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Media Alerts - Parks, LLC v. Tyson Foods, Inc-Third Circuit
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July 20, 2017
  Parks, LLC v. Tyson Foods, Inc-Third Circuit
Headline: False advertising claims may not be used to subvert the evidentiary burden of a false association claim

Area of Law: Trademarks

Issues Presented: Is there a substantive distinction between false advertising and false association claims? Does geographic origin refer solely to place of origin, or does it include any broader conception of the term origin?

Brief Summary:
The Third Circuit affirmed the lower court's dismissal of PARKS' false advertising and false association claims against Tyson. The court dismissed the false advertising claim because - principally - it was a false association claim in disguise, the former of which has a lesser evidentiary burden. For the false association claim, the court held that no reasonable jury could find secondary meaning in the "PARKS" mark because there is almost no direct-to-consumer advertising, PARKS had a miniscule market share, and there is virtually no record of actual confusion.

Extended Summary:
Parks Sausage Company ("PARKS") was founded in 1950 and is the first African-American owned company to be publicly traded on the NYSE. The company enjoyed wide success and recognition until the early 1990's, when it went bankrupt and sold to new owners, who then entered into a licensing agreements with distributors. PARKS registered its trademark in 1970 and let it lapse around 2000.

Tyson owns and manufactures "BALL PARK" branded hot dogs, which account for 23% of all franks sold in the United States.* Tyson claims that 90% of adults in the U.S. recognize the Ball Park brand, so it designed a premium product - "PARK'S FINEST" - to capitalize on the brand recognition.

The claims on appeal were false association and false advertising, which PARKS brought under the Lanham Act. To establish a false advertising claim, the statement must misrepresent the nature, characteristics, qualities, or geographic origin of a product. To establish a false association claim, the owner of an unregistered trademark has the burden of proving the existence of a protectable mark - here, a second meaning in the form of a mental association in buyers' minds between the alleged mark and a single source of the product.

PARKS made three arguments in support of its false advertising claim, the name PARK'S FINEST is misleading because: it falsely implies Tyson's product is one of PARKS' products; it implies that the product is a sausage when it is really a frankfurter, an item consumers may regard as inferior; and it mispresents product origin.

The court dismissed all three for being inseparable from false association claims. It reasoned PARK'S FINEST is only misleading if a consumer makes the connection between PARK'S FINEST and PARKS, and has in mind a pre-existing association between PARKS and high-quality products. The court noted that the distinction between a frankfurter and a sausage is not legally significant - here, the PARK'S FINEST packaging displays a factually accurate unambiguous statement that the product is a frankfurter, and a frankfurter is a kind of sausage. Additionally, the court specifically held that "geographic origin" refers solely to place of origin and not to the creator, manufacturer, or any broader conception of the term origin. The name PARK'S FINEST says nothing about the product's geographic origin, so the false advertising claim failed on all three allegations.

On the false association claim, PARKS argued its mark is inherently distinctive and - in the alternative - that its mark had secondary meaning. The court affirmed the claim's dismissal because trademarks based on the surname of a founder - Parks - are not inherently distinctive, and the mark cannot have secondary meaning if not interpreted by the public as both an identification of the product and a representation of its origin. The record showed no recent extensive advertising such as would create the necessary mental association between the mark and the product - Tyson submitted extensive focus group/survey data showing the name PARK'S FINEST was selected without any reference to PARKS and none of the sales numbers from PARKS are large enough to indicate a secondary meaning.

PARKS attempted to establish secondary meaning by showing customer confusion, but the court found insufficient evidence. The customer surveys submitted by PARKS were fundamentally flawed and did not evaluate the presence of secondary meaning. Also, there was no showing of actual confusion amongst consumers because there were only a handful of such complaints among the millions of franks sold by PARK'S FINEST.

* "Though it may distress the cognoscenti, we use the terms 'frankfurters,' 'franks,' and 'hot dogs,' as synonyms. Not so with the term 'sausage,' which we use to denote something akin to but arguably different from hot dogs."

Find the full opinion at: http://www2.ca3.uscourts.gov/opinarch/162768p.pdf

Panel: Circuit Judges Smith, Jordan, and Roth

Argument Date: March 22, 2017

Date of Issued Opinion: July 6, 2017

Docket Number: No. 16-2768

Decided: Affirmed

Case Alert Author: Kevin P. McGilloway

Counsel:
Roberta Jacobs-Meadway, Jeffrey P. Lewis, Theodore H. Jobes, Ronald J. Shaffer, James C. McConnon, Alex R. Sluzas, counsel Appellant

Daniel T. Brier, Mark H. Churchill, John J. Dabney, Mary D. Hallerman, counsel for Appellees

Author of Opinion: Judge Jordan

Circuit: Third Circuit

Case Alert Supervisor: Professor Susan L. DeJarnatt

    Posted By: Susan DeJarnatt @ 07/20/2017 10:27 AM     3rd Circuit  

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