'Kraft v. Cracker Barrel': A Summary Of Judge Posner’s Opinion And An Alternative Reverse Confusion Theory Of Liability

In a unanimous opinion authored by Judge Posner, the Seventh Circuit recently upheld the district judge's granting of plaintiff Kraft Foods Group Brands LLC's motion to preliminarily enjoin defendant Cracker Barrel Old Country Store, Inc.'s sale of food products to grocery stores under the CRACKER BARREL trademark. The opinion is worth examining given the commercial prominence of the litigants and the always interesting insights of Judge Posner. Additionally, at the conclusion of this short article, I will posit an alternative theory of reverse consumer confusion potentially applicable to the facts of this dispute.

The parties' respective reputations are well established and known. Kraft is a leading manufacturer of food products and Cracker Barrel operates one of the country's best-known chain of restaurants. Their dispute arose when Cracker Barrel announced its intention to begin selling branded food products - not including cheese - in grocery stores, expanding the channels of commerce in which it had previously sold such items, i.e., its restaurants and website. Kraft filed suit and moved to preliminarily enjoin Cracker Barrel's expansion, claiming that its sale of products bearing the Cracker Barrel logo in grocery stores would result in consumer confusion with cheese Kraft sells under its registered CRACKER BARREL trademark. The trial court granted Kraft's motion, enjoining Cracker Barrel's sale of all food items in any retail locations other than its aforementioned established channels of trade. Cracker Barrel appealed the decision to the Seventh Circuit on the grounds that the injunction was overbroad, Kraft's likelihood of confusion survey evidence was defective, and the trial court incorrectly analyzed the likelihood of confusion factors.

The Seventh Circuit upheld the injunction based on the combined similarity of the parties' marks, goods, and channels of trade: "It's not the fact that the parties' trade are so similar that is decisive, nor even the fact that the products are similar (low-cost packaged food items. It is those similarities coupled with the fact that, if [Cracker Barrel] prevails in this suit, similar products with confusingly similar trade names will be sold through the same distribution channel - grocery stores, and often the same grocery stores - and advertised together." In Judge Posner's estimation, these similarities - despite the differences in the parties' respective logos and regardless of where the...