Intellectual Property Attorney

Kraft Foods Sues Restaurant Chain Over Plan To Expand Use Of “Cracker Barrel” Trademark

Kraft Foods, LLC has been selling cheese under the “Cracker Barrel” trademark since 1954. Meanwhile, Cracker Barrel Old Country Store, Inc., founded in 1969, operates a national chain of 621 “Cracker Barrel” roadside restaurants. For more than 40 years, the two “Cracker Barrel” trademarks have peaceably co-existed. Until now.

Last week, Kraft Foods filed a complaint against Cracker Barrel Old Country Store in U.S. District Court for the Northern District of Illinois alleging trademark infringement. It seems the restaurant chain signed a license agreement with John Morrell Food Group, a subsidiary of Kraft’s rival, Smithfield Foods, in November. Pursuant to that agreement, John Morrell Food Group will produce and sell a line of food products, such as “ham, bacon, assorted lunch meats, glazes, jerky and summer sausage” through grocery, club stores and mass merchandisers under the “Cracker Barrel” trademark. What’s more, Cracker Barrel filed several trademark applications to register the “Cracker Barrel Old Country Store” mark (in both standard characters and as part of a design mark) for those licensed products, as well as for a variety of other food products, including oatmeal, muffin mixes, lemonade and iced tea, on an intent-to-use basis.

This is not Cracker Barrel’s first foray into the retail food market. In addition to serving tender vittles to road-weary travelers, the company also sell mixes, candies, preserves, sauces and syrups under the “Cracker Barrel” trademark in shops adjacent to the eateries and online. Nevertheless, according to Kraft’s complaint, Cracker Barrel’s proposed expansion “threaten[s] to destroy the substantial good will that Kraft has created in its Cracker Barrel trademark, and to create significant confusion and cannot be permitted.”

At first blush, it would seem that Kraft is out of luck. If there were such a substantial likelihood of confusion between the two trademarks, how have they managed to co-exist over the past four decades and why didn’t Kraft object before? Yet, Kraft may well prevail here—or at least manage to negotiate a favorable settlement—based on the fact that the restaurant chain’s plans for expansion will encroach on channels of distribution (i.e., third party retail food channels, such as grocery stores) that had previously been exclusive to Kraft.

When analyzing whether a likelihood of confusion exists, courts will consider a number of factors, in addition to the similarities between trademarks themselves. District courts in the Seventh Circuit, such as the District Court of the Northern District of Illinois, typically consider the following seven factors:

(1) the degree of similarity between the marks in appearance and suggestion;

(2) the similarity of the products for which the name is used;

(3) the area and manner of concurrent use;

(4) the degree of care likely to be exercised by consumers;

(5) the strength of the complainant’s mark;

(6) actual confusion; and

(7) an intent on the part of the alleged infringer to palm off his products as those of another.

Helene Curtis Industries, Inc. v. Church & Dwight Co., 560 F.2d 1325, 1330 (7th Cir. 1977), cert. denied, 434 U.S. 1070 (1978);
see also
AutoZone, Inc. v. Strick, 543 F.3d 923, 929 (7th Cir. 2008).

Where, as here, Cracker Barrel’s prior area and manner of concurrent use of the “Cracker Barrel” trademark was limited to only a few types of food products sold exclusively through its own retail outlets, this third factor may be sufficient to tip the scales of justice in favor of Kraft.

The case is Kraft Foods Group Brands LLC v. Cracker Barrel Old Country Store Inc., Case No. 13-cv-00780, U.S. District Court, Northern District of Illinois.

Share Button
Grimes LLC