## Facts

- The Coca-Cola Company owned federally registered COCA-COLA and COKE trademarks and marketed its products nationwide.
- Missouri restaurant operators (Stewart and Moran) served non-Coca-Cola beverages when customers ordered “Coca-Cola” or “Coke.”
- In 1972 and 1973, the parties entered federal consent judgments enjoining substitution of other products for Coca-Cola or Coke and acknowledging federal jurisdiction over trademark infringement and unfair competition.
- Coca-Cola later investigated and concluded the restaurants continued substituting other beverages when customers ordered Coca-Cola or Coke.
- Coca-Cola initiated civil contempt proceedings in federal district court seeking sanctions for violating the injunctions.
- The district court dismissed the contempt actions for lack of subject-matter jurisdiction, reasoning the conduct was not “in commerce” under the Lanham Act and the amount in controversy was insufficient for diversity jurisdiction.

## Issues

1. Whether the restaurants’ intrastate substitution of another soft drink when customers ordered “Coca-Cola” or “Coke” constituted activity “in commerce” under the Lanham Act because it substantially affected interstate commerce.
2. Whether the district court erred in dismissing the civil contempt proceedings for lack of subject-matter jurisdiction despite prior federal injunctions addressing trademark infringement and unfair competition.

## Decision

- The Eighth Circuit reversed the dismissal and remanded.
- The court held Coca-Cola established federal trademark jurisdiction under the Lanham Act because the alleged passing off had a substantial effect on interstate commerce.
- The court concluded the district court had subject-matter jurisdiction to proceed on Coca-Cola’s contempt claims enforcing the earlier injunctions.

## Legal Principles

- The Lanham Act reaches intrastate conduct that significantly affects interstate commerce.
- “Passing off” a non-genuine product in response to orders for a nationally marketed trademarked product can substantially affect interstate commerce by harming the trademark owner’s nationwide reputation and goodwill.
- Federal trademark jurisdiction may exist even when the challenged conduct occurs entirely within one state, if the conduct threatens national trademark rights built through interstate advertising, distribution, and consumer expectations.

## Conclusion

The Eighth Circuit held that local restaurant substitution of another beverage for “Coca-Cola” or “Coke” could be federally actionable under the Lanham Act because it substantially affected Coca-Cola’s interstate goodwill, and it reinstated Coca-Cola’s contempt proceedings to enforce existing federal injunctions.


Coca-Cola Co. v. Stewart, 621 F.2d 287 (8th Cir. 1980)