl.'s LR 56.1(b)(3)(B) Stmt. ¶ 55.

2. Naturally Zero Marketing Efforts

On February 18, 1999, with Hopkins' assistance, Plaintiffs issued a press release

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announcing Naturally Zero water, which was distributed to beverage industry publications. Def.'s LR 56.1(a)(3) Stmt. ¶ 26. Following the issuance of the press release, in 1999, articles regarding Naturally Zero water appeared in three trade publications. Id. ¶ 27. Plaintiffs also exhibited Naturally Zero water at three separate trade fairs: a beer wholesalers trade show in Las Vegas in 1999; a health fair in Chicago sponsored by the American Kidney Fund in 2001; and a Chicago food show in 2002. Id. ¶ 28. Plaintiffs have never had a written business plan for the Naturally Zero business. Id. ¶ 52.

While Plaintiffs admit that they never engaged in any newspaper, print, television, radio, billboard or other media advertising for their Naturally Zero water, the parties dispute whether Plaintiffs ever produced any magazine advertising, point-of-sale, or any other retail or consumer-facing marketing materials for Naturally Zero water. Def.'s LR 56.1(a)(3) Stmt. ¶ 29; Pl.'s LR 56.1(b)(3)(B) Stmt. ¶ 29. Plaintiffs created " brochures" or flyers regarding the Naturally Zero water, which were sent to potential distributors. Id. ¶ 30. And, while the parties agree that Plaintiffs at one time operated an Internet website, www.naturallyzero.com, which included a link to the website of the Canadian manufacturer Clarus Canadian, they dispute the length of time the website remained operational. Def.'s LR 56.1(a)(3) Stmt. ¶ 31; Pl.'s LR 56.1(b)(3)(B) Stmt. ¶ 31. Moreover, Plaintiffs have provided no records of whether, how frequently, or by whom the website was accessed or visited, and have provided no evidence that any Naturally Zero water was ever ordered or purchased through the website. Def.'s LR 56.1(a)(3) Stmt. ¶ 31. The website domain name is currently for sale. Id. ¶ 58.

As for licensing of the Naturally Zero product, in 2000, Plaintiffs entered into a license agreement with the American Kidney Fund (" AKF" ) providing for use of the AKF name on the label of Naturally Zero water. In return, AKF was promised a royalty of four percent of gross sales. Id. ¶ 32. Also in 2000, the American Kidney Fund issued one press release about Naturally Zero water. Id. ¶ 33. In 2002, Bluesprings sublicensed its rights under the AKF license to Clarus Canadian, a company in Canada that was bottling the water for Plaintiffs. Id. ¶ 34. The amount of Naturally Zero water sold bearing the AKF label was very minimal. Id. ΒΆ 35. Neither Baig nor Bluesprings ever paid any royalties to the ...


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