Vienna Beef, Ltd. v. Red Hot Chicago, Inc., 2011 WL 2516515 (N.D. Ill.)
Vienna Beef sought a TRO prohibiting Red Hot from (1) using the Vienna name in its promotional and marketing material; (2) using Vienna Beef recipes or claiming that their recipes are century old, date back to 1893, or that they are "Sam Ladany's recipes" or the Ladany family recipes; and (3) implying an affiliation with or continuation of Vienna Beef.
The company that became Vienna Beef was founded by Austro-Hungarian immigrants Emil Reichel and Samuel Ladany using their family recipe from 1893, and claims to have used the same trade secret recipe for 118 years. Defendant Scott Ladany is Samuel’s grandson, who began working for the company in 1971 and obtained a 10% stock interest. The Ladanys sold the company in the early 1980s to Vienna Beef, and in 1983 Ladany left Vienna Beef, sold all his stock, and signed a noncompete agreement with a confidentiality clause covering the trade secret recipes. In 1986, at the end of the noncompete term, he founded Red Hot Chicago.
Vienna Beef argued that its history as a 118-year old company using family recipes was part of its brand, including references to the 1893 Columbian Exposition and images of its Chicago-style hot dog. It contended that Red Hot was either misappropriating trade secrets or engaging in false advertising by declaring that it uses 118-year-old family recipes. Vienna Beef also argued trademark infringement/unfair competition for, among other things, use of the registered phrases “Make me one with everything” and “Drag it through the garden.”
Red Hot rejoined that it had been continuously emphasizing Scott Ladany's family history in the Chicago hot dog industry in its marketing materials for 25 years, including the slogan "A Family Tradition Since 1893." Further, it used the family history and images of a classic Chicago-style hot dog beginning with an ad campaign 8 years ago.
Vienna Beef focused on its false advertising claims at oral argument. Red Hot conceded that a brochure erroneously stated that it uses a “century old family recipe,” but that brochure has been in use for 8 years.
Vienna Beef argued literal falsity. But the court found that the statements at issue were not literally false, since Vienna Beef also argued that they had to be evaluated in context. Moreover, Ladany’s grandfather was one of the founders of the old company and sold hot dogs at the 1893 World’s Fair, and members of the Ladany family have been in the hot dog business for 118 years. Thus, statements of this kind are literally true, and Vienna Beef had no evidence of consumer confusion.
Trademark: "Make me one with everything," and "Drag it through the garden" were used verbatim, but they were used in a descriptive manner for customers ordering hot dogs with particular toppings and condiments. There was no evidence of consumer confusion, nor did Red Hot use the terms to refer to Vienna Beef product, rather than to hot dogs in general (I think this means that this wasn’t use as a mark). “The phrases are part of full-page ads and do not convey an attempt by RHC to palm-off its hot dogs as Vienna Beef products.”
The trade secret claim failed on this procedural posture because Ladany submitted an affidavit stating that Red Hot doesn’t use the Vienna Beef recipe, but rather uses a recipe he developed with another company in 1986.
Given these findings, it’s not surprising that the court declined to find irreparable harm. Red Hot had been using the slogan “A Family Tradition Since 1893” for 25 years. Though Vienna Beef argued that it was not directly challenging that slogan, it was related to many of the challenged images and statements (references to the 1893 World’s Fair and the 118-year history). Red Hot also claimed that it had been using the two phrases “Make me one with everything” and“Drag it through the garden” for eight years. Except for one new ad in the May 2011 issue of Food Industry News, the ads had been in use for years and the court failed to see an emergency requiring a TRO. Likewise, the balance of harms weighed against entering a prohibitory injunction that would change the status quo, and Vienna Beef failed to show a public interest in avoiding confusion since it hadn’t shown actual consumer confusion.