Dr Pepper Lawsuit Highlights the Complexities of a Licensing Agreement

As Dr Pepper takes one of its bottlers to court, it brings up the importance of franchisees knowing the ins and outs of their licensing agreement. In Dr Pepper/Seven Up, Inc. (DPS) v. Dr Pepper Bottling Company of Dublin, Texas, the parent company says that Dublin Dr Pepper is violating its licensing agreement. DPS owns the brand and trademarks associated with the popular soda. It has relationships with 170 bottlers throughout North America, and allows them to sell the soda with approved bottles and cans with strictly authorized logos and trademarks.

In its complaint, DPS claims the actions of Dublin Dr Pepper, “…harm the brand and its trademarks by creating confusion as to the quality, source, and origin of the brand and its trademarks and creating the potential for erosion of the trademark and brand recognition, loyalty, and value.” Dublin Dr Pepper is selling retro bottles with six different designs that remind consumers of soda fountains, use patriotic and Texas designs, and promote Dublin, Texas. The Dublin bottler is the oldest DPS bottler in the U.S. and wants to emphasize the fact that it has been open since 1891 and still uses cane sugar to sweeten the soda.

DPS acknowledges that from time to time it has special campaigns with retro and unique logos, but asserts that Dublin Dr Pepper has done this for too long and additionally sells unapproved merchandise with the coveted logo. DPS also has issue with the fact that Dublin is selling its goods online and throughout the U.S., encroaching on other bottlers’ defined territories.

When it comes to operating an entity that licenses products from another, it is important to have legal representation so that questions related to intellectual property, license agreements and contracts, and actions with competitors are addressed early on before disputes arise.

Licensing agreements can be extraordinarily complex as there are many factors and competing concerns that must be addressed. Furthermore, situations change with time. For an entity like Dublin Dr Pepper that has been in business since 1891, this can mean vast changes over the life of the business.

If a dispute arises over a licensing agreement that your business is involved in, it is recommended to retain a skilled business litigation attorney who is experienced in this area. To learn more, contact Austin business litigation attorney and Austin business lawyer Gregory D. Jordan at (512) 419-0684.