In the tricky world of trademarks, sometimes it boils down to a simple matter of who was there first. For example, Kraft has been labeling some of its cheeses with the name “Cracker Barrel” since 1954. Fifteen years later, in 1969, Cracker Barrel Old Country Store, Inc. was founded. The low-priced restaurant has since grown to a chain of about 620 restaurants.
Recently, Cracker Barrel has announced that it plans to use its name, “Cracker Barrel Old Country Store” to sell various pork products, such as ham, lunchmeat, bacon, and jerky, to be sold in supermarket stores. After the announcement of these plans, Kraft Foods Group Brand sued Cracker Barrel for trademark infringement. The complaint argued that “consumers will be confused by the similarity of the logos and think that food products so labeled are Kraft products, with the result that if they are dissatisfied with a Cracker Barrel Old Country Store product, they will blame Kraft.”
The district court found that Kraft was likely to prevail in its claim so the court issued a preliminary injunction against Cracker Barrel Old Country Store, barring the restaurant from using its logo to sell pre-packaged meat products. Cracker Barrel appealed the decision and the case went to the Seventh Circuit Court of Appeals.
The appellate court agreed with Kraft that, if a consumer was dissatisfied with one of Cracker Barrel’s products, she might blame Kraft. As a result, said the court, “Kraft’s sales of Cracker Barrel cheeses are likely to decline.” The court further asserted that such an event was no minor consideration for Kraft and was unlikely to be an isolated incident. Instead, the court stated that, “The likelihood of confusion seems substantial and the risk to Kraft of the loss of valuable consumer goodwill and control therefore palpable.”
This remains true even though the logos of the two products are different. The court further asserted that, even if the products are sold in different parts of the store, labeling the two products with the same name is still sufficient for consumers to forget the difference between the two logos and mistakenly think that they are produced by the same company. Given that Kraft has been selling cheeses with the name “Cracker Barrel” for sixty years, the court noted that consumers by now have most likely grown familiar with the label. That familiarity might cause consumers to attribute any product bearing the “Cracker Barrel” name to Kraft, even if the logos are different. This is especially true when considering the fact that companies are constantly updating their logos in an attempt to look “fresh” and up-to-date. A consumer may assume that the “Cracker Barrel” cheese they are buying is still from Kraft, even if she does notice that the label is different.
The appellate court therefore concluded that, if Cracker Barrel was to be allowed to sell pre-packaged meat products bearing the name “Cracker Barrel Old Country Store”, the products would likely be distributed through the same channels, which would only serve to cause more confusion among consumers. For these reasons, the appellate court upheld the ruling of the district court and the injunction remains in effect.
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