Wednesday, May 20, 2015

Pop goes the lawsuit: "original" ice pop claim could be false advertising

Conopco Inc. v. Wells Enterprises, Inc., No. 14 Civ. 2223, 2015 WL 2330115 (S.D.N.Y. May 13, 2015)
Wells makes the Bomb Pop, the first red-white-and-blue rocket-shaped ice pop sold in the US, created in 1955, and markets it as the “original Bomb Pop,” with “original” prominent on the packaging.  Wells owns nine trademark registrations for the name and design elements of the bomb pop.  Conopco (Unilever) sells a rocket pop, the Firecracker, which strongly resembles the Bomb Pop, but was introduced nearly thirty years after the Bomb Pop.  I found a blog post with some interesting background, including design patents for the pops and previous package designs. 
Bomb Pop "The Original" with blue package

Bomb Pop "The Original" with blue and yellow package

Popsicle "The Original Firecracker" yellow package

In 2014, Unilever sued Wells for trademark infringement etc., arguing that the Bomb Pop packaging was confusingly similar to the Firecracker trade dress.  Wells counterclaimed, alleging that Unilever “recently altered its Firecracker product packaging to prominently feature the phrase ‘The Original,’ knowing that the Bomb Pop was the first red-white-and-blue rocket shaped frozen ice treat,” and therefore engaged in false advertising. Wells argued that if a likelihood of confusion does exist, it does so as a “result of Unilever’s infringement of Wells’ trademarked Bomb Pop design.” [Given the long duration of both parties’ use, this strikes me as almost like a Shredded Wheat situation: given that both might be entitled to use their own rocket shapes, what duties to avoid other similar trade dress elements might they have?]
Wells argued that the words and pictures of the Firecracker packaging necessarily and falsely implied that the Firecracker was the first rocket ice pop. Unilever argued that “original” literally, clearly and truthfully indicated only that the product was the original Firecracker. Wells rejoined that, in the context of the whole package, “original” wouldn’t apply solely to the noun Firecracker, but would necessarily be associated with the rocket ice pops prominently displayed on the package.  The court found this sufficient to state a claim for falsity. “While it is true that manufacturers often deploy the term ‘original’ in a brand-specific way, to modify only the product name, it is not evident from the face of the pleadings that the word ‘original’ must be read in this manner.”  When used in a brand-specific way, “original” generally distinguishes between different versions, so “original” differs from, e.g., “diet,” “low-salt,” “baked,” “creamy,” or “fun-shaped” versions.  On the pleadings, the “original Firecracker” was the only Firecracker that existed, which made the brand-specific interpretation of the phrase tautological and suggested that “original” might differentiate “the original Firecracker” from other rocket ice pops instead of from other varieties of Firecracker.  This interpretation was further supported by Unilever’s use of “original” elsewhere on the package to indicate—truthfully—that Unilever’s “Popsicle” was “The Original Brand” of ice pop, that is, the first of its type.  The court found further support for its conclusion in other cases that found that “original” could be literally false in similar circumstances.
In the alternative, Wells sufficiently pleaded misleadingness, because it was plausible that consumer studies would show that consumers interpret “original” on the Firecracker’s packaging to indicate that Unilever’s “Firecracker” is the original rocket ice pop. Note that the court did not require Wells to have such studies in hand for plausibility—Wells was simply allowed to develop facts supporting its theory.
Unilever disputed materiality, but that’s generally a fact question.  Plus, “Unilever’s own decision to highlight the word ‘original’ on its packaging, at the forefront of the box and as the largest word other than the product’s name, suggests the relative importance, and hence materiality, of the claim to originality in its marketing of rocket ice pops.” Also, “given that very little distinguishes one rocket ice pop from another, it is plausible that such a claim to originality could sway a consumer, either by intimating that the manufacturer has a proficiency in producing ice pops that has withstood the test of time or by intimating that these ‘original’ ice pops are the ones the consumer remembers fondly from his childhood.”
Unilever argued that Wells failed to allege injury proximately caused by the alleged misrepresentation.  But Wells alleged that it had touted its own originality for 19 years, amassing goodwill, and Unilever’s claim could jeopardize that. At the pleading stage, this was enough.
NY GBL §§ 349 & 350: these provisions require consumer injury or harm to the public interest. Trademark infringement alone isn’t enough to state a claim.  Wells argued that its claims were about false advertising, but the harm wasn’t sufficiently directed at or borne by consumers to constitute the gravamen of Wells’s complaint.  False advertising claims come within the GBL when they pose a danger to consumers, but not when they “merely encourage consumers to buy an inferior product or buy a product from one company where they may have preferred to buy it from another.”  The harm alleged here wasn’t the type that would trigger FTC intervention or involve governmental functions or agencies, as has been found sufficient in other cases. The “lessened enjoyment of a confection of sugar, water, and flavoring from a company other than the one intended” just wasn’t significant; the primary injury was to Wells’s business.
Trademark infringement: Unilever argued that Wells failed to state a claim in that it was arguing only conditionally that, if likely confusion existed, the fault was Unilever’s. Wells was free to assert a counterclaim conditional on the outcome of Unilever’s infringement claim. Nonetheless, Wells didn’t make an affirmative allegation of consumer confusion; it could do so “by simply denoting that any allegations of consumer confusion are limited solely to this particular counterclaim.” Thus, the court dismissed the counterclaim without prejudice and with leave to amend.

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