Chesebrough-Pond's, the Unilever unit that markets Vaseline Intensive Care, filed suit against Venture Stores four years ago in U.S. District Court in St. Louis. Chesebrough alleged Venture's store brand infringed on Vaseline Intensive Care's copyright, trademark and packaging. Chesebrough prevailed, winning more than $2.6 million in damages along with a recall order.
But the District of Columbia U.S. Circuit Court of Appeals last week sided with Venture. Chesebrough said it will seek a rehearing.
The reversal is considered significant because it backs off a watershed 1992 U.S. Supreme Court decision that found packaging was subject to the same protection as a trademark.
"This emboldens prospective infringers. This is an important case," said Mel Seminsky, a lawyer whose firm represents Coca-Cola Co. "While the store name is on the product, there is also a disclaimer issue here. The District Court pooh-poohed Venture's disclaimer but the appeals court didn't address the issue at all."
Other legal experts applauded the decision for addressing the issue of consumer sophistication.
"The court said consumer confusion is less likely in a sophisticated marketplace," said one lawyer familiar with the case.
Procter & Gamble Co., which has filed 13 such lawsuits against store brands and other copycat marketers this year and has settled six in its favor, isn't backing off.
"Each of these infringement cases is decided on its own merits," a P&G spokesman said. "We'll continue taking action to stop infringement when we see it."