The U.S. Court of Appeals for the Seventh Circuit upheld a preliminary injunction barring use of the mark Cracker Barrel Old Country Store for use in connection with ham products to be sold in supermarkets, based on plaintiff’s existing Cracker Barrel trademark registration for use in connection with cheese, also sold in supermarkets, concluding that the marks were likely to cause confusion among consumers. Kraft Brands Food Group v. Cracker Barrel Old Country Store, Case No. 13-2559 (7th Cir., Nov. 14, 2013) (Posner, J.).

Defendant, Cracker Barrel Old Country Store Inc., is a low-price restaurant chain with about 620 restaurants, founded in 1969. Cracker Barrel wanted to start using its name “Cracker Barrel Old Country Store” in connection with various ham products, such as hams, lunchmeat, bacon and jerky, and sell its products at supermarket stores.

Plaintiff, Kraft Foods Group Brands (Kraft), a major supplier of packaged food products to grocery stores, has been selling Cracker Barrel cheese since 1954. After Cracker Barrel Old Country Store announced plans to start selling a line of meat products under the name Cracker Barrel Old Country Store, Kraft sued, claiming trademark infringement, arguing that many “consumers will be confused by the similarity of the logos and think that food products so labeled are Kraft products, with the result that if they are dissatisfied with a Cracker Barrel Old Country Store product, they will blame Kraft.”

The district court issued a preliminary injunction, stopping the restaurant’s plans to expand its brand to sell pre-packaged meat products in grocery stores, finding that Kraft was likely to prevail on its trademark infringement claim. Cracker Barrel Old Country Store appealed.

On appeal, the 7th Circuit upheld the preliminary injunction issued by the lower court, concluding that Kraft could be injured if consumers were dissatisfied with the restaurant chain’s meat products. If a consumer has a bad experience with product sold by Cracker Barrel Old Country Store “and blames Kraft, thinking it is the producer-Kraft’s sales of Cracker Barrel cheeses are likely to decline.” “The likelihood of confusion seems substantial and the risk to Kraft of the loss of valuable goodwill and control therefore palpable.” The appeals court further said that although the appearance of the logos of the two products is different, if the two products are at different locations in the grocery store, some consumers might forget the differences between the logos and therefore think that the products are sold by the same company. “Familiarity is likely to have made the name Cracker Barrel salient to grocery shoppers, and so any product bearing that name might be attributed to Kraft, even if close scrutiny of the label would suggest that the product might well have a different origin.” The court concluded that if Cracker Barrel Old Country would prevail in this suit, the similar products would be sold through the same distribution channels which would further cause likelihood of confusion among consumers.