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A Beverage War with “Zero” at Stake

Can a company obtain exclusive rights to zilch, nada, nothing?   For years, two beverage giants have been trying to find out.

For nearly nine years, Royal Crown Company and Dr. Pepper/Seven Up, Inc. (both part of the Dr. Pepper Snapple Group) have been trying to end Coca-Cola’s bid to exclusive rights to a variety of trademarks including the term “ZERO” for soft drinks (e.g., Coca-Cola Zero, Sprite Zero, Pibb Zero, Fanta Zero, and Powerade Zero, to name a few).

Dr. Pepper opposes Coke’s trademark applications on the basis that “zero” is descriptive if not generic for a zero calorie or diet soft drink. Dr. Pepper alleges that, due to negative associations with the word “diet,” Coke began replacing “diet” with “zero” in the mid-2000s, and “zero” is no different than the word “diet” as short-hand for zero calories. Dr. Pepper also identified several examples of other companies using “zero” for the same purpose in connection with their zero-calorie drinks such as Diet Rite Pure Zero, Propel Zero, Arnold Palmer Zero and others, and it introduced into evidence a consumer survey purportedly indicating that ninety-two percent of consumers understand the term “Zero” to mean a zero-calorie soft drink.

In contrast, Coke claims it began using “zero” to “reframe and contemporize” its brands. It denies that “zero” is generic, and claims that “zero” is not merely descriptive as it has acquired distinctiveness as a trademark based on extensive use and advertising. While most financial figures have been filed under seal, Coke’s attorney has reportedly noted that consumers recognize the term as part of a trademark based on Coke’s $6 billion in sales of soft drinks bearing marks including “ZERO” prior to 2011.

Interestingly, this is not the first time Coke has faced this challenge. More than two years ago, the Trademark Office dismissed oppositions brought by the Brazilian company, Ambev, to the same trademark applications, and found that Coke had proven that ZERO had acquired distinctiveness when used as an element of a mark for soft drinks. That decision was non-precedential, and leaves Coke again facing a similar challenge.

To some, this may be much ado about nothing. Those in the industry obviously disagree and are awaiting the Trademark Office decision with carbonated breath.

DISCLAIMER: The information provided is for general informational purposes only. This post is not updated to account for changes in the law and should not be considered tax or legal advice. This article is not intended to create an attorney-client relationship. You should consult with legal and/or financial advisors for legal and tax advice tailored to your specific circumstances.

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