Dueling food options faced off in the Eastern Division of the Northern District of Illinois in Grubhub v. Kroger Co. This case was notable because it had been delegated to a magistrate judge, and the district judge rejected the subsequent report and recommendation.
Kroger is a mega-corporation that owns several supermarket chains across the U.S. Within its operations, it established a subdivision with trademarks called HOME CHEF and SEAMLESS. Kroger’s Home Chef division alleged that its logo — consisting of a simplified house, a fork, and a knife — was infringed by GrubHub’s logo of a simplified house, a fork, and a knife. Home Chef sought a preliminary injunction under a theory of reverse confusion. (That means people allegedly saw GrubHub’s logo and perceived that Home Chef was part of GrubHub.) The magistrate judge wrote in his report and recommendation (R&R) to the judge that the court should grant the injunction and prevent Grubhub from using its logo, because some of the two logos’ elements were similar.
GrubHub filed four objections to the R&R:
1. The magistrate judge did not give enough weight to GrubHub’s survey. The district court judge agreed that the R&R erroneously failed to include GrubHub’s survey because it demonstrated that there really weren’t any instances of actual confusion between the GrubHub and Home Chef logos.
The judge further dismantled any likelihood of confusion by pointing out that GrubHub is a delivery service, and Home Chef is an in-store, prepared food product. Any confusion in the context of grocery stores was unlikely because GrubHub does not sell in grocery stores. As for actual confusion, the R&R noted that the parties’ logos had only coexisted for a few months, so a lack of actual confusion was not dispositive. But the judge disagreed: the fact that the brands and products had coexisted for years — Home Chef since 2013 and GrubHub since 2004 — indicated virtually no actual confusion.
2. The court found that the magistrate judge improperly relied on a non-final USPTO finding to establish that the marks were confusingly similar. The court said the USPTO did not have access to the same evidence that was available to the court, and that militated against deference to the USPTO decision. While the analysis of the USPTO can often be important, in this case it wasn’t.
3. There’s no evidence that GrubHub used its logos without also including the name GrubHub in the U.S. In fact, because the Seamless brand was being phased out, consumers would not even encounter the Seamless logo. Prominent display of different brand names, in this case GrubHub, reduced the likelihood of confusion, even where the marks were otherwise similar. Additionally, the use of brand marks next to the logos was more likely to mitigate reverse confusion because both parties here had established highly recognizable brands.
4. There were only two instances of anonymous social media comments. Home Chef relied on two conspicuously worded, anonymous social media posts to prove actual confusion. The R&R shouldn’t have relied on such evidence.
In the Seventh Circuit (where District Courts for Illinois are located), courts look to seven factors when evaluating the potential for consumer confusion. Among the factors this judge considered in denying the motion for preliminary injunction was the appearance of the marks. Here, the judge found that the logos themselves were dissimilar and described their dissimilarities in detail.
Finally, there was no evidence that GrubHub used its mark in bad faith because in fact they had adopted the mark with a new parent company that was using the logo overseas. Home Chef did not argue that Grubhub had any intent to pass off its services for Home Chef’s. Instead, Home Chef just claims that their rights were ignored.
Well, that’s not enough. One has to show bad faith to have that additional element to demonstrate passing off. The court decided that Home Chef did not make a sufficiently strong showing of likely success on the merits, rejected the R&R and denied the motion for preliminary injunction.
And the moral of the story? The first decision — here, the R&R — is not necessarily the final one.
