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Kraft wins in food fight with Cracker Barrel

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A federal appeals court ruled recently that savvy consumers might be confused if food branded Cracker Barrel Old Country Store was sold in grocery stores that carry Kraft’s Cracker Barrel brand cheese. Turns out even a law professor who teaches a course on trademarks and unfair competition might be fooled.

“When I thought of that cheese in the store, that’s what I would have thought of,” Notre Dame School of Law professor and associate dean Mark McKenna said. “In my mind at least, I associate the Cracker Barrel mark much more with the restaurant.”

wilson Warr

The 7th Circuit Court of Appeals on Nov. 14 affirmed an Illinois District Court’s temporary injunction won by Kraft Foods, which claimed that allowing the restaurant chain’s branded hams and other foods to be sold in groceries would confuse consumers familiar with Kraft’s Cracker Barrel cheese trademark.

“In some respects, the case is an application of some pretty standard principles of trademark law,” McKenna said. “What’s different about this case is you have longstanding mutual use of trademarks in different areas.”

Northfield, Ill.-based Kraft sued the Tennessee-based restaurant chain 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.

Daniel P. Albers of Barnes & Thornburg LLP in Chicago represented Cracker Barrel and said he couldn’t discuss what the company might do after the ruling. “Cracker Barrel is disappointed with the ruling but pleased the court supports the sale of its product through its old country stores, mail order and online,” he said.

The restaurant has been doing that for years without challenge from Kraft. Albers said Kraft also has stipulated as part of this litigation that it has no objection to the restaurant selling items in grocery stores using its distinctive silhouette logo of Uncle Herschel in a rocking chair with the wording modified to “CB Old Country Store.”

New York attorney Barbara Solomon of Fross Zelnick Lehrman & Zissu P.C. represented Kraft at oral arguments before the 7th Circuit but did not reply to inquiries seeking comment.

The 7th Circuit opinion isn’t a ruling on the merits, Albers noted. “There’s not a lot of precedent where two companies coexisted this long and used the same words in their respective marks, and that was an issue we raised (at the District Court).”

Albers argued that a 66-year-old 7th Circuit ruling, California Fruit Growers Exch. v. Sunkist Baking Co., 166 F.2d 971 (1947), could have helped his client prevail. In that case, Hoosier jurist Sherman Minton wrote an opinion reversing a ruling that a baking company’s use of the “Sunkist” brand infringed the trademark on citrus and other such products. The case was remanded for dismissal.

Krieg DeVault LLP intellectual property litigation practice chairman Ali Warr said he thinks the Kraft opinion strikes a balance using time-tested principles. Warr is not involved in the litigation.

“We know in trademark law, first in time is first in right,” Warr said. “What the preliminary injunction does is protects the Cracker Barrel trademark for Kraft’s cheese in grocery story outlets.” Kraft perfected a Cracker Barrel trademark in the 1950s, and the restaurant chain didn’t trademark its name until the 1970s.

“It permits the coexistence of two otherwise identical trademarks … based on the channels of trade and the potential for customer confusion,” he said.

Similarity of the goods being sold also enters the equation. McKenna noted that there are all kinds of similar trademarks – think of Delta Air Lines and Delta Faucets, or Ace Bandages and Ace Hardware for example. But usually those brands are unlikely to compete in similar lines of commerce, so infringement isn’t typically an issue, he said.

Experts noted that 7th Circuit Judge Richard Posner went to some length in this case to note such factors. The opinion borrows from U.S. Supreme Court Justice Learned Hand’s observation that it would be hard for the seller of steam shovels to find grounds for a complaint against a lipstick using the same trademark.

“Cheese and deli meat are much more closely related,” Warr said.

Affirming the preliminary injunction, he continued, “sends a pretty strong signal to Cracker Barrel that Kraft has a substantial likelihood of succeeding on the merits in the case at trial.” But the opinion also gives Cracker Barrel Old Country Stores an avenue to proceed in the District Court or appeal because it was critical of Kraft’s expert survey, he said.

“If I’m Cracker Barrel Old Country Store and I don’t like this ruling, this is one issue I would attack in proceeding to trial,” Warr said. “Conversely, if I’m Kraft, now I have time to conduct a more thorough survey.”

McKenna said the case also is interesting in that Kraft had not objected to Cracker Barrel’s sale of similar food items until they began appearing on grocery store shelves.

In an opinion complete with pictures of the competing logos and an inconclusive exploration of consumer psychology in trademark cases, Posner wrote 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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  1. I have been on this program while on parole from 2011-2013. No person should be forced mentally to share private details of their personal life with total strangers. Also giving permission for a mental therapist to report to your parole agent that your not participating in group therapy because you don't have the financial mean to be in the group therapy. I was personally singled out and sent back three times for not having money and also sent back within the six month when you aren't to be sent according to state law. I will work to het this INSOMM's removed from this state. I also had twelve or thirteen parole agents with a fifteen month period. Thanks for your time.

  2. Our nation produces very few jurists of the caliber of Justice DOUGLAS and his peers these days. Here is that great civil libertarian, who recognized government as both a blessing and, when corrupted by ideological interests, a curse: "Once the investigator has only the conscience of government as a guide, the conscience can become ‘ravenous,’ as Cromwell, bent on destroying Thomas More, said in Bolt, A Man For All Seasons (1960), p. 120. The First Amendment mirrors many episodes where men, harried and harassed by government, sought refuge in their conscience, as these lines of Thomas More show: ‘MORE: And when we stand before God, and you are sent to Paradise for doing according to your conscience, *575 and I am damned for not doing according to mine, will you come with me, for fellowship? ‘CRANMER: So those of us whose names are there are damned, Sir Thomas? ‘MORE: I don't know, Your Grace. I have no window to look into another man's conscience. I condemn no one. ‘CRANMER: Then the matter is capable of question? ‘MORE: Certainly. ‘CRANMER: But that you owe obedience to your King is not capable of question. So weigh a doubt against a certainty—and sign. ‘MORE: Some men think the Earth is round, others think it flat; it is a matter capable of question. But if it is flat, will the King's command make it round? And if it is round, will the King's command flatten it? No, I will not sign.’ Id., pp. 132—133. DOUGLAS THEN WROTE: Where government is the Big Brother,11 privacy gives way to surveillance. **909 But our commitment is otherwise. *576 By the First Amendment we have staked our security on freedom to promote a multiplicity of ideas, to associate at will with kindred spirits, and to defy governmental intrusion into these precincts" Gibson v. Florida Legislative Investigation Comm., 372 U.S. 539, 574-76, 83 S. Ct. 889, 908-09, 9 L. Ed. 2d 929 (1963) Mr. Justice DOUGLAS, concurring. I write: Happy Memorial Day to all -- God please bless our fallen who lived and died to preserve constitutional governance in our wonderful series of Republics. And God open the eyes of those government officials who denounce the constitutions of these Republics by arbitrary actions arising out capricious motives.

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  4. "Meanwhile small- and mid-size firms are getting squeezed and likely will not survive unless they become a boutique firm." I've been a business attorney in small, and now mid-size firm for over 30 years, and for over 30 years legal consultants have been preaching this exact same mantra of impending doom for small and mid-sized firms -- verbatim. This claim apparently helps them gin up merger opportunities from smaller firms who become convinced that they need to become larger overnight. The claim that large corporations are interested in cost-saving and efficiency has likewise been preached for decades, and is likewise bunk. If large corporations had any real interest in saving money they wouldn't use large law firms whose rates are substantially higher than those of high-quality mid-sized firms.

  5. The family is the foundation of all human government. That is the Grand Design. Modern governments throw off this Design and make bureaucratic war against the family, as does Hollywood and cultural elitists such as third wave feminists. Since WWII we have been on a ship of fools that way, with both the elite and government and their social engineering hacks relentlessly attacking the very foundation of social order. And their success? See it in the streets of Fergusson, on the food stamp doles (mostly broken families)and in the above article. Reject the Grand Design for true social function, enter the Glorious State to manage social dysfunction. Our Brave New World will be a prison camp, and we will welcome it as the only way to manage given the anarchy without it.

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