Knorr-Nahrmittel A.G. v. Reese Finer Foods, Inc.

695 F. Supp. 787, 9 U.S.P.Q. 2d (BNA) 1309, 1988 U.S. Dist. LEXIS 10712, 1988 WL 99271
CourtDistrict Court, D. New Jersey
DecidedSeptember 27, 1988
DocketCiv. A. 87-4569
StatusPublished
Cited by10 cases

This text of 695 F. Supp. 787 (Knorr-Nahrmittel A.G. v. Reese Finer Foods, Inc.) is published on Counsel Stack Legal Research, covering District Court, D. New Jersey primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Knorr-Nahrmittel A.G. v. Reese Finer Foods, Inc., 695 F. Supp. 787, 9 U.S.P.Q. 2d (BNA) 1309, 1988 U.S. Dist. LEXIS 10712, 1988 WL 99271 (D.N.J. 1988).

Opinion

OPINION

BARRY, District Judge.

Plaintiffs, Knorr-Nahrmittel A.G. (“Knorr”) and CPC International (“CPC”), bring this action alleging federal and common law unfair competition against Reese Finer Foods, Inc. (“Reese”), Bascom Foods, Inc. (“Bascom”), and John Fressie. Plaintiffs, a manufacturer of dried soup mixes and its parent company respectively, now move for summary judgment on their claim that Reese uses, on a competitive product, trade dress confusingly and intentionally similar to their own. For the reasons that follow, the motion will be granted.

CPC markets its “Knorr” line of dried soups, imported from Switzerland, throughout the United States. CPC describes Knorr as the world’s most popular dried soup and, whatever the exact percentages are, its United States sales are significant. In recent years, CPC has spent approximately 6.75 million dollars annually on advertising its line of dried soups on television and in print. Although in previous years CPC engaged in apparently little or no direct retail advertising, it has utilized the same distinctive packaging for thirty years.

Prior to late 1983 or early 1984, when it took over distribution itself, CPC sold *789 Knorr soups through independent distributors including Reese. 1 When Reese was dropped as a distributor 2 it was, in the words of its president, “without a dry soup mix” to complement its line of ethnic and specialty foods which it markets under its own name. Reese then contacted an Israeli company, OSEM, to manufacture a “Reese” line of dried soups for sale in the United States. Although Reese’s president now affirms that he told OSEM to design the packaging to “use fresh spring-like colors that would reflect the attractive and appetizing flavor and quality of the soup mixes,” Affidavit of John A. Freesie at ¶ 6, what OSEM ultimately designed for Reese is a package that plaintiffs claim is so similar to the Knorr package that not only is customer confusion likely, but that it was planned. In fact, the correspondence between Reese and OSEM reveals defendants’ intentions to copy the packaging of the successful Knorr line. On June 16, 1985, OSEM’s Export Manager, Izzet Ozdogan, wrote to defendant Fressie, Reese’s president and sole shareholder of Bascom which controls Reese, to confirm a conversation held at a trade show:

Dear Mr[.] Fressie,
It was a pleasure meeting you in Chicago during the FMI Exhibition.
As we discussed, we can supply you with the quality soups that you are looking for in a similar packaging to Knorr. All that we need is the green light from you to start all the preparations____

Brief in Support for Summary Judgment, Exhibit 5 (emphasis added).

The immediate response from Fred Greenberg, Reese’s vice-president, emphasized the Knorr connection:

We are very interested in pursuing a line of dehydrated soups exactly like the Knorr line. The variety, packaging, and taste must be the same ones as Knorr ...

Id. (emphasis added).

In November, 1985, Greenberg sent Ozdogan several samples of the Knorr packaging for OSEM’s use in developing the Reese package. The transmittal letter again expressly referred to the Knorr line and requested that “particularly important and necessary” elements of the Knorr soup box be incorporated into the Reese package.

Both the Knorr and the Reese soups are sold in a paper box approximately 5 7 /s" X 578". A direct comparison of the two products reveals that the Knorr package has several distinctive features. First, the upper half of the box is colored in a bright yellow. The bottom half of the box has a green background upon which is superimposed a picture of a prepared bowl of the product. In most cases, superimposed on the soup bowl are representations of the soup’s main ingredients in either whole or raw form. The name “Knorr” is blazoned across the yellow strip in bright red bold faced script type. Below the name is the description of the product and its flavor, for example, “Vegetable Soup and Recipe Mix” in bold green block type. In at least one case, specifically its green pea soup, Knorr uses the term “soupmix” to describe the product.

Like the Knorr package, the Reese carton uses primary versions of green and yellow as the dominant colors. Yellow, as it does in the case of the Knorr package, covers the upper half. Below that is a green border approximating a chevron. The bottom half, again like the Knorr version, depicts a prepared bowl of soup juxtaposed with representations of the raw ingredients. Reese also announces its name across the yellow strip in red script and uses the term “soupmix” to describe its green pea soup. Despite the allegedly sim *790 ilar packages, sales of Reese soups, which are not advertised directly to the public, have been slow.

Knorr first informed Reese of its objections to its trade dress in July of 1987. When Knorr and CPC became impatient over Reese’s promises to change its packaging, they filed this suit on November 12, 1987. The parties have now apparently agreed that Reese will change its carton on all soup manufactured in the future and defendants have submitted a design to plaintiffs which has been accepted as unobjectionable. However, still at issue are the thousands of packages of unsold product remaining on supermarket shelves and in the hands of Reese and other distributors. On March 24, 1988, a hearing was held on plaintiffs’ application to enjoin defendants’ use of the allegedly infringing packaging. The Court remarked from the bench its tentative conclusion that plaintiffs were likely to prevail on the merits of their infringement claim, but took the matter under advisement to reflect on the issue of laches. 3

Within days of the hearing, while the matter was under advisement and with the knowledge that a decision by the Court, almost certainly adverse, was imminent, defendants sold, at a discounted rate, all of the remaining soup on hand, a quantity of soup that defendants’ counsel had represented to the Court at oral argument would take six to nine months to sell. A hearing was held on April 13,1988 to determine the best course to follow in light of the disturbing actions taken by defendants. After hearing the details of the sale and hearing the arguments of counsel, this Court made clear that it would enter an order directing “that the soup that has left the defendant[s’] premises [ ] be returned to the defendant within one week from today.” Defendants’ counsel expressly represented to the Court that he had “called Mr. Green-berg [on April 12, 1988 and] I told him not to ship anymore soup.” Trans, at 9. Despite this representation, defendants continued to ship product contending now, feebly and disingenuously, that they did not feel obligated to stop doing so until a formal order was entered. In any event, except for a subsequent appearance at a recent trade show, the goods in question remain warehoused.

Summary judgment under

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695 F. Supp. 787, 9 U.S.P.Q. 2d (BNA) 1309, 1988 U.S. Dist. LEXIS 10712, 1988 WL 99271, Counsel Stack Legal Research, https://law.counselstack.com/opinion/knorr-nahrmittel-ag-v-reese-finer-foods-inc-njd-1988.