Kellogg Co. v. National Biscuit Co. 305 U.S. 111 (1938)
FACTS
Inventor Henry Perky developed a shredded wheat machine and introduced the cereal in 1893; he was issued utility patents in 1895 on both the shredded wheat and on the machine. The cereal became successful, and Perky's company, the Shredded Wheat Company, continued to manufacture the product after he retired.
The Kellogg Company started manufacturing shredded wheat cereal in 1912 after Perky's patents expired. After the Shredded Wheat Company objected, Kellogg stopped manufacturing their version in 1919. In 1927, the Kellogg Company resumed manufacturing shredded wheat, prompting a lawsuit from the Shredded Wheat Company. In 1930, the Shredded Wheat Company was acquired by the National Biscuit Company (later Nabisco), which again sued Kellogg, both in Canada and in the United States, for unfair competition.
Nabisco complained in its lawsuit about Kellogg's use of the term "Shredded Wheat"; the similarity of its cereal biscuits' shape to the Nabisco cereal biscuits and Kellogg's use on the product box of a picture of two of the pillow-shaped cereal biscuits submerged in milk.
PROCEDURAL HISTORY
In 1928 National Biscuit Co. sued Kelllogg for unfair competition. In 1932 another suit was brought. In 1935 the suit was dismissed by the district court stating no ‘passing off’ or deception had been shown and that the product had passed into public domain upon the expiration of its patent.
This decision was appealed and reversed by the District Court with a decree that enjoined Kellogg from advertising its product as shredded wheat as well as producing it in the same ‘pillow shaped’ form as well as apportioned damages.
In 1938 National Biscuit Co. requested clarification of the injunction because Kellogg insisted that it was only forbid from using the term ‘shredded wheat’ in conjunction with the “pillow-shaped’ product and not otherwise.
Circuit court granted appeal for interpretation and amended it to forbidding use of both the term and the shape independently of one another as well as together. Supreme Court granted certificate this time to both.
ISSUE
Whether Kellogg Company has infringed the rights of Nabiasco by manufacturing “Shredded Wheat”, a product of Nabiasco, for which trademark was rejected and it had passed into the public domain upon the expiration of its patent?
HELD
Supreme Court reversed with directions to dismiss. The court uses the doctrine of genericide to explain that the term “shredded wheat” is now generic and therefore secondary meaning is irrelevant.
Further the court explains that the term brings to mind in the public the product more so than the product’s origin.
Then the court explained that with regards to the trademark rights associated with the pillow shape, it was not protected because the goodwill created by such a form had been established due to its monopoly that had been allowed for by the patent, which has now expired. To hold that it is protectable would fly in the face of the entire purpose of patent law, it is now allowed as part of the public domain.
Finally, the court alludes to what would be termed as trade dress with regards to the packaging of the product, and explains that Kellogg’s packaging and marketing was substantially unique so as not to create confusion as to the source or to trade off the goodwill of National Biscuit’s trade dress. For all these reasons, the Supreme Court reversed with directions to dismiss.
RULE
This case helps to establish the doctrine of genericide and probably lays the groundwork to future cases with regards to trade dress and how it is to be treated.
Most importantly however it indicates the significance of trying to take a product previously protected by patent and later using another form of intellectual property protection to protect it going forward and how in most instances this is not going to stand.