Schwan's Ip, LLC Schwan's Consumer Brands North America, Inc. v. Kraft Pizza Company

Citations: 460 F.3d 971; 79 U.S.P.Q. 2d (BNA) 1790; 2006 U.S. App. LEXIS 21146; 2006 WL 2381494Docket: 05-3463

Court: Court of Appeals for the Eighth Circuit; August 18, 2006; Federal Appellate Court

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Schwan's IP, LLC, and Schwan's Consumer Brands North America, Inc. (collectively, Schwan's) appeal a district court's summary judgment favoring Kraft Pizza Company (Kraft) regarding Schwan's trademark infringement claim over the term "Brick Oven" for frozen pizzas. Schwan's, the second-largest frozen pizza producer in the U.S., introduced its Freschetta Brick Oven pizza in 2003, promoting it as a gourmet product with a unique fire-baked crust. Initially, no other frozen pizzas used the term "Brick Oven" until Kraft, the largest producer, began marketing its Tombstone Brick Oven style pizzas in 2004, directly competing with Schwan's product.

The United States Patent and Trademark Office (PTO) denied Schwan's trademark registration for "Freschetta Brick Oven" and "Brick Oven" on three occasions, deeming the term generic and descriptive in relation to frozen pizza. The PTO noted that "Brick Oven" was commonly used to describe pizza styles and provided evidence of multiple third-party registrations that disclaimed exclusive use of the term. In 2005, Schwan's requested the PTO to suspend further actions on its applications pending the outcome of this litigation. The Eighth Circuit Court affirmed the district court's ruling in favor of Kraft.

Schwan's initiated a trademark infringement lawsuit against Kraft in January 2004, shortly before Kraft's introduction of Tombstone Brick Oven pizza. Kraft subsequently sought summary judgment in November 2004, arguing that "Brick Oven" is either a generic or descriptive term without secondary meaning. The district court agreed, classifying "Brick Oven" as generic and ruling that even if it were considered descriptive, it lacked the necessary secondary meaning for trademark protection.

The appellate review of this summary judgment is conducted de novo, adhering to the same standards as the district court. The appellate court must view facts favorably for the nonmoving party and will affirm the judgment if no genuine issues of material fact exist and the moving party is entitled to judgment as a matter of law. Schwan's bears the burden of proving the protectability of the "Brick Oven" mark, particularly because the PTO denied its registration, eliminating any presumption of validity.

Schwan's argues that a genuine issue exists regarding the distinctiveness of the "Brick Oven" mark. Trademark protection hinges on categorizing the mark as generic, descriptive, suggestive, or arbitrary. Generic terms cannot function as trademarks, while descriptive terms require a secondary meaning to be protectible. A term is considered generic if it refers to the common name of the product rather than its source. If "Brick Oven" primarily signifies the product itself rather than its source, there can be no infringement, as competitors must be able to describe their goods accurately.

Evidence from various reliable sources can be used to assess the genericness of a term, as established in legal precedents. Kraft can demonstrate that "Brick Oven" is a generic term through publications, competitors' usage, and third-party trademark registrations. The district court ruled that "Brick Oven," in reference to pizza, is indeed generic. Testimony from Tom Bierbaum, head of the Freschetta brand, clarified that "Brick Oven pizza" refers to pizza cooked in a brick oven. Supporting evidence includes Schwan's trademark application, which describes "Brick Oven" pizza as mimicking a handmade, brick-oven baked product, and certifications from the U.S. Department of Agriculture regarding their baking methods.

Further, industry commentators and retailers have used "Brick Oven" generically to describe pizzas baked in such ovens. Historical usage by various companies, including Weight Watchers and Meijer, reinforces this view. The term is widely employed in media and restaurant contexts without exclusive rights being granted by the PTO, which has denied trademark applications based on a substantial number of articles using "Brick Oven" generically.

While Schwan's attempted to differentiate between frozen and restaurant pizza markets, the testimony indicated that consumers overlap in purchasing behaviors. Schwan's further contended that the district court neglected to consider their survey evidence in the genericness determination, but this was countered by precedent emphasizing consumer perception in trademark classification. The legal distinction between coined terms and those in common usage was cited, supporting the conclusion that survey evidence may not apply if the term was in common use prior to trademark claims.

In Miller Brewing Co. v. Jos. Schlitz Brewing Co., the Seventh Circuit ruled that a term commonly used before being associated with specific products cannot be trademarked, as generic terms cannot receive trademark protection. In Hunt Masters, Inc. v. Landry's Seafood Restaurant, Inc., the Fourth Circuit addressed a similar issue, where the plaintiff's survey evidence sought to prove that "Crab House" was not generic. The court affirmed the lower court's decision, highlighting that a term may be classified as generic if it either originated as a coined term or was widely used before its association with the products. Since "Crab House" was commonly used prior to its application to the restaurants, the survey evidence was deemed irrelevant. Similarly, the term "Brick Oven" was also commonly used prior to its application to frozen pizzas, justifying the district court's decision to exclude survey evidence from its genericness analysis. The court upheld the summary judgment in favor of Kraft on the genericness issue, rendering the alternative holding unnecessary. The judgment was affirmed. Additionally, the PTO has registered seventeen marks using "Brick Oven" for baked goods, with one registration not requiring a disclaimer of exclusive use due to its inclusion in a slogan.