Article by Clyde Shuman
The maker of DUM DUMS lollipops has been granted a preliminary injunction against the manufacturer of Tootsie Roll, preventing its rival from selling competing mini lollipops in look-alike red bags. In Spangler Candy Co. v. Tootsie Roll Industries LLC, case number 3:18-cv-01146 (N.D. Oh.), the court ruled that Spangler Candy (manufacturer of DUM DUMS) had demonstrated a likelihood of success on the merits of its claim for infringement of Spangler Candy’s unregistered trade dress, under Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a), due to Tootsie Roll’s deliberately switching to “deceptively and confusingly similar” new bags for its Charms Mini Pops.
Although the court characterized Spangler Candy’s trade dress as “weak” and noted that no consumers had been actually confused by Tootsie Roll’s copycat packaging, the court focused on evidence that Tootsie roll intentionally chose its new bag design to mimic the existing DUM DUMS bags.
Specifically, the court noted that in 2016, Tootsie Roll’s CHARMS MINI POPS, then in yellow packaging, held only 0.04% of the lollipop market. Because Spangler Candy had been gaining market share and was approaching that of Tootsie Roll’s, Tootsie Roll developed a strategy in which CHARMS MINI POPS would compete with DUM DUMS. By July 2017, the red packaging first appeared in Tootsie Roll materials, and by September 2017, the design had been approved for use. Although Tootsie Roll engaged an outside consultant to develop initial designs, none of those designs were used. Rather, with knowledge of DUM DUMS trade dress and using no market research, Tootsie Roll completely redesigned its package in five months, to mimic that for DUM DUMS.
Addressing Tootsie Roll’s intentional selection of confusingly similar packaging, the court said, “Without market research and with full knowledge of the appearance of the DUM DUMS bag, Tootsie chose a package with elements that were nearly identical. Tootsie specifically recognized the similarity between the [packages'] color scheme, had multiple other options, and chose to proceed with the similar design anyway. Because Tootsie performed no market research to advise the rebranding strategy and recognized the similarity between the two packages when targeting DUM DUMS’ market share, I conclude there is sufficient circumstantial evidence to find Tootsie acted with the intent to copy.”
Emphasizing its point, addressing Spangler Candy’s likelihood of success on the merits, the court said, “While the Charms Mini Pops trade dress is distinguishable when seen alone, Tootsie intends the product to be sold side-by-side on the shelf with DUM DUMS, which would increase the likelihood of confusion due to the low degree of purchaser care. This intent along with other evidence also supports a conclusion that Tootsie acted with the intent to deceive.”
The injunction bars Tootsie Roll from continuing to use the offending bags while the case proceeds. Addressing the balance of hardships likely to result from the injunction, the court note that Tootsie Roll had already started using alternate white bags at Walmart. Per the court, “While Tootsie may experience some hardship in repackaging the existing inventory into the white Walmart bags, it would not be burdened with a complete redesign. [ ]Tootsie’s burden in transferring inventory to an existing package is substantially less than Spangler’s loss of goodwill and reputation.”