Nutella Nastygrams Restaurant Promoting Its Product, Opens The Door For Competitors

from the i-drink-your-milkshake dept

It’s astounding and depressing how often companies seem to abuse trademark law to pretend it’s about complete ownership of a brand, rather than its roots as a consumer protection statute to stop someone from buying a product believing it was made, supported or endorsed by someone else. The latest ridiculous news comes courtesy of the Citizen Media Law Project in Boston, who notes that their local popular-with-the-college-kids “wraps and smoothies” joint, Boloco, has been legal nastygrammed by Nutella. Why? Because of this: their Nutella Milkshake, which they’ve sold for 14 years:

Andrew Sellars from CMLP points out that the legal basis for this is… questionable at best:

Courts have long confronted this unauthorized-but-accurate use of another company’s name. In a 1924 Supreme Court case the court considered a New York company that took a French company’s cosmetic powder, blended it with a binding agent, and sold it as a compact including both the New York company’s and French company’s names on the packaging. The Supreme Court allowed the defendant to do this, provided that the defendant include a prominent disclaimer that the district court in the case initially imposed, informing the public that the two companies are not affiliated. Writing for the majority, Justice Holmes observed:

[W]hat new rights does the trade-mark confer? It does not confer a right to prohibit the use of the word or words. It is not a copyright. . . . A trade-mark only gives the right to prohibit the use of it so far as to protect the owner’s good will against the sale of another’s product as his. . . . When the mark is used in a way that does not deceive the public we see no such sanctity in the word as to prevent its being used to tell the truth. It is not taboo.

Many courts have adopted this case’s approach to this question: you can use the trademark so long as you are not misleading the public into there being an affiliation between you and the company, other than your use of the company’s product in your product. For example, a 2004 case from the Southern District of New York allowed a company that makes tuna salad display on the lid of its container – in letters about as large as the company’s own brand name – that the salad was “Made with Bumble Bee Tuna,” over objections from the famous tuna company.

In response, Boloco has decided to cave and is instead looking for alternatives to Nutella for their shake, even to the point of showing some of the other brands they’re considering:

In the end, it’s difficult to see how any of this helps Nutella. They show themselves to be a bully, pissing off fans, and Boloco goes looking for competitors to promote in their place. As Sellars concludes in his article:

…when I was in Boloco today (field research!) I couldn’t help but see the dozens of jars of Nutella in the back, and thinking about the dozen-or-so other locations around Boston with similar stacks of Nutella jars. Those will be replaced by a competitor’s product, in a chain that seems to be growing with each passing month. Not to mention the thousands of Bostonians who have heard about this case and will naturally root for the local guy; you get the feeling that this whole experience is going to leave a bitter taste in [Nutella’s] mouths.

Perhaps, next time, they’ll realize that bullying may be legal, but it’s often not a particularly smart business strategy.

Filed Under: cease and desist, marketing, nutella
Companies: boloco, nutella