Monday, August 03, 2015

Plaintiff fails to hit one out of the park with false advertising claim as substitute for TM

Parks, LLC v. Tyson Foods, Inc., 2015 WL 4545408, No. 5:15–cv–00946 (E.D. Pa. July 28, 2015)
Parks sells sausage and other processed meats; its origin is in the H.G. Parks Sausage Company, known for the first African–American–owned company to be publicly traded on a U.S. stock exchange and for its radio and television advertisements that contained “a distinctive plea in the voice of a child for ‘more Parks’ sausages Mom.’”  In 1995, the Parks Sausage Co. declared bankruptcy, and plaintiff Parks acquired its assets in 1996, ultimately licensing Dietz & Watson to produce and sell Parks processed meat products.  Parks also licensed the use of the “Parks” name to Super Bakery Inc., which “specializes in nutrition-oriented foods for schoolchildren and sells food products to the armed services.”

Tyson Foods bought Hillshire Brands Co. and thus acquired the “Ball Park” trademark, which has been used to sell frankfurters for over fifty years.  The Ball Park brand generates over $500 million in sales, primarily from sales of Ball Park-branded hot dogs but also in part from the sale of frozen, pre-cooked hamburger patties sold under the Ball Park brand. Research conducted between 2012 and 2014 found that over 90% of adults over the age of eighteen were familiar with the brand.

In 2014, Hillshire launched a new line of franks under the name Park’s Finest, which Parks alleged constituted false advertising and trademark infringement.  Park’s and Finest are on separate lines of the package, with Hillshire’s Ball Park trademark superimposed in the center. Radio and TV ads describe the product as “Park’s Finest from Ball Park.” A cross-sectional view on the front package also allegedly showed “what appears to be a sausage link,” rather than a frankfurter. Thus, Parks argued, defendants “are marketing and selling their product as PARK’S FINEST sausages.”
Parks sought a preliminary injunction, relying only on its false advertising claim.
Why I love Lanham Act cases: now we learn a little about the market for hot dogs, which is three-tiered.  “At the bottom of the food chain” (heh) are meat hot dogs, primarily consumed by children.  The intermediate level has “beef hot dogs” such as Ball Park hot dogs.  At the top are “super premium hot dogs,” which “tend[ ] to be beef hot dogs with additional benefits, whether that be flavor, or simpler ingredient statements.” Super premium is the fastest growing segment of the market, and includes brands such as Nathan’s Famous and Hebrew National.
Park’s Finest targets this category.  Compared to a Ball Park-branded hot dog, a Park’s Finest hot dog has “more seasoning, a coarser grind, [and] a bit more snap to the exterior” as well as “a cleaner ingredient label” and “no added preservatives” or nitrates. In choosing Park’s Finest as the name, Hillshire desired to invoke its Ball Park brand but also to “communicate[ ] to consumers that [Hillshire was] producing something different and better.” Hillshire viewed Park’s Finest as  a “clear shorthand version of Ball Park” that “convey[s] that this is Ball Park’s finest hot dog.”  Testing found that the name “evoked thoughts among consumers of going to the ball park and that consumers linked PARK’S FINEST to [Defendants’] BALL PARK brand.”  
The packaging was designed with the same objectives in mind (differentiate but link, no pun intended, these hot dogs to the Ball Park brand) and also to call attention to the product’s seasoning, flavors, and lack of artificial preservatives. “When compared to cross-sectional views of the inside of one of Defendants’ Ball Park-brand hot dogs and one of Defendants’ Hillshire smoked sausages, the [cross-sectional view of the] Park’s Finest hot dog bears closer resemblance to a Hillshire smoked sausage than to a Ball Park hot dog.” (When looking at actual sizes, however, the Park’s Finest frank has a notably smaller diameter than a Hillshire smoked sausage.)  This appearance comes from the coarser grind of meat and additional seasonings used in the Park’s Finest product.  But Hillshire didn’t want to sell the product as sausage, because the hot dog market is so much bigger.  Thus, “uncured beef frankfurters” appears prominently on the package.
Park’s Finest had the “biggest launch in the last four years within the hot dog category.”  When he first saw Park’s Finest, Patrick Caputo, an employee of Dietz & Watson and Account Manager for the Parks Sausage Co., believed that the product consisted of link sausages. Giuseppe Harris, an employee of Super Bakery and Marketing Manager for Parks products, had a similar first impression.  One consumer contacted the Parks Sausage Co.’s consumer telephone number “to complain about ‘Parks from Ball Park brand.’” Two others complained to Caputo about the nitrate content of sausage products sold under the Parks name, saying that TV commercials said that Parks sausages didn’t contain nitrates. Caputo believed they were referring to the ads for Park’s Finest, which do say that there are no nitrates.  However, Tyson’s VP and GM of the Ball Park brand, didn’t learn of any instances of consumer confusion, though he was in a position to do so.
The court found that the challenged statement wasn’t literally false.  First, the court determined that the meaning of Park’s Finest was ambiguous.  Parks argued that the only plausible meaning of PARKS was Parks, so the name Park’s Finest meant that Ball Park was now offering Parks’ “finest” products.  Defendants responded that Park’s, in context, unambiguously referred to the Ball Park brand.  While the connection between Park’s Finest and Ball Park might not have been readily apparent if Park’s Finest appeared in isolation, the context made that connection, both on the package and in ads.
Parks argued that this connection was implausible because the Ball Park trademark is associated with franks, not sausages, and that defendants were marketing the Park’s Finest product as a sausage.  But that wasn’t true: they were marketing it as a frank, and even if a customer mistakenly believed that Park’s Finest was a sausage, or even were it a sausage, a consumer could still plausibly understand that Park’s Finest, in context, referred to the Ball Park brand.  Even if there was currently no Ball Park-sausage association, Hillshire “would effectively create that association by integrating the Ball Park trademark into the Park’s Finest word mark.”  (Hillshire already sells about $100 million/year of beef patties under the Ball Park brand.) 
Thus, the name was not unambiguously false. But the court declined to find that this was one of the rare cases in which a claim is so unambiguously true that no further factfinding was required, rejecting defendants’ argument that Park’s Finest unambiguously referred to Ball Park. In defendants’ own survey, out of 200 survey respondents, 26 of them (13%) identified “Parks” or “Park’s” as the company responsible for making the product.  Another 41 respondents (21%) responded that they “did not know” which company made it, and 23 respondents (12%) responded that it was made by a company other than “Ball Park,” “Parks,” or “Park’s.” 116 respondents (58%) identified “Ball Park” as the responsible party.  Because respondents could give multiple answers, between 81-90 respondents, or 40.5-45% of the sample, failed to identify “Ball Park” as the source, making Park’s Finest not unambiguously a reference to Ball Park.
However, whether Park’s Finest misrepresented the nature, quality, or characteristics of the franks depended on whether consumers who didn’t get the Ball Park connection would be deceived into believing that the franks were plaintiff’s “finest.”  (There was no other identified third party who might be referenced.)  Consumers’ failure to understand an association between Park’s Finest and Ball Park wasn’t enough to show misleadingness; in the absence of some further connection, “the name would contain little to no meaning at all, other than the meaning the name derives from its association with the product.”  A seller is free to pick a trade name with no inherent connection to itself, as long as that name isn’t infringing or otherwise deceptive.  Indeed, the court commented, it was questionable whether “a consumer’s mere failure to appreciate the relationship between the Park’s Finest name and the Ball Park brand—if determined to be in some way deceptive—would relate to the ‘the nature, characteristics, qualities, or geographic origin’ of the frankfurters.”
The false advertising claim “effectively collapses into an inquiry into whether consumer surveys or other evidence show that a substantial number of consumers would associate the Park’s Finest name with Plaintiff’s ‘Parks’ name.”  This meant a “substantial overlap” between the §43(a)(1)(A) and (a)(1)(B) claims (a prior registration was allowed to lapse, which is the source of much of Parks’ woes here), and the court thus seemed skeptical that this was an appropriate use of §43(a)(1)(B), though it gave Parks the benefit of the doubt even though false advertising supposedly didn’t require Parks to show secondary meaning. (Which is, by the way, one very good reason to channel trademark claims into §43(a)(1)(A), since we spend a lot of energy preventing people who can’t show that they have valid marks from suppressing the use of similar terms.  Query, however, whether there can be materiality without secondary meaning.)  Anyhow, Parks also made some false advertising-ish allegations, in that they claimed that was false to designate Park’s Finest as the “finest” of the Parks products, suggesting that other Parks products were less fine.
However, Parks did not produce a survey, only the statements of Caputo and Harris, employees of Parks licensees.  Their declarations were insufficient to show likely deception. Even assuming that the statements of the three consumers Caputo mentioned supported a finding of likely confusion, the reactions of three consumers couldn’t be extrapolated to find likely deception of a substantial number of consumers. Nor did Harris and Caputo’s opinions that there would be confusion add any support, given their connections with Parks. Not only was their testimony self-serving, but also, as people who were intimately familiar with Parks, “their perspectives are not representative of the perspectives of consumers who may encounter the Park’s Finest product.”
Meanwhile, defendants did conduct a survey.  Only 13% of respondents identified “Parks” or a variant thereof as the company that made Park’s Finest.  But a consumer’s identification of the name “Parks” is different from a consumer’s identification of Parks, and respondents were subsequently asked whether they’d previously heard of the company they identified as the source.  Only 4% of the sample said yes, and an additional 1.5% were unsure.  When the 4% were asked to name other products made by the company they named, only one was able to identify any of Parks’ products.
Parks objected that its reverse confusion theory meant that defendants surveyed the wrong universe, but that didn’t help given that their theory here was one of false advertising.  A survey limited to people who “had purchased hot dogs at a grocery or convenience store in the past six months and expected to do so again in the next six months” and who were also required to have “purchased 100% beef hot dogs in the past six months,” was “a proper attempt to limit participation in the survey to the persons to whom Defendants’ statements are addressed.”  Other alleged flaws in the survey also didn’t significantly undermine it.  (For example, Parks argued that the survey was leading because it called the products “hot dogs” and not sausages, but the package clearly says “frankfurters.”  Also, the court didn’t buy Parks’ argument that the potential for deception depended on the type of processed meat product the consumer believed Park’s Finest to be, in the absence of evidence, especially given that Super Bakery does use the Parks name to sell other kinds of meat.  While this argument wasn’t devoid of merit, it just wasn’t sufficient to reject the survey.)  Regardless of any flaws, Parks failed to meet its burden to show likely deception.

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