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: , ,
Companies: boloco, nutella

Rate this comment as insightful
Rate this comment as funny
You have rated this comment as insightful
You have rated this comment as funny
Flag this comment as abusive/trolling/spam
You have flagged this comment
The first word has already been claimed
The last word has already been claimed
Insightful Lightbulb icon Funny Laughing icon Abusive/trolling/spam Flag icon Insightful badge Lightbulb icon Funny badge Laughing icon Comments icon

Comments on “Nutella Nastygrams Restaurant Promoting Its Product, Opens The Door For Competitors”

Subscribe: RSS Leave a comment
average_joe (profile) says:

Re: Re: Re:

Fair use is primarily a copyright concept – not a trademark concept.

Fair use is a trademark concept that has nothing to do with the copyright concept of fair use. Not sure what your point is. Not only is fair use codified in the Lanham Act, there’s a rich body of case law developing it. So it’s not “primarily a copyright concept.” It’s a trademark concept, and it’s a copyright concept. And the two have nothing to do with each other.

“Trademark fair use” does exist but usually is referred to in other ways – such as “nominative use”.

The way I learned it, there’s two types of fair use in trademark: (1) classic fair use, and (2) nominative fair use. Classic fair use is when the defendant uses plaintiff’s mark to describe the defendant’s own product. Nominative fair use is when the defendant uses the plaintiff’s mark to refer to the plaintiff’s product.

Mike Masnick (profile) says:

Re: Re: Re: Re:

Fair use is a trademark concept that has nothing to do with the copyright concept of fair use

Kinda funny since this seems to invalidate the whole point you were trying to make that because we discuss copyright fair use all the time, we suddenly need to also mention it here.

Protip: instead of trying to attack the strawman you’ve built up in your head that you think is me, trying actually taking the time to look at what we actually say. You might learn something.

average_joe (profile) says:

Re: Re: Re:2 Re:

Kinda funny since this seems to invalidate the whole point you were trying to make that because we discuss copyright fair use all the time, we suddenly need to also mention it here.

Protip: instead of trying to attack the strawman you’ve built up in your head that you think is me, trying actually taking the time to look at what we actually say. You might learn something.

You see fair use in places that it’s not, so when you fail to mention it where it’s actually present, that’s noteworthy. Go ahead and pretend like you saw it. You and I both know that you just copied Sellars’ analysis.

Beech says:

Re: Re:

My guess would be that “fair use” is a term used in copyright law. Trademark happens to be a different thing from copyright. Therefore, there is no real reason to mention it here.

The best part is, however, that if they did mention it you would be the first one here bitching about they were using it improperly. Funny. They write an article about fair use, you bitch about it. Write an article about something other than fair use, you bitch about them not talking about fair use enough. An uninformed layman may be fooled into thinking that you come here only to troll!

Anonymous Coward says:

Re: Re:

How is listing the brand name of a product as an ingredient fair use?

In United States copyright law, fair use is a doctrine that permits limited use of copyrighted material without acquiring permission from the rights holders. Examples of fair use include commentary, search engines, criticism, news reporting, research, teaching, library archiving and scholarship.

Brand names are trademark, not copyright.

Ninja (profile) says:

Re: Re: Re:3 Re:

It’s a copyright case. Actually it’s precisely one of the things discussed here at Techdirt, when artist mistake copyright and trademark mixing both. Even the references in the link are from fair use regarding copyright. Thanks for clarifying you don’t know what you are talking about.

And thanks for the link. While I just hovered around using the find ability to check all instances of “fair use” it was enlightening. I’m still trying to define a better term that doesn’t confuse copyright with trademark though.

The eejit (profile) says:

Re: Re: Re:4 Re:

Actually, I disagree with you on this one. AJ has made a positive citation regardless of any confusion between trademark and copyright law, both of which are within the realm of IP).

Moreover, that report gives more links to other trademark cases which are also relevant, so I have to give AJ props for that one, even if we have a tendency to disagree on other things.

Ninja (profile) says:

Re: Re: Re:4 Re:

Replying to my own question since you didn’t bother to have evidence:

It is interesting there’s very little material on that part of trademark law. Maybe it’s even weaker or rarely used as defense?

Other than that my apologies. You could have avoided much of the animosity if you had not used it just to attack the article and Mike.

RD says:

Re: Re: Re:5 Re:

“Other than that my apologies. You could have avoided much of the animosity if you had not used it just to attack the article and Mike.”

Why would he, when that is the ONLY reason he comes here anyway?? He got the result he wanted: everyone reacting and piling on him so he can cry “woe is me, I am so persecuted!” just like his *IAA masters.

Andy Sellars (profile) says:

Re: Re:

First and foremost: thank you, Mike, for highlighting my piece! Very honored.

“Fair use” in trademark comes up in a few different contexts. Courts are not crystal clear as to the boundaries here, but our legal guide highlights a few of them. These include nominative fair use (using “McDonalds” to talk about McDonalds the company and its products), descriptive fair use (use of a trademark for its non-trademark meaning, such as referring to a deal as the “best buy” without reference to Best Buy), and more general First Amendment defenses (best articulated by Rogers v. Grimaldi and progeny, where courts give the contents of creative works more latitude through more abstract balancing tests).

I could see this situation cast in the “nominative fair use” light as a few commentators suggested, but I think it actually better fits into a whole different line of cases: the “genuine goods” line, which addresses circumstances where you are using the trademark to refer to the exact same goods as the trademark owner. The goods here are those that come from the Nutella company.

The contours of both “genuine goods” and “nominative fair use” are similar: in both cases courts have allowed the use of another’s trademark, provided that the use doesn’t go further to suggest a level of sponsorship that isn’t there. As I noted in the particular post, I could see a skilled argument pushing a court either way on this one (though personally I never for a minute thought that Boloco had any sort of “deal” with Nutella). But that’s hardly the point, as I think Nutella loses much more than it gains in approaching the issue this way.

RonKaminsky says:

Re: You jest...

> For a blog that sees fair use everywhere

Everywhere? You jest. Let me see… somehow “fair use” isn’t mentioned in the posts on the following, rather common subjects

  • Bad faith/bugily automated takedowns where there is no possible claim for the plaintiff to have rights
  • Legacy industries not understanding the need to adapt their business models
  • Democracy being undermined by lack of transparency on the part of government, especially in the realm of international IP treaties
  • Every post about patents, since “fair use” doesn’t apply there
  • Legacy industry using government regulation to block/kill innovative new budding competitors
  • Collateral damage which ensues when actual copyright infringement is stopped by law enforcement
  • Wonderful anecdotes of new business models for artists which have worked
  • Clueless governments trying to prevent “bad things” on the net, like trolling or criticism

In fact, as I write this, the last 20 RSS topics which I see in my feed include only one post concerning “fair use”, and that only peripherally: it was mainly about how abusers of the DMCA practically cannot be punished (in the particular case in the post, the content which was claimed to be infringing was ruled to be a “fair use”).

BTW, “fair use” is everywhere in real life. You should take off your blinders…

out_of_the_blue says:

You make the case every day against capitalist monopolies, Mike,

yet can’t seem to grasp that what you really want is a FAIR market with sensible rules enforced, not a totally “free” market. And you’re always bewildered by companies pushing the line even to acting against their own interests, as is claimed above. I think that’s basically because your libertarian-ized notions of “capitalism” never include bad actors, stupidity, or greed: you who were born at the top have a highly biased view, see only the bright and shiny accumulated wealth, not the sweaty laborers that produced it.

Anyhoo, here’s another project for you, Mike: a succinct statement of trademark to educate public and companies, instead of ad hoc bits when yet another story like this comes up. — As it will, because as you note, the people who run businesses are remarkably ignorant of the basics, blind to how every day they report… Whoops. I begin to recurse, there.

anon says:

Re: You make the case every day against capitalist monopolies, Mike,

Seriously. Maybe you should read back what you have just typed there, for some reason I think you will be a bit ashamed of yourself and maybe, just maybe, next time you decide to do a personal attack on someone else( for no other reason than that he has the moral high ground) you will think twice.

Ninja (profile) says:

Re: Re:

That. We have similar cases here. There’s Ovomaltine (it’s a freaking good chocolate powder that’s simply amazing in a milkshake. People don’t say chocolate powder, they say Ovomaltine. And the company is ok with that. There’s also Catupiry, a company that makes a type of cheese that resembles cream cheese (but it’s insanely better). Restaurants use the name catupiry in their meal names instead of whatever the name is. And Catupiry is ok with that.

The result is those companies are insanely well-known and their products widely used. If they really enforced trademark in this way (albeit wrong) the backlash would hurt them much more than any possible tarnishment….

Anonymous Coward says:

So who benefits from this?

Yet another example of a company allowing their lawyers drive their business strategy.
No surprise that the lawyers choose a strategy which is good for themselves (more legal activity), despite being unlikely to benefit Nutella.

When are companies like this going to wake up and remember that the goal of their business is to market their brand, not defend their brand. For a consumer product like Nutella, the more you can get your brand in front of consumers the better. If you can get another company to do that for you…GREAT!
If Nutella was thinking like an entrepeneur, they would be attempting to get other companies to do exactly what Boloco was doing

TasMot (profile) says:

So Now Another Milkshake is coming

Since it would be truthful, can they list a “NOT Nutella milkshake since Nutella sued us” flavor? and in bigger letters whoever won to be the replacement flavor?

What I find extremely weird was that when I had a store, we got money from manufacturers to use there name in advertising, aka co-branding. Now this place gets nastygrammed for doing what they’ve been doing for 14 years. I’m guessing that Nutella needs new laywers.

hobo says:

Re: So Now Another Milkshake is coming

I don’t think the new spread company would want “not Nutella” in their space.

As for the second point, it is a case of the right hand not knowing what the left hand is doing. One side of a business is looking for ways to get the brand out there, another side is trying to shut down uses of the brand name. While this isn’t quite the same situation as the music companies that upload promo videos and then DCMA them, it’s not wholly dissimilar either.

Anonymous Coward says:

I am not sure that the added value here for Nutella on being in this drink is the same as the value to the shot for using the Nutella name to sell the drink.

Look at it this way: Which has more marketing value, a Nutella milkshake, a Justins milkshare, or a Choco Butter milkshake? Only one out of the three even rings a bell with me, and that would be Nutella.

Put another way, if the product was described as “Nut Spread Milkshake” would it be more or less appealing to consumers?

Now, conversely, does Nutella having their name on this drink drive anywhere near the same benefit to them? What about the potential harm if the drink sucks? Do they have any control over it?

It’s really a no brainer here. Nutella gets little, gives up way more, and didn’t even get to choose being in the relationship. I don’t blame them for using the lawyers.

average_joe (profile) says:

Re: Re:

That’s a good point. I was thinking that it’s definitely fair use to list Nutella as an ingredient, because that’s descriptive and it’s true. But calling the drink a “Nutella milkshake” strikes me as possibly not fair use since there the restaurant is using the mark as a mark, and not merely descriptively.

average_joe (profile) says:

Re: Re: Re: Re:

I dunno. I can’t take the guts of a Dell computer and put them in a computer case I built and then sell it as a “Dell computer.” I can sell it as an “AJ computer” while listing the Dell parts as components. The critical difference is that one use of the mark is descriptive and the other use is as a mark.

Some Other AC (profile) says:

Re: Re: Re:2 Re:

In addition to the other statements, I will also add these little nuggets for you. Consider any establishment that sells blended ice cream desserts. Examples would be Sonic, McDonalds, Dairy Queen(if you have them), etc… They routinely use Brand Name items when listing these on their menus. Dairy Queen: M&M Blizzard, Butterfinger Blizzard, Kit Kat Blizzard and a decent amount more. McDonalds: Oreo McFlurry, M&M McFlurry. Sonic: Butterfinger Blast, M&M Blast, Oreo Blast.
These options have been around for decades and yet neither Mars nor Nabisco have gone after these companies. It is possible that there are contracts or agreements in place, but that still does not detract from the premises that the name of the milkshake is descriptive of its ingredients.
Common Sense(not so common any more) points that this is an ignorant and self abusive move on that part of Nutella.

Oblate (profile) says:

Re: Re: Re:3 Re:

Seems like if Nutella’s management had any sense they would shove their current lawyers in a dark hole somewhere, and have their new lawyers sign an exclusive deal with Boloco where they would only use Nutella (sold to Boloco at a discount rate). Maybe even help them develop new varieties.

So far Nutella has only encouraged Boloco to advertise for Nutella’s competitors.

Not an Electronic Rodent says:

Re: Re: Re:2 Re:

Just for the change of pace you could forgoe the usual pedantic legalese nuances and realise that everyone on the planet who isn’t a lawyer would say a “nutella milkshake” is “a milkshake that is made with nutella as opposed to another brand of chocolate nut spread” and that the afor-mentioned non-lawyers are all going to:
a/ Not think nutella themselves made it
b/ not care whether nutella themselves made it
c/ be informed correctly as to the purchasing decision they may be about to make because that’s how real language works
d/ think nutella are a bunch of morons if they happen to hear about this case whether nutella happen to be “legally correct” or not.

just sayin’

Below_Average_Joe says:

Re: Re: Re:2 Re:

Kind of different with food. How many ppl advertise they use Hershey’s Chocolate in their recipes? I do agree it may cross a line that Nutella has its brand associated with a product it has no quality control over, but before the legal nastygrams a QA group should have sampled it. May be the best shake they ever had.

E. Zachary Knight (profile) says:

Re: Re:

What about the potential harm if the drink sucks?

If the drink sucked, then no one would buy it and it would no longer be on the menu. Considering that the drink has been on the menu for 14 years, means that it is good enough and popular enough to not harm the Nutella brand in any way.

It’s really a no brainer here. Nutella gets little, gives up way more, and didn’t even get to choose being in the relationship. I don’t blame them for using the lawyers.

What? They get nothing out of this? What about all the jars of Nutella the restaurant buys to fill the demand for the drink? What about all the people that go out of their way to buy Nutella in order to make the drink at home? That is not a net gain for Nutella and its brand?

As for using lawyers, that has done more harm than good for the brand. By sending in the lawyers, Nutella has now alienated itself from a large number of former and potential customers. Now, instead of seeking out Nutella to make their drinks, these former customers will be buying competing brands. That is a net loss to Nutella and its brand.

What reality do you live in?

Anonymous Coward says:

Re: Re:

And yet we all know that this is false. It may be, as Joe would like to think, a good point, but it really isn’t. If they were putting some other hazelnut spread in them and calling it Nutella, there would be a case, since that would be deceptive practices. Since that is not what is happening, they really are just trying to bully, and it is backfiring on them.

Jeremy Kane (profile) says:

"Decided to cave"

I disagree with the use of the phrase “decided to cave” to describe Boloco’s response to the threat. Fighting a corporation in court would certainly cost a small company more than it can bear, and I’d hardly say it’s up to the owner of a small restaurant to be expected to take a righteous stance in the current copyright/trademark/patent mess.

It would be awesome if the owner chose to fight the cease & desist, but NOT fighting it shouldn’t be called “caving”. Can we just call it “has decided to agree to Nutella’s ridiculous and baseless demand”? That leaves no doubt that Nutella is the problem here, not the owner of Boloco.

Anonymous Coward says:

This seems kinda random on Nutella's behalf

I’ve seen several Nutella(tm) referenced items in several major cities in two different countries (US and Australia).

They mainly referring to cheesecakes, icecreams or some other dessert item where they use Nutella(tm) as a major ingredient.

That Nutella(tm) is striking out now at a random local shake company feels like some local branch exec trying to get some cash. Bear in mind that Nutella is a Ferrero brand (I think) which is Italian (again, this is from memory).

RD says:


Yet Another Article Where I Just Hit Report on all of AJ’s posts. Once again he brings specious, incorrect, and deceptive arguments always max pro-IP, while brushing aside any counter arguments as “outliers” (the new IP Maximalist Buzz Word) or he knows better becuase he has high grades in law from some school no on has ever heard of (hint: Big Media Butt Fuck U is not a real school), all wrapped up in massive straw-men and ad-hom attacks on anyone who takes issue with his abusive rhetoric.

Anonymous Coward says:

And another thread completely derailed by trolls… I understand and respect Techdirt’s commitment to free speech, but sometimes I really wish you guys would ban some of the more obnoxiously prolific trolls who always put some stupid bs as the first post and argue with everyone that corrects them.

Or at least add a block feature so I don’t have to scroll past them all.

RayB (profile) says:

Fantastic Business Acumen There

It was such a terrific action that I had to send compliments on the ferrerousa website.

Read about your bullying and stupidity with Boloco and its use of the word nutella. Am extremely pleased that Boloco is now displaying pictures of competitive products and will shortly have depleted its supply of nutella and will prominently display those products instead of nutella. It took you 14 years to recognise the danger of someone using nutella in their products and announcing its use on their menu, thankfully that danger will soon be gone. Great publicity stunt, hope all your efforts work out this well. I am sure you have made the lawyers quite happy, I will not comment on the reaction of the public, but suspect nutella sales are going down the toilet in the northeast.

Add Your Comment

Your email address will not be published. Required fields are marked *

Have a Techdirt Account? Sign in now. Want one? Register here

Comment Options:

Make this the or (get credits or sign in to see balance) what's this?

What's this?

Techdirt community members with Techdirt Credits can spotlight a comment as either the "First Word" or "Last Word" on a particular comment thread. Credits can be purchased at the Techdirt Insider Shop »

Follow Techdirt

Techdirt Daily Newsletter

Techdirt Deals
Techdirt Insider Discord
The latest chatter on the Techdirt Insider Discord channel...