Coca-Cola blues: Will more courts scrutinize "reputation" theories of harm as part of the standing inquiry?

Meenaxi Enterprise, Inc. v. Coca-Cola Company, --- F.4th ----, No. 2021-2209, 2022 WL 2335343 (Fed. Cir. Jun. 29, 2022)

Many things going on here, including the pushback on Belmora from an evidentiary perspective: It may be easy to plead injuries that satisfy the theories approved in Belmora, but proving them can be difficult. This ties into my hope that courts will start interrogating those harm theories more than they currently do in infringement cases, pushed by Lexmark and Article III standing cases even as the TMA removed any need to consider harm in the injunctive relief calculation.

I will talk just about Coca-Cola’s theory of harm from reputational injury. The Federal Circuit indicates that any reputational injury must be suffered in the US, and Coca-Cola didn’t explain how that would happen given that it didn’t sell its own Thums Up (and Limca) in the US. This is one place that the “anonymous source” doctrine turns against the trademark owner: Since no one knows who owns Thums Up, they won’t blame Coca-Cola if it’s bad, even if they incorrectly think “Indian Thums Up must also be bad now too.”

But the Federal Circuit didn't even need to interrogate the theory that deeply. “Coca-Cola failed to explain how its supposed reputational injury adversely affected its commercial interests other than to speculate that a consumer dissatisfied with Meenaxi’s products might blame Coca-Cola.” But, the court continued, Lexmark indicates that reputational injury—no less than economic injury—needs to be cashed out in some way, generally by showing that “deception of consumers causes them to withhold trade from the plaintiff.” So if Coca-Cola didn’t show that the reputational hit would cause lost sales, there was no statutory standing. And “Coca-Cola alleges no lost U.S. sales as a result of the claimed reputational injury in the Indian-American community.”

One thing the court didn’t talk about was whether US Thums Up was actually bad—or even different from the familiar Indian Thums Up—which is another predicate fact that needs to be established before reputational injury could be established.  Given how different Diet Coke is in countries that use different sweeteners (ugh), it’s not even clear to me why consumers would penalize the manufacturer for making a different version in other countries—after all, lots of companies deliberately do so in order to interfere with parallel imports.