Maine Springs LLC v. Nestlé Waters, U.S. District Court for District of Maine, 2:14-cv-00321 (2014), Filed August 11, 2014
One Maine water bottler is thirsty for justice in a federal unfair competition dispute. Maine Springs LLC, a local water company in Maine, has filed a suit against Nestlé Waters NA in U.S. District Court for the District of Maine alleging false and misleading advertising, and tortious interference with business. More specifically, Maine Springs alleges that labels on Nestlé’s bottled water products bearing the Poland Spring® mark contain false and/or misleading statements as to the sources of the water in violation of the federal Lanham Act, and that because of its assertion of its trademark rights in the Poland Spring® mark against Maine Springs, Nestlé has effectively interfered with Maine Springs’s attempts to sell its bulk water to other third party bottling companies.
This suit is one of the first to follow a recent ruling from the U.S. Supreme Court in a similar labeling dispute between Coca-Cola and Pom Wonderful, LLC (discussed in more detail below). In that case, the Supreme Court ruled that a Lanham Act claim could be brought against a competitor challenging the competitor’s food and beverage label, even though the food and beverage label was subject to Food and Drug Administration labeling regulations.
The dispute between Maine Springs and Nestlé arises from Maine Springs allegations that the Poland Spring, a natural water source in Maine, has not been in use for more than 30 years, and thus, accordingly the complaint, was not in use in 1994, when Nestlé began bottling and selling water under the Poland Spring® brand. Thus, any statements made by Nestlé that the water is sourced from the Poland Spring are false and misleading. Further, according to the complaint, Nestlé’s label indicates that the water is 100% spring water. Maine Springs contends that this too is false, and states that Nestlé utilizes water from other springs and non-spring water sources, from other places in the region.
According to Nestlé, the Poland Spring® brand is famous and has been marketed for decades. Indeed, Nestlé owns numerous U.S. federal trademark registrations that include the words POLAND SPRING for spring water. Based on its rights in these registrations, Nestlé sent Maine Springs a cease and desist letter threatening litigation in response to Maine Springs’ attempt to bottle and market a bottled water product after securing permits to extract water from underground spring water sources in Maine, wherein the label on the bottled water product identified the source of the water as Poland Spring, Maine. Nestlé contended that this would create confusion with Nestlé’s Poland Spring® bottled water product.
Further, Maine Springs was in the process of securing contracts to sell bulk water to other small and mid-sized bottlers, including Niagara Bottling Company, and Crystal Rock. Maine Springs alleges that because of a cease and desist letter from Nestlé threatening trademark infringement against Maine Springs for labeling that indicated that the water source was Poland Spring, its potential business partners rejected Maine Springs’ proposals for fear of threatened litigation by Nestlé. Although there are no allegations that Nestlé ever directly contacted any of the bottlers, Maine Springs alleges that Nestlé’s actions constituted tortious interference with prospective business advantage.
This is the third lawsuit that Nestlé has defended regarding the label on its bottled water. The company settled two prior consumer class action suits for fraud in Illinois and Connecticut, by parties who claimed that Nestlé used municipal water to fill its bottles, despite product labels that represented the product was 100% natural spring water.
Whether Nestlé’s statements on the labels are false and misleading remains to be seen, as does whether threatening litigation against Maine Springs constitutes tortious interference of business with parties in negotiation with Maine Springs. However, based on its registrations, Nestlé has the right to object to product labels that attempt to utilize its brand Poland Spring® as a source identifier of the product. Competitors, however, are entitled to identify the geographic location Poland Spring. Thus, the resolution of this issue will likely depend upon the manner in which the identification of the geographic location, Poland Spring, is presented on the label, as it is not likely that Nestlé’s registration rights will allow them the ability to prevent truthful statements regarding the geographic location of the water being sold to be included on the product.
If you have questions about trademarks, or have received a cease and desist letter from a competitor, you need an experienced trademark attorney. Anna Vradenburgh is a well-respected, business-mind expert in trademark issues with extensive experience prosecuting domestic and foreign trademarks. In addition to her prosecution practice, Anna also assists clients in the selection and use of trademarks and represents clients in trademark opposition matters, domain name dispute matters, and before the federal Trademark Trial and Appeals Board. Anna can also assist your company in licensing maters, including drafting and negotiation of trademark licensing agreements. For more information visit the Eclipse Law Group website, or contact Anna at (818) 488-8146.