Illinois Tamale Company, Inc. v. LC Trademarks, Inc. et al was a case that originated in the Eastern District of Illinois before being appealed to the Seventh Circuit. Illinois Tamale Company (d/b/a “IlTaco”) brought claims against Little Caesars under the Lanham Act for trademark infringement and false designation of origin, in addition to Illinois state law claims. IlTaco further sought a preliminary injunction that would have prevented Little Caesars from offering the menu items that are the subject of this case. (Such relief would stop the company in its tracks, requiring them to stop selling and pull all allegedly infringing products “off the shelf”.)
IlTaco registered the mark PIZZA PUFFS in 2009 for a product that consisted of a doughy outer shell and filled with pizza-like ingredients (cheese, tomato sauce, and meat). In March of 2024, Little Caesars began an extensive advertising campaign for its new menu offerings called Crazy Puffs, Pizza Puffs, and Puffs.
The district court granted the preliminary injunction, for Pizza Puffs only, after finding that IlTaco demonstrated a likelihood of success. The court rejected IlTaco’s infringement claims for Crazy Puffs and Puffs because those terms were generic. Finally, the district court rejected the plaintiff’s alternative theory that, even if there was infringement, it fell under fair use. Both parties then appealed to the Seventh Circuit.
Normally, a registered trademark becomes incontestable after five years of use. The only path to overcoming IlTaco’s incontestability would be proving that the mark had become generic. Little Caesars sought to prove the genericness of PIZZA PUFFS with a very effective survey that found 83.3% of consumers understood a “pizza puff” to be any doughy pastry filled with pizza ingredients. So, only 16.7% of consumers associated it with the plaintiff in this case.
The appellate court found that survey persuasive in part because an established treatise addressed this area specifically. McCarthy on Trademarks defined the threshold for establishing genericness as 80% of survey respondents not being able to tie the mark to its source.
Plaintiff looked at the same survey in a different light, claiming that several courts in the Seventh Circuit had found confusing similarity when as little as 10% of consumers recognized the mark as a source identifier – and IlTaco had 16.7%. The court pointed out that those surveys measured different things; Little Caesars’ survey tested genericness, while the 7th Circuit cases that IlTaco cited tested confusing similarity. That is, if a small but substantial number of people weren’t sure whose trademark was used, that indicated that the trademarks were confusingly similar — but that’s very different from whether the so-called mark was generic (synonymous with the type of product, regardless of who sold it).
The court also took note of how online, crowd-sourced dictionaries defined “pizza puff.” Essentially, that was a common phrase that described any doughy outer shell with pizza ingredients inside. (Though crowd-source dictionaries are, by definition, able to be altered, the court noted that they could still be weighed as evidence.)
The appeals court partly reversed the district court, instead finding that IlTaco’s PIZZA PUFF mark was generic, and therefore not enforceable. It also found that the district court erred by not finding that Little successfully demonstrated a fair use of the term “pizza puff” – that is, use of those words was necessary to describe the product being sold. The appeals court went on to affirm the district court’s denial of a preliminary injunction as to Crazy Puffs and Puffs, agreeing that those terms were generic.
IlTaco had a good thing going for a while, but so did Bayer’s one-time brand-name pain reliever, ASPIRIN. It’s unusual for an incontestable trademark to become generic, something that no doubt comforts the makers of KLEENEX tissues. So, it’s hard to determine what would have been best in this case: IlTaco might have settled to avoid cancellation of their trademark registration, but not before Little Caesars had spent the time and money on getting its effectively slam-dunking survey results – at which point, settlement might not have been so attractive to Little Caesars. There’s also the fallacy of sunken costs: Iltaco might not have believed that its successful registration had failed, over time, to be distinctive.
