Frito-Lay North America loses the Patent, Trademark Infringement Case against Medallion Foods

Frito-Lay North America filed a suite against Medallion Foods & Ralcop Holdings Corporation on the ground of following issues.

Allegations

The bowl shaped tortilla chips made by defendant Medallion Foods and its associate Ralcop Holdings Corporation infringe on the trademarks for similiar shaped chips manufactured by theplaintiff.
The lawsuit is brought to restrain the defendant from trademark infringement, trade dress infringement, unfair competition, and dilution under United States Trademark Act. Frito-Lay invested alarge amount in unique designed product TOSTITOS SCOOPS! and the products have now become very much popular among the customers. Defendani’s bowl shaped tortilla chips and its packages are
imitation of popular TOSTITOS SCOOPS! tortila chips. The defendant has done it intentionally. Frito – Lay requested repeatedly the defendant to stop manufacturing and marketting their copycat chips.

They did not stop manufacturing and marketing the products. The Frito-Lay customers are the worst sufferers for the defendant’s unlawful activities. Therefore, the plaintiff seek the court’s intervention to

stop this type of unlawful marketing strategy of Medallion Foods.

Background

1. Frito-Lay is using the bowel shaped design of TOSTITOS SCOOPS! since early 2001. The plaintiff registered the trademark of for the multi-sided, bowl shaped design of the TOSTITOS
  SCOOPS! tortilla chip under the registration no U.S. Reg. 2,766,278 from the federal agency.

1. The bowl shaped design of tortilla chip created a distinctiveness from the other same type of products.
2. Frito-Lay spent millions of dollars in advertisement to popularize the the bowl shaped design of TOSTITOS SCOOPS! brand tortilla chips. Frito-Lay sells tens of millions of dollars per year of
  TOSTITOS SCOOPS! tortilla chips.
3. Apart from the trademark, Frito-Lay obtained the patent on the manufacturing process unique bowl shaped tortilla chips from US Patent Office. The variouspatents were issued from July,2002 to October,2003

1. After more than a decade, defendant began to sell tortilla chips imitating the shape and design of TOSTITOS SCOOPS! Brand of plaintiff. They also copycat the manufacturing process of the plaintiff’sproduct.
2. According to the informations, the defendants’ products are sold through the same outlets in the same aisles at same prices as as Frito-Lay’s products. Defendant’s marketing strategy is damaging thereputation of the plaintiff. Moreover, the customers of the plaintiff are confused by this tactice.
3. In this context, Frito-Lay claimed 4.5 million dollars compensation for the damage of their reputation and and an injunction against Ralcorp Holdings, Inc. and its subsidiary Medallion Foods, Inc. forinfringement of intellectual property and infractions under Texas law.
4. The court directed the defendant to show clear and convincing evidence that supports the plaintiff’s design and manufacturing process can be used publicly. Defendants were unable to produce theevidence. Therefore, the court granted the plaintiff’s motion.
5. Although, the summary judgement was decided on January 2013, the trial began in February 2013. In the trial process, Frito-Lay complained that defendant infringed its trade dress rights to scoopdesign and the chip packaging also.

Conclusion

One of the requirements of the trade dress is that plaintiff has to produce the concrete evidence in support of consumer confusion about the source of product. The court was not satisfied with the

evidence of Frito-Lay. Frito-Lay demands a trial by jury on all issues triable of right by a jury Pursuant to Rule 38 of the Federal Rules of Civil Procedure. The court granted it.

A 10 person jury in Texas go through the 40-pages document and came to the conclusion that the bowl-shaped tortilla chips made by Ralcorp Holdings do not infringe on trademarks for similar-shaped chips produced by Frito-Lay North America.

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