Designer Skin LLC v. S & L Vitamins, Inc., et al.
Kraft Foods Holdings, Inc. v. Stuart Helm a/k/a "King Velveeda"
205 F.Supp.2d 942, Case No. 02 C 2171 (N.D. Ill., June 7, 2002)
Court finds that plaintiff Kraft Foods Holding, Inc. ("Kraft"), owner of the famous federal trademark "Velveeta," is likely to prevail on its claim of trademark dilution as a result of defendant's use of the mark "King VelVeeda" on a website featuring adult images and illustrations of drug use, and at which defendant offers for sale various non-cheese products. As a result of the tarnishment of plaintiff's mark arising out of such activities, the court issued a preliminary injunction, enjoining defendant from further use of his "King VelVeeda" mark.
Kraft has owned the "Velveeta" mark since 1923, which it uses in connection with the sale of cheese products. Revenues from the sale of Velveeta cheese products since the early 1990's have exceeded $3 billion, with an estimated one in four U.S. households using a Velveeta cheese product in any given year. Kraft has extensively advertised its Velveeta products, spending over 100 million dollars on such efforts in the last decade alone.
Defendant is an individual who has used the nickname "King VelVeeda" for the past 17 years. At the time he picked this nickname, he was aware of plaintiff's mark. For the last 12 years, defendant has operated a website at www.cheesygraphics.com. At the top of each page of defendant's website is a banner that reads "King VelVeeda's Cheesy Graphics." Defendant has also inserted the mark "VelVeeda" into the meta tags of his site, and has signed art work he has created with his "King VelVeeda" mark.
Defendant's site contains numerous adult images, including images depicting bestiality. Defendant's site also features images of drug paraphernalia and drug use. Defendant offers various non-cheese products for sale at his site. Finally, defendant has repeatedly used the word cheese or derivatives thereof on his site. Examples of such use include an invitation to sign his "cheesy guestbook" or to purchase "cheesy merch[andise]."
Upon discovery of defendant's site in January 2002, plaintiff demanded that defendant stop using the "King VelVeeda" mark. When he refused, plaintiff commenced this lawsuit, asserting that defendant had violated both the Federal Trademark Dilution Act (15 U.S.C. Section 1125(c)) and its Illinois state counterpart.
Plaintiff moved for a preliminary injunction, enjoining defendant from further use of his "King VelVeeda" mark. Finding that Kraft was likely to succeed on the merits of its dilution claim, the court issued the requested injunctive relief.
To establish a claim under the Federal Trademark Dilution Act, the owner of a mark must establish "(1) the senior mark is famous; (2) the junior mark is being used in commerce and for commercial purposes; (3) the use of the junior mark began after the senior mark became famous and (4) the junior mark causes dilution of the senior mark." One of the ways a mark holder can establish that his mark is being diluted is via "tarnishment." "Dilution by tarnishment occurs when a junior marks' similarity to a famous mark causes consumers to mistakenly associate the famous mark with the defendant's inferior or offensive product."
The court found that Kraft was likely to establish each of these elements. The court held that "Velveeta" is a famous mark by virtue, inter alia, of the extensive expenditures made by Kraft in advertising the mark over the years, as well as the public's purchase of billions of dollars of Velveeta cheese products. The court held that defendant was making a commercial use of the mark by using it on a web site at which he offered various products for sale. The court found that defendant's use of "King VelVeeda" commenced in 1985, long after Kraft's first use of the Velveeta mark, which Kraft registered in 1923. Lastly, the court held that defendant, by associating the "Velveeta" mark with the adult images found on defendant's website, depicting, among other things, bestiality, as well as the images of drug paraphernalia and drug use, was tarnishing Velveeta's mark. "Tarnishment is often found when the senior mark is placed in the context of sexual activity, obscenity or illegal activity."
Importantly, the court found that defendant's "King VelVeeda" mark was sufficiently similar to plaintiff's "Velveeta" mark to warrant a finding that defendant's use of his mark would tarnish defendant's mark. In so holding, the court rejected defendant's argument that his mark was dissimilar because of his use of the word "King" in conjunction with "VelVeeda" with a d instead of a t.
Finding plaintiff likely to prevail on the merits of its trademark dilution claim, the court issued a preliminary injunction, enjoining defendant from further use of the "King VelVeeda" mark. In so holding, the court rejected defendant's claim that the balance of hardships resulting from such an injunction favored defendant, finding that any harm he might suffer from the grant of injunctive relief must be excluded from the calculus because these were burdens "defendant voluntarily assumed by proceeding in the face of a known risk" -- i.e. by electing to commence use of the "King VelVeeda" mark knowing of plaintiff's prior use of the "Velveeta" mark.
Lastly, the court rejected defendant's claims that his activities were protected by the First Amendment. Such actions were not a parody, both by defendant's own admission, and as a result of an examination of the content of defendant's website. Nor was defendant engaged in non-commercial speech requiring a strict scrutiny analysis, because, in part, he was using the mark to identify the source of his commentary, and not to identify the object he was speaking about.
The full text of the court's decision can be found on a web site maintained by the United States District Court for the Northern District of Illinois. To obtain it, visit the court web site's home page. Once there, click on the Recent Opinions entry in the site navigation bar. This will take you to a search page. On that page, type each of the entries noted below in the boxes noted below - 1 in the office no. box, 02 in the year box, cv in the case type box and 2171 in the case no. box. Then hit search. Finally, click on the link to the case in the search result box that appears. Happy hunting!