SCHWAN'S IP, LLC v. Kraft Pizza Co.

379 F. Supp. 2d 1016, 2005 U.S. Dist. LEXIS 17181, 2005 WL 1802128
CourtDistrict Court, D. Minnesota
DecidedJuly 28, 2005
DocketCiv. 04-125 (MJD/JGL)
StatusPublished
Cited by4 cases

This text of 379 F. Supp. 2d 1016 (SCHWAN'S IP, LLC v. Kraft Pizza Co.) is published on Counsel Stack Legal Research, covering District Court, D. Minnesota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
SCHWAN'S IP, LLC v. Kraft Pizza Co., 379 F. Supp. 2d 1016, 2005 U.S. Dist. LEXIS 17181, 2005 WL 1802128 (mnd 2005).

Opinion

ORDER

DAVIS, District Judge.

I. INTRODUCTION .

This is a trademark dispute regarding the use of the term BRICK Oven 1 in describing frozen pizzas. Defendant Kraft Pizza Company (“Kraft”) has filed two motions for summary judgment on the trademark claim of Plaintiffs Schwan’s IP, LLC, and Schwan’s Consumer Brands North America, Inc. (collectively, “Schwan’s”). Kraft’s first motion seeks judgment under Fed. R.Civ.P. 56, arguing that Briok Oven is generic, is descriptive and lacks secondary meaning, or — in the alternative — that Kraft’s use of that term constitutes fair use. Kraft’s second motion seeks judgment as a matter of law that no reasonable jury could find a likelihood of confusion stemming from its use of the term BRICK Oven. For the reasons that follow, summary judgment is appropriate.

II. FACTUAL BACKGROUND

Kraft and Schwan’s are the two largest producers and suppliers of frozen pizzas in *1018 the United States, both selling a variety of brands between $1.50 and $8.

A. Schwan’s Brick Oven Product

Plaintiff Schwan’s is the second-largest producer and supplier of frozen pizzas in the United States, with a grocery market share of approximately 27%. Schwan’s pizza brands include: Red Baron, Tony’s, and Schwan’s premium brand, FResohetta. In 2003, Schwan’s gross U.S. sales of its Fresohetta frozen pizzas totaled $190 million.

In 2000, Schwan’s sought to develop a new line of pizzas under its Fresohetta brand, and its efforts resulted in a square, fire-baked pizza with sauces and toppings that were not, at that time, typical in the frozen pizza market. In this new product, the crust is partially baked in a conveyor oven lined by ceramic tiles; the sauce, toppings, and cheese are applied in a different Schwan’s facility; and the pizzas are baked fully in the consumer’s conventional home oven.

Schwan’s considered several names for its new product, including Earth Fired, Stone Hearth, Hearth Baked and Stone Bared, but it eventually chose the brand Brioic Oven. Schwan’s asserts that it spent $500,000 in consumer tests relating to that term. While some consumers believe the term is “vague” and does not provide “specifics that would make them understand what the pizza would taste like,” other consumers believe the term conveys ideas such as: fresh, highest quality, Italian restaurant, different, and upscale.

When Schwan’s began using the BriCK Oven mark in 2003, no other frozen pizza on the market used that term. But beginning more than ten years earlier, from 1992 to 1996, Weight Watchers marketed a frozen pizza under the brand Brick; Oven Style. And after Schwan’s began using the term, Market Day began selling a BriCK Oven frozen pizza, and Meijer similarly offered a Brior Oven Style frozen pizza.

Schwan’s internally announced the release of BriCK Oven pizzas to its sales personnel in December 2002, shipped product samples to the field in January 2003, and distributed nationally to grocery stores on March 8, 2003. Schwan’s began advertising the brand on March 24, 2003. Within six months, Schwan’s Brioií Oven pizzas reached more than eighty percent of the retail grocery store market, and within nine months, more than 10.5 million units were sold. Schwan’s claims that it has spent over $17 million in mark selection, advertising, tracking studies, slotting, and promotion of the BriCK Oven brand and product.

B. Kraft’s Brick Oven Product

Kraft is the nation’s largest producer of frozen pizzas, selling under the brands DiGiorno, Tombstone, California Pizza Kitchen, and Jack’s. In 2003, Kraft considered using the term Briok Oven with its DiGiorno product but concluded that the term “Brick Oven does not have a clearly defined meaning to consumers — consider this a fanciful term.” Kraft ultimately rejected the mark, concluding that Brick Oven has “the least amount of potential of the six Tombstone concepts tested.”

In October 2003, seven months after Schwan’s Briok Oven launch, Kraft sent an e-mail to packaging vendors, stating “We have a potential ‘hair on fire’ project for you all: Scenario: Launch a Tombstone branded Brick Oven Style Pizza,” with “packaging objectives” that include “com-municat[ing] Brick Oven to compete directly with Freschetta in non-core markets.”

Kraft sought to place “pricing pressure on Fresohetta with a cheaper product,” ultimately choosing to “[ujtilize the naming Brick Oven Style as opposed to Brick Oven *1019 to denote similarities.” Kraft code-named its strategy “Project Rightguard: Our Best Defense against BO [Beick Oven].” Its design firm stated that it would “ ‘Use Brick Oven Style Pizza’ all words same size and on one version, reduce ‘Style,’” and would “Develop strong Brick Oven imagery to compete with Freschetta,”

In February 2004, Kraft began to sell Tombstone Beice Oven Style pizzas to grocery stores. Kraft also markets its pizza to consumers as Beick Oven Style, Tombstone Beick Oven, and as Bkiok Oven. By the end of 2004, and without any advertising support, Kraft’s sales of its Beiok Oven Style pizzas totaled $37 million.

Based on Schwan’s prior growth rate, that company projected that its 2004 gross sales of its Beice Oven pizzas would total $84 million, but the 2004 sales ultimately reached only $76 million. Schwan’s attributes its market losses to the entry of Kraft’s Bricií Oven Style pizzas.

C.Market Analysis: Frozen vs. Restaurant

It is undisputed that thousands of restaurants have used the term BeiCK Oven to describe either the ovens in which the pizza is baked or the restaurants themselves. But Schwan’s seeks to distinguish the restaurant-pizza market from the frozen-pizza market, noting that the points of sale and cooking methods differ: frozen pizzas are sold in grocery refrigerators, not in restaurants, and are baked in home kitchens, not in commercial ovens. Schwan’s argues that because the markets differ, any restaurant use of the term is irrelevant for trademark purposes. Further, Schwan’s contends that the restaurants do not describe the products themselves, but they merely describe either the restaurants or the manner in which the products are baked.

The record contains expert testimony that BriCK Oven refers to the oven itself and does not refer to a style of pizza — an analysis consistent with Kraft’s expert testimony that hearth ovens or brick ovens can create a variety of pizzas, including thin crust, deep dish, and everything in between. But Schwan’s consumer research also indicates that some consumers associate Brick Oven with a style of pizza with specified physical characteristics, such crust height, crispness of crust, or the amount or type of cheese.

D. Alleged Consumer Confusion

Schwan’s points to three instances of alleged actual consumer confusion.

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Bluebook (online)
379 F. Supp. 2d 1016, 2005 U.S. Dist. LEXIS 17181, 2005 WL 1802128, Counsel Stack Legal Research, https://law.counselstack.com/opinion/schwans-ip-llc-v-kraft-pizza-co-mnd-2005.