Question: BY RITE DISTRIBUTING, INC. v. THE COCA-COLA CO., 577 F. SUPP. 530 (D. UTAH 1983)
FACTS By-Rite Distributing, Inc., operated and sold self-service soft drink dispensing systems under the name "Carb-A-Drink." By-Rite used the system in some of its own convenience stores and marketed the system to others. The Carb-A-Drink system consisted of a large unit of fountain dispensing equipment, equipped with 10-20 heads dispensing up to 40 flavors of soft drinks. The fountain heads bore the trademarks of the products being dispensed. A customer would obtain an empty two-liter bottle bearing the trademark "CARBA-DRINK" and would fill the bottle at the dispensing station. The customer was encouraged to return to the store and refill the bottle or other package of his own at the fountain. Thus, customers could and did fill empty bottles containing the trademarks of one soft drink manufacturer with products manufactured by another company. By-Rite also marketed a six-pack carrying case so that customers could fill and take home a number of bottles at one time. The bottles (and their contents) could remain in the customers' possession for three or more weeks and were often consumed by individuals other than those who purchased the products.
Several major soft drink producers, including The Coca-Cola Company, PepsiCo, Inc., Sunkist Soft Drinks, Inc., and Seven-Up USA, Inc., filed for a preliminary injunction, contending that By-Rite's activities constituted reverse passing off in violation of the Lanham Act. DECISION The federal trial court agreed, stating: "Although purchasers at a Carb-A-Drink fountain will believe that they are buying the defendants' products because they can see the trademarks on the fountain heads, other users who later drink these beverages at home, at picnics or elsewhere, will see only the CARB-A-DRINK trademark on the bottle, and they may be led to believe that it is a CARB-ADRINK product. To the extent that they are satisfied with the product, only CARB-A-DRINK will benefit." The court thus issued a preliminary injunction preventing By-Rite from selling in bottles soft drinks mixed from the defendant's fountain syrups. By-Rite was permitted to sell the products in cups, however.