The
In 2012,
As part of the restructuring, Kraft assumed ownership of the KRAFT marks.
In 2016, Mondelez sold KFL's peanut butter business to
In early 2018, Kraft planned to resume selling peanut butter featuring the PBTD, the KRAFT marks, and the slogan "Loved Since 1935." However, Bega continued to use the PBTD after KFL's license expired. Kraft sued Bega for breach of contract of the Master Agreement and argued that Bega's use of the PBTD could mislead consumers as to the source of the goods. Bega filed a counterclaim and alleged that rights in the PBTD were transferred to Bega when it bought KFL's peanut butter business. Moreover, Bega argued that Kraft's ads featuring the slogan "Loved Since 1935" were misleading consumers because Kraft's new peanut butter was manufactured by a different entity and factory.
The
This decision raises concerns for trademark licensors because Kraft controlled KFL's operations, including the production process, packaging, and labeling of its goods. More importantly, Kraft was the ultimate controller of the quality of the KRAFT peanut butter made by KLF. However, the
Furthermore, the court held that Bega's use of the PBTD under the BEGA mark was not misleading or deceptive because (1) consumers were unlikely to think that Bega and Kraft were related because the sale of KFL's business to Bega was widely advertised and (2) ultimately, the assumption that "Bega took over Kraft's peanut butter business" was correct. However, the court held that Kraft's use of the slogan "Loved Since 1935" would mislead consumers as they could mistakenly assume that Kraft was selling the same peanut butter manufactured at KFL's factory.
This decision is surprising from a trademark perspective because trademarks are intended to assure consumers of the source and quality of the products. However, in this case, there was no evidence showing that consumers were aware of Kraft's control over the manufacturing of the goods or that they identified PBTB with Kraft more than they did with KFL's business or Bega's use. Furthermore, the court took into account that, before Bega's acquisition of KFL's business, Mondelez had commenced the use of the PBTB under a different mark. Therefore, Kraft's control over KFL and the quality of the peanut butter was not sufficient for it to claim ownership of the unregistered PBTD. Ultimately, this decision reminds us of the importance of registering all trademarks associated with a business.
The full decision is available via the link below.
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