Maine Springs, LLC v. Nestlé Waters North America, Inc.,
2015 WL 1241571, No. 2:14–cv–00321 (D. Me. Mar. 18, 2015)
Maine Springs was founded seven years ago to start a bottled
water operation in Poland Spring, Maine. Maine Springs owned the natural
springs, bottling facility, bulk water facility and necessary equipment for
bottled water operations. The bottling facility was located in Poland Spring, and
the bulk water facility was about 2 miles away in Poland, Maine. Each had its
own spring water source, and Maine Spring’s permits make it the holder of the
single largest natural spring water withdrawal permit issued by the State of
Maine.
Nestlé Waters is the largest distributor of bottled water in
the US, with a 31.6% share of all bottled water sales in the United States, almost
double that of its closest competitor. Among its 15 brands is Poland Spring, America’s
leading brand of bottled water. Nestlé
Waters represents that Poland Spring® bottled water is 100 percent natural
spring water. The bottle says: “not all water is created equal. Poland Spring®
Brand 100% Natural Spring Water comes only from carefully selected mountain
springs that are continually replenished. What starts out as rain and snow,
soaks into the ground and is filtered naturally by the earth with a distinct
composition of minerals to create our crisp, refreshing taste.” This is part of
a general strategy by bottled water sellers to differentiate their products
from regular bottled tap water.
Although Nestlé Waters has a bottling plant in Poland
Spring, the original Poland Spring is not used as a resource for Poland Spring
water, because that spring has been dry for decades. Nestlé’s product doesn’t come
from the same aquifer as the original source. Thus, Maine Spring alleged that Nestlé
Waters’ representation that the Poland Spring was one of its sources was
literally false. (Wouldn’t the mark be
subject to cancellation on this ground if the falsity were material?) In
addition, Maine Springs alleged that the ground or well water sold as Poland
Spring doesn’t necessarily come from “carefully selected mountain springs that
are continually replenished,” as advertised. Though Poland Spring was sold as
100% natural spring water Main Springs alleged that the water comes from a
variety of sources including springs, ground water and well water in the Maine
geographic area.
Maine Springs made attempts to supply bottling companies
with its bulk water, but was rejected, and it alleged that “[o]ther bottling
companies and at least one distributor have similarly rejected Maine Springs’
proposals for fear of threatened litigation by Nestlé Waters.” Thus, the
bottling and distribution facilities have sat idle. Nestlé Waters threatened
litigation against Maine Springs for trademark infringement: Nestlé Waters’
position was that Maine Springs could not identify the source of its water,
Poland Spring, without creating confusion.
As it wrote, “While we appreciate that there is a geographic location
known as Poland Spring, Maine, the predominant associations created by the
statement are that the ‘Poland Spring’ is the source of the water and that its
contents are associated with the Poland Spring® brand.”
Nestlé Waters demanded that Maine Springs not use any label
that identified Poland Spring, Maine as the source of its water, but, as a
matter of federal and state law, bottled water must identify its source on the
label, including city, state and ZIP code. (Sounds like an interesting
preemption/preclusion defense.) Maine
Springs thus changed its label from “Source: Poland Spring, Maine” to “Source: Located
in Poland Spring, Maine,” but Nestlé Waters advised that it did not approve of
the change.
Maine Springs sued for violation of the Lanham Act; Nestlé
Waters argued that Maine Waters didn’t come within the zone of interests
protected by the Lanham Act and failed to sufficiently allege proximate cause.
But that was distinct from Article III standing, which the court had to address
independently, and found wanting. Maine Springs needed to show that Nestlé
Waters has invaded “a legally protected interest that is ‘concrete and
particularized.’” It didn’t. Its claims
of harm from the false advertising were bald and conclusory.
Maine Springs alleged that consumers of bottled water choose
Poland Spring water due to Poland Spring’s false statement that its water is
natural spring water from the Poland Spring, whereas if Poland Spring were
truthful consumers would buy Maine Springs water instead. But Maine Springs hadn’t actually entered or
attempted to enter the bottled water market in any way. Instead its facilities
are idle and the complaint didn’t allege that it was prepared to sell bottled
water. Thus, the allegedly false advertising couldn’t have diverted consumers. Maine
Springs’ plans of eventually marketing and selling bottled water were “too
speculative to constitute an injury-in-fact for its Lanham Act claim.”
Maine Springs also alleged that bottling and distribution
companies rejected its supply proposals, which was a concrete and
particularized injury, but it failed at the causation stage. The alleged
violation of the Lanham Act was the false advertising, but the rejection of
supply proposals wasn’t connected to that.
(This also prevented Maine Springs from alleging proximate cause under Lexmark.)
The court declined to exercise supplemental jurisdiction
over Maine Springs’ tortious interference claim.
No comments:
Post a Comment