Just when the world thought that we had moved past the peanut butter wars, another skirmish flared up in the Northern District of Ohio, East Division. In J.M. Smucker Company v. Hormel Food Corporation, the makers of JIF and SKIPPY peanut butter, respectively, jousted over trade dress.
Smucker maintained that Hormel’s filing of a trademark application for the color teal was an attempt to prevent Smucker from going ahead with its planned rollout of a light blue color for its low-calorie peanut butter.
Smucker further claimed that its three cease and desist letters to Hormell show that Hormel was purposely trying to interfere with Smucker’s launch of a new product. Despite the fact that all of Hormel’s business decisions are made in Minnesota, Hormel decided to send the cease and desist letters to Hormel’s production facility in the Northern District of Ohio, its home turf.
The court was not swayed by Smucker’s arguments. The court found that it did not have jurisdiction over Hormel: Hormel’s factories in Ohio had nothing to do with this matter because the cause of action is for enforcing trademark rights, and the trade dress choices were made by advertising decision-makers in Minnesota.
That makes receipt of the cease and desist letters in Ohio the only contact Hormel had with the State of Ohio — and that’s not enough to establish jurisdiction. The court cited multiple cases that establish cease and desist letters are simply not enough to be a basis for declaratory judgment.
Lastly, Smucker claimed that Hormel was not entitled to have the court impose personal jurisdiction because the cease and desist letters were sent in bad faith. What Hormel was really trying to do with the letters was prevent competition. That brings up the concept of the Noerr–Pennington doctrine, which says you can’t threaten to bring litigation baselessly, for the purpose of squelching competition.
The court said Hormel’s conduct might be wrong, but none of it is baseless. It has grounds to say that the color that a competitor’s proposed trade dress is confusingly similar to Hormel’s. The cease and desist letters were not sent in bad faith.
From my point of view, this ruling is good news. It makes it possible to reach across state borders and tell someone that they are engaging in infringing conduct, and that should not be the sole basis for the recipient to bring a declaratory judgment action against your client in a “foreign,” inconvenient jurisdiction. Other districts may rule differently, but at least this is an indication that you can go about trying to resolve your rights, not by suing another party, but by sending a demand letter first. If demanding compliance with the law does not provide the recipient with personal jurisdiction in a state that’s inconvenient, demand letters are less likely to backfire.
Mark S. Kaufman
Kaufman & Kahn
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