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Kodiak Cakes LLC v. Continental Mills, Inc.

United States District Court, D. Utah

January 18, 2019



          Ted Stewart United States District Judge.

         This matter is before the Court on Plaintiff's Motion for Preliminary Injunction. For the reasons set forth below, the Court will grant the Motion.

         I. BACKGROUND

         Plaintiff Kodiak Cakes LLC (“Plaintiff) is a Delaware corporation with its principal place of business in Park City, Utah. Since 1982, Plaintiff has manufactured and sold high protein, whole grain pancake mix, among other products. In 2014, following some media attention, Plaintiff experienced significant growth in its commercial success. Plaintiff is now a major competitor within the pancake mix industry, and its products are sold at health food stores and major retailers such as Walmart and Target.

         Plaintiff's packaging is pictured below.

         (Image Omitted)

         The packaging on the left was distributed and sold beginning in 2014 and the packaging on the right is the most recently designed packaging. Both versions are currently being sold.

         Plaintiff claims its protected trade dress consists of the following unique elements: “a kraft box featuring a distinctive tan, red, black, and white color scheme characterized by: a light tan background color offset by a bold, full bleed black border; alternating use of serif and sans serif fonts; standout appearance of reference to ‘Protein Packed' and ‘Whole Grains.'”[1]

         Defendant Continental Mills, Inc. (“Defendant”) is a Washington corporation with its principal place of business in Tukwila, Washington. Under the brand “Krusteaz, ” Defendant also manufactures and sells pancake mix, among other products, and has done so for 86 years. Defendant's Krusteaz-branded pancake mix is sold at major retailers throughout the United States. Krusteaz pancake mix is generally packaged in a high-gloss box featuring a large image of a stack of pancakes and a Krusteaz logo in red across the top of the box. An image of its original protein pancake mix product is shown below.

         (Image Omitted)

         In June 2018, upon “seeing changes in the pancake mix market and after conducting its own research, ”[2] Defendant opted to redesign its protein pancake mix product. “It conducted focus groups, tested different formulae, and analyzed market data, including considering the strengths and weaknesses of the protein pancake mix market leader, Kodiak.”[3] At the conclusion of its market research, Defendant put the following box design into production.

         (Image Omitted)

         After Defendant put this design into production, Defendant continued its research and decided it would eventually design a different packaging that would “properly account for its consumer research.”[4] However, before Defendant could implement a different design, Plaintiff contacted Defendant to inform Defendant that it believes their current packaging infringes Plaintiff's trade dress. Following communications between the parties, Defendant accelerated its redesign plan and has agreed to cease shipping products with the current packaging by January 31, 2019.

         Plaintiff filed suit in this Court on October 10, 2018, for trade dress infringement in violation of 15 U.S.C. § 1125, among other causes of action. Plaintiff filed the Motion for Preliminary Injunction now before the Court on November 2, 2018, seeking an order enjoining Defendant from “[c]ontinuing to sell, advertise, or promote any product using the infringing packaging, or using any packaging that is otherwise confusingly similar to the Kodiak Trade Dress.”[5] This includes a recall of all of the offending products by a date to be determined by the Court.


         To obtain a preliminary injunction, the moving party must demonstrate: “(1) a likelihood of success on the merits; (2) a likelihood that the movant will suffer irreparable harm in the absence of preliminary relief; (3) that the balance of equities tips in the movant's favor; and (4) that the injunction is in the public interest.”[6] “A preliminary injunction is an extraordinary remedy; it is the exception rather than the rule.”[7]A. LIKELIHOOD OF SUCCESS “[T]he very purpose of an injunction under Rule 65(a) is to give temporary relief based on a preliminary estimate of the strength of the plaintiff's suit, prior to the resolution at trial of the factual disputes and difficulties presented by the case”[8] Therefore, “a plaintiff must present a prima facie case but need not show a certainty of winning.”[9]

         Plaintiff seeks a preliminary injunction based on its claim of trade dress infringement. “A product's trade dress ‘is its overall image and appearance, and may include features such as size, shape, color or color combinations, texture, graphics, and even particular sales techniques.'”[10] “To establish a claim of trade dress infringement, a plaintiff must show: (1) The trade dress is inherently distinctive or has become distinctive through secondary meaning; (2) There is a likelihood of confusion among consumers as to the source of the competing products; and (3) The trade dress is nonfunctional.”[11]

         1. Distinctiveness/Secondary Meaning

         Plaintiff must first show that the its trade dress is inherently distinctive or that it has acquired secondary meaning. “A trade dress is inherently distinctive if its ‘intrinsic nature serves to identify a particular source.'”[12] “Trade dress, like trademarks, are classified in the following categories of generally increasing distinctiveness: (1) generic, (2) descriptive, (3) suggestive, (4) arbitrary, or (5) fanciful.”[13]

A generic mark refers to a general class of goods, such as “cola, ” of which an individual article is but a member. Such marks do not indicate the particular source of an item and are not entitled to any trademark protection. A descriptive mark identifies a characteristic or quality of an article or service, such as its color, odor, function, dimensions, or ingredients. A descriptive mark may receive protection only when it has acquired a secondary meaning by becoming distinctive of the applicant's goods in commerce. Suggestive marks suggest rather than describe a characteristic of the product and require the consumer to use imagination and perception to determine the product's nature. Arbitrary marks use common words, symbols, and pictures that do not suggest or describe any quality or characteristic of the goods or services. Finally, fanciful marks are words invented or selected for the sole purpose of functioning as a trademark. Suggestive, fanciful, and arbitrary marks are considered inherently distinctive and entitled to trademark protection.[14]

         While the Tenth Circuit has utilized these categories in the trade dress context, it has “not mandated exclusive use of that framework.”[15] The Tenth Circuit has stated that it may be useful to supplement that test using the test set out in Seabrook Foods, Inc. v. Bar-Well Foods Ltd.[16]The Seabrook test considers whether the trade dress is: (1) “a common basic shape or design” (2) “unique or unusual in a particular field, ” and (3) “a mere refinement of a commonly-adopted and well-known form of ornamentation for a particular class of goods viewed by the public as a dress or ornamentation for the goods.”[17]

         Plaintiff explains that its protected trade dress includes the following elements: “a light tan background color offset by a bold, full bleed black border; and the use of contrasting black, red, and white lettering and backgrounds. In addition, the Kodiak Trade Dress makes alternating use of serif and sans serif fonts and includes standout appearance of references to ‘Protein Packed' and ‘Whole Grains.'”[18] Plaintiff's mix also prominently includes its logo of an encircled bear and the “Kodiak Cakes” brand name.

         The Tenth Circuit has held “that the use of color in product packaging can be inherently distinctive (so that it is unnecessary to show secondary meaning) only if specific colors are used in combination with a well-defined shape, pattern, or other distinctive design.”[19] In reaching this conclusion, the Tenth Circuit examined a number of cases from other courts.

         In Paddington Corp. v. Attiki Importers & Distributors, Inc., [20] the Second Circuit found that the trade dress of a bottle of liquor was “undeniably arbitrary”[21] and, therefore, inherently distinctive where:

There [was] no evidence in the record of any industry practice of using a design like the one that appear[ed] on the bottle's labels. There [was] nothing descriptive about the bottle and label design that conveys anything about its particular contents, except for the use of the trademark “No. 12 Ouzo, ” . . . and the fact that the bottle [was] of a style such that it indicates to the observer that it contains a liquid that probably is potable.[22]

         The court found that “the tone and layout of the colors, the style and size of the lettering, and, most important, the overall appearance of the bottle's labeling, ” “were selected from an almost limitless supply of patterns, colors and designs” and were, therefore, “undeniably arbitrary.”[23]

         In AmBrit, Inc. v. Kraft, Inc., [24] the Eleventh Circuit affirmed a district court's finding that the trade dress of a Klondike Bar wrapper was inherently distinctive. “[T]he Klondike wrapper with its square size, bright coloring, pebbled texture, polar bear and sunburst images, and distinctive style of printing is a complex composite of size, color, texture and graphics creating a distinctive visual impression.”[25] The circuit court concluded that “[t]he trade dress [did] not describe the ice cream product, rather it suggest[ed] to the consumer the coldness of the product.”[26] Therefore, the court found that “the overall appearance of the Klondike trade dress and of its constituent elements [were] arbitrary or suggestive.”[27]

         Similarly, in McNeil Nutritionals, LLC v. Heartland Sweeteners LLC, [28] the district court found the packaging of Splenda artificial sweetener was inherently distinctive. The Splenda trade dress comprised of a yellow, blue, and white color scheme, and a “combination of pictorial elements, colors, labeling, and layout (including the prominent placement of the product name surrounded by a distinctive white cloud).”[29] The court rejected the defendant's argument that the trade dress could not be inherently distinctive because it included elements that were merely descriptive of the product or common in the industry, such as images of a coffee cup, teaspoon, and pitcher. The court reasoned that, considering “[t]he combination of pictorial elements, colors, labeling, and layout, ” “the overall Splenda trade dress [was] arbitrary or fanciful and thus inherently distinctive.”[30] The court also found it insignificant that other sweetener products used the same color scheme as Splenda because “Splenda's principal competitors [did] not use [the same] color scheme.”[31]

         Aside from its use of the words “Protein Packed” and “Whole Grains, ” none of Plaintiff's elements are descriptive of pancake mix. Additionally, there is no evidence that this color scheme or design is commonly used in the pancake mix market. Defendant provides examples of various pancake mixes in the marketplace that also use a kraft-type box and/or a dark border offset by a light or tan background. However, viewed in its entirety, Plaintiff's trade dress is visually distinct from each of its competitors. As with the cases discussed above, “the tone and layout of the colors, the style and size of the lettering, and, . . . the overall appearance of the [package's] labeling” were “selected from an almost limitless supply of patterns, colors and designs” and are accordingly “undeniably arbitrary.”[32]

         Defendant argues that Plaintiff's claim cannot succeed because it has not adequately articulated the elements of its trade dress. This argument is not persuasive. The Tenth Circuit in Forney found that the Plaintiff had not sufficiently identified its trade dress where the trade dress as described was not definite. For example, the Forney Court found it significant that the plaintiff identified the trade dress as follows: “that the yellow [bar] ‘typically' begins higher than red [bar], ” and “the [l]ettering and accents ‘may' be red, yellow, white, or black.”[33] There is no such uncertainty with Plaintiff's description of its trade dress in this case.

         Based on the above, the Court finds that Plaintiff is likely to succeed in demonstrating that its trade dress is inherently distinctive. Even if not inherently distinctive, the Court finds that Plaintiff has demonstrated that its trade dress has acquired secondary meaning. Secondary meaning can be shown by circumstantial evidence such as: (1) the length and manner of the trade dress's use; (2) the nature and extent of advertising and promotion of the trade dress; (3) the efforts made in the direction of promoting a conscious connection, in the public's mind, between the trade dress and a particular product; (4) actual consumer confusion; (5) proof of intentional copying; or (6) evidence of sales volume.[34] These factors are discussed in more detail below in relation to the likelihood of confusion factors, [35] but they support a showing of secondary meaning.

         2. Likelihood of Confusion

         In determining whether a likelihood of confusion exists, courts are to consider the following factors: (1) the degree of similarity between the products; (2) the intent of the alleged infringer in designing its product; (3) evidence of actual confusion; (4) similarity in how the products are marketed; (5) the degree of care likely to be exercised by purchasers; and (6) the strength of the trade dress.[36]

         i. Degree of Similarity

         “[M]arks may be confusingly similar if, as entities, they look or sound similar or convey the same idea or meaning.”[37] Elements to be examined include the products' “appearance, pronunciation of the words used, verbal translation of the pictures or designs involved, and suggestion.”[38] In examining these elements, the Court “must determine whether the allegedly infringing mark will confuse the public when singly presented, rather than when presented side by side with the protected trademark.”[39] “Similarities are to be weighed more heavily than differences, especially when the trademarks are used on virtually identical products packaged in the same manner.”[40]

         The similarities of the products include the following: a kraft box; a similar color scheme with a black border, tan foreground, and red, black, and white lettering and images; similar fonts; and prominent placement of the words “protein” and “whole grains.” The differences are as follows: Plaintiff's packaging includes a large image of the Kodiak Cakes bear within a circle while Defendant's packing includes an image of a large stack of pancakes. The placement of images and wording are different, each bears its own logo, and there are subtle differences in the colors, layout, and font design.

         Considering these elements as a whole, the Court finds this factor weighs in favor of Plaintiff. Defendant is correct that the Kodiak bear logo, featured prominently on all of Plaintiff's products, is not found on Defendant's packaging. Instead, Defendant's packaging features a large drawn image of a stack of pancakes. However, when weighing the similarities more heavily than the differences and examining each of the boxes singly, the two boxes present a confusingly similar appearance and convey the same overall message. This is particularly true when viewing the competing companies' pancake mix packaging presented in both parties' briefing.[41] Prior to Defendant's new packaging, Plaintiff's design was noticeably unique when compared to the other leading pancake mixes that consumers would likely encounter when selecting a pancake mix.

         ii. Intent to Copy

         “[D]eliberate adoption of a similar mark may lead to an inference of intent to pass off goods as those of another which in turn supports a finding of likelihood of confusion.”[42] “One who adopts a mark similar to another already established in the marketplace does so at his peril, because the court presumes that he can accomplish his purpose: that is, that the public will be deceived. All doubts must be resolved against him.”[43]

         Direct evidence of intent to copy is not necessary. For example, in Beer Nuts, Inc., the Tenth Circuit found the evidence of intent to copy weighed in favor of the plaintiff where: the plaintiff's use of its trademark predated the use of defendant's trademark by two decades; defendant had distributed its original product for many years prior to developing its new, infringing product; the plaintiff's product was successful; the defendant could not deny knowledge of plaintiff's product nor deny knowledge of its popularity; the products were sold in the same markets; the packages and names of the products were similar; and the defendant's advertising agency advised against use of the trademark.[44]

         Here, the evidence shows that Defendant originally packaged its protein pancake mix similar to each of its pancake mixes, which included the high-gloss box with an image of a large stack of pancakes and the Krusteaz logo prominently placed across the top of the box. Defendant's protein pancake packaging changed to its current design after Defendant conducted a market research study. Defendant admits knowledge that Plaintiff is leading the protein pancake mix industry and further admits that Defendant's market research was conducted, in part, to understand why Plaintiff had achieved such success. Defendant also admits that it sought to create a product to compete with Plaintiff's product. After the study, Defendant produced a packaging for its protein pancake product in sharp contrast to its traditional pancake mix packing and, as discussed above, obviously similar to Plaintiff's product.

         Considering the case law cited above, this evidence is sufficient to create an inference that Defendant intended to copy Plaintiff's trade dress. Defendant argues that its only intent was “to create a product to compete with Kodiak.”[45] However, given the obvious similarity between the two companies' packaging, and Defendant's admitted efforts to study Defendant's success, the Court finds this factor weighs in favor of Plaintiff.

         iii. Evidence of Actual Confusion

         “Although not necessary to prevail on a trademark infringement claim, evidence of actual confusion in the marketplace may be the best indication of likelihood of confusion.”[46] However, an absence of evidence of actual confusion “does not necessarily support a finding of no likelihood of confusion, especially when the products involved are inexpensive.”[47]

         In conjunction with its Motion, Plaintiff offered the following evidence of actual customer confusion: (1) a statement from Plaintiff's former employee stating that he spoke to “several customers who expressed confusion after seeing the Krusteaz protein pancake mix packaging in stores;”[48] (2) a customer who reported that she sent her father to the store to purchase Kodiak Cake pancake mix and described the general trade dress to her father, even taking the time to write it down, and her father returned with a box of Krusteaz pancake mix instead;[49] (3) a customer contacted Plaintiff stating his confusion between Plaintiff and Defendant's packaging;[50] (4) a customer posted an Instagram photo of himself with a box of Krusteaz pancake mix and included a caption identifying the box as Kodiak Cake pancake mix;[51]and (5) a grocery store stocked a large display box at a grocery store, purchased by Plaintiff to display its product, with both Plaintiff and Defendant's pancake mixes.[52] Plaintiff's Reply included evidence of an additional instance where a husband and wife, both Kodiak employees and consumers, thought the Krusteaz mix was Kodiak mix before looking more closely.[53]

         At the hearing, Plaintiff's CEO similarly testified that Plaintiff had received statements from customers who had purchased Defendant's product thinking that it was Plaintiff's mix. After the hearing, Plaintiff provided a Supplemental Appendix identifying other instances of customer confusion and instances where people have commented on the similarity between the two packages.

         In addition to this evidence, Plaintiff has also provided charts using sales data provided by SPIN, a subscription service that provides sales figures for various products in the food industry. These charts compare the sales data for the parties' protein mixes. They show that Defendant experienced growth after it started using the accused package and that growth increased during the time when its mix would have become distributed more widely. In contrast, Plaintiff's sales decreased during that time.

         Defendant argues that Plaintiff's evidence is insufficient to demonstrate actual confusion. The Tenth Circuit has held that “isolated instances of actual confusion may be de minimis.”[54]“Probable confusion cannot be shown by pointing out that at someplace, at some time, someone made a false identification.”[55]

         In King of the Mountain Sports, Inc., the Tenth Circuit found that seven isolated instances of actual confusion to be de minimis.[56] The court found that “[t]his handful of anecdotal evidence” did not support a finding of likelihood of confusion, especially in light of the lack of similarities between the parties' use of the mark.[57] Other cases are in accord.[58] Here, the exact number of instances of actual confusion is unclear. However, considering all the evidence, including the examples contained in the Supplemental Appendix, Plaintiff's evidence of actual confusion is more than de minimis.

         To combat Plaintiff's evidence of actual confusion, Defendant hired an expert to conduct a survey. Evidence of actual confusion “may be introduced through surveys, although their evidentiary value depends on the methodology and questions asked.”[59]

         Defendant's expert reported that, “[c]ontrolling for pre-existing beliefs, guesses, other background noise that respondents may bring to the survey, and the non-asserted design elements of the product, ” 7% of respondents believed “Kodiak was the source of the Krusteaz protein pancake mix, ” and 5.7% of respondents believed there was some level of affiliation between the two pancake mixes.[60] However, a look at the raw data shows that 28% of respondents believed that Kodiak was the source of the protein mix and 42.4% of respondents believed there was some relation between the two pancake mixes.[61]

         Putting aside the Court's concerns about the evidentiary value and methodology used in the survey, Defendant's evidence tends to support Plaintiff's claim of actual confusion rather than detract from it. This support is found in not only the raw data, but also the comments provided by the survey takers, which Defendant's expert does not address. As Plaintiff points out, those statements include some of the following comments about the similarity of the packaging: “They basically took the entire design and could get sued;” “They look exactly the same just with different pictures and words;” “The product seems identical;” “They look almost exactly alike;” “Wouldn't it be copyright infringement or something I don't think it's legal to do that.”[62] These types of statements are riddled throughout the study.[63]

         Considering all of the evidence, the Court finds that this factor weighs in favor of Plaintiff. Plaintiff has provided evidence of numerous instances of actual confusion. Further, Defendant's survey evidence shows that over 42% of the treatment group respondents believed there was some connection between the two mixes. This combined evidence supports a showing of actual confusion.

         iv. Similarity of Products and Manner of Marketing

         “The greater the similarity between the products, the greater the likelihood of confusion.”[64] The Court separately considers “(1) the similarity of products and (2) the ...

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