Perry v. H. J. Heinz Brands
N/A (2021)
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Rule of Law:
While a weak trademark requires substantial proof of a likelihood of confusion for an infringement claim to succeed, the abandonment of an incontestable trademark requires clear and convincing evidence of non-use with intent not to resume, even in cases of de minimis sales, as intent is a question for the fact-finder.
Facts:
- Dennis Perry started making 'Metchup' sauce, a blend of either Walmart-brand mayonnaise and ketchup or mustard and ketchup, in his home kitchen around 2010 or 2011.
- Perry exclusively sold Metchup from the lobby of his nine-room motel adjacent to his used-car dealership in Lacombe, Louisiana, producing only 50 to 60 bottles for about $170 in sales since 2010.
- Perry registered 'Metchup' as a trademark with the United States Patent and Trademark Office in 2011, which achieved incontestable status in 2018.
- In 2018, Heinz decided to launch its mayonnaise and ketchup blend, 'Mayochup,' in the United States, after selling it in the Middle East since 2016.
- To promote Mayochup, Heinz held an online naming contest where a fan submitted 'Metchup'; Heinz then posted a mock-up bottle bearing the name 'Metchup' on its website alongside other proposed names, but never sold a product labeled 'Metchup'.
- Perry discovered Heinz's 'Mayochup' product and its promotional use of the 'Metchup' name.
Procedural Posture:
- Dennis Perry sued H. J. Heinz Company Brands, L.L.C. and Kraft Heinz Foods Company (collectively 'Heinz') in the United States District Court for the Eastern District of Louisiana, asserting claims for trademark infringement, trademark counterfeiting, false designation of origin, and violations of various Louisiana trademark laws.
- Heinz filed a counterclaim seeking the cancellation of Perry's 'Metchup' trademark registration, alleging abandonment or non-use.
- Following discovery, Heinz filed a motion for summary judgment on all claims.
- The district court granted Heinz's motion for summary judgment in full, dismissing all of Perry’s claims and canceling his 'Metchup' trademark registration on the grounds of abandonment.
- Perry appealed the district court's decision to the United States Court of Appeals for the Fifth Circuit.
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Issue:
1. Does Heinz's use of 'Metchup' in advertising or the sale of 'Mayochup' create a likelihood of confusion with Perry's 'Metchup' trademark, constituting infringement? 2. Did Dennis Perry abandon his 'Metchup' trademark as a matter of law, warranting its cancellation by summary judgment?
Opinions:
Majority - James E. Graves, Jr.
No, Heinz's use of 'Metchup' in advertising or the sale of 'Mayochup' did not create a likelihood of confusion with Perry's 'Metchup' trademark. The court found that Perry's 'Metchup' mark was too weak, and there was no probability of confusion given the significant differences in packaging, market segments, and advertising media between the parties. Although the products are similar, the names only differ by three letters, and Perry’s sales were limited to a small motel lobby, while Heinz sells nationwide. The court also rejected the plaintiff's expert testimony on actual confusion because it focused on pronunciation confusion rather than source confusion and lacked consumer survey data. No, Dennis Perry did not abandon his 'Metchup' trademark as a matter of law. The court vacated the district court's summary judgment on the abandonment counterclaim, remanding it for further proceedings because a genuine issue of material fact existed regarding Perry's intent to abandon the mark. The Fifth Circuit reasoned that the district court erred by misplacing the burden of proof for 'use in commerce' and by failing to recognize that even de minimis, intrastate sales can constitute 'use in commerce' under the Lanham Act, rejecting the argument that minor regulatory non-compliance constituted 'unlawful use.' The court distinguished Perry's sporadic sales from 'token defensive use' or 'trademark maintenance programs' explicitly prohibited by the Lanham Act. Given Perry's stated hopes for expansion, a fact-finder must determine if his minimal use of the mark was a bona fide business effort or merely an attempt to reserve trademark rights, as summary judgment is rarely appropriate when intent is at issue.
Analysis:
This case clarifies the high evidentiary bar for proving 'likelihood of confusion' in trademark infringement claims, particularly when the plaintiff's mark is weak and there is a significant lack of market overlap or actual consumer confusion. More significantly, it reinforces the stringent standard for proving trademark abandonment, particularly for incontestable marks, emphasizing that de minimis sales alone do not equate to abandonment when there is a genuine, albeit struggling, intent to use the mark in commerce. The ruling also explicitly declines to adopt the 'unlawful use doctrine,' suggesting that minor non-compliance with other regulations typically won't invalidate trademark rights, and highlights the critical role of a fact-finder in discerning intent when evaluating abandonment claims.
