Lanham Act Claim Targeting Nestlé’s “Poland Spring” Bottled Water Dismissed For Lack of Standing

Last summer, Maine Springs LLC filed a false advertising suit over the use of “Poland Springs” on bottled water sold and distributed by Nestle Waters North America Inc. (a unit of Nestle SA).   Yesterday, however, a Maine district court dismissed the lawsuit, holding that Maine Springs’s plans to eventually sell bottled water that would compete against Nestle’s Poland Spring® brand product was too speculative to constitute injury-in-fact.

Maine Springs LLC, based in Poland Springs, Maine, sells bulk water and aspires to produce and sell its own bottled water.   In its Complaint against Nestle, it alleged two sets of related, but distinct, facts.

First, Maine Springs alleged that Nestle had previously asserted that Maine Springs could not identify the source of its water, Poland Spring, Maine, without creating confusion with Nestle’s “Poland Spring” products.  Accordingly, Nestle demanded that Maine Springs not use any label that would identify Poland Spring, Maine as the source of its water.  Maine Springs responded by noting that, as a matter of federal and state law, bottled water must identify its source on the label.  When an amicable resolution could not be reached, Maine Springs alleged that it lost proposals to supply bulk water to several companies based on fears that Nestle might file suit.  As a result, Maine Springs alleged that it was “prevented from selling any of its water and the bottling and distribution facilities have sat idle.”

Second, Main Springs’s alleged that Nestle was engaged in false advertising because the water contained in the Poland Spring products was not “extracted from the [actual] Poland Spring,… does not even come from the same aquifer as the original source,” “does not necessarily come from carefully selected mountain springs that are continually replenished, as advertised, but from other sources including ground water and well water,” and was “sold as 100% natural spring water when it is not.”

In light of the second set of allegations, Main Springs alleged a claim under Section 43(a) the Lanham Act for false advertising which included the following allegation on damages:  “As a direct and proximate result of Nestle Water’s misrepresentations about Poland Spring® Brand water, competitors, such as Plaintiff Maine Springs, have and continue to suffer damage.”   And Main Springs alleged a second claim for tortious interference regarding the first set of facts which included the following damages allegation: “As a result of Defendant’s interference, Plaintiff has suffered actual damages in that it is being prevented from entering the market and selling its product.”

The Court granted Nestle’s motion to dismiss both claims.  With respect to the Lanham Act claim, the Court labeled Maine Springs’s damages allegation as a “bald and conclusory assertion [that] alone is insufficient to state an injury.” Construing all facts in the Complaint in the most favorable light for the plaintiff, the Court further found that the “allegedly false advertising or false designation of origin cannot have harmed Maine Springs by channeling customers toward Poland Spring® Brand water when Maine Springs has not even begun to offer bottled water.”  Moreover,  although the rejection of supply proposals was viewed as concrete and particularized, and is a sufficient injury at the pleading stage of litigation, the Court held that Maine Springs did not establish that this injury was fairly traceable to Nestle’s alleged false advertising.  Thus, Maine Springs did not establish causation and there was not Article III standing.

In light of its dismissal of the Lanham Act claim, the Court refused to exercise supplemental over the state law claim and it was dismissed without prejudice.

Wal-Mart Targeted with False Advertising Class Action Over Pomegranate-Cranberry Juice

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To no one’s surprise, the POM Wonderful v. Coca-Cola ruling from the U.S. Supreme Court has inspired class action lawsuits against similar fruit blends. The crux of the claim is essentially the same, as highlighted in the following allegations:

Defendant strategically and purposely misleads the consuming public to believe that the Product is, or at a minimum, primarily consists of, cranberry and pomegranate juice.  The Product’s label prominently displays the words “CRANBERRY POMEGRANATE,” while at the same time down plays the other words in smaller and thinner font that reveal the juice is actually a flavored juice blend from concentrate, primarily consisting of water and cheap white grape juice concentrate, apple juice concentrate, and plum juice concentrate.  The names o f the cheap juices are not identified on the front of the label.  Cranberries and pomegranates are prominently depicted on the Product’s label, while none of the other cheaper juices are even pictured on the Product’s label.

Plaintiff’s allege claims under Florida’s Deceptive and Unfair Trade Practices Act, and common law claims for negligent misrepresentation and unjust enrichment.

Notably, the central holding of the Supreme Court’s POM Wonderful v. Coca-Cola ruling is that a federal Lanham Act claim between competitors is not precluded by FDA regulations under the Food, Drug and Cosmetic Act (FDCA) because these acts complement, rather than contradict, each other — and claims under the Lanham Act are thus not precluded by regulations under the FDCA.  That reasoning does not apply to the Wal-Mart case which involves state law claims that do not involve competitors.

Accordingly, the plaintiffs in Wal-Mart have an entire section of their complaint titled “Plaintiff’s Claim is Not Preempted” which alleges as follows in an effort to to ride the coattails of the Supreme Court ruling while attempting to avoid preclusion.

The Supreme Court of the United States has ruled on this issue.  Plaintiff’s claim is predicated on the fact that the naming, labeling, and marketing are misleading, deceptive, and unfair according to Florida’s Food Safety Act, but only in regards to the provisions that are identical in material aspects to the FFDCA or FDA regulations already imposed by the Federal Government.

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A simple reading of the plain language of the Florida’s Food Safety Act and the FFDCA shows that Plaintiffs claims do not seek to contest or enforce anything in Florida’s Act that is beyond the FFDCA or FDA regulation requirements.  Instead, Plaintiff’s claims are predicated on the fact that Defendants’ naming, labeling, and marketing are misleading, deceptive, and unfair according to Florida’s Food Safety Act, but only in regards to the provisions that are identical in material aspects to the FFDCA.

Whether this contention holds up in light of any potential motion to dismiss remains to be seen.  A copy of the Complaint may be found here.

Ferrero Files Infringement Suit Against Brooklyn Crêperie Over NUTELLA Trademark

The Ferrero Group, which manufactures the well-known NUTELLA brand hazelnut and cocoa spread, filed a trademark infringement suit against a Brooklyn crêperie over its use of allegedly confusingly-similar marks.

The lawsuit, filed in the U.S. District Court for the Eastern District of New York, alleges that crêperie, GCAS Cafe, “specializes in offering food and drinks which use Ferrero’s NUTELLA brand hazelnut and cocoa spread as the most prominent ingredient.”  The cafe had been using the term “Nutelleria” in connection with signage at its cafe, domain names of websites (www.NutelleriaNY.com, www.NutelleriaMia.com, and www.NutelleriaLA.com), and social media accounts on Facebook, Twitter and Instagram.  Ferrero alleges that when its attorneys were negotiating with GCAS’s attorneys about use of “that mark, the cafe changed from using “Nutelleria” to “Nuteria” on its signs and on the internet.  See, e.g., www.nuteriaNY.com and facebook.com/NuteriaNY.   Although GCAS no doubt believed this switch would satisfy Nutella, it was mistaken.

In the complaint, Ferrero contends that consumers who type in the term “Nutelleria” in Google or type in the “Nutelleria” domain names are redirected to the current “Nuteria” websites and, thus, “the term NUTELLERIA functions as a mark to direct traffic to the GCAS cafe.”  Ferrero further contends that (a) the “Nuteria” mark is displayed with “Nu” presented differently than “teria” to convey that consumers should pronounce “Nu” the same way as in “Nutella” and (b) the “prominent display” of Nutella posters and jars at the cafe is such that it creates the impression that there’s a “connection between GCAS Cafe and Ferrero or the NUTELLA” trademarks.

In light of these and other concerns, Ferrero asserts claims for trademark infringement and trademark dilution under federal law, a claim under New York state’s anti-dilution and unfair trade practices statute, and a common law claim for unfair competition.

This case is intriguing because GCAS is clearly a fan and promotor of Nutella and the parties’ interests are generally aligned.  The problem, of course, is that GCAS created a new mark — Nutelleria — that echoed and called-to-mind the NUTELLA mark.  But for reasons unknown, negotiations between the parties broke down when GCAS unilaterally (as alleged by Ferrero) changed the mark to “Nuteria” which Ferrero does not specifically allege as being confusingly similar to Nutella.

Red Bull Facing Criticism for Trademark Opposition Against “Old Ox Brewery” Marks

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A short while ago I posted a piece on the power of social media with respect to certain IP disputes.  There is a new dispute that might serve as a powerful footnote on this issue.

On January 28, 2015, Red Bull GmbH filed a Notice of Opposition in the USPTO against applications for the OLD OX BREWERY and the OX Logo marks, as shown above.  Red Bull alleges that its famous energy drinks and other beverages will be confused with the beverages sold by Old Ox Brewery under the foregoing marks.  In particular, Red Bull alleges that:

An “ox” and a “bull” both fall within the same class of “bovine” animals and are virtually indistinguishable to most consumers. In addition, an ox is a castrated bull.

Applicant intends to use its name and logos on other Class 32 beverages,namely soft drinks for non-beer drinkers….

The Class 32 goods on which Applicant claims it has an intent to use in conjunction with Applicant’s OLD OX Marks include and are closely related to, used for the same or similar purposes, and/or are or will be advertised and promoted to and directed at the same trade channels, the same purchasers, and are or will be used in the same environment as Opposer Red Bull’s products and related goods and services.

Simultaneous use of Applicant’s OLD OX Marks on the Class 32 goods … and Opposer Red Bull’s RED BULL and Bull Logo Marks on its goods and related services … is likely to cause confusion, mistake or deception among purchasers, users and the public, thereby damaging Red Bull.

The critical allegations are thus that consumers will confuse or conflate the terms “Bull” and “Ox” and that the relevant beverages are related or overlap.

In a response posted to its website and social media on February 8th, Old Ox Brewery posted a public letter to Red Bull which stated as follows, in relevant part:

We are a small startup brewery in Ashburn, Virginia. We’re family-run, we love beer, and we love our community. For reasons that we cannot understand, you have attempted to strong arm us into changing our identity for the last 10 months because you believe folks might mistake Old Ox beer for Red Bull energy drinks. We respectfully disagree. The only similarity between our two products is that they are both liquids. You make non-alcoholic (but very extreme) energy drinks. We make delicious (but laid-back) beer. Our consumers are looking for two distinctly different experiences from our respective products.

Basically you are holding us hostage with a list of demands that, if agreed to, would severely limit our ability to use our brand. Demands like, never use the color red, silver or blue; never use red with any bovine term or image; and never produce soft drinks. Do you own the color red? What about fuchsia, scarlet, crimson, or mauve? Are you planting your flag in the color wheel and claiming those shades for Red Bull? Do you claim exclusive rights to all things bovine? Do you plan to herd all heifers, cows, yaks, buffalo, bison, and steer into your intellectual property corral, too?

When we refused to succumb to your demands, you responded by filing a formal opposition to not just our trademark but to the very name Old Ox Brewery. Way to step on our American dream. You say you are protecting your intellectual property rights, but your claim, in our opinion, is Red Bulls**t.

…. Can you honestly look at our brand and say, “this is a threat to my image?” We don’t think you can. Given that, we repeat our offer: We agree NEVER to produce energy drinks. In exchange, we are asking for one simple thing: Leave us alone. Drop this trademark dispute.

In addition, Old Ox has recently started a change.org petition that has so far collected over 1,600 supporters.

The broader news media has picked up on this dispute and, so far, they are generally siding with Old Ox.  For example, the Washington Post’s article is titled “Red Bull Wants to Rename an Ashburn Brewery, Because an Ox Looks Like a Bull.”  Whether Red Bull persists with the opposition or decides to moderate its demands, remains to be seen.

“Health and Safety Arguments over GMO Labeling” – My article for Food Safety Magazine

It was my pleasure to author an article for Food Safety Magazine titled “Health and Safety Arguments over GMO Labeling,” which focuses on the Grocery Manufacturers of America’s lawsuit to prevent Vermont’s GMO-labeling law from going into effect.  Please see here.

My Article for Food Manufacturing: “2015 Could Be Breakthrough Year for Strategies to Mitigate and Defend Against Food Labeling Challenges”

Please see my article for FoodManufacturing.com titled “2015 Could Be Breakthrough Year for Strategies to Mitigate and Defend Against Food Labeling Challenges.”

Lagunitas “IPA” Lawsuit and Lessons in Social Media

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When determining whether to file a lawsuit, the cost-benefit analysis must always include public reaction, which these days plays out almost instantly on social media.  But predicting public reaction is quite imprecise.  Case in point is Lagunitas Brewing Co.’s recent lawsuit against Sierra Nevada Brewing Co., which was filed on Monday, January 12th and then voluntarily dismissed on Thursday, January 15th.

In the lawsuit, Lagunitas claimed that Sierra Nevada infringed numerous trademarks registered with the U.S. Patent and Trademark Office for several design-plus-word marks pertaining to its India Pale Ale, all of which feature  the words “Lagunitas IPA” that are variations on the above.   None of the registrations, however, are for the word mark “IPA” standing alone and many other brewers have trademark registrations for names of beer that include “IPA.” Recognizing this fact, Lagunitas further alleged that, “[w]hile other brewers have adopted the shorthand parlance of “IPA” to market their India Pale Ales, only Lagunitas is identified with the large, bold, black, centralized “IPA” lettering ….”

Claims for trademark infringement, unfair trade practices and unjust enrichment were alleged against Sierra Nevada premised on the following allegations:

[Sierra Nevada’s] proposed design uses all capital, large, bold, black “IPA” lettering in a font selection that is remarkably similar to the iconic Lagunitas design and, indeed, is the central and most prominent feature of the new Sierra Nevada design, emulating the iconic Lagunitas Family  of IPA Trademarks.  This proposed design even uses the kerning between the “P” and the “A” characters that is distinctive to the Lagunitas Family of IPA Trademarks….  Significantly, Sierra Nevada now appears to be making a radical departure from its traditional label designs which feature “IPA” lettering in much smaller text, usually preceded by another term (i.e., “Fresh Hop,” “Extra,” “Rye”, “Red,” etc.) of the same text size and which feature outdoor/nature scenes. Instead, … the proposed Hop Hunter IPA design is strikingly different from its prior imagery used with its India Pale Ales.

Lagunitas further alleged that the likelihood of confusion as to origin increases when the product is viewed at some distance and, moreover, that there’s a high likelihood of confusion as to “sponsorship or approval” between the companies because “Sierra Nevada is well-known in the craft brew industry for its collaboration with other brewers.”

But when the filing the lawsuit became publicized, Lagunitas was harshly criticized because it seemed focused on protecting the acronym “IPA”, which describes a type of beer.  As noted by CNBC:

The beer battle fell flat on social media.

“Really – Is this necessary?” tweeted @FW_Brewmaster.

“This is ridiculous, @lagunitasbeer should be ashamed,” added @mattmaceachem.

As for the logos creating confusion among consumers, @BeerMagazine tweeted, “The only thing confusing is this,” referring to the lawsuit.

“It was stunning actually, and by 10 o’clock in the morning I was reeling,” [the founder and CEO of Lagunitas, Tony] Magee said about the backlash online. ”  I went home at the end of the day feeling as if I’d run a marathon or been beaten up.”

Indeed, on February 13th, Magee sent the following tweets which began by defending the lawsuit and ended with the statement that the lawsuit would be withdrawn.

This is just a course of action we did not want to take. I attempted to work it out privately w/ SNB but not successful. Deeply saddened…

Today, January 13th 2015, has been the worst day ever in 23 years of growing my brewery. Worst. Growing a biz involves defending a biz…

Defending a biz requires answers to Hard Questions. Q’s like: Are our Foundations Strong? Are our Flavors right? Are our Labels Defensible?

There r many Courts in the world. For me, over the last month, one Court was a series of rebuffed phone calls. Another was a court of law…

Today was in the hands of the ultimate court; The Court of Public Opinion and in it I got an answer to my Question; Our IPA’s TM has limits.

I don’t know every answer beforehand, so I feel around for the edges and try to learn. Today I was seriously schooled & I heard you well…

Tomorrow mornin we’ll Drop the Infringement Suit & get back to answering other Questions. I don’t think I was wrong for wanting to know cuz…

I had to know the Answer, but the Answer came much sooner than I thought and in a different Court than I thought it would. Can I say thanks?

As he wisely notes, there are various “courts” in which business disputes are considered and judged.  Because trademark rights represent the goodwill of a company, sometimes efforts to defend trademarks can, ironically, do more than good to that goodwill.