Thursday, December 27, 2007

Court Examines Private Label Product Trade Dress That Mimics Name-Brand Products

Third Circuit Ruling - The Third Circuit Court of Appeals recently issued an opinion examining whether private label products could be sold in packaging that was nearly identical to name-brand products. See
McNeil Nutritionals v. Heartland Sweeteners, No. 07-2644 (3d Cir. Dec. 24, 2007).

Similarity of Packages - McNeil Nutritionals, which is the manufacturer of artificial sweetener Splenda, sued Heartland Sweeteners and Heartland Packaging Corp., which packages and distributes a generic version of Splenda as store brands for various supermarket chains, including Ahold, Food Lion, and Safeway. Heartland's private label packaging mimics Splenda-brand packaging, using the same colors, the same packaging size and shape, and similar font and design. For each supermarket, the logo of the store appeared on the product, and the design varied slightly.

Lanham Act - McNeil sought relief under the Lanham Act, 15 USC § 1125, for trade dress infringement, which requires, inter alia, that consumers are likely to confuse the source of the plaintiff's product with that of the defendant's product. The Third Circuit applied a ten-factor test to determine the likelihood of confusion, but stressed that the degree of similarity of the trade dress was the most important factor.

No Likelihood of Confusion - The court found no likelihood of confusion between Splenda and the Food Lion or Safeway private label products, as those involved distinctive design features, such as Safeway's "S" or a Food Lion vertical bar. But the court held that there may be a likelihood of confusion as to Ahold products, which did not contain such distinctive features, and the court reversed and remanded for further findings.

Thus, the McNeil Nutritionals ruling provides important guidance in determining the acceptability of private label product packaging that mimics that of a brand-name product. News stories on the decision are available here and here.


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