I’m a Pepper, You’re a Pepper, Dublin’s not a Pepper Anymore

To follow Mike’s shift toward anti-competitiveness (and beverages):

Dublin Dr. Pepper and Dr. Pepper Snapple Group have settled their trademark licensing dispute and Dublin Dr. Pepper, the beverage darling of the Lonestar State, is no more.

Dublin Dr. Pepper is a Texas favorite.  This original Dr. Pepper was created in 1891, and its birthday is still celebrated every year in the town of Dublin, which changes its name to “Dr. Pepper, Texas” each year on that day.  What makes Dublin Dr. Pepper unique in today’s market is the fact that it has continuously (even during difficult times, including WWII sugar shortages) been manufactured with cane sugar — which gives it a distinct (many would just say “better”) taste.

For years, Dr. Pepper Snapple Group and Dublin Dr. Pepper operated under the terms of a licensing agreement.  The agreement provided, inter alia, that the sales territory for Dublin Dr. Pepper would be limited to six counties in Texas, and that Dr. Pepper Snapple Group would approve designs for the Dublin Dr. Pepper bottles.  Several months ago Dr. Pepper Snapple Group filed a complaint alleging that Dublin Dr. Pepper violated the terms of the agreement by selling Dublin Dr. Pepper outside of its agreed-upon six county territory (through internet sales, telephone sales, and otherwise) and creating a likelihood of confusion in the marketplace.

Dublin Dr. Pepper countersued, claiming that Dr. Pepper Snapple Group wanted to create its own “retro” version of Dr. Pepper, using trade dress similar to that of Dublin Dr. Pepper based on designs Dublin Dr. Pepper had submitted for approval in the past.  (Dublin Dr. Pepper is quick to point out that Dr. Pepper Snapple Group’s version was made with refined beet sugars, however, and not cane sugar.)

The settlement agreement provides, among other things, that Dr. Pepper Snapple Group will make a Dr. Pepper with “nostalgic packaging” sweetened with cane sugar that will be distributed to certain parts of Texas — but it won’t be called “Dublin Dr. Pepper.”  Austin station KXAN reports on the story here, and the Wall Street Journal story can be found here.  Dublin Dr. Pepper’s original response and counterclaim to the lawsuit can be found here.  What the newly named “Dublin Bottling Works” will be doing next is discussed in the Dallas Observer blog here.

The underlying issues would be good fodder for a trademark class, including establishment of trademark rights, trade dress, geographic designations, geographic limitations on sales, concurrent use, infringement, and trademark policing.