Kraft’s Cracker Barrel Injunction Upheld by 7th

CHICAGO (CN) - A new product line from the restaurant chain Cracker Barrel Old Country Store will likely cause consumer confusion, the 7th Circuit ruled, upholding an injunction for Kraft.

Kraft Foods has sold cheese under the name "Cracker Barrel" for 60 years, and owns a registered trademark of the name.

It sued Cracker Barrel Old Country Store in January for trademark infringement after the restaurant announced it was partnering with Smithfield to sell a line of Cracker Barrel Old Country Store (CBOCS) foods, including hams, lunchmeat, and bacon - but not cheese.

A federal judge issued Kraft a preliminary injunction, and the 7th Circuit affirmed last week, finding that the similarity of the logo to Kraft's Cracker Barrel Cheese, and the advertising overlap between the products, supported Kraft's claim that consumers will believe the products are made by the same company.

"It's not the fact that the parties' trade names are so similar that is decisive, nor even the fact that the products are similar (low-cost packaged food items)," Judge Richard Posner wrote for a three-judge panel. "It is those similarities coupled with the fact that, if CBOCS prevails in this suit, similar products with confusingly similar trade names will be sold through the same distribution channel - grocery stores, and often the same grocery stores - and advertised together."

Kraft showed that it may suffer financial harm without a preliminary injunction, according to the 14-page judgment.

"The particular danger for Kraft of CBOCS's being allowed to sell food products through the same outlets under a trade name confusingly similar to Kraft's 'Cracker Barrel' trade name is that if CBOCS's products are inferior in any respect to what the consumer expects - if a consumer has a bad experience with a CBOCS product and blames Kraft, thinking it the producer - Kraft's sales of Cracker Barrel cheeses are likely to decline; for a consumer who thinks Kraft makes bad hams may decide it probably makes bad cheeses as well," Posner said.

Competition will also be impaired if consumers confuse the two Cracker Barrel products, and purchase fewer Kraft products if they perceive quality problems with Cracker Barrel Old Country Store items.

"The similarity of logos and of products, and of the channels of distribution (and the advertising overlap) if CBOCS is allowed to sell its products through grocery stores under its Cracker Barrel logo, and the availability to the company of alternatives to grocery stores for reaching a large consumer public under the logo, provide adequate support for the issuance of the preliminary injunction," the ruling concludes.

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