IP Law Daily, TRADEMARK—D. Minn.: Dairy Queen loses infringement case over BLIZZARD bottled water, (Jun 22, 2022)

By Cheryl Beise, J.D.

Dairy Queen’s BLIZZARD mark for frozen treats and W.B. Mason’s BLIZZARD mark for bottled water were not similar and the parties’ goods were sold through different trade channels to different customers.

Following a 12-day bench trial, the federal district court in St. Paul, Minnesota, has concluded that Dairy Queen failed to prove, by a preponderance of the evidence, all of the elements of its claims against W.B. Mason for trademark infringement, trademark dilution, unfair competition by false designation of origin, as well as common law unfair competition and deceptive trade practices claims under Minnesota law. Dairy Queen’s BLIZZARD mark/logo for frozen treats and W.B. Mason’s BLIZZARD mark/logo for bottled water were not substantially similar when considering marketplace conditions and the parties’ goods were sold and distributed through fundamentally different trade channels, sales outlets, and to different customers. Moreover, there was no evidence of actual confusion despite 11 years of coexistence. On June 17, the court unsealed its 220-page June 10 opinion (American Dairy Queen Corp. v. W.B. Mason Co., Inc., June 10, 2022, Nelson, S.).

American Dairy Queen (“DQ”) has used the BLIZZARD mark since 1946. In 1985, it began using the mark in connection with a treat that combines soft-serve vanilla ice cream with various flavorings. The treat is a core menu item at all 7,000 franchised DQ restaurants. DQ has marketed and promoted the BLIZZARD heavily, and it has become a very profitable item for DQ. Since 2001, DQ has sold nearly $365 million in BLIZZARD treats in the United States.

W.B. Mason (“Mason”) is a business-to-business retailer of office supplies. Its products include BLIZZARD copy paper. Mason also markets BLIZZARD bottled spring water, and applied for federal registration for the marks "WHO BUT W.B. MASON’S BLIZZARD SPRING WATER" and "BLIZZARD SPRING WATER.” Mason first began using its BLIZZARD mark and logo in 2003 with its copy paper. It expanded its use of its BLIZZARD mark and logo to five-gallon water jugs in 2010. In 2013, Mason began selling individual-sized bottles of BLIZZARD spring water.

DQ requested that Mason cease the use of the word “BLIZZARD,” and when Mason refused, DQ filed suit alleging state and federal claims for trademark infringement and dilution by blurring, and state law claims for unfair competition and deceptive trade practices. DQ moved for partial summary judgment on the issue of likelihood of confusion, Mason moved for summary judgment on all of DQ’s claims, and both sides moved to exclude expert witness testimony. On June 10, 2021, the court denied all motions.

The court conducted a 12-day bench trial that concluded on November 8, 2021. At trial, the parties introduced over 500 exhibits and testimony from 30 witnesses. The court held that Dairy Queen failed to proffer sufficient evidence to prove any of its claims.

Trademark infringement. To evaluate likelihood of confusion, the court examined the six non-exclusive SquirtCo factors: (1) the strength of the plaintiff’s mark; (2) the similarity between the plaintiff’s and defendant’s marks; (3) the degree to which the allegedly infringing product competes with the plaintiff’s goods; (4) the alleged infringer’s intent to confuse the public; (5) the degree of care reasonably expected of potential customers, and (6) evidence of actual confusion.

Strength of DQ mark. On summary judgment, the court found that DQ’s BLIZZARD mark was “suggestive.” After reviewing the trial evidence of third-party use of BLIZZARD in connection with various goods and services—including use by video game giant Blizzard Entertainment and Mason’s own use of BLIZZARD in connection with over $400 million in copy paper sales—the court determined that the overall strength of DQ’s BLIZZARD mark enjoyed only moderate overall strength.

Similarity of marks. DQ had registered both word marks and design marks featuring the literal element BLIZZARD. DQ argued that that the word marks should be compared first, separate from the design marks. The court disagreed, explaining that the marks should be analyzed as consumers encounter them in the marketplace. The court also decided to compare Dairy Queen’s word mark, BLIZZARD, as it appeared in the mark/logo in use at the time of the filing of the lawsuit. After filing suit, DQ revised its mark, choosing a design that was actually more similar to Mason’s mark than its original mark. The court declined to consider DQ’s revised mark/logo.

Comparing DQ’s BLIZZARD mark/logo and W.B. Mason’s BLIZZARD mark/logo, the court determined that the overall impression of the marks, as encountered in the marketplace, was not similar, despite common use of the word BLIZZARD. One distinguishing feature was that both parties used their house marks with their respective BLIZZARD marks. DQ’s BLIZZARD logo appeared in staggered blue letters against a gold background with the phrase “THE ORIGINAL BLIZZARD ONLY AT DQ.” In contrast, Mason’s BLIZZARD logo appeared with straight white lettering in different font type against a blue sky background with a tree filled with snow. In addition, the Mason label included the tagline “WHO BUT W.B. MASON” and an image of the W.B. Mason character, encircled by two American flags.

Similarity of goods. DQ admitted that Mason was not a competitor but argued that because DQ sold bottled water at all of its restaurants nationwide, customers could think that Mason’s BLIZZARD water was an extension of DQ's BLIZZARD brand. DQ also contended that each party's co-branding practices brands (e.g., Dairy Queen with products like Snickers® or Dasani® and W.B. Mason with brands HP® and Dunkin Donuts®) made it more likely for consumers to mistakenly believe that DQ sponsored or was affiliated with Mason.

The court, however, found that DQ’s BLIZZARD frozen treats and Mason’s BLIZZARD spring water had negligible competitive proximity. The parties’ products were sold and distributed through fundamentally different trade channels, sales outlets, and to different customers. DQ’s products were sold directly to consumers in restaurants and retail establishments. In general, Mason sold its BLIZZARD bottled water to business customers through its online website or sales personnel. The limited instances of resale of Mason’s bottled water to downstream consumers in restaurants, ice cream shops, and baseball games was de minimis, amounting to a mere $5,818 of more than $130 million in sales of BLIZZARD water from 2010 to the present. The court also credited expert testimony opining that because of extensive third-party use of “Blizzard,” consumers were able to distinguish among different brands and uses.

Mason’s intent. Although Mason did not conduct a trademark search prior to applying the Blizzard name to its spring water, including before it began selling individual-sized bottles of BLIZZARD spring water, this was not indicative of a bad faith intent to pass off Mason’s goods as being associated with DQ. This factor favored Mason.

Degree of care. Both parties’ goods were inexpensive, but Mason generally sold its water in bulk, primarily to relatively sophisticated business customers. The court found that this factor favored neither party.

Actual confusion. Regarding actual confusion, the court noted that DQ had not identified any instances of actual confusion as to the source or sponsorship of Mason’s BLIZZARD spring water, after 11 years of coexistence, over $130 million in BLIZZARD water sales, and over 190 million individual water bottles sold. DQ did not offer survey evidence, but Mason offered survey evidence showing no likelihood of confusion. The court found Mason’s survey evidence to be persuasive. This factor favored Mason.

Balancing the factors. Balancing the SquirtCo factors, the court concluded that DQ failed to establish that consumers were likely to be confused by Mason’s use of its BLIZZARD mark and logo in connection with spring water. Moreover, “Dairy Queen’s own conduct suggests that it was not concerned about the likelihood of consumer confusion when it consciously changed its BLIZZARD logo to make it more similar to W.B. Mason’s logo,” the court said. “Awarding relief to Dairy Queen under such circumstances would be inconsistent with the equitable principles of the Lanham Act.”

Trademark dilution. DQ submitted evidence showing widespread public recognition of its BLIZZARD mark—84% of the general public recognized the BLIZZARD brand in connection ice cream or frozen treats. Even if the court were to assume that DQ’s mark was sufficiently famous for federal dilution protection, DQ failed to demonstrate by a preponderance of the evidence that Mason’s use of BLIZZARD spring water was likely to impair the distinctiveness of DQ’s BLIZZARD mark, such that it was likely to cause dilution by blurring. DQ offered no evidence of an actual association between the two products.

State law claims. Because DQ’s common law unfair competition and deceptive trade practices claims under Minnesota law required the same likelihood of confusion analysis as DQ’s Lanham Act claims, the court’s finding of no likelihood of confusion, and thus, no trademark infringement or unfair competition by false designation of origin under the Lanham Act, applied equally to DQ’s state law claims.

The court entered judgment in favor of Mason on all of DQ’s claims.

The Case is No 0:18-cv-00693-SRN-ECW.

Attorneys: Dean Eyler, Ashley M. Bennett Ewald, and Sheldon Howard Klein (Lathrop GPM LLP) for American Dairy Queen Corp. Jason Kravitz, Deborah Thaxter, Leslie Hartford, and Melanie Dempster (Nixon Peabody LLP) and Thomas R Johnson (Merchant & Gould, P.C.) for W.B. Mason Co., Inc.

Companies: American Dairy Queen Corp.; W.B. Mason Co., Inc.

Cases: Trademark MinnesotaNews GCNNews