Kellogg Co. v. National Biscuit Co.
Headline: Court reverses injunction and allows rival maker to sell pillow-shaped “shredded wheat” under that name while requiring clear labeling to avoid consumer confusion, denying exclusive rights in the name or shape.
Holding:
- Allows competitors to sell pillow-shaped shredded wheat using the common name.
- Requires rival makers to clearly label their product to avoid consumer confusion.
- Prevents exclusive ownership of generic names and patent-dedicated product shapes.
Summary
Background
A long-running fight was between National Biscuit Company (owner of the old Shredded Wheat business from Niagara Falls) and Kellogg Company (a rival cereal maker). National Biscuit said it alone owned the name “Shredded Wheat” and the pillow-shaped biscuit form and sued Kellogg for unfair competition. The product was first made by Henry D. Perky in 1893; Perky’s patents and related patents later expired, and National Biscuit acquired the business and goodwill in 1930. Kellogg had made similar products at various times and resumed making pillow-shaped shredded wheat in 1927. Lower courts issued conflicting rulings and injunctions before the case reached the Court.
Reasoning
The Court asked whether the name and pillow-shaped form could be monopolized by one maker. It decided they could not. The Court found “Shredded Wheat” to be a generic name the public uses for the product and held that the pillow shape, produced under the expired patents, was dedicated to the public. Because the patents expired, anyone could make the article and use the name, though makers must take reasonable steps to avoid confusing customers about who made the product. The Court found no evidence that Kellogg was passing off its goods as National Biscuit’s.
Real world impact
The Court reversed the injunctions and ordered the bill dismissed, letting Kellogg make and sell pillow-shaped shredded wheat and use the common name so long as it reasonably identifies its product as Kellogg’s. The Court did not decide a separate trademark question about a two-biscuits-in-a-dish picture because that specific trademark issue was not fully before it.
Dissents or concurrances
Two Justices (McReynolds and Butler) disagreed and would have affirmed the Circuit Court of Appeals, believing Kellogg was wrongfully appropriating the other company’s goodwill.
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