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J & J SNACK FOODS CORP. v. NESTLE USA
June 27, 2001
J & J SNACK FOODS, CORP, PLAINTIFF,
NESTLE USA, INC., DEFENDANT. J & J SNACK FOODS, CORP., PLAINTIFF, V. THE EARTHGRAINS CO., ET AL., DEFENDANTS.
The opinion of the court was delivered by: Simandle, District Judge:
FINDINGS OF FACT AND CONCLUSIONS OF LAW
This Court is called upon to decide whether a preliminary
injunction should issue upon the allegations of plaintiff J & J
Snack Foods Corporation ("J & J") that defendants The
Earthgrains Company ("Earthgrains") and Nestle USA, Inc.
("Nestle") should be enjoined from using the "BREAK & BAKE"
mark, which was first registered by Schwan's Sales Enterprises,
Inc. ("Schwan") in 1996, and later obtained by J & J in 1999, on
their refrigerated cookie dough products. Defendant Earthgrains
uses the phrase "Break 'N Bake" in connection with its
refrigerated cookie dough product, and defendant Nestle uses the
phrase "Just Break — & Bake" in connection with its Nestle's
Toll House refrigerated cookie dough product.
There is no dispute that J & J owns the "BREAK & BAKE" mark.
Therefore, the primary issues to be decided in this matter are:
1) whether plaintiff is likely to succeed in proving the
trademark "BREAK & BAKE" is valid and protectable, which
requires this Court to consider whether it is probable that the
mark is suggestive or descriptive with secondary meaning and 2)
whether plaintiff is likely to successfully show that the use of
the mark by either defendant is confusing to consumers. The
Court has considered the lengthy submissions of all parties,
including detailed affidavits, attachments consisting of
documents and depositions, several expert reports, as well as
the oral arguments held on June 18, 2001.
II. PROCEDURAL BACKGROUND
Plaintiff J & J first filed a complaint against defendant
Nestle on June 23, 2000, charging Nestle with trademark
infringement and unfair competition in violation of federal,
state, and common law. On July 12, 2000, the Complaint against
Nestle was amended to include John Does I-X. Then, on December
26, 2000, plaintiff filed another action against defendant
Earthgrains, charging Earthgrains with identical trademark
infringement and unfair competition claims and requesting a
preliminary injunction. On February 16, 2001, almost eight
months after filing their original complaint against Nestle, J &
J made a motion for a preliminary injunction against Nestle,
seeking to enjoin its use of plaintiffs "BREAK & BAKE" mark. On
March 21, 2001, this Court granted plaintiffs motion to
consolidate the two proceedings for all purposes under civil
action number 00-3081(JBS).
Now before this Court are plaintiffs motions for preliminary
injunctive relief against defendants Earthgrains and Nestle.
This Court has federal question jurisdiction pursuant to
28 U.S.C. § 1331 and 1338, and under the Lanham Act
15 U.S.C. § 1051 et seq. Having read the parties' submissions, and having
heard extensive argument on the motions at oral argument on June
18, 2001, this Court will now make factual findings and
conclusions of law as required by Rule 65, Fed.R.Civ.P.
The facts of these consolidated cases are, for the most part,
J & J, through its food service division Camden Creek, has
sold frozen cookie dough with the "BREAK & BAKE" mark (see
Pl.'s Br., Exs. D & E) to distributors who offer the products to
fund raising organizations. (Pl.'s Br. 3.) The mark "BREAK &
BAKE" is featured below the brand name, Camden Creek Bakery.
(See Exs. D & E.) Plaintiff has not offered evidence of any
specific advertising of the products containing the mark, and
all of their sales are through fundraisers. (Nestle Opp. at
8-9.) Plaintiffs Camden Creek product is sold only to commercial
distributors in the food service industry, and the ultimate
consumer would not know the product because it has not been
advertised to consumers, according to J & J's Vice President of
Marketing, Michael Karaban. (See Valenti Decl., Ex. C, Tr.
55-11 to 56-18.) To date, plaintiffs total sales using the mark
range from $1 million (Pl.'s Br. at 3) to $2 million (Pl.'s
Reply Br. at 11). It is the business practice of plaintiff to
guard its trademarks and plaintiff claims that it has been
considering breaking into the retail supermarket refrigerated
cookie dough market. (Pl.'s Br. at 3.)
In August, 1999, Nestle began selling its pre-sectioned NESTLE
TOLL HOUSE cookie dough bar product. (Nestle's Opp., Ex. Q at
41-42.) Plaintiff claims that in March, 2000, defendant Nestle,
through a third-party, Kelly Pioneer Group, Inc., attempted to
purchase the right to use the "BREAK & BAKE" mark. (Pl.'s Br. at
4.) J & J refused to sell the right to use the "BREAK & BAKE"
mark. (Id. at 5.) In August, 2000, defendant Earthgrains began
selling a break and bake style refrigerated dough, labeled as
"Break 'N Bake Style Cookies," which was sold under their own
trademarked name, "MERICO," as well as other private supermarket
labels. (See Earthgrains Opp. at 4-5 and 7, Ex. 19; Valenti
Decl., Ex. E.) The labels on such products are "Break 'N Bake
In early April, 2000, plaintiff discovered that Nestle was
using the words "break and bake" in conjunction with their line
of refrigerated chocolate chip cookie dough. (Id. at 4.)
Through discovery, plaintiff learned that Nestle had been
considering use of the words "break & bake," despite knowledge
of the mark's prior registration and an alleged attempt to
obtain the right to use the mark, as early as September, 1998.
(Id. at 4; Confidential Document Packet, Ex. 1.) On April 14,
2000, J & J's counsel sent a cease and desist letter to Nestle,
demanding that they stop using the "BREAK & BAKE" mark. (Id.
at 6, Ex. K.) Plaintiff asserts that Nestle did not discontinue
use of the words "break and bake" on its packaging.
Nestle indicates that, in response to customer concerns about
mess and the necessity for a knife, they expanded their Toll
House brand to include pre-made cookie dough, similar to the
dough in the chub, but packaged instead in rectangular bar form
and scored for easy separation and baking. (Id. at 4.) In
August, 1999, Nestle began selling the pre-sectioned
refrigerated cookie dough under the Toll House name in retail
stores. (Id. at 4-5; Ex Q at 41-42.) Sometime thereafter,
after conducting consumer research, Nestle added the words,
"Just Break & Bake!" under an illustration of a dough piece
being broken off and baked on a cookie sheet. (Id. at 5; Ex.
Nestle actively began to advertise and promote the new
pre-sectioned refrigerated cookie dough using television, print
and coupons. (Nestle Opp. at 6-7.) A national television
commercial produced by Nestle features a song set to the tune of
"Shake Your Bootie" which urges consumers: "Lets bake . . .
break, break, break . . . break and bake, bake your cookies,
Pl.'s Video Exhibit; Earthgrains Opp., Ex 9-B, Video of Nestle's
product.) From August, 1999 through the end of 2000, Nestle
spent over $20 million promoting, marketing and advertising
their Nestle Toll House pre-sectioned refrigerated dough.
(Nestle Opp. at 7.)
Plaintiff has not offered any evidence of actual customer
confusion, such as a survey, and instead submitted only the
testimony of Kelly Bordini, J & J's Director of Sales for the
cookie division, who stated that she received phone calls from
consumers, that is the ultimate users who baked and consumed the
J & J Camden Creek Bakery product, who expressed confusion about
whether the "BREAK & BAKE" cookies were made by J & J or Nestle.
(Nestle's Opp., Ex. V, Tr. 44-55.) Ms. Bordini could not recall
the names of such consumers or approximately how many had called
her and expressed confusion and she did not keep any notes of
such calls. (Nestle's Opp., Ex. V, Tr. 45-50.) Ms. Bordini
admitted that she had not received any calls expressing
confusion from J & J's food service customers. (Id. at Tr.
Earthgrains is a private label manufacturer that sells to
customers, generally grocery stores, who in turn sell products
to customers in their own stores. The majority of Earthgrains
consumers use the name "MERICO," a brand name and trademark
owned by Earthgrains, while some retail stores use their own
brand name. (See Valenti Decl., Ex. E.) Earthgrains entered
the premade sectioned cookie dough market approximately eleven
months after Nestle introduced its "Just Break — and Bake!"
products. Earthgrains's packaging appears with the words "Break
'N Bake" prominently featured under the store or private label
cookie name, with the word "Style" following in smaller letters.
(See Valenti Decl., Ex. E, Exemplars of various Earthgrains
packages). Earthgrains's product, like Nestle's, is a
rectangular bar of cookie dough, approximately five inches long,
four inches wide, and one inch thick, that is partially scored
both horizontally and vertically so that the bar is divided into
twenty one-inch cubes. Both Nestle's and Earthgrains's dough
bars are packaged in a soft bag-like package.
J & J's product is not a bar of dough that is partially
scored. Rather, J & J's product is packaged in a box as
individual, separate, puck-like*fn3 round portions of cookie
dough that are described as "kissing" or pressed together, which
must be kept frozen. Each box contains dough for forty-eight one
ounce cookies, which is packaged in two large sheets of
twenty-four dough pucks each. (Pl.'s Motion, Ex. E.) Rather than
forming a dough bar similar to the Nestle and Earthgrains
products, the J & J product is best described as round cookie
dough pucks, partially joined together at the edges in a frozen
sheet. When the consumer uses J & J's product, they must detach
the number of frozen dough pucks they desire and break each puck
apart before placing them on a baking sheet in the oven.
The plaintiff has filed motions for preliminary injunctions
against Earthgrains and Nestle, to stop each defendant from
using words that allegedly infringe plaintiff's "BREAK & BAKE"
mark on the packaging and advertising for their refrigerated
cookie dough products. Although the actions were commenced
separately, due to the similar issues of fact and law and the
common plaintiff, they were consolidated for all purposes.
A. Preliminary Injunction Standard
The decision of whether to grant a preliminary injunction is
within the discretion of the district court. United States v.
Price, 688 F.2d 204, 210 (3d Cir. 1982). When deciding a motion
for a preliminary injunction under Rule 65(a), a district court
must consider four factors:
(1) whether the movant has shown a likelihood of
success on the merits; (2) whether the movant will be
irreparably injured by denial of relief; (3) whether
granting preliminary relief will result in even
greater harm to the nonmoving party; and (4) whether
granting the preliminary relief will be in the public
Times Mirror Magazines, Inc. v. Las Vegas Sports News, L.L.C.,
212 F.3d 157, 160 (3d Cir. 2000), cert. denied, 531 U.S. 1071,
121 S.Ct. 760, 148 L.Ed.2d 662 (2001). An injunction, however,
is an extraordinary remedy that should only be granted in
limited circumstances. AT & T v. Winback & Conserve Program,
42 F.3d 1421, 1426-27 (3d Cir. 1994). The Third Circuit has
held, however, that a district court shall grant such relief in
trademark infringement cases when a plaintiff carries its burden
on each of the aforementioned factors. See Opticians Ass'n of
Am. v. Independent Opticians of Am., 920 F.2d 187, 191 (3d Cir.
1) Likelihood of Success on the Merits
Plaintiff J & J alleges that both Earthgrains's and Nestle's
use of the "BREAK & BAKE" mark constitutes federal trademark
infringement and unfair competition under §§ 32(1) and 43(a) of
the Lanham Act, 15 U.S.C. § 1114(1)(a) and 1125(a) (Counts I
and II), common law trademark infringement and unfair
competition (Counts III and IV), and unfair competition under
New Jersey statutory, N.J.S.A. 56:4-1 et seq., and common law
(Count V). The parties have focused their briefing on the
federal claims under the Lanham Act, 15 U.S.C. § 1051 et seq.,
this Court will evaluate plaintiffs likelihood of success on
those counts first.
a.) Federal Claims under the Lanham Act
"`The law of trademark protects trademark owners in the
exclusive use of their marks when use by another would be likely
to cause confusion.'" Commerce Nat'l Ins. Servs. v. Commerce
Ins. Agency, Inc., 214 F.3d 432, 437 (3d Cir. 2000) (quoting
Interpace Corp. v. Lapp, Inc., 721 F.2d 460, 462 (3d Cir.
1983)). Trademark infringement claims under § 32(1) of the
Lanham Act, 15 U.S.C. § 1114(1),*fn4 and federal unfair
competition claims under § 43(a)of the Lanham Act,
15 U.S.C. § 1125(a),*fn5 are considered using the same standard. See
Advance Magazine Publrs. v. Vogue Int'l 123 F. Supp.2d 790, 795
(N.J. 2000) (citing A & H Sportswear, Inc. v. Victoria's Secret
Stores, Inc., 237 F.3d 198, 201-11 (3d Cir. 2000)). A claim of
trademark infringement or unfair competition is established when
the plaintiff proves that: (1) it owns the mark; (2) its mark is
valid and legally protectable; and (3) the defendant's use of
the mark to identify its goods or services is likely to create
confusion concerning the origin of those goods or services.
Commerce, 214 F.3d at 437; see Opticians Ass'n of Am. v.
Independent Opticians of Am., 920 F.2d at 192.
There is no dispute in this case that J & J owns the "BREAK
AND BAKE" mark, originally registered by its predecessor Schwan
on January 16, 1996. (See Nestle's Opp. at 11.)*fn6
Therefore, the Court will focus its inquiry on whether plaintiff
is likely to succeed in showing that the mark is valid and
legally protectable and whether the use by each defendant is
likely to create confusion.
i.) Validity and Protectability of Mark
If the mark at issue in an infringement case is federally
registered and has become incontestable, then validity and
protectability are proved as a matter of course. See Commerce,
214 F.3d at 438. If, however, a mark is registered, but has not
achieved incontestability,*fn7 then
"`validity depends on proof of secondary meaning, unless the
unregistered or contestable mark is inherently
distinctive.'"*fn8 Commerce, 214 F.3d at 438 (quoting Ford
Motor Co. v. Summit Motor Prods., 930 F.2d 277, 292 (3d Cir.
1991)). Plaintiff concedes that the "BREAK & BAKE" mark is not
incontestable, but notes that it would have achieved such status
in January, 2001, had the instant suits not been filed to halt
the alleged infringement by defendant. (See Pl.'s Br. at 9 n.
3; Pl.'s Mot. Prelim. Inj. Earthgrains at 5 n. 1.)
Trademark law recognizes varying types of marks, typically
grouped into four categories: (1) generic; (2) descriptive; (3)
suggestive; and (4) arbitrary or fanciful. A & H Sportswear,
237 F.3d at 221-22. The "suggestive" and "arbitrary and
fanciful" categories are deemed inherently distinctive and
therefore valid and legally protectable. See Fisons
Horticulture, 30 F.3d at 472 (citing Ford Motor, 930 F.2d at
291). Plaintiff argues that the "BREAK & BAKE" mark is
suggestive or, at a minimum, descriptive with secondary meaning
and that it is therefore protectable. Defendants challenge the
protectability of the mark, arguing that the mark is generic or,
at most, descriptive with no secondary meaning.
(1) Whether the Mark is "Generic"
First, the Court will consider whether the mark "BREAK & BAKE"
is generic, as argued by defendants Nestle and Earthgrains. A
mark is "generic" when it is a common descriptive name for a
class of products, not connected to any specific brand, and has
not been afforded trademark protection. See Harlem Wizards
Entm't Basketball, Inc. v. NBA Prop., Inc., 952 F. Supp. 1084,
1092 (N.J. 1997). The Third Circuit has discussed what makes an
When a producer introduces a product that differs
from an established product class in a significant,
functional characteristic, and uses the common
descriptive term of that characteristic as its name,
that new product becomes its own genus, and the term
denoting the genus becomes generic if there is no