November 1, 2018
Heartland Food Products Group (“Heartland”), the maker of Splenda sweetener, has settled a lawsuit with Dine Brands Global (formerly DineEquity Inc.) (“DBG”), the franchisor of International House of Pancakes (“IHOP”) and Applebee’s.
Heartland sued DBG for trademark infringement on the basis that the two DBG restaurants provided customers with an artificial sweetener made in China when they had asked for Splenda. This Chinese-made sweetener was distributed in yellow packets similar to the packaging used by Splenda. Heartland owns several design trademarks that protect the artificial sweetener’s yellow packaging colour.
Heartland filed its complaint in the U.S. District Court for the Southern District of Indiana, and alleged trademark infringement, false designation of origin, unfair competition and trademark dilution. Heartland pointed to interviews it conducted with DBG’s customers, and the evidence indicated that customers were unclear as to whether they were consuming Splenda or the off-brand sweetener.
DBG tried to have the lawsuit thrown out earlier this year, arguing that the yellow-packaging colour served a functional purpose, i.e., distinguishing the sweeteners as sucralose, rather than sugar or another low-calorie sweetener. However, District Court judge Sarah Evans Barker ruled that Heartland had a valid case. Following a precedent set in 1995 in Qualitex Co. v. Jacobsen Prod. Co., Inc., 514 U.S. 159, 162, Justice Barker held that “color alone can serve as a protectable trademark feature if it develops secondary meaning and does not serve a functional purpose that would place competitors at a non-reputational disadvantage.” The Court in this case held that the allegations supported the inference that Splenda’s yellow packaging served only to signify the contents were Splenda.
Heartland and DBG came to a settlement after this ruling, the terms of which are unknown. Notably, Heartland had filed a similar lawsuit against Dunkin’ Donuts in 2016, which was also settled under unknown terms.
Author: Abid Khalid