Cheese Wars

by Winthrop & Weinstine, P.A.
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Trademarks covering cheese are at the heart of two lawsuits involving Kraft Foods Group, Inc. (“Kraft”).  Kraft is the largest packaged-food company in the United States.  It is second only to Nestlé in terms of world sales.  Kraft is both a plaintiff and a defendant in pending lawsuits.

At the beginning of June, Saputo Cheese USA Inc. (“Saputo”) sued Kraft, alleging unauthorized use of the TOPPERS mark for Velveeta cheese products.

Specifically, Saputo brought the following claims against Kraft:  (1) infringement of a federally registered trademark; (2) federal unfair competition and false designation of origin; (3) federal false advertising; (4) violation of the Uniform Deceptive Trade Practices Act under Illinois law; (5) common law trademark infringement; and (6) common law unfair competition.  Saputo is one of the top three cheese manufacturers in the United States.

In another lawsuit, Kraft is the plaintiff, alleging that Cracker Barrel Old Country Store Inc. (“CBOCS”) and others intend to enter Kraft’s trade channels, and because their new, licensed food products under the CRACKER BARREL mark are highly related to Kraft’s cheese products under the identical CRACKER BARREL mark, an injunction should issue.  Specifically, Kraft brought claims against CBOCS and the other defendants, including:  (1) declaratory judgment that the CRACKER BARREL mark, if used in connection with the goods sold in retail food channels, will constitute trademark infringement; (2) declaratory judgment regarding unfair competition; and (3) unfair competition and unfair business practices contrary to the state and common laws of Illinois.  Kraft wants a marketing license agreement between CBOCS and the John Morrell Food Group to be declared void because it violates its rights to the Cracker Barrel brand.

CBOCS brought a counterclaim alleging that it has federal registrations and is the presumed owner of valid trademarks with the exclusive right to use the CRACKER BARREL OLD COUNTRY STORE® marks and the CRACKER BARREL® marks on the products and services at issue in retail locations.  Accordingly, it contends that Kraft’s complaint is without merit.

Kraft claims to have sold cheeses called “Cracker Barrel” since 1948 and has had a trademark registration with the United States Patent and Trademark Office since 1957.  Its first “Cracker Barrel” trademark application was filed in 1950.  The lawsuit arose after CBOCS announced a licensing agreement to sell “Cracker Barrel” branded items in grocery chains.  In response, CBOCS countered that Kraft has not objected to its sale of products with the mark on the packaging for decades.  Moreover, products from Cracker Barrel restaurants are now being sold in grocery stores.  Cheese is not one of those products (at least not yet).

CBOCS has filed applications for a number of trademarks related to goods such as:  a range of meat products, lemonade, muffin mix, oatmeal and fruit tea.  Kraft is likely worried that Cracker Barrel will also file an application for the mark in connection with cheese.

Do you think Kraft will win one or both lawsuits?

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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