## Facts

- Squirt Co. (later renamed SquirtCo) owned the federally registered trademark **SQUIRT** for a carbonated grapefruit soft drink; the mark was coined in 1937, registered in 1939, and used continuously thereafter.
- The Seven-Up Company and Seven-Up U.S.A., Inc. developed a new noncarbonated lemonade drink and, through an advertising agency, coined the mark **QUIRST** in late 1977 in connection with the idea of “quench thirst.”
- After consumer research and trademark availability searching, Seven-Up adopted **QUIRST** as the product name on February 15, 1978.
- SquirtCo learned of Seven-Up’s intended use on March 24, 1978, objected orally that day, and objected in writing on March 28, 1978; Seven-Up proceeded with the rollout.
- SquirtCo filed suit on April 7, 1978, asserting trademark infringement and related claims, and also asserting a pendent state-law claim for tortious interference with SquirtCo’s franchise relationships.
- Seven-Up began marketing QUIRST in May 1978.
- The parties’ products were both soft drinks marketed to ordinary retail consumers through overlapping trade channels, including grocery and convenience outlets.
- The district court denied a preliminary injunction, later separated liability from damages, and tried liability to the court without a jury in May and August 1978.
- The district court issued a memorandum opinion with findings and conclusions on September 6, 1979, and entered judgment and a permanent injunction on November 23, 1979.
- Survey evidence presented at trial used a point-of-purchase, marketplace-style setup in which consumers were exposed to both products and questioned about source or affiliation, producing evidence of actual consumer confusion.

## Issues

1. Whether Seven-Up’s use of **QUIRST** for a noncarbonated lemonade soft drink was likely to cause consumer confusion with SquirtCo’s **SQUIRT** mark for a carbonated grapefruit soft drink, warranting injunctive relief under federal and state trademark law.
2. Whether Seven-Up tortiously interfered with SquirtCo’s contractual or business relationships with its franchisees, and whether the district court could dismiss that pendent claim without findings of fact and conclusions of law.

## Decision

- The district court found a likelihood of confusion between **SQUIRT** and **QUIRST** and held that Seven-Up’s use of QUIRST infringed SquirtCo’s trademark rights.
- The district court entered a **permanent injunction** barring Seven-Up and those acting with it from using **QUIRST**, any colorable imitation, or any designation confusingly similar to **SQUIRT** in connection with the manufacture, advertising, or sale of soft drinks and related products in the United States and its territories.
- The district court dismissed SquirtCo’s pendent tortious-interference claim.
- On appeal, the Eighth Circuit **affirmed** the permanent injunction, holding that the district court’s likelihood-of-confusion determination was not clearly erroneous.
- The Eighth Circuit **vacated** the dismissal of the tortious-interference claim and **remanded** for findings of fact and conclusions of law on that separate claim.

## Legal Principles

- Likelihood of confusion is evaluated under a multifactor analysis that commonly considers: the strength of the senior mark; similarity of the marks in sight, sound, and meaning; the competitive proximity of the products and overlap in trade channels; evidence of actual confusion; the alleged infringer’s intent; and the degree of care expected of purchasers of the goods.
- For low-cost, frequently purchased consumer goods such as soft drinks, ordinary buyers may exercise limited care, so relatively small differences between short word marks may not prevent confusion.
- The similarity of two marks must be assessed in the commercial setting in which they are encountered, including how consumers perceive them quickly at retail.
- Evidence of actual confusion is probative on likely confusion; properly designed consumer surveys that approximate marketplace conditions may be credited by the factfinder.
- On appellate review, a district court’s likelihood-of-confusion finding is reviewed for clear error, and an appellate court will uphold the finding when supported by the record.
- When a case is tried to the court, Fed. R. Civ. P. 52(a) requires findings of fact and conclusions of law on resolved claims; a summary dismissal of a separate pendent claim without such findings may require vacatur and remand.

## Conclusion

The district court concluded that Seven-Up’s QUIRST mark for a lemonade soft drink was likely to confuse consumers in the marketplace with SquirtCo’s long-used SQUIRT mark for a grapefruit soft drink and permanently enjoined Seven-Up from using QUIRST or confusingly similar designations for soft drinks and related products; the Eighth Circuit affirmed the injunction but vacated the one-sentence dismissal of SquirtCo’s tortious-interference claim and remanded for the required findings and legal conclusions.


SquirtCo v. Seven-Up Co., 480 F. Supp. 789 (E.D. Mo. 1979) (aff’d, 628 F.2d 1086 (8th Cir. 1980))