Worthington Foods, Inc. v. Kellogg Co.
| Decision Date | 01 March 1990 |
| Docket Number | No. C-2-89-0842.,C-2-89-0842. |
| Citation | 732 F. Supp. 1417 |
| Parties | WORTHINGTON FOODS, INC., Plaintiff, v. KELLOGG COMPANY, Defendant. |
| Court | U.S. District Court — Southern District of Ohio |
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Edwin M. Baranowski and Kathleen McManus, Trafford, Porter, Wright, Morris & Arthur, Columbus, Ohio, for plaintiff.
Mary Jane McFadden and Melodee S. Kornacker, Casey, McFadden & Winner, Dublin, Ohio, and Daniel Mason and Bruce Wecker, Furth, Fahrner, Bluemle & Mason, San Francisco, Cal., for defendant.
This matter comes before the Court to consider the motion of the plaintiff, Worthington Foods, Inc. ("Worthington") for a preliminary injunction, to enjoin the defendant, Kellogg Company ("Kellogg"), from selling its "Heartwise" cereal. Fed.R. Civ.P. 65. The plaintiff alleges that Kellogg's use of the name "Heartwise" is a violation of the trademark, service mark, and certification mark that Worthington Foods purportedly has in the "HEARTWISE" name and logo borne on its products.
In the Complaint, Worthington asserts a claim for relief under the Ohio common law of trademark infringement, unfair competition, and dilution, as well as section 43(a) of the Lanham Trade-Mark Act, 15 U.S.C. § 1125(a) (1982), amended by 15 U.S.C.A. § 1125(a) (West Supp.1989). In a memorandum supporting the instant motion, the plaintiff also asserts that it is entitled to relief under the Ohio Deceptive Trade Practices Act, Ohio Rev.Code Ann. §§ 4165.01-4165.04 (Anderson 1980 & Supp.1989).
The parties presented evidence at a hearing before the Court which began on October 18, 1989. Considering the evidence presented at the hearing and the memoranda submitted after the hearing, the Court reaches the following conclusions of fact. The Court will first discuss Worthington Foods, Inc. and its HEARTWISE mark. Then, the Court will describe Kellogg Company and the development of its Heartwise mark.
The plaintiff, Worthington Foods, Inc., has sold health food for fifty years and is the world leader in vegetable protein products.1 The company intends to provide consumers with an alternative to meat products which have certain "unhealthy characteristics."2 In fact, a growing number of consumers are paying closer attention to diet. "Worthington Foods serves a growing market whose consumers are concerned about their health and are taking greater interest in their dietary choices."3 According to the plaintiff:
Worthington's president estimates that sales of its products will reach $65 million this year.5
Worthington produces three lines of products. First, it sells food under the brand name of "Worthington" which it has sold since 1939. Second, the company's most widely distributed line of goods is its "Morningstar Farms" set of products. Third, Worthington produces a smaller line of goods, named "Natural Touch."6
The Morningstar Farms line consists of five products distributed nationwide. The Scramblers product is a substitute for eggs.7 Breakfast Links and Breakfast Patties are vegetable protein foods which look and taste like sausage links and sausage patties respectively. Breakfast Strips are substitutes for bacon. Finally, Grillers are analogous to hamburger patties.8 Collectively, the vegetable protein substitutes for meat products are called "meat analogs."
The Morningstar Farms line also includes three other products sold under the name of Country Breakfasts, which Worthington distributes to selected markets.9 Each Country Breakfast is a combination of items. One contains French toast and two protein patties.10 Another contains hash browns, two protein links, and scrambled egg product.11 The last type of Country Breakfast contains two pancakes, two protein links, and scrambled egg product.12
In selected markets, Worthington also sells certain chicken analog products within the Morningstar Farms line under the name of Country Crisps.13 One product is a substitute for battered deep fried chicken patties.14 The other Country Crisps products look to be chicken nuggets, one with a "zesty" flavor and the other with a "home style" flavor.15
Displayed on all packages of the products in the Morningstar Farms line is the logo that is the subject matter of this suit.16 It consists of a yellow circle with a red heart inside. The words "Zero Cholesterol" appear inside the circle, but outside the heart; they traverse the area just inside of the circumference of the circle. Inside the heart, the word "HEARTWISE" appears. The "HEART" part of the word rests just inside the left edge of the heart. "WISE" rests just above the right edge of the heart. Given the ninety-degree angle formed by the left and right edges of the heart, the segments "HEART" and "WISE" also are at a right angle to each other.17
On the Morningstar Farms items distributed nationally, Breakfast Strips, Breakfast Patties, Grillers, and Breakfast Links, the circular logo is 3.5 cm in diameter and the heart inside is 2 cm wide at its largest point.18 On the Country Breakfasts, the circular logo is approximately 2.5 cm in diameter and the heart is approximately 1.4 cm wide.19 Logos of this smaller size appear on the Country Crisp products as well.20
Worthington developed the HEARTWISE mark with the assistance of an advertising agent late in 1986.21 The plaintiff did not intend to create a logo and name to reflect the manufacturer's name, the name of the line of products, or the name of the product itself. For foods bearing the HEARTWISE mark, the name of the line of foods is Morningstar Farms and each individual product has a name such as Grillers or Breakfast Strips.
Instead, Worthington sought to produce a mark which would distinguish the products even more than the Morningstar Farms name does. Specifically, Worthington wished to establish something analogous to the "Good Housekeeping Seal of Approval," which would seem to certify the healthy nature of its products.22 Worthington narrowed the field of potential names and finally began using the HEARTWISE mark in February 1987.23 It has continued to use it from that time until the present.
The plaintiff markets its products through brokers. These brokers solicit purchase orders from retail chains. Upon delivery, the chains stock these items in their warehouses. They then distribute the goods among their retail stores as they see fit.24 The retail stores stock the Morningstar Farms items in frozen food chests or freezer cases. These containers appear in the frozen foods section of the grocery stores.
Worthington's has spent $3.4 million on advertising since 1987.25 Worthington has advertised in national magazines such as U.S. News and World Report, Newsweek, Prevention, and Reader's Digest.26 It also places advertisements in newspapers.27 Moreover, its advertisements appear in special advertisement tabloids distributed by grocery stores.28 It also sends out direct mailings to consumers.29
Advertising materials used in the grocery store include an "angler," which is a plastic card hanging over the price rail of a freezer case to draw attention to the product.30 Also, Worthington uses "neck hangers" on Puritan Oil bottles. A neck hanger is a cardboard card which rests on top of an oil bottle; the neck of the bottle fits through a hole in the card.31 Furthermore, Worthington provides stores with stickers bearing the HEARTWISE mark and design for use on freezer case glass doors.32 Finally, Worthington hands out coupons in stores,33 and places them on cartons of certain Morningstar Farms products34 as well as on products of other companies.
Worthington also pays its brokers a fee for their marketing services and has spent $3.4 million in such fees since 1987.35 In addition, Worthington makes certain price concessions in the form of discounts for grocery stores ("trade deals"). It has spent $7 million on such concessions since 1987.36 Fees for brokers are approximately four percent of sales and trade deals amount to about eight percent of sales.37 Given that sales in 1990 will be approximately $66 million and $75 million next year,38 fees for brokers and trade deals will amount to $7.92 million in 1990 and $9 million in 1991.
In the future, Worthington plans to increase production, having embarked upon a capital improvements project.39 Moreover, the plaintiff contends that it signed a letter of intent to acquire a company that manufactures food very similar to Worthington's; this company makes ready-to-eat cereal in the form of breakfast "biscuits," which it calls "Ruskets."40
Kellogg Company's U.S. Food Product Division produces ready-to-eat cereal for the American market.41 Consumers normally eat ready-to-eat cereal simply by pouring the cereal out of the box into a bowl and drenching it in milk.42 Kellogg's executive vice president for marketing and sales in the U.S. Food Products Division, William Weintraub, estimated that 93% of American households stock ready-to-eat cereal and Kellogg products are in 84% of households.43
Kellogg produces a large number of different cereals, appealing to different segments of the ready-to-eat cereal market. Many people are concerned with limiting the amount of cholesterol they ingest. Appealing to this market, Kellogg produced a cereal named "Heartwise." The cereal package contains a discussion of a...
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