In February, we reported here on the lawsuit filed by Kraft Foods Group Brands LLC (“Kraft”) against Cracker Barrel Old Country Store, Inc. (“Cracker Barrel”) over the restaurant chain’s plans to sell packaged foods in grocery stores and other third-party food retailers. Kraft alleged that the planned brand expansion would infringe on its long-standing rights in the “Cracker Barrel” trademark for cheese.
Although the parties’ trademarks had peaceably co-existed for more than forty years, we opined that Kraft may well prevail based on the fact that Cracker Barrel’s expanded use “will encroach on channels of distribution (i.e., third party retail food channels, such as grocery stores) that had previously been exclusive to Kraft.” Indeed, Kraft recently won its first victory in the dispute.
On Monday, a federal judge granted Kraft’s motion for preliminary injunction against Cracker Barrel, blocking the restaurant chain from using, or licensing the use of, the “Cracker Barrel” trademark on food products in any expanded retail or wholesale trade channels. Although the injunction is temporary—lasting only until the end of the litigation or until further order of the court—the decision by U.S. District Judge Robert Gettleman strongly favors Kraft.
“The court finds that Kraft is likely to prevail on the merits of its trademark infringement and unfair competition claims” Order at 2. “Kraft need only show a ‘better than negligible’ chance of success on the merits, and has more than sufficiently carried this burden.” Id.
Considering the typical likelihood of confusion factors, Judge Gettleman consistently focused on the proximity of the products in the retail channel. According to Judge Gettleman, “a consumer who views the Kraft mark briefly in the dairy section of the grocery store and subsequently views the [Cracker Barrel] mark in the deli or meat section of the same store may not distinguish between the two brands.” Opinion at 3. Judge Gettleman rejected Cracker Barrel’s argument that the distance between the dairy case and the meat section will lessen confusion. Instead, Judge Gettleman agreed with Kraft that “once [Cracker Barrel] branded food products are introduced into grocery stores, the Kraft Cracker Barrel brand will be overwhelmed and diluted.” Opinion at 5. While such a dire prediction seems at odds with Judge Gettleman’s finding that “Kraft’s mark is indisputably strong,” he was clearly mindful that Cracker Barrel was entering the retail channel with a range of branded food products that “will be placed throughout grocery stores.” Opinion at 4.
Citing the fact that this is a new venture for Cracker Barrel, which voluntarily withdrew its limited product launch from the market pending the outcome of this motion, Judge Gettleman found that “the harm to Kraft significantly outweighs the potential harm to [the defendants].” Order at 5-6. Nevertheless, Judge Gettleman ordered Kraft to post a $5 million bond “to protect defendants in the event they are found to have been wrongfully enjoined.” Order at 8.
As reported in The Tennessean, Cracker Barrel is considering whether to appeal the preliminary injunction. Even if Judge Gettleman’s injunction is vacated on appeal, he’s already given Cracker Barrel an indication of how he views their arguments. Cracker Barrel will have to decide whether to press on to trial under these circumstances.
As this case demonstrates, whether you’re starting out with a new trademark or contemplating a brand extension program, it is critical that you seek the advice of an experienced trademark attorney before commencing use.
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.
