U.S. Supreme Court Rules In Favour Of Kellogg's In Nabisco Trademark Case

U.S. Supreme Court dismissed National Biscuit Company's lawsuit against Kellogg's, involving copyright infringement accusations against the cereal maker for its shredded wheat cereal. 

Nabisco claimed Kellogg's' use of the name 'shredded wheat,' the similarity in cereal biscuit form, and an image on the packaging amounted to unfair competition and trademark violations.

The history of the usage goes back to 1912, when Kellogg's started producing shredded wheat after Perky's' patent for the term expired. Kellogg's ceased production of the breakfast food in 1919 after facing opposition from the Shredded Wheat Company. However, it resumed production in 1927, leading to a lawsuit. 

Nabisco sued Kellogg's for unfair competition after acquiring the Shredded Wheat Company in 1930.

The biscuit maker argued that Kellogg's lost the right to use the name 'shredded wheat' due to delayed serious attempts at production. However, the court clarified that Kellogg's, like any other member of the public, had the right to produce shredded wheat and use the generic name.

The expiration of patents dedicated both the name and the pillow-shaped form to the public. The court emphasised that a particular manufacturer cannot claim exclusive rights to a form or name associated with a public product.

The court considered fairness in Kellogg's use of the name and form, highlighting distinctions in packaging and labels that minimised confusion. Kellogg's cartons, distinct in size, form, and colour, prominently displayed the brand name.

While there were similarities in some imagery, the court noted that Kellogg's took reasonable precautions to prevent confusion, and the prominent branding on cartons minimised the likelihood of deception.

The court dismissed suggestions that Kellogg's refraining from using the name "shredded wheat" or adopting a different form would eliminate confusion, emphasising that both the name and form were integral to the product's goodwill.

Kellogg's sharing in the goodwill created by vast advertising expenditures was deemed fair, and there was no evidence of deception. The court acknowledged the functional nature of the pillow shape, stating that using another form might increase costs and reduce quality.

The cereal maker's exercise of its right to share in the goodwill of an unprotected product was considered legitimate and in the interest of the consuming public.