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CUMBERLAND PACKING CORP. v. MONSANTO CO.

January 12, 1999

CUMBERLAND PACKING CORP. AND STADT CORPORATION, PLAINTIFFS,
v.
MONSANTO COMPANY, THE NUTRASWEET COMPANY, THE NUTRASWEET KELCO COMPANY, AND OLYMPIA INDUSTRIES, INC., DEFENDANTS.



The opinion of the court was delivered by: Nickerson, District Judge.

    MEMORANDUM AND ORDER

Plaintiffs Cumberland Packing Corporation and Stadt Corporation (collectively "plaintiff") brought this action claiming trademark and trade dress infringement, trademark dilution, and false advertisement against defendants Monsanto Company, The NutraSweet Company, The NutraSweet Kelco Company, and Olympia Industries, Inc., (collectively "defendant"), pursuant to 15 U.S.C. § 1114, 1125(a), 1125(c), New York General Business Law §§ 349-350, and the New York common law of unfair competition.

Plaintiff is the maker of the sweeteners Sweet'N Low and NatraTaste. Defendant is the maker of the EQUAL, Sweetmate, and NutraSweet brands of sweeteners.

The court has jurisdiction under 28 U.S.C. § 1338(a), giving federal courts jurisdiction over, among other matters, trademark cases, and 28 U.S.C. § 1338(b), providing jurisdiction over a claim of unfair competition when joined with, among other claims, a substantial and related trademark claim.

Plaintiff moved for a preliminary injunction prohibiting defendant from infringing the Sweet'N Low and NatraTaste trade dresses, in violation of section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a); from infringing and diluting the Sweet'N Low trademark, in violation of sections 32, 43(a) and 43(c) of the Lanham Act, 15 U.S.C. § 1114, 1125(a), 1125(c); and from falsely advertising its NutraSweet brand sweetener, in violation of section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a). Defendant moved to dismiss plaintiff's false advertising claim, or, in the alternative, for summary judgment on the claim.

The court heard argument on the motions on October 28, 1998.

I

The record shows, in substance, the following. Plaintiff and defendant are long-time competitors in the sweetener industry. Currently the two most commonly used artificial sweetening ingredients are saccharin and aspartame. In terms of sales, plaintiff's Sweet'N Low is the leading saccharin brand sweetener, and defendant's EQUAL the leading aspartame brand sweetener. In the combined sweetener market, Sweet'N Low is the largest volume seller and EQUAL the highest grossing sweetener.

Plaintiff first marketed Sweet'N Low in 1958 and has been selling it at retail in boxes with the same trade dress since 1963. Since 1970 saccharin, a chemical compound about 300 times sweeter than sugar, has been the sole sweetening ingredient in Sweet'N Low.

Aspartame, discovered in 1965 by defendant's then parent company, is a natural protein compound that can be metabolized. It is about 200 times sweeter than sugar. Aspartame was patented in 1972 and approved by the Food and Drug Administration for use in or with foods in 1981 and in beverages in 1983.

Saccharin and aspartame have different tastes, aspartame tasting more like sugar than does saccharin.

In the 1980s, defendant marketed aspartame primarily through a so-called "branded ingredient strategy." Defendant 1) gave aspartame the brand name of NutraSweet, 2) sold aspartame as an ingredient to makers of foods and beverage and required them to display prominently the NutraSweet name and logo, a red and white swirl, and 3) heavily advertised the NutraSweet name and logo to attempt to create a strong association between NutraSweet and aspartame in the minds of consumers buying products containing aspartame. As a result of defendant's promotion much of the public came to recognize the NutraSweet brand name and logo. The chief emphasis in defendant's advertising was that, whereas like saccharin aspartame had no calories, it tasted more like sugar than did saccharin.

In 1982, defendant began selling a so-called "table-top" product containing aspartame as a sweetener. Defendant called this product EQUAL. Table-top sales are made typically to individual consumers, or to restaurants for patrons to add to already prepared foods and beverages. From 1988 to 1996 all EQUAL boxes and packets displayed the brand name NutraSweet and the NutraSweet logo swirl.

Before the introduction of EQUAL, the table-top sweetener market was comprised entirely of sweeteners containing saccharin and sold about 5.1 billion packets per year. EQUAL was an immediate success, selling over 2.09 billion packets in its first full year of sales. But EQUAL sales did not significantly affect sales trends in saccharin sweeteners. The industry soon discovered that saccharin users continued to use saccharin. EQUAL's new customers were mainly people who had previously not used any artificial sweeteners. Because aspartame and saccharin have, as noted, different tastes, the two markets continue to have almost no overlap in customer-base.

With the expiration of defendant's patent on aspartame in December 1992, a number of companies, including plaintiff, jumped into the aspartame market. In 1993, plaintiff introduced its own aspartame-based table-top sweetener called NatraTaste (a name with some similarity to NutraSweet). NatraTaste sold for about half the price of EQUAL. NatraTaste's retail distribution rate has been growing "slowly but steadily" since 1993. As of the beginning of 1998, it was sold in about 70 percent of supermarkets in the United States. In 1997, about 891 million NatraTaste packets were sold. Of the industry leader EQUAL, about 2.09 billion packets were sold.

In 1997 defendant introduced the present table-top sweeteners, NutraSweet and Sweetmate. NutraSweet has aspartame as its significant ingredient and is priced to compete directly against NatraTaste. Sweetmate has saccharin as its sweetening ingredient and is priced to compete with plaintiff's Sweet'N Low. Sweetmate is a repackaged version of defendant's product SweetMate, first sold in the market in 1992.

The market for the NutraSweet and Sweetmate products has expanded rapidly since their introduction. As of July 1998, Sweetmate's retailer authorization was 64 percent; NutraSweet's was above 80 percent, which defendant says is equivalent to full market penetration.

Sales have also soared. From January 1997 to January 1998, 6.3 million packets of Sweetmate were sold. But for the one year period ending in July 1998, sales had increased to 36 million packets. Similarly, during the year 1997 23.7 million packets of NutraSweet were sold. For the six month period ending July 12, 1998, the sales increased to 168 million packets.

The parties disagree somewhat as to the impact that defendant's new products have had on plaintiff's sales. The most recent sales data in the record suggest that the effect has not been significant. Since 1993, Sweet'N Low sales have been declining by 1 to 3 percent per year. The same trend held during 1997 and 1998, after Sweetmate made its appearance. NatraTaste sales have been increasing by about 2 percent per year since its introduction in 1993. Sales of NatraTaste for the eighteen month period ending July 1998 showed no marked change.

All of the table-top products named above are sold in rectangular cardboard boxes containing individually wrapped paper packets. Except in plaintiff's false advertising claim, only the outer appearance of the boxes is at issue.

Plaintiff's NatraTaste box is rectangular with an overall blue coloring. A significant portion of the background uses lighter blue tones. In the front and back panels, the product name, "NatraTaste", appears in large font across the top portion of the box. The name is spelled out in a cursive font with the "N" and the "T" capitalized. The letters are green with white lining and stand out against the blue background. There is a photograph of a coffee cup and a saucer in the center right. Resting on the saucer is a photograph of an individually wrapped paper packet marked "NatraTaste". Another coffee cup to the lower left and saucers to the upper left cast shadows in the background. In the center right is a bright pink burst containing a comparative advertisement stating "Same Sweetener AS EQUAL. . . . At A Sweeter Price." The top and side panels also say "NatraTaste" in the same style and color, but in slightly smaller font.

Defendant's NutraSweet box is also rectangular but has dimensions differing considerably from those of plaintiff's NatraTaste box. The NutraSweet box is not as wide along the front, and the side panels are thinner. The box is light blue overall, but there are less variations in the blue tones than on the NatraTaste box. At the top of the front panel of the box is the red and white NutraSweet swirl logo, which stands out against the blue background. Below the logo is the trademark "NutraSweet" in big, black block print. The bottom half of the front panel is largely taken up by a picture of a coffee cup on a saucer. An individual packet of NutraSweet is on the left side of the saucer, tilted against the cup so that the NutraSweet swirl logo and the NutraSweet trademark printed on the packet are visible. The back panel is identical to the front panel. The two side panels also display prominently the logo and NutraSweet trademark.

Plaintiff's Sweet'N Low box has a red musical staff slightly undulating across the front panel and set off against a white background. Superimposed on the staff is the Sweet'N Low name in large, dark blue, block capital letters. In the background is a photograph of a glass containing ice tea with lemon. Below is a coffee cup. There is a photograph of a woman's fingers pouring some Sweet'N Low from a pink packet into the coffee. The overall coloring of the front and top panels is red with the exception of a white rectangular space on the left side of the front and top panels, each under an undulating musical staff.

Defendant's Sweetmate box is largely pink, except for the red top one-fifth portion. On the front the name "Sweetmate" appears in blue, cursive font and in thinner and appreciably smaller print than the Sweet'N Low print on the Sweet'N Low box. Although the background has a coffee cup and a glass of ice tea with lemon, they are portrayed in a cartoonish drawing, not a photograph. On the top portion of the front panel of the box is a red, curving wave containing a comparative advertisement: on the left is the statement "Compare'N Save" in white roman type, and on the right is a bright yellow "sunshine burst" with the statement "same sweetener as SWEET'N LOW at a SWEETER PRICE." At the bottom of the right side panel is the statement in small print "Sweet'N Low is a registered trademark of [defendant]."

Defendant previously sold a sweetener called Sweetmate (spelled "SweetMate" from 1992-96 and "Sweetmate" from 1996-97) but it used aspartame, not saccharin, as its main sweetening ingredient. The product was repackaged a number of times between 1992, when it was first introduced, and 1997, when the trade dress version currently at issue began to be used. Plaintiff concedes that Sweetmate's trade dress in 1996, which is not a subject of this or any other suit, looked very similar to the 1997 version. But plaintiff points out the following differences: (1) the present Sweetmate packaging no longer advertises itself as a saccharin-free product and (2) whereas the comparative advertising section in the 1996 version spelled out the Sweet'N Low name in ordinary font, the present version uses the Sweet'N Low trademark itself. Plaintiff says that the Sweet'N Low name is now used in a more prominent way and that this is likely to cause confusion among consumers as to the source of Sweetmate.

II

To obtain a preliminary injunction, a plaintiff must show (1) likelihood of irreparable harm should the injunction be denied and (2) either (a) likely success by plaintiff on the merits or (b) sufficiently serious questions going to the merits and a balance of hardship tipping decidedly in the plaintiff's favor. Jackson Dairy, Inc. v. H.P. Hood & Sons, Inc., 596 F.2d 70, 72 (2d Cir. 1979). A preliminary injunction is an extraordinary remedy and not granted routinely.

In a trademark or trade dress case, where there is a showing of a likelihood "that an appreciable number of ordinarily prudent purchasers are likely to be misled, or indeed simply confused, as to the source of the goods in question" the court may find irreparable injury. Tough Traveler, Ltd. v. Outbound Products, 60 F.3d 964, 967 (2d Cir. 1995) (citing cases discussing this standard).

Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a), provides, in pertinent part, for a private cause of action against any person who:

  in connection with any goods . . . or any container
  for goods, uses in commerce any word, term, name,
  symbol, or device, or any combination thereof . . .
  which . . . is likely to cause confusion, or to cause
  mistake, or to deceive . . . as to the origin,
  sponsorship, or approval of his or her goods . . . by
  another person. . . .

15 U.S.C. § 1125(a).

The Lanham Act, enacted to protect both consumers and trademark owners, is designed to ensure that consumers purchasing a product may be confident of getting the brand they think they are getting, and that when trademark owners expend resources promoting their products to consumers their reputation and goodwill will not be misappropriated by pirates. See Mana Products, Inc. v. Columbia Cosmetics Mfg., Inc. 65 F.3d 1063, 1068 (2d Cir. 1995).

Section 43(a) applies equally to trademark and trade dress claims. See Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 773, 112 S.Ct. 2753, 2760, 120 L.Ed.2d 615 (1992). A product's trade dress is "its total image . . . includ[ing] features such as size, shape, color or color combinations, texture, [or] graphics." Paddington Corp. v. Attiki Importers & Distrib., Inc., 996 F.2d 577, 582 (2d Cir. 1993).

In order to prove trade dress infringement, plaintiff must show first, that its dress is inherently distinctive or has acquired a secondary meaning, and second, that the requisite likelihood of confusion as to source or sponsorship exists between plaintiff's dress and defendant's. A trade dress need not have widespread recognition among consumers to be distinctive. It need only serve to identify a product as emanating from a particular, although possibly anonymous, source. See Two Pesos Inc., 505 U.S. at 773-76, 112 S.Ct. at 2760-62.

A

A trademark or dress is generally classified on a spectrum of increasing distinctiveness as (1) generic, (2) descriptive, (3) suggestive, and (4) arbitrary or fanciful. See Abercrombie & Fitch Co. v. Hunting World, Inc., 537 F.2d 4, 9 (2d Cir. 1976). A mark is generic if it refers merely to "the genus of which the particular product is a species." Id. A descriptive mark describes the nature of the product. A suggestive mark uses names in a creative way to suggest the nature of the product. It requires purchasers to use "imagination, thought and perception to reach a conclusion as to the nature of the goods." Thompson Medical Co. v. Pfizer, Inc., 753 F.2d 208, 213 (2d Cir. 1985). Fanciful or arbitrary marks are those invented solely for trademark usage. They are marks that do not describe or suggest the nature or qualities of the product and are given the greatest protection. See, e.g., Exxon Corp. v. Xoil Energy Resources, Inc., 552 F. Supp. 1008, 1014 (S.D.N.Y. 1981) (holding that "Exxon" is an arbitrary trademark).

Trade dresses that are suggestive or arbitrary are inherently distinctive. A descriptive trade dress may be distinctive if it has acquired a "secondary meaning" giving it distinctiveness to the consumer. See Two Pesos, 505 U.S. at 769, 112 S.Ct. at 2757-58. But a specific trade dress must be evaluated "to determine whether it is so distinctive as to point to a single source of origin and thereby be entitled to Lanham Act protection." Fun-Damental Too, Ltd. v. Gemmy Indus. Corp., 111 F.3d 993, 1000 (2d Cir. 1997). Finally, a generic trade dress is ineligible for protection.

Plaintiff says that the NatraTaste and Sweet'N Low trade dresses are arbitrary or, at the least, suggestive, and therefore, distinctive. A product's distinctiveness is based on the way the trade dress appears to the observer when viewed as a whole. Individual aspects of the dress may be generic, but as long as the overall combination of the design is likely to identify the particular source of a product, its total impression is inherently distinctive. Jeffrey Milstein, Inc. v. Greger, Lawlor, Roth, Inc., 58 F.3d 27, 32 (2d Cir. 1995).

Both the NatraTaste and the Sweet'N Low boxes have elements that are generic when viewed in isolation. Sweeteners commonly feature on their boxes images of a coffee cup, glass of ice tea, or individually wrapped paper packets. Viewed as discrete elements, these do not help distinguish plaintiff's products. Furthermore, in this industry consumers associate the color blue with aspartame sweeteners and the color pink or red with saccharin sweeteners. Thus, the dominant coloring of the boxes serve a functional purpose and does not differentiate them from other products. See Qualitex Co. v. Jacobson Products Co., 514 U.S. 159, 164-65, 115 S.Ct. 1300, 1303-04, 131 L.Ed.2d 248 (1995); Forschner Group Inc. v. Arrow Trading Co., 124 F.3d 402, 407 (2d Cir. 1997).

But the combination of the elements in plaintiff's trade dresses creates a "suggestive" package capable of identifying each product with a particular source. The presence of the NatraTaste and Sweet'N Low trademarks prominently displayed as an integral part of the respective trade dresses is a significant indication of their distinctiveness.

B

The existence of the requisite likelihood of confusion as to source or sponsorship between two trade marks is determined by applying the factors described in Polaroid Corp. v. Polarad Electronics Corp., 287 F.2d 492, 495 (2d Cir. 1961). Those factors are: (1) the strength of the prior owner's mark; (2) the similarity between the marks; (3) the competitive proximity of the products; (4) the likelihood that the prior user will bridge the gap; (5) actual confusion as to source or sponsorship; (6) the defendant's good faith; (7) the quality of defendant's product; and (8) the sophistication of the buyers. These factors are not exclusive and the test makes no single factor dispositive. The court "weigh[s] each factor in the context of the others to determine if, on balance, a likelihood of confusion exists." W.W.W. Pharm. Co. v. Gillette Co., 984 F.2d 567, 570-71 (2d Cir. 1993). The same considerations are applied to determine likelihood of confusion as to source or sponsorship between trade dresses. See, e.g., Bristol-Myers Squibb Co. v. McNeil-P.P.C., Inc., 973 F.2d 1033, 1043 (2d Cir. 1992) (applying Polaroid factors to assess likelihood of confusion in a trade dress case).

In this case where the products are in direct competition with each other, the third Polaroid factor, proximity of the products, is obvious. The fourth, likelihood that the gap will be bridged, is not relevant. See Bristol-Myers Squibb, 973 F.2d at 1044. The seventh factor, the quality of defendant's product, is not in issue. Plaintiff does not say defendant's products are of inferior quality. Plaintiff has not submitted evidence as to the eighth factor, the sophistication of the buyers. But the nature and low price of the products suggest that consumers typically will not spend an extraordinary amount of time evaluating them before making a purchase. The court analyzes the remaining factors in turn.

  (i) The strength of plaintiff's NatraTaste and Sweet'N Low
      trade dresses

A trade dress's strength is measured by both its conceptual and commercial strength. See W.W.W. Pharm. Co., 984 F.2d at 572.

The conceptual strength is determined by the degree to which a trade dress is distinctive. Id. NatraTaste and Sweet'N Low have "suggestive" trade dresses and, as noted above, they are distinctive.

The commercial strength of a trade dress is measured by the degree to which it is distinctive in the marketplace. The commercial success of a product reinforces the dress's strength. See Charles of the Ritz Group Ltd. v. Quality King Distributors, Inc., 832 F.2d 1317, 1321 (2d Cir. 1987).

The NatraTaste brand is relatively new, and plaintiff has not submitted any evidence indicating how much recognition the product commands in the market. According to defendant, NatraTaste has low brand recognition. But the NatraTaste mark, while somewhat similar in looks and sound to the older NutraSweet mark, is distinctive and the product has enjoyed considerable commercial success since its introduction in 1993. In terms of aspartame table-top sales volume, it is second only to the industry leader, EQUAL. Among value-brand aspartame sweeteners NatraTaste is the current leader. Its dress has considerable commercial strength.

Sweet'N Low has been marketed in the same trade dress since 1963 and is the top saccharin sweetener in terms of sales. Because of extensive advertising over the past years, it has achieved national brand recognition. The commercial strength of Sweet'N Low's trade dress is strong.

  (ii) Comparison of the trade dresses of NatraTaste and
      NutraSweet

The count considers whether the similarities in the NatraTaste and NutraSweet trade dresses are likely to confuse an appreciable number of ordinarily prudent purchasers as to the source of the products.

Plaintiff says that the (1) blue lighting and the "pronounced shadowing and gradation of the blue shades" make the NatraTaste and NutraSweet boxes look "strikingly" similar; (2) both boxes show a cup of black coffee (although NutraSweet's coffee is a dark brown); (3) both have a packet resting on a saucer; and (4) both have a cup and saucer "resting on an undefined surface."

The relevant inquiry is not how many details the two boxes share. It is whether the similarities create the same general, overall impression such as to make likely the requisite confusion among the appropriate purchasers.

It seems unlikely that a reasonably prudent purchaser would find the overall image of the two boxes confusingly similar. They both display their different product names prominently in front of the box. The largest print on the NatraTaste box is its name, "NatraTaste." It is on the top portion of the box in large, light blue or green print with white-lining. The curvy-lettering jumps out because of the color contrasts.

The NutraSweet box also has its product name in large print on the front of the box. The thick, block letters are in black and give off a very different impression from NatraTaste's curvy, light-colored letters. The NutraSweet box conspicuously features the NutraSweet logo, the red and white swirl. The NutraSweet name and logo have a high recognition rate among consumers and are powerful source identifiers. The combination of the NutraSweet name, presented in this particular color and font, coupled with the red and white swirl logo, has appeared since the early 1980s on numerous products using NutraSweet as an ingredient. The NatraTaste box displays no similar looking logo.

The conspicuous use of a well-known logo and product name sufficiently differentiates defendant's trade dress from NatraTaste's. See Merriam-Webster, Inc. v. Random House, Inc., 35 F.3d 65, 71 (2d Cir. 1994) ("the impressions conveyed by the combinations of angular and curving logos, and by quite different names and some different colors [used in the respective letterings of the trade names] . . . preclude a finding of similarity."); Bristol-Myers Squibb Co. v. McNeil-P.P.C., Inc., 973 F.2d 1033, 1045-46 (2d Cir. 1992) (the district court's finding that the two trade dresses are similar was clearly erroneous because "the prominence of the trade names on the two packages weighs heavily against a finding of consumer confusion resulting from the overall look of the packaging.").

The other noticeable distinctions between the two boxes are that the NatraTaste box is significantly wider and longer than the NutraSweet box and has a bright pink burst on the surface, something the NutraSweet box does not have.

The court finds that the total images of the NatraTaste and NutraSweet trade dresses are so different that there is no significant likelihood prudent purchasers will be confused as ...


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