The Squirt Company V. the 7-Up Company

207 U.S.P.Q. 12 FOR EDUCATIONAL USE ONLY Page 1 1979 WL 25027 (E.D.Mo.), 207 U.S.P.Q. 12 (Cite as: 207 U.S.P.Q. 12)

The Squirt Company TRADEMARKS v. [3] Infringement -- In general (§ 67.431) The Seven-Up Company et al. Marks and names subject to ownership -- Descriptive -- In general (§ 67.5071) District Court, E. D. Missouri, E. Div. Marks and names subject to ownership -- Descriptive -- Misdescriptive or not descriptive -- Particular marks (§ No. 78-375C (A) 67.5078) Decided Sept. 6, 1979 "Squirt" is entitled to greater or broader degree of protection United States Patents Quarterly Headnotes because of its strength than is weak or commonplace mark.

TRADEMARKS TRADEMARKS [1] Marks and names subject to ownership -- Descriptive [4] Identity and similarity -- How determined -- -- Misdescriptive or not descriptive -- Particular marks Appearance, meaning or sound (§ 67.4055) (§ 67.5078) Identity and similarity -- How determined -- Purchasers Name "Quirst" is coined, fanciful term having no meaning and selling methods (§ 67.4071) in English language. Both visual impression of trademark and sound of words are important when dealing with products such as soft drinks TRADEMARKS that are frequently sold in self-service grocery stores and [2] Evidence -- Of confusion (§ 67.337) supermarkets; "Squirt" and "Quirst" must be compared for Identity and similarity -- How determined -- In general similarity in appearance as well as in sound. (§ 67.4051) Infringement -- In general (§ 67.431) TRADEMARKS Infringement -- Knowledge or intent (§ 67.437) [5] Identity and similarity -- How determined -- In Pleading and practice in courts (§ 67.63) general (§ 67.4051) Court, in order to determine whether there is likelihood of Two marks should not be examined with microscope to confusion in trademark infringement case, must consider detect minute differences, but, on contrary, should be numerous factors, including strength or weakness of viewed as whole. plaintiff's mark, degree of weakness of plaintiff's mark, TRADEMARKS degree of similarity between two products, competitive [6] Evidence -- Of confusion (§ 67.337) proximity of products, accused infringer's purpose in Fact that approximately 45% of entire sample specifically adopting its mark, actual confusion, and degree of care mentioned either similarity in sound between words "Squirt" likely to be exercised by consumers; while each of factors is and "Quirst," or similarity between names "Squirt" and essential to determination of likelihood of confusion "Quirst," without any prompting or suggestion whatsoever, question, it is important that when applying these factors is affirmative evidence of definite likeness between two that court keep in mind that they are variable and that no marks as perceived by persons hearing two names together. single factor is determinative; they are variable and relative and no single one, because of its presence or absence is, in TRADEMARKS itself, determinative of case; rather, method of approach [7] Class of goods -- Particular cases -- Similar (§ requires trial court to consider and weigh evidence relative 67.2073) to each of these points and such other points as it finds There is high degree of similarity between grapefruit applicable in particular circumstances before it; then, from flavored carbonated soft drink and lemonade flavored balancing of conclusions reached on all of these factors, it non-carbonated soft drink, both of which not only fall under decides whether or not parties are entitled to relief or general category of "soft drinks," but also under heading of protection sought. "non-cola, fruit-flavored soft drinks."

TRADEMARKS held critical in its marketing strategy. [8] Identity and similarity -- How determined -- Considering goods (§ 67.4057) TRADEMARKS Degree of similarity in trademarks necessary to support [11] Infringement -- Knowledge or intent (§ 67.437) finding of infringement where products are virtually Indicator of alleged infringer's intent in selecting name is identical is less than in case of dissimilar, noncompeting amount of money he intends to or has already spent on products. advertising and promotion of his product; when alleged infringer selects mark very similar to well established, well TRADEMARKS advertised mark that is held by plaintiff, and then attaches [9] Class of goods -- How determined -- In general (§ that mark to product very similar or virtually identical to 67.2031) product to which plaintiff's well established mark is Identity and similarity -- How determined -- In general attached, and does not spend any money or very little (§ 67.4051) money in advertising his product, it is not unreasonable to Identity and similarity -- How determined -- Purchasers infer that alleged infringer selected his mark with specific and selling methods (§ 67.4071) intent of profiting from plaintiff's reputation and advertising. Closeness of competition between two non-cola, fruit-flavored soft drinks is shown by identities that in some TRADEMARKS instances, they are being packaged by same bottler and/or [12] Evidence -- Of confusion (§ 67.337) being distributed by same distributor, two products are Evidence of actual confusion is not essential to finding of being offered for sale in common retail outlets, and, in fact, trademark infringement; however, there can be no more in at least one grocery store or supermarket, they were positive proof of likelihood of confusion than evidence of positioned on shelf next to one another, in marketing two actual confusion. soft drinks parties are making use of same vehicles for TRADEMARKS advertising, namely, television, radio, and newspaper, and [13] Evidence -- Of confusion (§ 67.337) "thirst-quenching" characteristics of soft drink is theme Identity and similarity -- How determined -- common to advertising of both of them, and both are Appearance, meaning or sound (§ 67.4055) packaged in convenient 12-ounce aluminum cans. Episode in which individual mistook accused's television TRADEMARKS commercial for trademark owner's is evidence of definite [10] Evidence -- Of confusion (§ 67.337) likeness in sound that exists between two words. Identity and similarity -- How determined -- TRADEMARKS Considering other marks (§ 67.4059) [14] Evidence -- Of confusion (§ 67.337) Infringement -- Knowledge or intent (§ 67.437) Court cannot say that results of survey in which actual Even though defendant was well aware of plaintiff's purchaser is asked to list brands he has just purchased, and trademark when it chose its name and was cognizant of then asked to display brands he has named, in order to plaintiff's vigorous trademark protection policies prior to determine accuracy of his listed purchases demonstrate final decision to proceed with its mark, court cannot say that existence of actual confusion between products as in it was defendant's intent to pass their product off as being absence of any opportunity for surveyed party to be manufactured by plaintiff in case in which fact that cross-examined it is not possible to determine reasons for defendant's product is defendant's is clearly spelled out on three instances of plaintiff's mark being interchanged with face of its product directly below its mark and that its defendant's; unavailability of cross-examination of three survey commissioned prior to its mark selection indicated respondents is crucial fact that distinguishes Roto-Rooter that accused mark had much stronger connotation than four Corp. v. O'Neal, 186 USPQ 73, from present case. other names it had selected for product -- a quality that it

TRADEMARKS There is no problem with manner in which interview in [15] Evidence -- Of confusion (§ 67.337) which interviewers were instructed to record responses Fact that survey was conducted in live market environment verbatim was conducted; fact that there was at least twenty and measured actual consumer purchasing behavior as percent verification of results in surveys conducted in two opposed to being conducted in home and measuring cities insures that interview was accurately recorded by consumer opinion, lends greater reliability to survey results; interviewer. degree of attention of interviewee who is not in buying mood but is just in friendly mood answering pollster is quite TRADEMARKS different from that of interviewee who has his wallet in his [20] Evidence -- Of confusion (§ 67.337) hand; many men do not take same trouble to avoid Identity and similarity -- How determined -- confusion when they are responding to sociological Appearance, meaning or sound (§ 67.4055) investigators as when they spend their cash. Identity and similarity -- How determined -- Purchasers and selling methods (§ 67.4071) TRADEMARKS Visual impression of mark is very important when dealing [16] Evidence -- Of confusion (§ 67.337) with products that are frequently sold in self-service grocery Evidence that suggests that with respect to goods at issue stores because of fact that purchaser identifies and selects there is definite interconnection between similarity of name product through his sense of sight; some visual and possible confusion supports theory that interchanges representation of two marks on such product, such as goods that occurred between two brands were result of similarity themselves or photographs of them, should be displayed to that exists between marks and not result of carelessness or survey respondent so that visual comparison of two marks inadvertence on respondent's part. can be made.

TRADEMARKS TRADEMARKS [17] Evidence -- Of confusion (§ 67.337) [21] Evidence -- Of confusion (§ 67.337) Court cannot say that 4.3% (three out of seventy) level of 34% and 23% of respondents in two surveys who said error between plaintiff's and defendant's soft drink products plaintiff's and defendant's soft drinks were put out by same is de minimus or statistically insignificant, when it is company are not insubstantial percentages and are some considered in context of entire soft drink industry; evidence of likelihood of confusion. percentage of "likely confusion" required varies from case to case. TRADEMARKS [22] Evidence -- Of confusion (§ 67.337) TRADEMARKS Identity and similarity -- How determined -- [18] Evidence -- Of confusion (§ 67.337) Appearance, meaning or sound (§ 67.4055) Identity and similarity -- How determined -- Purchasers It is significant that without any suggestion whatsoever and selling methods (§ 67.4071) approximately 25% (114/476) of entire sample cited as basis Survey offered in support of contention that likelihood of for their response to question as to whether survey confusion exists between two marks applied to two soft respondent thought defendant's and plaintiff's soft drinks are drinks might well have been directed at general population put out by same or different companies a reason very instead of just women 25 years of age or older who had closely related to either similarity between names or purchased any kind of soft drink on day of survey, as similarity between sounds of names or similarity in spelling practical matter, since almost anyone would be likely to of two names; this is evidence of definite likeness or have purchased soft drinks at one time or another. similarity between marks as perceived by persons hearing two names together. TRADEMARKS [19] Evidence -- Of confusion (§ 67.337) TRADEMARKS

[23] Identity and similarity -- How determined -- Harper, District Judge. Considering goods (§ 67.4057) Identity and similarity -- How determined -- Purchasers This action was filed April 7, 1978, for alleged infringement and selling methods (§ 67.4071) and dilution of plaintiff's trademark rights and alleged Identity and similarity -- Words -- Similar (§ 67.4117) tortious interference with plaintiff and its franchisee's It is reasonable to infer that relatively low degree of care contracts. would be involved in purchase of two relatively low priced Plaintiff, The Squirt Company, was organized under the brands of soft drinks since soft drinks tend to be purchased laws of the State of California and maintains its principal on fairly frequent basis and thus be relatively routine type of place of business therein. The defendants are Missouri purchase as result of low cost and relatively short product corporations, maintaining their principal places of business life after purchase, and grocery stores and supermarkets are in Clayton, Missouri. The jurisdiction of this Court exists primary retail outlet for soft drinks, purchases being made pursuant to 28 USC 1332 and 1338. without assistance of any type of sales person and in environment not particularly conducive to slow, thoughtful, Plaintiff filed a motion for a preliminary injunction and deliberate purchasing process; this degree of care that requesting that defendants be restrained from: might be exercised by purchaser cannot eliminate likelihood of confusion that might otherwise exist between "Squirt" "1. Introducing, using, distributing, manufacturing, and "Quirst"; in fact, because of relatively low degree of licensing and/or selling a soft drink or related product care likely to be exercised in purchase of "squirt" and in connection with the trademark 'QUIRST' or any "Quirst," it is fair inference that likelihood of confusion other confusingly mark similar thereto; and between two brands would be greater than with items in which relatively high degree of care might be exercised in "2. Printing, reprinting, publishing, promoting, lending connection with their purchase. or distributing any advertisement or other material, whether written, audio or visually portrayed, which use TRADEMARKS or refer to the mark 'QUIRST' or any other mark [24] Identity and similarity -- Words -- Similar (§ confusingly similar to the mark 'SQUIRT' in connection 67.4117) with soft drink or related product." "Quirst" for non-carbonated lemonade flavored soft drink is likely to cause confusion with "Squirt" for carbonated A hearing was held on the motion for a preliminary grapefruit flavored soft drink. injunction and in a memorandum and order dated July 14, 1978, 207 USPQ 9, this Court denied plaintiff's motion for a *15 Action by The Squirt Company, against The Seven-Up preliminary injunction. Company and Seven-Up, U.S.A., Inc., for trademark infringement, dilution, and contract interference. Judgment In response to a motion filed by defendants, and joined in by for plaintiff. plaintiff, this Court, pursuant to Rule 42(b) of the Federal Rules *16 of Civil Procedure, ordered that the issues of See also 207 USPQ 9. liability and damages be separated and that the trial relate only to the issue of liability. Armstrong, Teasdale, Kramer & Vaughan, and Frederick H. Mayer, both of St. Louis, Mo., and Price, Heneveld, This cause of action came on for trial before this Court Huizenga & Cooper, and Daniel Van Dyke, both of Grand sitting without a jury on issues of liability only. The Rapids, Mich., for plaintiff. pleadings, stipulation of facts, credible testimony, and exhibits offered at the hearing of the motion for preliminary Rogers, Eilers & Howell, John M. Howell, and Edmund C. injunction and at the trial on the merits, disclose that on Rogers, all of St. Louis, Mo., for defendants. June 18, 1978, The Squirt Company amended its articles of

incorporation to change its name to Squirt-Co, the 23, 1964, for the trademark SQUIRT, on soft drinks and Certificate of Amendment having been filed with the the bases and syrups for making the same (Plff's Ex. 7). Secretary of State of California on June 21, 1978. For the purpose of this memorandum, however, the plaintiff will The parties further stipulated that Squirt-Co is the owner of still be referred to as The Squirt Company. the SQUIRT trademarks and the goodwill associated therewith and the owner of U.S. Trademark Registration The Squirt Company had duly registered and was the owner Nos. 367,659, 388,777, 410,177, 528,806, 689,587, 748,123 of the trademark SQUIRT in several classifications on the and 771,971. Principal Register in the United States Patent Office. The Squirt Company's registrations cover the word SQUIRT Finally, The Squirt Company asserts common law alone, and the word SQUIRT with accompanying words or trademark rights in the phrase, "Never an After Thirst," designs. The Squirt Company is the duly registered owner through long and continuous use of such phrase as applied of the following United States trademark registrations: to soft drinks, syrups, extracts and mixes for marketing the same. Trademark Registration No. 367,659, registered May 23, 1939, for the trademark SQUIRT imposed on a Since 1937, The Squirt Company through its predecessors splash design, on nonalcoholic grapefruit drink and in business has been engaged in growing grapefruit and bases and syrups and extracts for making the same principally engaged in the business of producing and (Plff's Ex. 1). marketing grapefruit concentrate, bases, syrups and extracts for carbonated nonalcoholic soft drinks prepared in Trademark Registration No. 388,777, registered July 8, accordance with its proprietary specification and formula by 1941, for the trademark SQUIRT, on fresh citrus fruits franchise bottling, canning and selling agencies throughout and canned fruit juices for food purposes (Plff's Ex. 2). the United States and abroad. In the field of production, The Squirt Company's primary business has been the Trademark Registration No. 410,117, registered manufacture of a soft drink base derived from fresh November 7, 1944, for the trademark SQUIRT, on grapefruit. To be more specific, The Squirt Company first nonalcoholic grapefruit drink and bases and syrups and processes fresh grapefruit into grapefruit juice and then extracts for making the same (Plff's Ex. 3). processes the juice into a grapefruit concentrate. From the concentrate is produced a soft drink base which is sold by Trademark Registration No. 528,806, registered August The Squirt Company to SQUIRT franchise bottlers who 8, 1950, for the trademark SQUIRT, on nonalcoholic utilize the soft drink base in the production of SQUIRT, a maltless beverages sold as soft drinks and bases and carbonated grapefruit flavored soft drink. In addition, concentrates and syrups and extracts for making the through contract canners, The Squirt Company same (Plff's Ex. 4). manufactures and sells to its franchised bottlers canned and Trademark Registration No. 689,587, registered bottled SQUIRT. A "contract canner" is a soft drink December 8, 1959, for the trademark SQUIRT on free manufacturer that has canning lines, and under a standard form design on soft drink and bases for making the arrangement The Squirt Company provides the canner with same (Plff's Ex. 5). a certain inventory of the finished product SQUIRT, and for a fee the canner packages the product. After the SQUIRT is Trademark Registration No. 748,123, registered April packaged, The Squirt Company sells it to its franchisees. At 16, 1963, for the trademark SQUIRT on free form the time of this cause of action The Squirt Company has design, on soft drinks and the bases and syrups for approximately 230 franchised bottlers. making the same (Plff's Ex. 6). In addition to production, The Squirt Company has assumed Trademark Registration No. 771,971, registered June an active role in the marketing of products bearing the

SQUIRT name. Pursuant to agreements with its franchised SQUIRT brand drinks are sold not only in the United States, bottling and selling agencies, *17 The Squirt Company has but are also sold in Canada, Mexico, Panama, Cost Rica, engaged in extensive advertising on a national basis and Bolivia, Luxembourg and Angola. The foreign sales also participates in certain local advertising programs for the represent approximately fifty percent of The Squirt purpose of publicizing and selling the beverage SQUIRT. Company sales. Since the year 1940, The Squirt Company has expended approximately forty-five million dollars for advertising and With respect to the retail distribution of SQUIRT in the sales promotion. The advertising undertaken by The Squirt United States, it is currently available for sale, at retail, in at Company has been in the form of point of purchase least one market in some thirty-eight states. In terms of displays, as well as media advertising, including radio, volume of sales, the principal retail outlet of the soft drink television, outdoor posters, magazines and newspapers. SQUIRT is the grocery store. However, the product is also Some of the slogans which have been employed by The offered for retail sale at package liquor stores, recreational Squirt Company in the marketing and advertising of the soft facilities such as bowling alleys and golf courses, bars or drink SQUIRT are as follows: taverns, and finally, in vending machines located at businesses such as service stations and motels, just to name 1. "Put a Little Squirt in Your Life." (Plff's Ex. 17) a few. For the year 1977, the approximate total retail sales volume of the soft drink SQUIRT was $54,407.891.00. 2. "Our Secret Ingredient Grows on Grapefruit Trees." (Plff's Ex. 87.) (Plff's Ex. 13) Turning to the packaging of the soft drink SQUIRT, it is 3. "Switch to Squirt, Never an After Thirst." (Plff's Ex. 27) sold at retail in returnable bottles (ranging in size from 32 ounces to 7 ounces), non-returnable or "throwaway bottles" 4. "Squirt, The Soft Drink That Moonlights as a Mixer." (ranging in size from 64 ounces to 7 ounces), and finally in (Plff's Ex. 13) twelve-ounce aluminum cans. In terms of volume of sales 5. "Squirt, From the Land Where Thirst Comes Tall." (Plff's per year at the retail level, approximately 25 to 30 percent of Ex. 51) SQUIRT sales are made in cans.

6. "Squirt Quenches Quicker." (Plff's Ex. 47) The SQUIRT name was originally coined in the year 1937 by Citrus Club Products, Inc., of Phoenix, Arizona. 7. "Switch from Sweet to Squirt." (Plff's Ex. 44) Subsequently, the rights to the SQUIRT name were sold to The Squirt Company, a partnership which was incorporated 8. "Squirt, From the Land Where Thirst Comes Big." (Plff's under the laws of the State of California in 1946. The Ex. 52) SQUIRT trademark was first registered by The Squirt Company on May 23, 1939, for use in "nonalcoholic 9. "Squirt, When You're Thirstier Than Usual." (Plff's Ex. grapefruit drink and bases, and syrups and extracts for 32) making the same." 10. "Smoother Together -- Squirt & Gordon's Vodka." Since the trademark SQUIRT was first registered by The (Plff's Ex. 23) Squirt Company in 1939, the Company has continuously Turning to the product itself, SQUIRT is a carbonated used the SQUIRT trademark in identifying its grapefruit grapefruit base soft drink that is opaque in color. The flavored soft drink, soft drink base, syrups and extracts. And ingredients of SQUIRT are as follows: Carbonated water, in order to maintain the recognition and value of its corn sweetener, grapefruit juice, citric acid, oil of grapefruit, SQUIRT trademark, The Squirt Company has maintained a and finally, benzoic acid. vigilant trademark protection policy. This policy has been manifested in The Squirt Company's unquestioned

willingness to contest and oppose the registration of "brainstorming session" was held at the advertising trademarks which misuse the SQUIRT trademark. agency with the purpose of the session being the generation of a "laundry list" of potential names for The The Seven-Up Company is a manufacturer of flavored Seven-Up Company's lemonade flavored soft drink. Out extracts which it sells to others for the purpose of flavoring of this brainstorming session some 144 names were finished and packaged soft drinks which in turn are sold to generated one of which being the name QUIRST. the ultimate consumers. While The Seven-Up Company Suprisingly enough, no one at the advertising agency manufactures several different flavors, it is principally would step forward and take credit for creating the name associated with the soft drink, SEVEN-UP, a carbonated QUIRST, and as a result the identity of the person who lemon-lime drink. created it is not known. Nevertheless, it is apparent from the spelling of the term that the word "quirst" is a Seven-Up, U.S.A., Inc., is a wholly owned subsidiary of combination of the words "qu ench" and "th irst." The Seven-Up Company, and is essentially the sales arm of The Seven-Up Company in the United States. The primary As for the marketing of the soft drink QUIRST, "Thirst responsibility of Seven-Up, U.S.A., Inc., is the presentation Quenching" was the central theme of The Seven-Up to Seven-Up developers of the sales execution plans for Company's advertising effort. QUIRST was to be positioned Seven-Up Company products. on the market as a "superior thirst quencher" to all other soft drinks and beverages. The objective of QUIRST advertising The soft drink QUIRST is a ready to serve, non-carbonated was to "create the belief that QUIRST is a great tasting Vitamin C enriched lemonade flavored drink which is lemonade drink that is superior to soft drinks and other slightly yellowish in color. The ingredients of *18 QUIRST beverages in its ability to quench thirst." (Plff's Ex. 103) are as follows: Water, sugar, citric acid, potassium sorbate, The advertising objective is clearly manifested in the lyrics sodium benzoate, gum arabic, Vitamin C. glyceryl abietate, and slogans contained in a few of the QUIRST commercials natural flavors, brominated vegetable oil and artificial color. and advertisements: The history of the lemonade drink QUIRST dates back to 1. Newspaper Advertisement: "Try New Quirst for Thirst." late fall of the year 1977, when the decision was made by (Plff's Ex. 108) William E. Winter, President and Chief Executive Officer of The Seven-Up Company for The Seven-Up Company to 2. Promotional Folder: "Quirst Quenches." (Plff's Ex. 127) introduce a lemonade flavored soft drink to the market. While no target date was established for the lemonade soft 3. Song Lyrics: "Whenever I want to quench my thirst * * * drink being available on the retail market, Winter I feel likaQuirst * * * I feel lika Quirst." (Radio designated April 1, 1978, as a target date by which time the commercial.) (Plff's Ex. 331) formulation and total marketing plan for the product would be completed. On or about May 8, 1978, The Seven-Up Finally, the thirst-quenching advertising theme for the soft Company's lemonade flavored soft drink QUIRST was for drink QUIRST was even reflected in the packaging design, the first time offered for sale at the retail level in and around as one of the design objectives of the can was to convey the Colorado Springs, Colorado. image that the product is a superior thirst-quenching beverage to other beverage alternatives. [1] The name QUIRST is a coined, fanciful term having no meaning in the English language. The exact origin of In terms of advertising expenditures, the Executive the word QUIRST is not known for certain. However, the Committee of The Seven-Up Company authorized between evidence would suggest that the name originated with the two million one hundred thousand and two million two advertising agency hired by The Seven-Up Company to hundred thousand dollars for advertising promotion of the work on the lemonade project. Allegedly, a soft drink QUIRST for the year 1978. It was the goal of the

Company to test market QUIRST in about twenty percent of ready-to-drink form, QUIRST is available to consumers in the United States in 1978. The proposed Media Plan for the United States only in 12-ounce aluminum cans. At the QUIRST called for television as the primary medium, with time of this action QUIRST was being test marketed in the local market newspapers serving as a supportive medium Phoenix, Arizona, market in the form of a powdered drink (Plff's Ex. 166). The entire one million one hundred mix. And, at the time of this action The Seven-Up Company thousand dollars budgeted for the proposed Media Plan was contended that it had made no commitment to introduce and to be expended in television and newspaper advertising distribute QUIRST in the United States in bottles. running intermittently from the last week of May to the first week of September of 1978. The entire proposed Media The basis for plaintiff's action is found in the Lanham Act, Plan was to be funded by The Seven-Up Company. 15 USC 1114(1), which provides:

In addition to television and the newspaper, advertising for "Any person who shall, without the consent of the the soft drink QUIRST could be found in radio registrant -- commercials, outdoor billboards, truck posters, store shelves "(a) use in commerce any reproduction, counterfeit, (point of purchase displays), and finally, vending machine copy, or colorable imitation of a registered mark in panels. connection with the sale, offering for sale, distribution, Turning to the distribution of QUIRST, The Seven-Up or advertising of any goods or services on or in Company had a fairly rigid policy that it would not connection with which such use is likely to cause approach a developer for QUIRST distribution if the confusion, or to cause mistake, or to deceive; * * * developer was already distributing another brand of shall be liable in a civil action by the registrant for the lemonade. There were in fact two types of agreements used remedies hereinafter provided." in the wholesale distribution of QUIRST. The first was a franchise agreement whereby the franchisee would buy the Section 45 of the Act, 15 USC 1127, reads in pertinent part QUIRST concentrate from The Seven-Up Company, as follows: manufacture the finished product QUIRST from the QUIRST concentrate, package the product, and finally "The term 'colorable imitation' includes any mark distribute it. The second type of agreement was a which so resembles a registered mark as to be likely to distributorship agreement under which Seven-Up cause confusion or mistake or to deceive." Enterprises, a division of Seven-Up, U.S.A., Inc., would arrange for the production and packaging of *19 QUIRST, In the contest of the present case the essential question to be and then sell it to the distributor for distribution. As of on or answered is whether under all of the circumstances the about July 13, 1978, there were between sixty and seventy trademark QUIRST on the label of a soft drink is similar bottling plants which were under contract with The enough to the SQUIRT trademark that its use is likely to Seven-Up Company for the soft drink QUIRST by either a cause confusion, mistake or deception of any kind. See franchise agreement or a distributorship agreement. Grotrian, Helfferich, Schulz, etc. v. Steinway & Sons, 365 F.Supp. 707, 712, 180 USPQ 506, 509-510 (S.D. N.Y. At the retail level there was evidence of QUIRST being 1973); aff'd in relevant part, 523 F.2d 1331, 186 USPQ 436 available for retail sale in both grocery stores and (2nd Cir. 1975). supermarkets. And as for the location of the product in the store itself, all of the evidence showed QUIRST being [2] In order to determine whether there is a "likelihood of positioned on the shelf next to, and in the aisle with, other confusion" in a trademark infringement case such as this, soft drinks. the Court must consider numerous factors, including inter alia, the strength or weakness of the SQUIRT mark, the Lastly, we turn to the packaging of QUIRST. In its finished, degree of weakness of the SQUIRT mark, the degree of

similarity between the two marks, the degree of similarity coined or fanciful marks are generally thought to have a between the two products, the competitive proximity of much more unique or distinctive appeal than words in the products, the alleged infringer's purpose in adopting common use, and are frequently found to be strong its mark, actual confusion, and the degree of care likely to marks deserving a correspondingly broader degree of be exercised by consumers. See Grotrian, etc., supra, at protection." (Citations omitted.) 712, 180 USPQ at 509-510; Union Carbide Corp. v. Ever-Ready, Inc., 392 F.Supp. 280, 185 USPQ 464 (N.D. [3] In view of this Court's finding in its memorandum and Ill. 1975); rev'd 531 F.2d 366, 81-82, 188 USPQ 623, order on plaintiff's motion for a preliminary injunction 636-638 (7th Cir. 1976), cert. denied 429 U.S. 830, 191 that the SQUIRT mark is both a distinctive and strong USPQ 416 (1976). trademark, and that it is "fanciful and arbitrary as to soft drink products," there is little need for additional While each of the above factors is essential to a discussion of this factor. For purposes of this opinion it determination of the question of a likelihood of confusion, it need only be said that because of the strength of the is important that when applying these factors that the Court SQUIRT trademark it is entitled to a greater or broader keep in mind that the factors are variable and that no single degree of protection than is a weak or commonplace factor is determinative. As the Court pointed out in KiKi mark. See J. B. Williams Co., Inc. v. Le Conte Cosmetics, Undies Corp. v. Promenade Hosiery Mills, Inc., 411 F.2d Inc., 523 F.2d 187, 192, 186 USPQ 317, 321 (9th Cir. 1097, 1099, 162 USPQ 67, 68- 69 (2nd Cir. 1969), cert. 1975), cert. denied 424 U.S. 913, 188 USPQ 720 (1976); dismissed 396 U.S. 1054 (1970): Grotrian, etc., supra at 713, 180 USPQ at 510-511.

"These factors are variable and relative and no single We next consider the degree of similarity between the one, because of its presence or absence, is, in itself, marks. determinative of a case. Rather, the method of approach requires the trial court to consider and weigh the [4] When dealing with products such as SQUIRT and evidence relative to each of these points and such other QUIRST which are frequently sold in self service grocery points as, in the particular circumstances before it, the stores and supermarkets, both the visual impression of the court finds applicable; then, from a balancing of the trademark and the sound of the words are important. conclusions reached on all of these factors, the court Spangler Candy Co. v. Crystal Pure Candy Co., 235 decides whether or not the parties are entitled to the F.Supp. 18, 22, 143 USPQ 94, 97-98 (N.D. Ill. 1964), relief or protection sought." aff'd 353 F.2d 641, 147 USPQ 434 (7th Cir. 1965). For this reason, in determining the degree of similarity We turn now to consideration of the relevant factors. between the two marks, SQUIRT and QUIRST, they must be compared for similarity in appearance as well as of In the case of E. I. DuPont de Nemours & Co. v. Yoshida sound. David Sherman Corp. v. Heublein, Inc., 340 F.2d International, Inc., 393 F.Supp. 502, 512, 185 USPQ 597, 377, 380, 144 USPQ 249, 251-252 (8th Cir. 1965). 604-605 (E.D.N.Y. 1975) the Court discussed the distinction between a "strong" and "weak" trademark: [5] It is well settled that in comparing the SQUIRT and QUIRST marks that "the two marks should not be "Strength or weakness is primarily a question of examined with a microscope to detect minute differences, assessment of a mark's distinctiveness or popularity. but, on the contrary, should be viewed as a whole." Where the public has been educated to recognize and Syncromatic Corporation v. Eureka Williams accept a particular mark as the *20 hallmark for a Corporation, 174 F.2d 649, 650, 81 USPQ 434, 434-435 particular source of that product, or the mark itself is (7th Cir. 1949); cert. denied 338 U.S. 829, 83 USPQ 543 inherently unique or has been the subject of wide (1949). advertisement, it is a strong trademark. Similarly,

A simple visual comparison of the words SQUIRT and shoppers were randomly stopped and asked a series of QUIRST reveals a definite similarity in appearance. Both questions by the interviewer. For each respondent a words are short, single words containing the identical questionnaire was filled out recording the respondent's letters, with the word "quirst" being formed from the word answers to the respective questions. The questionnaires "squirt" by simply moving the "s" from its position at the were then collected and the results tabulated. beginning of "squirt" and repositioning it between the "r" and "t". Moreover, a comparison of the two trademarks as to Turning to the questions asked in the Chicago survey, the form and coloring as they are displayed on the 12-ounce first two questions were *21 directed to determining the aluminum cans which are used in packaging the soft drinks respondent's brand awareness, both on an unaided and aided discloses further similarity. First, both marks are printed in basis, of soft drinks and of cleaning disinfectants. In standard block letters. Second, only the first letter of both Question 3, four different radio commercials were played on marks is capitalized, and thus it is larger in size than the a cassette recorder for the respondent. One of the remaining letters. Finally, both marks are printed on the side commercials advertised SQUIRT, one advertised QUIRST, of the can with the letters ascending upward from left to one advertised Lysol, and finally one advertised Kraft Blue right. Cheese. After all the commercials were played the respondent was asked to identify the product being Turning to the dissimilarities in appearance of the two advertised in the commercial. Following Question 3, the marks, the most striking distinction is the fact that the first respondents were read the following statement as an letter of the two marks is obviously not the same. In terms introduction to Question 4: "Among the soft drinks on the of the form and coloring of the two marks as they appear on market is a non-carbonated lemonade flavored soft drink a 12-ounce aluminum can, there are further dissimilarities. called QUIRST. Another soft drink on the market is a The word SQUIRT is printed in bright red letters, with a red carbonated grapefruit flavored soft drink called SQUIRT." "heart" dotting the "I", against the background of a bright yellow can. In contrast, the word QUIRST is printed in pale This was followed by Question 4 which read: "Do you think yellow letters, with a bright yellow lemon dotting the "I", SQUIRT and QUIRST are put out by the same company or against a dark green background, with a pale lime green by different companies?" colored can. After answering Question 4, the respondent was asked A comparison of the phonetics of the two marks reveals a Question 4a: "What makes you think that?" definite similarity in sound. The likeness of sound between The respondent's answer to Question 4a was to be recorded SQUIRT and QUIRST is the result of the group of letters verbatim by the interviewer. "quir" appearing in both words and the letter "t" being stationed at the end of each word. Perhaps the best evidence In Question 5, the respondent was asked to identify, both on of the similarity of sound which exists between SQUIRT an unaided and aided basis, any brands of soft drink he or and QUIRST is found in the results of the "Chicago" survey members of his family had purchased in the last year. commissioned by defendants. (Plff's Ex. 352) The objective of the Chicago survey and the questionnaire Very briefly, and reserving until a later point in this was "to determine whether or not confusion existed in the memorandum a complete discussion of the mechanics of the minds of consumers as to the brand names SQUIRT and Chicago survey, the procedure of the survey was as follows: QUIRST; and if so, to what degree." (TTR p. 11)

The Chicago survey was conducted in five different Zayre Before turning to the specific results of the Chicago survey department stores located in and around the City of two items merit mentioning. First, during the course of the Chicago, Illinois, on July 20, 21 and 22 of 1978. It was interviews and the administration of the questionnaire, the conducted using the store intercept method in which store respondents were shown no visual aids, such as a can of

QUIRST or SQUIRT, or a photograph of either of the competitive proximity of the products. products or even a card with the words SQUIRT and QUIRST written on it. The respondent's only exposure to [7] For purposes of this trademark action, there is a high either the SQUIRT mark or the QUIRST mark was by degree of similarity between the products. While SQUIRT hearing it. A second important consideration is the fact that is grapefruit flavored and carbonated in contrast to SQUIRT was available for sale in the Chicago area, but QUIRST which is lemonade flavored and non-carbonated, there had been little advertising undertaken promoting the the fact remains that both marks are being applied to product. And as for QUIRST, at the time the survey was products which fall under the general category of "soft taken it had never either been sold or advertised in the drinks". Moreover, the likeness between the products does Chicago market, and thus it would be reasonable to assume not stop with the general category of "soft drinks", for that many of the respondents were hearing the name both SQUIRT and QUIRST would fall under the heading QUIRST for the first time. By virtue of the small amount of of "non-cola, fruit-flavored soft drinks." prior advertising of SQUIRT in Chicago and the complete In the case of Sweetarts v. Sunline, Inc., 380 F.2d 923, 927, absence of any QUIRST advertising at all, it is less likely 154 USPQ *22459, 462-463 (8th Cir. 1967), the Eighth that the survey responses were substantially affected by any Circuit in reversing the trial court and finding that the conditioning effect which might result from recent exposure plaintiff's common law trademark had been infringed, to SQUIRT or QUIRST advertising. (TTR p. 12) emphasized the fact that both the infringed mark and the [6] A tabulation of the questionnaires in the Chicago infringing mark were being applied to the same general survey revealed that out of a total of 152 respondents, 22 class of product, candy, and overlooked the fact that the respondents, or approximately 15% of the sample, gave as infringed mark was identifying candy of the "toffee and a reason for their response in Question 4 the similarity or mixed chocolate variety", whereas the infringing mark was closeness in sound between the names SQUIRT and identifying a candy described by the court as "a small, QUIRST. Moreover, an additional 46 respondents, or brightly colored, powdery tablet with an artificial fruit approximately 30% of the sample, cited as a reason for flavoring." Id. at 926, 154 USPQ at 461. their answer in Question 4 the similarity or likeness [8] Where products are virtually identical, as is the case between the names SQUIRT and QUIRST. In this Court's here, the degree of similarity in trademarks necessary to view, the fact that approximately 45% of the entire support a finding of infringement is less than in a case of sample specifically mentioned either a similarity in sound dissimilar, noncompeting products. See David Sherman between the words SQUIRT and QUIRST, without any Corporation, supra, at 382, 144 USPQ at 252-253 (8th prompting or suggestion whatsoever, is affirmative Cir. 1965). evidence of the definite likeness between the two marks as perceived by persons hearing the two names together. [9] Turning to the competitive proximity of the products, there is no question but that SQUIRT and QUIRST The importance of the existence of a similarity in sound compete on a direct basis for the same customers. The between two marks is highlighted by the case of Grotrian, closeness of the competition between SQUIRT and etc., supra at 1339-40, 186 USPQ at 442-443. In Grotrian, QUIRST is shown by the following identities: etc., the Second Circuit found that differences between the types used in printing the marks served to distinguish the (1) In some instances, SQUIRT and QUIRST are marks from a visual standpoint. Yet in spite of the obvious being packaged by the same bottler and/or being visual distinctions, the Second Circuit sustained the district distributed by the same distributor. court's finding that auditory confusion is inevitable and thus that similarity of marks exist. (2) The two products are being offered for sale in common retail outlets. In fact, in at least one grocery We next consider the degree of similarity between and the

store or supermarket, SQUIRT and QUIRST were Seven-Up Company was cognizant of the plaintiff positioned on the shelf next to one another. corporation's vigorous trademark protection policies prior to the final decision to proceed with QUIRST. (3) In marketing QUIRST and SQUIRT the parties Nevertheless, this Court cannot say that it was the intent are making use of the same vehicles for advertising, of defendants to pass their lemonade drink off as being namely, Television, Radio and Newspaper, just to manufactured by plaintiff or that defendants selected the name a few. name QUIRST in the hope that the similarity in name would allow defendants to "trade off" or unfairly benefit (4) The "thirst-quenching" characteristics of the soft by the excellence of plaintiff's product and good will. drink is a theme common to the advertising of both SQUIRT and QUIRST. First of all, the fact that the lemonade drink QUIRST is the product of the Seven-Up Company is clearly spelled out on (5) SQUIRT and QUIRST are both packaged in the face of the QUIRST can directly below the name convenient 12-ounce aluminum cans. QUIRST. Secondly, defendants presented a logical The Court turns now to consider the defendants' intent or explanation for the selection of the name QUIRST. purpose in adopting the QUIRST trademark. Prior to choosing a name for the canned lemonade product, In the case of Fleischmann Distilling Corp. v. Maier The Seven-Up Company decided upon a marketing strategy Brewing Co., 314 F.2d 149, 157-58, 136 USPQ 508, in which the product would be positioned on the market as a 515-516 (9th Cir. 1963), cert. denied 374 U.S. 830, 137 "superior thirst quencher." On or around February 8, 1978, USPQ 913 (1963), the plaintiff, a seller of Scotch Whiskey the Company, still undecided about a name for the canned under the trademark "Black & White", brought an lemonade drink, commissioned a "Canned Lemonade Name infringement action against the defendant who was Study." (Plff's Ex. 144) Very briefly, the study was marketing beer under the name "Black & White". In holding conducted in the cities of Philadelphia, Pennsylvania, and that the plaintiff's mark was infringed, the Court discussed Miami, Florida, and consisted of personal *23 interviews of the question of the defendant's intent and its relationship to some 150 respondents selected via the "shopping center the "likelihood of confusion" issue. The Court said: intercept method." The respondents were asked a series of questions, which were designed to determine which of five "It is well settled that plaintiffs were not obligated in names -- Chug-A-Jug, Fresh Up, Quirst, Refresh, or Thirst order to make a case against the defendants to prove a Burst -- was the most compatible for the Seven-Up wrong intent. Safeway Stores, Inc. v. Rudner, 9 Cir. Company's new canned lemonade. In Question 5 of the 246 F.2d 826, 829, 114 USPQ 206, 208-209. But when survey the respondents were asked about their interpretation the evidence does show or require the inference that of each of the five names as applied to a "12-ounce canned another's name was adopted deliberately with a view to lemonade product." For each of the five names the obtain some advantage from the good will, good name, respondents were asked to answer the question: "What and good trade which another has built up, then the would the product name ______mean to your?" inference of likelihood of confusion is readily drawn, for the very act of the adopter has indicated that he The results to Question #5 indicated that approximately expects confusion and resultant profit." (Citations fifty-two percent of the respondents associated or evaluated omitted.) the name QUIRST as meaning "thirst quenching". (Plff's Ex. 145) This percentage was viewed as significant, [10] There is no question but that the Seven-Up Company especially when compared with the percentages of the other was well aware of the SQUIRT trademark when it was four names, which were as follows: For "Fresh Up", 8% of decided to market their canned lemonade drink under the the respondents, for "Refresh", 18% of the respondents, for name QUIRST. Moreover, there is no doubt but that The "Thirst Burst", 31% of the respondents, and for

"Chug-A-Jug", 1% of the respondents, who evaluated the and that when she met Mr. Julius he was employed by a respective names as meaning "quenches thirst." The survey food company. Mrs. Moore stated that approximately one demonstrated that the name QUIRST has a much stronger month prior to the taking of her deposition she had occasion thirst-quenching connotation associated with it than any of to talk to Mrs. Julius, who informed her that Mr. Julius had the four names surveyed. The ability of the name QUIRST accepted a position of employment elsewhere and that as a to communicate the idea of "thirst-quenching" was critical result they were in the process of selling their house and in view of the Company's prior decision to position the moving. Upon asking whether Mr. Julius was being product in the market as a "superior thirst quencher." This transferred she was informed by Mrs. Julius that he had in fact proved to be the determining consideration in the fact taken a job with the Squirt Company. Mrs. Moore Company's decision to utilize the name QUIRST. stated that although she knew there was a product like SQUIRT years ago, she could not recall it at the time of her [11] A further indicator of an alleged infringer's intent in conversation with Mrs. Julius, and thus she inquired as to selecting a name is the amount of money he intends to or what it was. Upon being informed by Mrs. Julius that "It's a has already spent on advertising and promotion of his fruit type soft drink", Mrs. Moore responded that she had product. When an alleged infringer selects a mark very seen the ads on television for the product. In reality the similar to a well established, well advertised mark which television ads to which Mrs. Moore was making reference is held by the plaintiff, and then attaches that mark to a were not advertisements for the product SQUIRT at all. product very similar or virtually identical to the product to Rather, the television advertisements to which Mrs. Moore which plaintiff's well established mark is attached, and was referring were commercials for the soft drink QUIRST, doesn't spend any money or very little money in with an audio portion identical to that of Plaintiff's Exhibit advertising his product, it is not unreasonable to infer that 104. the alleged infringer selected his mark with the specific intent of profiting from plaintiff's reputation and Plaintiff contends that actual confusion between the product advertising. See David Sherman Corp., supra. Such was advertised as QUIRST and the name SQUIRT was not the case under the facts before this Court. Defendant, responsible for Mrs. Moore's mistake. Moreover, it is the The Seven-Up Company, had budgeted between two contention of plaintiff that there can be no doubt but that the million one hundred thousand and two million two actual confusion was based upon the QUIRST hundred thousand dollars to be used for advertising and advertisement, and not a SQUIRT ad, because of the promotion of QUIRST for the year 1978. testimony of Mr. Brooks that there had been no advertising conducted on behalf of the Squirt Company in the Phoenix We next consider any evidence of actual confusion. area since early 1977.

[12] It is well settled that evidence of actual confusion is [13] *24 This Court has been cited no cases by plaintiff in not essential to a finding of trademark infringement. which an occurrence similar to the one involving Mrs. David Sherman Corp., supra, at pp. 380-81, 144 USPQ at Moore has been held to be direct evidence of actual 251-252. However, "There can be no more positive proof confusion. Nevertheless, in this Court's view the of likelihood of confusion than evidence of actual aforementioned incident does demonstrate that some confusion." Standard Oil Co. v. Standard Oil Co., 252 confusion was present in the mind of Mrs. Moore as to F.2d 65, 74, 116 USPQ 176, 182 (10th Cir. 1958). what she heard being advertised on television. It points up the possibility of consumers being unable to distinguish Plaintiff offered the deposition of Mrs. Nancy Moore, a the names SQUIRT and QUIRST, especially when the sales clerk and housewife from Phoenix, Arizona, as being names are heard in the context of a television or radio probative of an incident of actual confusion. Mrs. Moore commercial. Without question, the episode of Mrs. Moore testified that she had known her neighbors, Mr. and Mrs. is further evidence of the definite likeness in sound which George Julius, for a period of approximately seven months,

exists between the words SQUIRT and QUIRST. flavor did you buy?"

Plaintiff asserts as a second example of actual confusion the The answers to Question #3 were recorded verbatim by the results of the Maritz Survey commissioned by The interviewer on the questionnaire. Following the recording of Seven-Up Company. The designer of the Maritz Survey, Dr. the responses to Question #3 the respondent was issued the Twedt, defined the purpose of the Maritz Survey as follows: following request: Question #4: "May I see the six-pack(s) "To conduct a controlled experiment, the purpose of which of (each brand in the order mentioned in Question #3) you was to obtain factual information about measurable bought? I know it is an inconvenience to unpack your potential confusion between or among brands of soft groceries so I will give you a $3.00 gift certificate good on drinks." (TTR p. 1430). any purchase of $3.00 or more at this store through July 30th if you will show me the six-pack(s) you bought." We turn now to the methodology followed in the execution of the Maritz Survey. At three Low Cost Grocery Stores The interviewers were instructed to record verbatim the located in and around Phoenix, Arizona, a store intercept exact brands of 12- ounce canned, non-alcoholic beverages study was conducted on July 20, 21 and 22, 1978. During which were shown to them by the respondent. Finally, after the three-day period in which the study or survey was recording the brands displayed, the interviewer directed the conducted all three of the Low Cost Stores had the soft following question to the respondent: Question #5. "About drinks, SQUIRT and QUIRST, available for sale at the how many bottles or cans of soft drinks would you say you reduced price of ninety-nine cents for a six-pack of have purchased in the past 30 days?" 12-ounce cans. Upon entering the grocery store all customers were given a coupon worth fifty cents off the The answer to Question #5 was then recorded on the regular price of one six-pack of 12-ounce cans of any flavor questionnaire. Following Question #5 the respondents were of non-alcoholic beverage, with the exception of cola flavor. asked a series of demographic questions, which are The primary purpose of the fifty-cent coupon was to unimportant for purposes of this action. stimulate the purchase of non-cola soft drinks and thus It should be pointed out that to insure that the interviewer increase the efficiency of the three-day survey by having a had no prior knowledge as to the soft drink purchases of the large sample. respondent, the interviewers were instructed to interview After a customer had completed his shopping, gone through only those customers whose purchases of soft drinks were the check-out line, had his groceries bagged and was not outwardly visible to the interviewer. Thus, a customer preparing to leave the store, he was intercepted by an whose soft drink purchases were sitting in plain view within interviewer and asked the following questions which were the cart would not be interviewed. contained in a questionnaire: Question #1. "Did you get a After the last demographic question was answered and the coupon like this on your way into the grocery store?" (At results recorded on the questionnaire, the respondent was the time of asking the question the interviewer displayed the thanked and the questionnaire containing his responses was fifty-cent off coupon described above.) retained by the interviewer so that the results might be If the answer to Question #1 was "Yes," the interview tabulated. At this point a new interview was started with a continued and the respondent was then asked: Question #2: new copy of the questionnaire. "Did you use your coupon?" Following the completion of the entire survey a tabulation If the answer to Question #2 was "Yes," the interview was made of the number of respondents who correctly continued and the following question was directed to the identified the brand purchased and of respondents who *25 respondent: Question #3: "What brands of six-pack did not correctly identify the brands they had just previously 12-ounce cans of non-alcoholic beverage other than cola purchased.

A compilation of the Maritz Survey results disclosed that a as "not statistically significant," but in reversing the district total of 1,016 persons were in fact interviewed. Of this total, court the Fifth Circuit stated: "[A]s this court said in World some 884 persons answered "Yes" to Question #2 and thus Carpets, [Inc. v. Dick Littrell's New World Carpets, 438 used their fifty-cent coupon. Of the 884 persons who used F.2d 482, 489, 168 USPQ 609, 614-615 (5th Cir. 1971)], their coupon, 839 responded to Question #3 by identifying 'reason tells us that * * * very little proof of actual confusion the brands they purchased and then responded to Question would be necessary to prove the likelihood of confusion."' #4 by displaying their beverage purchases to the interviewer. Of the total of 839, there were 70 persons who As a starting point in this Court's evaluation of the Maritz stated in answer to Question 3 the soft drink SQUIRT. Of Survey, we would point out that we know of no cases the 70 persons who said they had SQUIRT, 65 in fact were containing an actual market survey of the Maritz variety able to display SQUIRT in response to Question #4. Three wherein an actual purchaser is asked to list the brands he has persons who said they had purchased SQUIRT, in fact had just purchased, and then asked to display the brands he has purchased QUIRST, while two persons of the total of 70 named, in order to determine the accuracy of his listed who said they purchased SQUIRT, in fact purchased the soft purchases. The cases which contain survey evidence that drink SPRITE. Thus, approximately 4.3% of the have been cited by the parties in their briefs are not of the respondents, three out of the 70 who said they had Maritz type wherein consumer action or behavior is purchased SQUIRT, when asked to display their purchases evaluated. Rather, the cases cited to this Court entail in fact had purchased QUIRST. "opinion" type surveys, where typically a specific number of interviews are conducted either in a "purchasing" There is no disagreement between the parties as to the environment, such as a store or shopping center, or in a questionnaire used, the procedure followed in executing the "non-purchasing" environment, such as the home or survey, or the procedure followed in compiling the results of laboratory, and the respondent will be asked to express his the survey. However, the parties do not disagree as to the or her opinion with respect to specific marks and whether reliability or validity of the Maritz Survey results, and there they originate from the same source, or whether there is any is sharp disagreement between the parties as to the relationship at all between two marks, etc. See E. I. DuPont interpretation which should be accorded the results of the de Nemours & Co. v. Yoshida International, Inc., supra; survey. Union Carbide Corp. v. Ever-Ready, Inc., supra; Standard Oil Co. v. Standard Oil Co., supra at 75, 116 USPQ at 183; It is the contention of the defendants that the Maritz Survey James Burrough Limited v. Sign of Beefeater, Inc., 540 F.2d does not demonstrate actual confusion. Rather, defendants 266, 277-78, 192 USPQ 555, 563-565 (7th Cir. 1976). assert that the survey evidences the possibility of confusion between SQUIRT and QUIRST. Moreover, defendants [14] This Court cannot say that the results of the Maritz contend that the 4.3% rate of possible confusion is Survey demonstrate the existence of actual confusion statistically insignificant and de minimus. between SQUIRT and QUIRST. It is unclear from the face of the survey whether the three instances wherein Plaintiff contends that the three instances in the Maritz SQUIRT and QUIRST were interchanged was the result Survey where the respondent said he purchased SQUIRT in of carelessness or inadvertence on the one hand, or answer to Question #3 but then displayed QUIRST in whether SQUIRT and QUIRST were interchanged as a response to Question #4, demonstrate the existence of actual result of the confusing similarity between the names on confusion on the part of the respondent. With respect to the other hand, or even some combination of the two whether 4.3% is statistically significant, in Roto-Rooter extremes. In the absence of any opportunity for the Corporation v. O'Neal, 513 F.2d 44, 46, 186 USPQ 73, surveyed party to be cross-examined it is not possible to 74-75 (5th Cir. 1975), the district court had considered the determine the reasons for the three instances of QUIRST testimony of four persons who had mistakenly employed being interchanged with SQUIRT. The unavailability of defendants although intending to use the service of plaintiffs

cross-examination of the three respondents who inadvertence on the part of the respondent, is found in interchanged QUIRST with SQUIRT is the crucial fact Exhibit E(4) wherein the survey data has been compiled. which distinguishes Roto-Rooter Corp., supra, from the Looking at the chart found on page 6, with but two present case. exceptions all of the incidents of "possible" confusion involved either brands with virtually identical names, In Roto-Rooter Corp. supra, the opportunity for such as Dr. Pepper being confused with Sugar Free Dr. cross-examination was present as to the four persons who Pepper and vice versa, Sugar Free Seven-Up being had mistakenly *26 employed defendants although confused with Seven-Up, Sugar Free Sprite being intending to use the services of plaintiffs. The confused with Sprite, and Sugar Free Shasta being cross-examination of the four persons cleared up any doubts confused with Shasta; or the "possible confusion" as to the reason for their mistakenly employing defendant: involving five brands with at least some similarity in "Cross-examination, rather than demonstrating carelessness name, those being Squirt, Quirst, Sprite, Shasta and or inadvertence, showed that the four persons had made Seven-Up. In other words, the incorrect identifications their mistakes because of reliance upon the similarity of were very highly concentrated in brands with either defendants' name to that of plaintiffs'." Id. at 46, 186 USPQ virtually identical names or names wherein some likeness at 74-75. For these reasons this Court does not believe that existed. This result would suggest that with respect to the Maritz Survey results demonstrate the existence of non-cola, non-alcoholic beverages, there is a definite actual confusion. interconnection between similarity of name and "possible confusion." [15] While unwilling to accept the Maritz Survey as evidence of actual confusion, this Court does believe that [17] Lastly, this Court cannot say that the 4.3% (three out the results of the Maritz survey are strong evidence of a of seventy) level of error between SQUIRT and QUIRST likelihood of confusion between SQUIRT and QUIRST. is de minimus or statistically insignificant, when it is First of all, the fact that the survey was conducted in a considered in the context of the entire soft drink industry. live market environment and measured actual consumer While the percentage of "likely confusion" required will purchasing behavior as opposed to being conducted in the vary from case to case, in Grotrian, etc., supra, at 716, the home and measuring consumer opinion, lends greater district court determined a survey to be strong evidence of reliability to the survey results. As Judge Wyzanski the likelihood of confusion in which 7.7% of the pointed out in American Luggage Works v. United States respondents perceived a business connection between the Trunk Co., Inc., 158 F.Supp. 50, 116 USPQ 188 alleged infringing company and the plaintiff company, (Mass.1957); aff'd 259 F.2d 69, 118 USPQ 424 (1st Cir. and 8.5% of the respondents confused the two names. 1958), at page 53, 116 USPQ at page 190-191: In addition to the Maritz Survey, plaintiff offers two other "If the interviewee is not in a buying mood but is just in surveys in support of its contention that a likelihood of a friendly mood answering a pollster, his degree of confusion exists between the SQUIRT and QUIRST marks. attention is quite different from what it would be had he More specifically, plaintiff commissioned two related his wallet in his hand. Many men do not take the same surveys which this Court will refer to as the Chicago Survey trouble to avoid confusion when they are responding to and the Phoenix Survey. sociological investigators as when they spend their cash." Turning to the procedures followed in executing the two surveys, this Court has already discussed in a fair amount of [16] Secondly, evidence which would support the theory detail the Chicago Survey. For this reason we direct our that the interchanges which occurred between SQUIRT attention to the Phoenix Survey. and QUIRST were the result of the similarity which exists between the marks and not the result of carelessness or The Phoenix Survey was conducted in eight different

Safeway and Fed-Mart supermarkets in and around the City It was the objective of the Phoenix Survey to determine of Phoenix, Arizona, on July 20, 21 and 22, 1978. The whether or not confusion existed in the minds of purchasers Phoenix area was selected as the site of the survey because of soft drinks as to the names SQUIRT and QUIRST, and if it represented a market wherein both SQUIRT and QUIRST so, to what degree. were available for sale. In the case of American Luggage Works, supra, at 54, 116 The survey was administered using the store intercept USPQ at 191, the court offered the following observations method in which "qualified respondents", that is, any with respect to the evaluation of survey evidence: woman 25 years of age and older, who had purchased soft drinks that day, were randomly stopped and asked a series "In every case where the results of a poll or similar of questions by the interviewer. For each respondent survey are offered, there arise as preliminary problems interviewed a questionnaire was filled out recording the the propriety of the universe, the choice of the sample, respondent's answers to the respective questions. At the the qualifications of the experts and investigators, the conclusion of the survey the questionnaires were collected manner of interviewing, the questions asked by the and the results tabulated. investigators, and the scope of freedom of the interviewee to frame an answer in his own terms." Turning to the questions which made up the Phoenix Survey Questionnaire (Plff's Ex. 353), the first question was Before examining the Phoenix and Chicago Surveys, it must directed toward determining the respondent's brand be pointed out that the parties made the following awareness of soft drinks, both on an unaided *27 and aided stipulation: basis. Both SQUIRT and QUIRST were included in the "It is stipulated that the interviewees who conducted the "aided" list of brands. Upon completion of Question 1, field survey work as the same relates to the surveys to Question 2 was directed to the respondent, which read: "I be relied upon by the parties followed instructions and noticed you purchased soft drinks today. Without looking at were competent. This stipulation is based upon mutual what you purchased * * * what brands of soft drink did you representations by counsel that the interviewees were purchase?" not advised for whom the survey was being taken." Following Question #2, the identical question to Question [18] Because of the similarities between the Chicago and #4 of the Chicago Survey was directed to the respondent: Phoenix Surveys, this Court will examine the two surveys "Among the soft drinks on the market is a non-carbonated, together. In the Chicago Survey, "Qualified Respondents" lemonade flavored soft drink called QUIRST. Another soft were any women 25 years of age or older who was drink on the market is a carbonated, grapefruit flavored soft shopping in the store on the day of the survey. In the drink called SQUIRT." This was followed by 2a, which Phoenix Survey, "Qualified Respondents" were limited to read: "Do you think SQUIRT and QUIRST are put out by any women 25 years of age or older who had also the same company or by different companies?" purchased any kind of soft drink on the day of the survey. After the respondent answered Question #2a he was asked In our view, both surveys were directed at suitable Question #2b: "What makes you think that? The interviewer universes, with the Phoenix Survey universe perhaps was to record the respondent's answer to Question #2b being more appropriate since the person interviewed was verbatim. definitely a purchaser of soft drinks. As a pactical matter, since almost anyone would be likely to have purchased Finally, in Question #3 the respondent was asked to identify soft drinks at one time or another, both surveys might any brands of soft drink that he or members of his family well have been directed at the general population. See had purchased in the last year, both on an unaided and aided Union Carbide Corp., supra, at 388, 188 USPQ at basis. 643-644.

As for the process of selecting the individual respondents, in said that SQUIRT and QUIRST are put out by the same both surveys respondents were selected in a random fashion. company, or 23% of the sample; 161 persons said that The first woman 25 years of age or older to approach the SQUIRT and QUIRST are put out by different companies, interviewer (In Phoenix the woman had to have purchased or 34% of the sample; and 205 persons didn't know if soft drinks on the day of the survey in addition to being a SQUIRT and QUIRST are put out by the same or by woman 25 years of age or older) was confronted and different companies, or 43f the sample. interviewed face to face. As soon as that interview was completed, the very next respondent who approached was In other trademark infringement cases surveys similar to interviewed. Thus, the first qualified respondent to approach plaintiff's Chicago and Phoenix surveys have been held to an interviewer after the completion of the preceding be of probative value in the Court's finding that a likelihood interview was the criteria for selecting respondents. of confusion existed. See LaMaur, Inc. v. Revlon, Inc., 245 F.Supp. 839, 146 USPQ 654 (D. Minn. 1965); Seven-Up [19] Both the Chicago and Phoenix Surveys were Co. v. Green Mill Beverage Co., 191 F.Supp. 32, 128 USPQ conducted under the direction of the firm of Britt and 284 (N.D. Ill. 1961); James Burrough LTD v. Sign of Frerichs, Inc., a well known marketing research firm in Beefeater, supra; Standard Oil Co. v. Standard Oil Co., Chicago, Illinois. The questionnaire utilized in the supra. Phoenix Survey, as well as the questionnaire utilized in the Chicago Survey, were developed by Dr. Steuart Britt, Before discussing the results of the Phoenix and Chicago a founder of the firm, and John Bunge, Manager of surveys this Court would offer the following observation Administration and Operations for the firm. Both men are with respect to the mechanics of the surveys. indeed qualified as experts in the area of Marketing First off, it is generally thought that in evaluating surveys Research. There would appear to be no problem with the that any technical deficiencies ought to go to the weight manner in which the interviews were conducted in either accorded them and not to their admissibility in evidence. survey, as the interviewers were instructed to record the See La Maur, Inc. v. Revlon, supra, at 842, 146 USPQ at responses verbatim. Moreover, the questions contained in 655-656. This Court's criticism of the Chicago and Phoenix both the Chicago questionnaire and the Phoenix Surveys is grounded upon the following statement by the questionnaire were neither slanted nor leading. There Court in Spangler Candy Co. v. Crystal Pure Candy Co., were no restrictions placed upon the respondent insofar as supra, at 22, 143 USPQ at 97-98: stating his reasons for a particular response when called upon to defend his answer. Finally, there was at least a "When products are sold by name over a counter the twenty percent verification of *28 the results in both the sound of the name is important. (Citations omitted.) Chicago and the Phoenix Surveys. This insures that the When products are sold in self service markets, then the interview was accurately recorded by the interviewer. visual impression of the trademark as well as the sound of the words is important." Turning to the results of the Chicago and Phoenix Surveys, we would begin by pointing out that a total of 152 [20] It is well established by the evidence that self service interviews were conducted in Chicago and that a total of grocery stores and supermarkets represent the largest 476 interviews were conducted in Phoenix. In Chicago, 51 retailer of the soft drink SQUIRT in terms of total volume persons said that SQUIRT and QUIRST were put out by the of sales per year. As pointed out by the Court in Spangler, same company, or 34% of the sample; 84 persons said that supra, when dealing with products such as SQUIRT SQUIRT and QUIRST were put out by different companies, which are frequently sold in self service grocery stores, or 55% of the sample; and 17 persons didn't know whether the visual impression of the mark is very important SQUIRT and QUIRST are put out by the same or different because of the fact that the purchaser identifies and companies, or 11% of the sample. In Phoenix, 110 persons selects the product through his sense of sight. In both the

Chicago and Phoenix surveys the respondents were 02 Sound the same/ "Qu" sound in both/ Sound alike/ Sound shown no visual aids whatsoever, thus precluding any sort similar. of visual comparison of the SQUIRT and QUIRST marks. In this Court's view some visual representation of the two 03 They are almost alike/ Similar/Same idea. marks, such as a can of SQUIRT and a can of QUIRST, 04 Letters in names/Switched letters. or a photograph of the two cans, should have been displayed to the respondent so that a visual comparison of Of the 161 respondents of the Phoenix Survey who the two marks could be made. As it was, in both surveys responded to Question #2a with the response "different the respondent's only exposure to the two marks was by companies", 53 persons gave as a reason for such answer a hearing them. response which would fall into at least one of the following categories which were established by the author of the Turning to the results of the Chicago and Phoenix surveys, survey (TTR pp. 66-67): we would begin by noting that the percentage of respondents who said SQUIRT and QUIRST were put out Response Categories: by the same company (Chicago 34%, Phoenix 23%), is 01 Names same/Similar/Confusing. comparable and in some cases higher than those held sufficient in other cases to support in part an inference that 02 Names sound similar/Too similar. confusion is likely. James Burrough LTD v. Sign of Beefeater, Inc., supra (15%); Jockey International, Inc. v. 03 Too much alike to be put out by the same company/Too Burkard, 185 USPQ 201 (S.D. Cal. 1975), (11.4%); confusing. Seven-Up Company v. Green Mill Beverage Co., supra 04 Same company would not have names so (25%); Humble Oil & Refining Co. v. American Oil Co., similar/Identical/Confusing. 259 F.Supp. 559, 151 USPQ 266 (E.D. Mo. 1966) (18%), aff'd 405 F.2d 803, 160 USPQ 289 (8th Cir. 1969), cert. 05 Spelled almost same/Changed letters around. denied 395 U.S. 905, 161 USPQ 832. [22] Disregarding the respondents' answer to Question [21] In this court's view, the not insubstantial percentages #2a for the moment, this Court believes it significant that of respondents who mistakenly connected the soft drinks without any suggestion whatsoever approximately 25% SQUIRT and QUIRST as being "put out by the same (114/476) of the entire sample cited as a basis for their company" is some evidence of a likelihood of confusion, response to Question #2a a reason very closely related to deception, or mistake regarding the source or origin of the either the similarity between the names or the similarity soft drink QUIRST. between the sounds of the names or the similarity in the spelling of the names SQUIRT and QUIRST. This is but This Court would offer this final observation with respect to further evidence of the definite likeness or similarity the Phoenix survey alone, having already made in essence between the marks as perceived by persons hearing the the same observation in regard to the Chicago survey. The two names together. results of the Phoenix survey disclose that out of a total of 110 respondents who answered Question 2a with the Finally, we turn to consider the degree of care likely to be response "same company", 61 persons gave as a reason for exercised by consumers in the purchase of products such as that answer a response which would fall in one of the four SQUIRT and QUIRST. following categories which were established by the author of the survey (TTR p. 64): In the case of Grotrian, Helfferich, Schulz, etc. v. Steinway & Sons, supra, at 1342, 186 USPQ at 445, the Court stated: *29 Response Categories: 01 Just the names/Names similar/Names alike. "We recognize that in a trademark infringement action

the kind of product, its cost and the conditions of SQUIRT trademarks because the name QUIRST is likely purchase are important factors in considering whether to cause confusion, mistake or deception. the degree of care exercised by the purchaser can eliminate the likelihood of confusion which would This memorandum opinion will be adopted by the Court as otherwise exist." its findings of fact and conclusions of law with respect to the question of liability, and the attorneys for the plaintiff [23] In the present case we are dealing with two brands of will prepare the proper order to be entered by the Court, first soft drink, the price of which are relatively low. As a submitting same to the attorneys for the defendants for result of the low cost and relatively short product life after approval as to form, and then to the Court for entry. purchase, soft drinks would tend to be purchased on a fairly frequent basis and thus be a relatively routine type E.D.Mo. of purchase. Grocery stores and supermarkets are the 207 U.S.P.Q. 12 primary retail outlet for soft drinks, the purchases being made without the assistance of any type of sales person END OF DOCUMENT and in an environment not particularly conducive to a slow, thoughtful and deliberate purchasing process. For these reasons this Court believes that it is reasonable to infer that a relatively low degree of care would be involved in the purchase of SQUIRT and QUIRST. Moreover, we do not believe that this degree of care which might be exercised by the purchaser can eliminate the likelihood of confusion which might otherwise exist between SQUIRT and QUIRST. In fact, because of the relatively "low" degree of care likely to be exercised in the purchase of SQUIRT and QUIRST it is a fair inference that the likelihood of confusion between SQUIRT and QUIRST would be greater than with items wherein a relatively "high" degree of care might be exercised in connection with their purchase. See American Chicle Co. v. Topps Chewing Gum, Inc., 208 F.2d 560, 563, 99 USPQ 362, (2nd Cir. 1953); RJR Foods, Inc. v. White Rock Corp., Case No. 77 Civ. 2329, 201 USPQ 578 (S.D. N.Y. 1978), attached to plaintiff's post trial brief.

[24] In summary, the presence of the strong and distinctive SQUIRT trademark, the extensive similarity between the SQUIRT and QUIRST mark, the close competitive proximity and similarity between the products, the low to moderate degree of care likely to be exercised by purchasers of soft drinks, and the Maritz, Chicago and Phoenix Surveys, are all signs of a likelihood of confusion. These considerations lead us to the conclusion that the defendants are infringing the plaintiff's