U.S. Appeals Court Enters Preliminary Injunction Where Consumers Would be Confused by Similar Tradenames

Kraft is a well-known manufacturer of food products sold in grocery stores.  It has been selling packaged cheeses sold under the trademarked “Cracker Barrel” label.  Kraft has been selling under that name for more than 50 years.  Thousands of grocery stores carry Kraft cheeses bearing that label. Kraft does not sell any non-cheese products under the name Cracker Barrel. 

Cracker Barrel Old Country Store (CBOCS) is a well-known chain of low-priced restaurants. It opened its first restaurant in 1969. There are more than 620 restaurants now operating, many of them located just off major highways.

When Kraft learned that CBOCS planned to sell a variety of food products, such as packaged hams in grocery stores under its logo, “Cracker Barrel Old Country Store” (the last three words are in smaller type in the logo), Kraft filed this lawsuit. Kraft claimed that many customers would be confused by the similarity of the companies’ logos and would think that food products so labeled were Kraft products. 

Kraft acknowledged that a trademark does not entitle its owner to prevent all other uses of similar or even identical marks.  “It would be hard, for example, for the seller of a steam shovel to find ground for complaint in the use of his trade-mark on a lipstick.”  L.E. Waterman Co. v. Gordon, 72 F.2d 272, 273 (2d Cir. 1934) (L. Hand, J.).

In this case, Kraft did not question CBOCS’ right to sell food products at issue under the name Cracker Barrel in CBOCS’ restaurants, in CBOCS’ small “country stores” that adjoin the restaurants or by mail order or on the Internet.  Kraft objects only to its sale in grocery stores. The district court judge found that the likelihood of confusion and the resulting harm to Kraft from CBOCS selling through such outlets was sufficient to warrant the grant of a preliminary injunction.

The district court and the court of appeals examined the label that Cracker Barrel Old Country Store used and the label that was used on Kraft’s cheeses. Even though the court found that in practicalities, the labels if side by side are different, the labels might lead a shopper to think both of them were Kraft products. Kraft’s management is concerned  about the potential for confusion of shoppers at the 16,000 or so grocery stores (or similar retail entities) that sell Cracker Barrel cheeses, if the stores also carry CBOCS food products under the CBOCS logo. The court found that the two parties’ tradenames were not so similar as to be was decisive, but rather that if CBOCS prevailed similar products with confusingly similar tradenames will be sold through the same distribution channel and often the same stores. 

Further, the products would likely be advertised in a similar fashion, increasing the likelihood of confusion. 

The panel noted that while there may be justifications that would weigh in favor of CBOCS, the only proper considerations for a preliminary injunction proceeding were the likelihood that a plaintiff would prevail in a full trial and which of the parties would be likely to be harmed more by a ruling granting or denying an injunction. Citing Abbott Laboratories v. Mead Johnson & Co., the harm to the plaintiff must also be judged to be irreparable for a preliminary injunction to be appropriate.

In affirming the district court’s order of a preliminary injunction, the panel found that if a plaintiff has a strong likelihood of prevailing in a full trial, and the costs to the plaintiff of the denial of the preliminary injunction are at least as great as the costs to the defendant of the granting of a preliminary injunction, and the plaintiff’s costs could not be fully recouped in a final judgment in their favor, the preliminary injunction must be granted.

Kraft Foods Group Brands, LLC v. Cracker Barrel Old Country Store, Inc., et al., No. 13-2559, U.S. 7th Cir. Nov. 14, 2013.

Kreisman Law Offices has been handling business litigation, commercial litigation and trial work for businesses, individuals and families for more than 37 years in and around Chicago, Cook County and its surrounding areas, including Aurora, Arlington Heights, Barrington, Berwyn, Bloomingdale, Downers Grove, Evergreen Park, Geneva, Glen Ellyn, Hinsdale, Homewood, Joliet, Crystal Lake, Chicago (Roscoe Village, Canaryville, Bridgeport) and Lisle, Ill.

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