The fight for logos, sales territories, and a piece of history is brewing in Texas as Dr Pepper/Seven Up, Inc. takes on Dr Pepper Bottling Company of Dublin, Texas. DPS, as the parent company is sometimes called, is taking one of its bottlers to court after the bottler has allegedly refused to stop using retro logos and sell its unique version of the soda outside of its licensed selling territory. The bottler says it is the oldest Dr Pepper bottler around and has done nothing to harm the brand since it began bottling in 1891.
The lawsuit in the U.S. District Court in the Eastern District of Texas alleges that Dublin Dr Pepper has infringed on the parent company’s trademark and diluted it, practiced unfair competition, violated numerous license agreements, and breached its contract.
“In the simplest terms, the bottler in Dublin is using a logo that is no longer authorized and is taking business from fellow Dr Pepper bottlers who play by the rules and sell within their defined territories,” said Jim Johnston, president of beverage concentrates for DPS. “We owe it to our other bottlers to stop these unauthorized practices.”
Dr Pepper, like many other soda and beverage companies, has been using retro logos in its sales and marketing campaigns throughout the last year. But these campaigns are for a limited time and with specific guidelines for its bottlers. Dublin Dr Pepper has six logos that use images from the days of soda fountains, Texas flags, patriotic designs, and the town name to woo consumers. The bottling company has a big local presence and online demand. Many fans love the fact that Dublin Dr Pepper uses pure cane sugar in its drink versus anything synthetic to sweeten it.
But the parent company says Dublin Dr Pepper is over-reaching its six county selling territory of Comanche, Eastland, Erath, Hood, Hamilton and Bosque. Soft drink companies give rights to bottlers for exclusive territories that are enforceable via the Soft Drink Interbrand Competition Act of 1980. The act is in place to prevent cut-throat competition and foster profitability among bottlers. Yet violations can also cause contract terminations from the parent company and licensee, which could put the bottler in a tough spot. DPS licenses the Dr Pepper brand to 170 bottlers throughout the U.S. and Canada.
“We have been a loyal partner to Dr Pepper Snapple longer than any other bottler, and we’ve worked successfully with several different ownership groups for our parent company to become one of the company’s most successful franchisees,” Dublin Dr Pepper said on its website. “It is unfortunate that Dr Pepper Snapple’s attorneys are asking our overburdened court system to resolve what we believe is a business matter, but we look forward to telling our side of the story before a judge and jury, and we will continue to provide great products and great service to every one of our customers.”
Other bottlers and DPS say that Dublin Dr Pepper is cutting in on their profits by selling the soda and also clothing and related merchandise through its website, restaurants, retailers, and solicitations on Facebook. DPS alleges that Dublin Dr Pepper is profiting from consumers in New York, California, and even nearby in Collin County in the city of Plano. The license agreement the two signed in 2009 purportedly prohibits such sales.
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Gregory D. Jordan is an Austin business attorney, Austin employment lawyer, and Austin business litigation lawyer. To learn more, visit Theaustintriallawyer.com.
