Everyone knows that The Coca-Cola Co. vigilantly guards its coveted soda formula. But the beverage giant's patented orange juice containers also are apparently worth some castle guarding. Coke recently filed a federal suit to protect its patent on an orange juice carafe used for one of its orange juice brands -- Simply Orange.
The suit accuses Citrus World Inc. and its subsidiary, Florida's Natural Growers, of allegedly using an orange juice carafe similar to one Coke patented in 2002. Coke says Florida's Natural is trying to take advantage of Coke's success with the container.
Florida's Natural, a cooperative of orange growers, is calling the suit harassment. Coke is suing for revenue its competitor has earned from using the bottle, and says it's only trying to protect its patent and brand.
The suit, filed in U.S. District Court in Atlanta on Jan. 21, is another challenge in the competitive war to win market share and profits in the unstable citrus beverage category.
The category can be volatile, as orange crops and prices wax and wane with the weather and international supply of oranges. Orange future prices, for example, reached a 27-year low last summer.
Sales of Simply Orange soared by 10 percent after introducing the patented packaging, according to Coke spokesman Ray Crockett.
Coke's two orange juice brands, Minute Maid and Simply Orange, are ranked second and fifth in Beverage Digest's 2004 ranking of top refrigerated juice brands by dollar share in U.S. supermarkets.
PepsiCo. Inc. brand Tropicana has the largest market share, while Florida's Natural is ranked third.
A carafe used by Tropicana looks more like Coke's than Florida's Natural's, which is shorter and has a thinner neck, as first reported in Lakeland, Fla.'s The Ledger.
But Coke's Crockett said he's not concerned about the Tropicana carafe.
"We filed suit against Florida's Natural for misappropriating the design of our signature carafe," Crockett said. "It infringes on patents that we hold and may cause consumers to confuse their products with ours. If you look at the two on the shelf, Florida's Natural looks almost identical. The label is similar; the only thing that is different is the size of the cap."
"It just appears to us to be harassment," said Stephen Caruso, CEO of Florida's Natural. "It just feels like the little guy is trying to eke out an existence and the big guy is trying to hold them down."
Atlanta-based Coca-Cola had sales totaling almost $22 billion in 2004, and 49,000 employees in 2003.
Revenues of purchase for N.Y.-based PepsiCo were $29 billion in 2004. The company had 143,000 employees in 2003.
Florida's Natural, based in Lake Wales, Fla., has 1,000 employees and about $528 million in revenue, according to Caruso.
He said he buys the bottle in question from PlastiPak Packaging Inc., a Plymouth, Mich. packaging giant. "You'd think they'd know who owns the bottle and go after them," Caruso said.
PlastiPak, a division of PlastiPak Holdings Inc., had more than $1 billion in sales in 2004.
In the suit, Coke is asking for a permanent injunction against Florida's Natural to bar the company from using the carafe, and monetary damages up to three times any gross profits Florida's Natural has derived from using the bottle.
Florida's Natural has been sued before in the orange juice wars.
In 2002, Tropicana Products Inc. claimed that Florida's Natural was deceptively labeling its orange juice as made only from Florida oranges.
Caruso said Tropicana eventually withdrew the suit.
Caruso also said his company is hiring a new patent lawyer who will file a response to the federal complaint in the next few weeks. He said his company hasn't stopped using the carafe, because it's not clear that there is a patent violation.