Category Archives: Trade Secrets

Crown Royal TM Suit Survives Summary Judgment Against “Crown Club”



In March 2013, Diageo North America, Inc., which owns the Canadian Whiskey brand “Crown Royal,” filed various trademark and unfair competition claims against Mexcor, Inc. and EJMV Investments, LLC.  Diageo alleged that Defendants have been selling “directly-competing Canadian whisky products” under various brands “dominated by the term ‘CROWN,’ including Texas CROWN Club, Florida CROWN Club … and South Carolina CROWN Club.” Diageo alleged that this issue was compounded by Defendants’ packaging of the products in “imitative bags … violate Diageo’s rights in [its] Purple Bag mark” and “unfairly imitate the overall look and feel of Diageo’s CROWN ROYAL® product line.”  In sum, Diageo claimed that consumers will mistakenly believe that [Defendants’] whiskeys are “affiliated with, sponsored by, approved by, or associated with Crown Royal” and/or that they “are regional variations or novelty line extensions of Crown Royal.”

Fast forward 20 months to the present and the case is now set to go to trial on December 3, 2014.  Both parties had filed motions for summary judgment that were all rejected by the court in an October 27th Order that did not elaborate as to the reasons for the denials.

Specifically Defendants’ motions sought summary judgment (1) as to trademark dilution on the grounds that the Crown Royal trademarks were not “famous” (2) on all claims based on laches and limitations, and (3) on the trademark infringement and unfair competition claim.   For its part, Diageo sought summary judgment on its trademark infringement, unfair competition, and false designation of origin claims.

The lack of any elaboration by the Court in its order likely means that it views issues of fact as precluding summary judgment on any of the motions.

With respect to the laches and limitations motion, Defendants claimed that they had been using the “CROWN” word mark on bottles in conjunction with velvet bags since 2008.  Diageo’s Response disputed those facts and also focused on the doctrine of progressive encroachment, which “allows a trademark owner to tolerate de minimis or low-level infringements and still have the right to act promptly when a junior user either gradually edges into causing serious harm or suddenly expands or changes its mark.”  This is an important principle to keep in mind for any brand owner.   A brand owner might be at risk of a trademark infringement suit by expanding its product lines or its geographic scope.  Thus, even if such a suit seems like a remote possibility when a trademark is adopted, strong consideration should be given to future events, especially if the brand might potentially be expanded or sold.

Hershey’s Not Amused By Pot-Infused “REEFER’S” Peanut Butter Cups

Hershey’s also just filed a very similar lawsuit against pot-infused candy makers in Colorado.  See here.  For obvious reasons, Hershey’s is not amused by sales of pot-infused candy products that plainly trade on its well-known trademarks and packaging.  While mimicking popular candy brands might have been popular for illegal marijuana products, that practice will likely fade very quickly for regulated dispensaries.

Recipe Ownership: Stolen Trade Secrets, Public Domain or Property of the Chef

The Chicago Tribune reports that a lawsuit filed by Fraiche bakery in Evanston, Illinois against a former chef over a binder containing key recipes was quickly settled.  Fraiche alleged that the recipes were property of the bakery and that the chef improperly took the binder when she left.  The chef, however, told the press that the recipes were not “secrets” and that she obtained them from the public domain (cook books, the Internet, etc.).  She added that she compiled the recipes on her own time and at her own expense and  that its very common for chefs to collect their own recipes.   The bakery owner’s husband, though, called this “a lie” and said his wife changed ingredients or their measurements.  See the entire report here.

This curious episode underscores that recipes are generally not protectable under intellectual property laws and that companies must safeguard such recipes as trade secrets in order to prevent their use by others.

Sara Lee and Tyson Foods Reach Settlement In Trade Secret Case

According to Law360, Sara Lee Corp. and Tyson Foods, Inc. resolved their dispute near the closing of a bench trial on Sara Lee’s claim that one of its former plant manager who defected to Tyson Foods would disclose trade secrets on sliced lunch meat production processes.  Central to this claim was the allegation that, after being offered the job by Tyson, the plant manager downloaded proprietary information from Sara Lee’s computer network onto four thumb drives.   The defense, however, argued that the alleged trade secrets were too diffuse to be carried away by one person and that the plan manager did not have the level of responsibility that Sara Lee alleged. 

Details of the settlement were not disclosed.  The case is Sara Lee Corp. v. Vincent W. Burns II et al., case no. 1:11-cv-07577, pending in the U.S. District Court for the Northern District of Illinois.   See full article here.

Nano-Foods: The Next Great Debate  recently posted an overview of nanotechnology applications currently being researched, tested and in some cases applied in food technology.  Check it out here.   As with GMOs, there have been, and no doubt will be, concerns voiced about the safety of food products made using nanotechnology.    For food companies, a key issue will be balancing their rights in trade secrets and proprietary know-how associated with nanotechnology with the inevitable demands for public disclosure of such technology by consumers and public interest groups.  Stay tuned.