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Third Circuit: Some store brand sucralose packaging confusing; injunction denial partially reversed

December 28, 2007
Post by Blog Staff

In a Christmas Eve decision, the Third Circuit partially reversed a district court's denial of a preliminary injunction regarding "store brand" sucralose sweeteners. McNeil Nutritionals, makers of Splenda®, brought suit against a company that produces several different sucralose products that bear the store's name and compete with Splenda®. The district court found McNeil not likely to succeed on the merits of the case, as the presence of the store's name on the competing product obviated any likely confusion. As a result, the district court denied preliminary injunctive relief.The Third Circuit partially reversed, finding that one of the three packaging configurations sold was, at least preliminarily, likely to be confused with McNeil's Splenda® trade dress. As a result, for this packaging, the court reversed the denial of the injunction with regard to this packaging, but affirmed with regard to the other two.More detail of McNeil Nutritionals, LLC v. Heartland Sweeteners, LLC after the jump.McNeil alleges trade dress rights in the packaging for its artificial sweetener product, Splenda®. The defendant, Heartland, private labels competitive artificial sweeteners, with its packaging bearing the store brand's name. Three different store brands are at issue in this suit. The appeal was limited to the issue of likelihood of confusion between Plaintiff's trade dress and the three trade dress packages of the defendant for the Food Lion store brand, Safeway store brand, and the store brands for Giant, Stop & Shop, and Tops (the latter three being collectively referred to by the owner's name Ahold). All of the sweeteners by both parties are made from sucralose, as opposed to saccharine or aspartame. An example of the trade dresses at issue is below (Splenda® on the left, Stop & Shop on the right):

Splenda package comparisonThe only issue on appeal was likelihood of confusion, which exists when consumers viewing the defendant's trade dress are likely to assume that the product it represents is associated with the source of a different product identified by the Plaintiff's similar trade dress. The court noted two types of confusion, initial interest confusion and point-of-sale confusion. In the Third Circuit, courts look to ten factors when deciding whether confusion is likely (the Lapp factors, from Interpace corp. v. Lapp, Inc., 721 F.2d 460 (3d Cir. 1983)):

  1. The degree of similarity between the plaintiff's trade dress and the allegedly infringing trade dress;
  2. The strength of the plaintiff's trade dress;
  3. The price of the goods or other factors indicative of the care and attention expected of consumers when making a purchase;
  4. The length of time the defendant has used its trade dress without evidence of actual confusion arising;
  5. The intent of the defendant in adopting its trade dress;
  6. The evidence of actual confusion;
  7. Whether the goods, though not competing, are marketed through the same channels of trade and advertised through the same media;
  8. The extent to which the targets of the parties' sales efforts are the same;
  9. The relationship of the goods in the minds of consumers because of the similarity of function; and
  10. Other factors suggesting that the consuming public might expect the plaintiff to manufacture a product in the defendant's market, or that the plaintiff is likely to expand into that market.
All factors are not relevant in all cases, and different factors may be accorded different weight, depending upon the particular factual setting. McNeil argued that the district court misapplied several of the Lapp factors.The court noted that the single most important factor in determining likelihood of confusion is trade dress similarity, the first Lapp factor. The proper test is not side-by-side comparison, but whether the trade dress creates the same overall impression when viewed separately. A side-by-side comparison may be appropriate if buyers typically see the two products side-by-side. The district court concluded that the similarity of the trade dress favored a likelihood of consumer confusion for the Ahold stores, but not for Food Lion or Safeway. The Third Circuit affirmed these conclusions. For Food Line and Safeway, the stores trade name was distinguishing, along with other differences in the packaging.In considering the third Lapp factor, the district court found, and the Third Circuit affirmed, that the reasonably prudent consumer, in this case, exercises some heightened care and attention when buying sucralose because health considerations typically override the product's low cost.With respect to the sixth Lapp factor, McNeil presented evidence of one instance of actual confusion by a consumer, which the district court found was not an ordinary purchaser. The Third Circuit found this finding not clearly erroneous, quoting a 1996 First Circuit case:
Just as one tree does not constitute a forest, an isolated instance of confusion does not prove probable confusion. To the contrary, the law has long-demanded a showing that the allegedly infringing conduct carriers with it a likelihood of confounding an appreciable number of reasonably prudent purchasers exercising ordinary care.
The Third Circuit then balanced the Lapp factors, and concluded the district court clearly erred in not finding a likelihood of confusion (and therefore likely success on the merits) as to the Ahold packaging, since the first, second, seventh, eighth, and ninth Lapp factors weighed in McNeil's favor, and the other factors were neutral.The court also acknowledged a potential danger in the district court's result, in that producers of store brand products could be held to a lower standard of infringing behavior. Essentially, they effectively would acquire per se immunity, as long as the store brands name or logo appears somewhere on the accused packaging. Here, the store name and logo were not prominently displayed on the Ahold packaging, as with Food Lion and Safeway. The court noted that even under their holding, store brands can "get away" with a little more similarity than other defendants' products when they display prominently a well-known label, such as a store-specific signature on their packages, but they cannot copy the national brands to such a degree of similarity, then merely affix a tiny differentiating label, as to become entirely immune to infringing actions.To read the full decision in McNeil Nutritionals, LLC v. Heartland Sweeteners, LLC, click here. We previously blogged about this and other disputes relating to Splenda® in this post.


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