Universal Frozen Foods, Co. v. Lamb-Weston, Inc.

Citations: 697 F. Supp. 389; 7 U.S.P.Q. 2d (BNA) 1856; 1987 U.S. Dist. LEXIS 14157Docket: Civ. 86-1212-RE

Court: District Court, D. Oregon; October 20, 1987; Federal District Court

Combined Opinion SummaryCombined Opinion Original

EnglishEspañolSimplified EnglishEspañol Fácil

Plaintiff Universal Frozen Foods Co. filed a lawsuit against defendant Lamb-Weston, alleging trademark infringement concerning the product configuration of its helically shaped frozen french fries (curlicue fries). A bench trial commenced on September 23, 1987, focusing solely on whether Universal possessed trademark rights in the product shape, as only injunctive relief was sought. The court previously granted a preliminary injunction on June 22, 1987, prohibiting Lamb-Weston from marketing or selling a similar product. 

Universal, a subsidiary of Universal Foods Corporation, emerged from the merger of Idaho Frozen Foods and Rogers Walla Walla, and is a prominent supplier of frozen potato products. Lamb-Weston is also a leading producer in the same market. Universal argues it was the first to mass-produce the helically shaped fries, although similar fresh-cut versions have been available for years. The trial specifically addressed certain claims from Universal's amended complaint regarding product configuration and Lamb-Weston's defenses, while other claims and counterclaims were reserved for later proceedings. Ultimately, the judgment favored the defendant.

Rogers, Universal's predecessor, faced financial difficulties between 1981 and 1983, becoming a 'second tier' producer of lower-grade frozen potato products. In 1983, Robert Cowan was hired to manage the company and successfully turned its finances around by recognizing the market potential for frozen helically shaped french fries. He directed the development of a production machine, which was completed in 1983 and later patented on February 24, 1987. Since December 1983, Universal has solely marketed and produced these frozen helical fries, achieving sales of over 15 million pounds in fiscal year 1984, increasing to 40 million pounds by fiscal year 1986. This product allowed Universal to enter the 'tier one' market and significantly expand its active accounts.

In contrast, Lamb-Weston initially considered but declined to manufacture curlicue fries in 1981 and 1984. By late 1985, recognizing a competitive need, Lamb-Weston developed its own version without infringing on Universal's patent. They claimed to have produced a superior product in terms of texture, color, oil absorption, and appearance, branding it as 'Country Twist.' In August 1986, Lamb-Weston communicated its intention to market the curlicue fries to Cowan, prompting Universal to assert its patent and trademark rights, leading to a lawsuit. Lamb-Weston alleged that the timing of the lawsuit was strategically aimed at hindering its market entry during contract negotiations.

The legal discussion centers on trademark infringement, requiring Universal to prove that its product is protectable as a trademark. The determination of functionality is crucial; if the product configuration is deemed functional, it lacks protectability. Evidence suggests that the helical shape offers utilitarian benefits, as indicated by Cowan's endorsement of its performance in advertising, which highlighted yield, cost-effectiveness, visual appeal, flavor, and texture.

Mr. Cowan's efforts to downplay advertising claims as mere marketing enthusiasm are contradicted by substantial evidence indicating that he and other employees of the plaintiff believe in the product's advantages. Evidence confirms these advantages, as shown in the defendant's fact sheet, which highlights four unique benefits of the curlicue fry: fresh appearance, superior yield, preferred flavor, and self-advertising qualities due to its shape. An advertisement produced by the plaintiff illustrates how the 1/4" and 1/3" curlicue fries occupy less space in portion baskets, thereby maximizing profit due to their configuration.

Cowan also noted that the fry's shape could enhance heat penetration during cooking, contributing to its better flavor. Richard Porter, the plaintiff's Vice President of Sales and Marketing, acknowledged that certain benefits, such as superior yield and improved taste, are linked to the product's shape, although he later suggested that recent analyses indicate it may not lead to lower portion costs, despite previous beliefs to the contrary.

The evidence suggests that the curlicue fry’s configuration yields manufacturing efficiencies, allowing the use of smaller, less expensive potatoes, which is a significant production advantage. While the plaintiff admits the product has functional elements, they argue that these advantages should not be considered in isolation; however, the evidence indicates that the unique shape does provide customer benefits, including superior yield, lower portion costs, and improved cooking efficiency.

Ultimately, the configuration of the curlicue fries is deemed functional under the Fuddruckers test, as it impacts cost and quality, and is thus not eligible for trademark protection. This conclusion aligns with the principle that functional shapes should be accessible to all competitors, supporting legitimate competitive practices.

The defendant invokes the 'aesthetic' functionality doctrine, arguing that the features of the plaintiff's curlicue fries serve a functional purpose by enhancing aesthetic appeal. However, the court finds the product functional under other tests, noting that this Circuit has limited or rejected the aesthetic functionality doctrine. The court does not need to assess whether the product has acquired secondary meaning or if imitation creates confusion due to its determination of functionality. Nevertheless, these issues were litigated, and the court's opinions on them may provide cost savings in future litigation if an appellate court disagrees with the functionality finding.

To qualify for trademark protection, a nonfunctional trade dress must be inherently distinctive or have acquired secondary meaning. The plaintiff does not claim inherent distinctiveness for the curlicue fries configuration and must prove it has gained secondary meaning in interstate commerce. Evidence of deliberate copying can support an inference of secondary meaning, but the court finds that the evidence of copying by the defendant, which includes attempts to improve the product, is insufficient. Both parties attempted to replicate a shape that has been on the market for years.

The parties dispute the buyer level at which secondary meaning must be established. The plaintiff argues it should be at the distributor level, citing a case that emphasizes the relevant buyer class as those likely to purchase the product. Conversely, the defendant contends that consumer level perception is crucial, supported by expert testimony indicating that consumer perception drives demand. The court acknowledges that while this issue lacks a clear definition in the Circuit, it is open to the possibility that the relevant buyer class could extend beyond ultimate consumers. The court will evaluate whether the product has achieved secondary meaning at the distributor or restaurant operator level.

Plaintiff did not successfully demonstrate secondary meaning at the distributor level for curlicue french fries. Evidence indicates that these fries have been sold for years without establishing exclusive association with the plaintiff as the source. Advertising expenditures were insufficient to create brand awareness, as the ads focused on the product's features rather than linking the trade dress to a specific source. Additionally, the 34 form statements from wholesale distributors, which were unsworn and collected prior to any alleged market contamination, lacked probative value regarding secondary meaning. Testimony from Professor McCarthy emphasized the need for carefully controlled questionnaire submissions to ensure unbiased responses. Defendant's expert, Robert C. Sorensen, critiqued the plaintiff's survey evidence for its narrow sample universe, inadequate sample size, biased questioning, and lack of alternative response options, concluding that the survey did not demonstrate secondary meaning for the curlicue product shape. Even if secondary meaning were established, the plaintiff would need to prove that imitation of its product configuration is likely to cause confusion among consumers. Confusion requires that customers associate the product with the source of a similar mark, and Professor McCarthy's testimony reinforced that secondary meaning must be proven before addressing likelihood of confusion.

A buyer cannot be confused by a product shape if it is not recognized as a symbol of origin. In evaluating the likelihood of confusion, several factors are considered: actual confusion, the intent of the defendant in adopting the mark, similarity of marks, similarity of goods and marketing channels, and the strength of the mark. In this case, it was determined that distributors and operators are unlikely to be confused by the plaintiff's curlicue fries, as they can identify the company from which they purchase the product, which is clearly labeled. Survey evidence did not support claims of actual confusion, and the defendant's intent was to improve the product, not to infringe on the plaintiff’s mark. Although there are similarities in marks and marketing channels, the strength of the plaintiff's mark was not substantiated. The curlicue fries have been on the market for years without being associated with a specific manufacturer. The plaintiff failed to demonstrate that imitation of the product shape would confuse purchasers, and it was acknowledged that food distributors are sophisticated buyers unlikely to be misled by the product shape.

Additionally, the court did not rule on the implications of the plaintiff's pending trademark registration application, which was refused based on the design being primarily functional. The defendant referenced the Kellogg Co. v. National Biscuit Co. case, which established that the shape of a product produced by a patented machine can enter the public domain once the patent expires, limiting trademark rights. The plaintiff holds a utility patent related to a method for cutting potatoes but contends that other shapes can be produced using its machinery, potentially avoiding Kellogg's implications. The court found it unnecessary to determine the relevance of Kellogg or the effect of other patents on the plaintiff's trademark claims.

Ultimately, the court concluded that the plaintiff did not meet the burden of proof regarding trademark rights for the curlicue-shaped fries, characterizing the product configuration as functional and lacking secondary meaning. The recognition of such trademark rights would create an unfair monopoly, contrary to public domain principles, leading to the dissolution of the preliminary injunction and denial of a permanent injunction.