Kraft Food Group Brands LLC v. Cracker Barrel Old Country ..., Study notes of Psychology

Download Kraft Food Group Brands LLC v. Cracker Barrel Old Country ... and more Study notes Psychology in PDF only on Docsity! 1 Kraft Food Group Brands LLC v. Cracker Barrel Old Country Store, Inc. 735 F.3d 735 (7th Cir. 2013) POSNER, Circuit Judge. This is a trademark infringement suit (see Lanham Act, 15 U.S.C. ßß 1051 et seq.) brought by Kraft against Cracker Barrel Old Country Store (we can disregard the other parties). The district judge granted Kraft a preliminary injunction against the sale by Cracker Barrel Old Country Store of food products to grocery stores under the name Cracker Barrel, which is a registered trade- mark of Kraft. To prevent confusion (an especially apt goal in a trademark case), we'll call Cracker Bar- rel Old Country Store "CBOCS," as do the parties. Kraft is a well-known manufacturer of food products sold in grocery stores. Its products include a wide variety of packaged cheeses, a number of them sold under the trademarked "Cracker Barrel" label. Kraft has been selling cheese in grocery stores under that name for more than half a century. Thou- sands of grocery stores carry Kraft cheeses bearing that label. Kraft does not sell any non-cheese prod- ucts under the name Cracker Barrel. [*737] CBOCS is a well-known chain of low-price restaurants (it opened its first restaurant in 1969), 620 in number at last count, many of them just off major highways. Upon learning recently that CBOCS planned to sell a variety of food products (not including cheese, however), such as packaged hams, in grocery stores under its logo, "Cracker Barrel Old Country Store" (the last three words are in smaller type in the logo), Kraft filed this suit. It claims that many consumers will be confused by the similarity of the logos and think that food products so labeled are Kraft products, with the result that if they are dissatisfied with a CBOCS product they will blame Kraft. Kraft acknowledges that a trademark does not entitle its owner to prevent all other uses of similar or even identical marks. "It would be hard, for example, for the seller of a steam shovel to find ground for complaint in the use of his trade-mark on a lipstick." L.E. Waterman Co. v. Gordon, 72 F.2d 272, 273 (2d Cir. 1934) (L. Hand, J.). And likewise identical marks used on similar products sold through differ- ent types of sales outlet might cause no confusion--indeed Kraft does not question CBOCS's right to sell the food products at issue under the name Cracker Barrel in CBOCS's restaurants, in CBOCS's small "country stores" that adjoin the restaurants, or by mail order or on the Web. It objects only to their sale in grocery stores. The district judge found the likelihood of confusion, and of resulting harm to Kraft, from CBOCS's selling through such outlets sufficient to warrant the grant of a preliminary injunction. These are factual determinations, which bind us unless clearly erroneous, Eli Lilly & Co. v. Natural Answers, Inc., 233 F.3d 456, 462 (7th Cir. 2000); Scandia Down Corp. v. Euroquilt, Inc., 772 F.2d 1423, 1427-28 (7th Cir. 1985)--a reinforcing consideration being the need for expeditious determination of whether to order preliminary relief. The district judge must act with a certain haste, and we must hes- itate to nitpick his findings and casually remand for further proceedings bound to cause additional de- lay. Kraft moved for a preliminary injunction on March 8 of this year; it was granted on July 1; it is now November. The grant of the preliminary injunction followed extensive discovery, the presentation of expert evidence, and some live testimony. Of the allegedly infringing CBOCS products, only the spiral hams had been shipped to grocery stores before the preliminary injunction was issued; and by then the stores had sold them all. Below, copied from CBOCS's website, is a picture of the logo that appeared on CBOCS food products shipped to grocery stores. 2 [*738] Up close at least, it looks different from the label "Cracker Barrel" that appears on Kraft's cheeses. Yet even if a Cracker Barrel cheese and a CBOCS ham (or other food products) were displayed side by side in a grocery store, which would make a shopper likely to notice the difference between the labels, the words "Cracker Barrel" on both labels--and in much larger type than "Old Country Store" on CBOCS's label--might lead the shopper to think them both Kraft products. Most consumers of Cracker Barrel cheese must know that it's a Kraft product, for the name "Kraft" typically though not invariably appears on the label, as in the following picture: Kraft is concerned with the potential for confusion of shoppers at the 16,000 or so grocery stores (or similar retail entities) that sell Cracker Barrel cheeses, if the stores also carry CBOCS food products under the CBOCS logo (not only ham but also delicatessen meats, bacon, sausages, jerky, meat glazes, baking mixes, coating mixes, oatmeal, grits, and gravies--all are sold by CBOCS). Were Cracker Barrel cheeses and Cracker Barrel meats exhibited side by side on the shelf, the difference in the appearance of the logos of the two brands might as we said lead some consumers to think they were made by dif- ferent companies--but might lead others to think the opposite, since different products of the same manufacturer are often exhibited together. If on the other hand the Kraft cheeses and CBOCS food products are at different locations in the store, some consumers might forget the difference between the logos and think all the products Kraft products. Cf. Ty, Inc. v. Jones Group, Inc., 237 F.3d 891, 898-99 (7th Cir. 2001). Even savvy consumers might [*739] be fooled, because they know that producers of- ten vary the appearance of their trademarks. 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). 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 to- gether. (In the brief period before the preliminary injunction was issued, in which CBOCS hams were sold in grocery stores, an online ad for Cracker Barrel Sliced Spiral Ham by a coupons firm provided a link to a coupon for Kraft's Cracker Barrel cheeses.) The competing products would also be likely to appear in the same store circulars. Such similarities and overlap would increase the likelihood of con- sumer confusion detrimental to Kraft. See CAE, Inc. v. Clean Air Engineering, Inc., 267 F.3d 660, 682 (7th Cir. 2001); Ty, Inc. v. Jones Group, Inc., supra, 237 F.3d at 900-01. 5 litigation are likely to be biased in favor of the party that hired and is paying them, usually generously. All too often "experts abandon objectivity and become advocates for the side that hired them." Of course, judges and jurors have their own biases and blind spots. As Judge Jerome Frank noted many years ago, dissenting in a pair of trademark cases that Seventeen magazine had brought against the makers of "Miss Seventeen" girdles, "as neither the trial judge nor any member of this court is (or re- sembles) a teen-age girl or the mother or sister of such a girl, our judicial notice apparatus will not work well unless we feed it with information directly obtained from 'teen-agers' or from their female relatives accustomed to shop for them." Triangle Publications, Inc. v. Rohrlich, 167 F.2d 969, 976 (2d Cir. 1948). And so a judge's finding that confusion [*742] was likely was "nothing but a surmise, a conjecture, a guess." Nevertheless it's clear that caution is required in the screening of proposed experts on consumer surveys. Kraft's expert in this case was Hal Poret, an experienced survey researcher, and we won't hold it against him that he appears to be basically a professional expert witness. See www.pli.edu/Content/Faculty/Hal_Poret/_/N-4oZ1z138h0? ID=PE830174 (visited Nov. 13, 2013). Poret was able to obtain a random or at least representative sample of 300 American consumers of whole-ham products, email them photographs of the CBOCS sliced spiral ham, and ask them in the email whether the company that makes the ham also makes other products--and if so what products. About a quarter of the respondents said cheese. It's difficult to know what to make of this. The re- spondents may have assumed that a company with a logo that does not specify a particular food prod- uct doesn't make just sliced spiral ham. So now they have to guess what else such a company would make. Well, maybe cheese. Poret showed a control group of 100 respondents essentially the same ham, but made by Smith- field--and none of these respondents said that Smithfield also makes cheese. Poret inferred from this that the name "Cracker Barrel" on the ham shown the 300 respondents had triggered their recollection of Cracker Barrel cheese, rather than the word "ham" being the trigger. That is plausible, but its rele- vance is obscure. Kraft's concern is not that people will think that Cracker Barrel cheeses are made by CBOCS but that they will think that CBOCS ham is made by Kraft, in which event if they have a bad experience with the ham they'll blame Kraft. Also it's very difficult to compare people's reactions to photographs shown to them online by a survey company to their reactions to products they are looking at in a grocery store and trying to decide whether to buy. The contexts are radically different, and the stakes much higher when actual shopping decisions have to be made (because that means parting with money), which may influence responses. In some cases an attractive alternative to a survey might be the use of statistical data to determine the effect of the allegedly infringing logo. Suppose that before this suit was filed, CBOCS products had been sold for a time in a number of grocery stores. Probably in some of them Kraft Cracker Barrel cheese would have been displayed side by side with CBOCS hams plus similar meat products sold at comparable prices, while in other stores the cheeses and the hams would have been displayed in differ- ent areas of the store, and still other grocery stores would have carried CBOCS hams but not Kraft Cracker Barrel cheese. By examining the "lift" (greater sales) if any that CBOCS hams obtain by prox- imity to the Kraft Cracker Barrel label, an expert witness might be able to estimate the extent of con- sumer confusion. The greater the lift (and hence the greater the confusion) the greater the likelihood of a consumer's blaming Kraft as the supposed maker of the CBOCS hams if the consumer has a bad ex- perience with the hams. Such a study would not have been feasible in this case, however, given the grant of the preliminary injunction, which has kept CBOCS hams with its Cracker Barrel logo out of 6 grocery stores for now. Nor have we such confidence in the reliability of such a study that we would think it an adequate basis for refusing to grant preliminary injunctions in trademark cases. [*743] We can imagine other types of expert testimony that might be illuminating in a case such as this--testimony by experts on retail food products about the buying habits and psychology of consum- ers of inexpensive food products. "Although the ordinary consumer's mindset is central to trademark law and policy, neither courts nor commentators have made any serious attempt to develop a frame- work for understanding the conditions that may affect the attention that can be expected to be given to a particular purchase. Some of the classic judicial descriptions cast the ordinary consumer as 'ignorant ... unthinking and ... credulous' or 'hasty, heedless and easily deceived.' In other cases, the courts have bris- tled at the 'claimed asininity' of the buying public, suggesting instead that the average buyer is 'neither savant nor dolt,' but is one who 'lacks special competency with reference to the matter at hand but has and exercises a normal measure of the layman's common sense and judgment.' For the most part, how- ever, the debate is a vacuous war of words, uninformed by any careful theoretical modeling of consum- er psychology or empirical study of consumer behavior." Thomas R. Lee, Glenn L. Christensen & Eric D. DeRosia, "Trademarks, Consumer Psychology, and the Sophisticated Consumer," 57 Emory L.J. 575, 575-76 (2008) (footnotes deleted). We have doubts about the probative significance of the Poret survey. But 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 compa- ny of alternatives to grocery stores for reaching a large consumer public under the logo, provide ade- quate support for the issuance of the preliminary injunction. The judgment is therefore AFFIRMED.