September 15, 2005
Branded products as ingredients
By Mark McKenna
Brett Frischmann tells a story about trying to buy his son a cookie with M&M's on it and having the person working at the cookie stand insist on calling the cookies "B&B" cookies, not M&M cookies. According to the store clerk, they are not allowed to call the cookies M&M cookies.
Brett seems to think that the cookie stand owner has instructed its employees not to call the cookies M&M cookies on its own. I sort of doubt that, given the pervasiveness of the use of brand names to inform customers about the ingredients of their products. I can think of a number of food examples off the top of my head, such as Oreo cookie ice cream and Jack Daniels BBQ sauce. And what about all those ice cream shops where you can have ingredients added into your ice cream (like Marble Slab Creamery and Cold Stone Creamery)? They have a whole array of branded products that you can incorporate into their ice cream.
While my instinct was to agree with Brett that this should be a slam dunk nominative fair use case (assuming of course that the "B&Bs" really were M&Ms and not some other small coated chocolate candies that looked an awful lot like M&Ms), I'll bet M&M Mars objected to their use. If I am wrong that the B&Bs really were M&Ms, then the objection might have been based on a legitimate concern about genericide - a concern that the cookie stand was calling all coated chocolate candies M&M's, regardless of their source. This is exactly what gets Coca-Cola all worked up when someone calls any dark soda a "coke," (which, my students remind me every semester, happens all the time).
But if the cookie stand really was using M&Ms on their cookies, then it's a much different story. I've been wondering for some time how long it would take before trademark owners started objecting to people using their marks to note that they in fact make products containing the branded product, so I did a little research.
When I was in Ben & Jerry's with my son the other day (Brett and I apparently have the same childcare priorities), I noticed that they don't use "oreo" in the name of their "Sweet Cream & Cookies" ice cream, which are of course made with "broken chocolate sandwich cookies." I also recalled that TGI Friday's has several food items that are made with Jack Daniel's bbq sauce, and I noticed that they say on their web page that they use "Jack Daniel's" under license.
So, if this anecdotal evidence means anything, I'll bet that the hapless cookie stand got a cease and desist letter from M&M Mars telling them they couldn't say they were selling M&M cookies, when in fact they were. As I said before, I've thought this was coming for some time. Despite some half-hearted attempts to protect users who employ a trademark to accurately describe their products, we've gotten so far down the road towards rights in gross, that the M&M argument probably doesn't seem far-fetched. M&M will argue that, when customers see "M&M cookies", they will assume that M&M Mars has given permission to the store to use their mark. The only basis on which consumers could draw that conclusion, of course, is that the cookie stand is saying the cookies have M&Ms on them. But that would hardly make the case unwinnable for M&M. As Brett points out (by reference to Stacey Dogan and Mark Lemley's article), we have other examples of areas where the only reason consumers might suspect some form of connection is the use of the mark by itself.
And the doctrine of exhaustion probably doesn't work to block liability here. Exhaustion usually applies when someone resells a product without change. Here, the downstream users are not merely reselling initial products without changing them - they are incorporating them into their own food products, which may or may not be any good.
Still, if we mean it at all when we say that trademark rights are not rights in gross, then it can't be trademark infringement to tell consumers that your product is made of ingredients that it is in fact made of. I certainly hope that nominative fair use would take care of this, because it if wouldn't, then trademark owners in a very real sense get to control the use of their products after they've made their way into commerce.
Posted by Mark McKenna at September 15, 2005 02:31 PM | Trademark
I think this still is the exhaustion or "first sale" doctrine. I've never read that the goods have to be unaltered for it not to apply. Granted, in the vast majority of cases, the goods are unaltered. In law school, I specifically recall the Prof. using "Oreo" ice cream as an example. And, she was a Prof of some distinction in the field.
And, while conceeding that I might be wrong, it would be a peculiar doctrine indeed if the trademark holder "exhausts" its rights after the first sale, but gets them back if the goods are altered on the resale.
That being said "M&M cookies" sounds like it's a cooking made by Mars, as opposed to Cookies w. M&M candies.
Posted by: Tom at September 15, 2005 04:34 PM
You have a pretty tough gig, Mark--conducting academic research via a culinary tour through snackdom! Eric.
Posted by: Eric Goldman at September 15, 2005 04:54 PM
With respect to whether a mark holder exhausts its rights and then gets them back on resale, I think a better way of thinking about it is that a mark holder exhausts the right only with respect to the unaltered good. Altered goods are different. There's actually a fair amount of precedent on this. See Section 25:41 of McCarthy's treatise.
Posted by: Mark at September 15, 2005 06:00 PM
Thanks for the cite to McCarthy. I think the treatment of exhaustion futher muddies the nominative fair use argument.
If the M&M cookies contain "materially altered" M&Ms, exhaustion doesn't apply. I think at least some of the rationale behind that argument is that the mark holder is being deprived of its right to quality control. Section 25:42 in McCarthy.
I don't see how the court could hold that there's been material alteration, but still allow the mark to be "fair used" to describe the goods.
In the Davidoff Case only the batch numbers had been ground of the bottles. Certainly that's less than baking it into a cookie. I didn't read Davidoff, but it sounds like there's more to it than that.
Thanks for the great post and follow up.
Posted by: Tom at September 16, 2005 12:37 PM