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Kraft prevails in Cracker Barrel fight

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Not coming soon to a grocery store near you: food products from Cracker Barrel Old Country Store restaurants.

The 7th Circuit Court of Appeals on Thursday upheld a District Court injunction won by Kraft Foods, which claimed that allowing the restaurant’s branded hams and other foods to be sold in groceries would confuse consumers familiar with Kraft’s Cracker Barrel-brand cheese and infringe on Kraft’s trademark.

Northfield, Ill.-based Kraft sued the Tennessee-based restaurant chain and won an injunction that was affirmed on appeal in Kraft Foods Group Brands LLC v. Cracker Barrel Old Country Store, Inc., et al., 13-2559. The restaurant is free to sell its branded food items in its establishments, but Kraft has a trademark to defend when both items are sold in the same stores, the 7th Circuit held.

The lawsuit against Cracker Barrel was filed after the restaurant began selling hams under license to a few groceries, but the opinion notes those sales stopped after Kraft sued.

In an opinion complete with pictures of the competing logos and an inconclusive exploration of consumer psychology in trademark cases, Circuit Judge Richard Posner wrote for the unanimous panel that Kraft must prevail. He noted prior court observations that “the average buyer is ‘neither savant nor dolt,’ but is one who ‘lacks special competency with reference to the matter at hand.’”

“Even savvy consumers might be fooled, because they know that producers often vary the appearance of their trademarks,” Posner wrote. Classifying the products as similar low-cost packaged food items, he found that if the restaurant chain prevailed, “similar products with confusingly similar trade names will be sold through the same distribution channel – grocery stores, and often the same grocery stores.

“Such similarities and overlap would increase the likelihood of consumer confusion detrimental to Kraft,” the court held.

Cracker Barrel operates more than 620 restaurants – including 29 in Indiana – and Kraft’s Cracker Barrel cheese is sold in thousands of grocery stores.

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