{ "id": 1902424, "name": "W.E. LONG CO. - Independent Bakers' Cooperative v. HOLSUM BAKING CO.", "name_abbreviation": "W.E. Long Co. v. Holsum Baking Co.", "decision_date": "1991-11-25", "docket_number": "91-125", "first_page": "345", "last_page": "353", "citations": [ { "type": "official", "cite": "307 Ark. 345" }, { "type": "parallel", "cite": "820 S.W.2d 440" } ], "court": { "name_abbreviation": "Ark.", "id": 8808, "name": "Arkansas Supreme Court" }, "jurisdiction": { "id": 34, "name_long": "Arkansas", "name": "Ark." }, "cites_to": [ { "cite": "300 Ark. 204", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 1886737 ], "weight": 2, "year": 1989, "opinion_index": 0, "case_paths": [ "/ark/300/0204-01" ] }, { "cite": "300 Ark. 594", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 1886790 ], "weight": 4, "year": 1989, "opinion_index": 0, "case_paths": [ "/ark/300/0594-01" ] }, { "cite": "846 F.2d 1079", "category": "reporters:federal", "reporter": "F.2d", "case_ids": [ 1788362 ], "year": 1988, "opinion_index": 0, "case_paths": [ "/f2d/846/1079-01" ] }, { "cite": "824 F.2d 622", "category": "reporters:federal", "reporter": "F.2d", "case_ids": [ 1730343 ], "weight": 2, "year": 1987, "opinion_index": 0, "case_paths": [ "/f2d/824/0622-01" ] }, { "cite": "271 Ark. 243", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 1756153 ], "weight": 2, "year": 1980, "opinion_index": 0, "case_paths": [ "/ark/271/0243-01" ] } ], "analysis": { "cardinality": 643, "char_count": 13307, "ocr_confidence": 0.898, "pagerank": { "raw": 1.5816611855244557e-07, "percentile": 0.6805159296931983 }, "sha256": "a3422e92961fc43da3249f086c5c49f4cf63bcad405db9a9dbbb8b4ae14ac0a2", "simhash": "1:8b71d5a4e66c3f4f", "word_count": 2102 }, "last_updated": "2023-07-14T22:45:32.876763+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "W.E. LONG CO. \u2014 Independent Bakers\u2019 Cooperative v. HOLSUM BAKING CO." ], "opinions": [ { "text": "Tom Glaze, Justice.\nThis case involves a dispute between W. E. Long Co. (Long) and Holsum Baking Co. (Holsum Baking) over the use of the \u201cHolsum\u201d trademark in the marketing of bakery products. The major events leading to the dispute are relevant to a discussion of the issues raised on appeal.\nLong first registered the \u201cHolsum\u201d mark on such products in Arkansas in 1929. Long licensed Shipley Baking Co. (Shipley), permitting it to use the \u201cHolsum\u201d mark. Years later, in 1944, Long entered into an agreement granting Holsum Baking a bread formula and the right to use the \u201cHolsum\u201d tradename for advertising purposes in Pine Bluff and in other areas not expressly reserved to other Long customers. In fact, Holsum Baking\u2019s geographical market reached outside Pine Bluff and bordered Shipley\u2019s territory. Under the 1944 agreement, Holsum Baking was able to purchase $3,000 or more advertising supplies from Long during the calendar years of 1944,1945 and 1946. In 1946, Holsum Baking joined Quality Bakers of America (QBA), a cooperative and a Long competitor. Since then, Holsum Baking has continuously displayed both QBA\u2019s Sunbeam trademark and the Holsum mark on its packaging. More specifically, Holsum Baking\u2019s vice-president, David Jenkins, explained that his company sold its bread during this period under the composite mark of Holsum Sunbeam.\nIn 1986, however, Holsum Baking added a wheat bread product and marketed it as \u201cHolsum Grains\u201d with no mention of the Sunbeam mark. In this same year, Long\u2019s representatives visited Holsum Baking and tried unsuccessfully to persuade Holsum Baking to join the Long cooperative. During this visit and discussions with Holsum Baking officials, the Long representatives inspected the bread selection of the two stores where the \u201cHolsum Grains\u201d bread was on display. Holsum Baking subsequently rejected a proposed membership agreement tendered to it by Long.\nIn February of 1990, Long claimed it had just learned of Holsum Baking\u2019s sales of \u201cHolsum Grains\u201d bread and its purchasing of packaging bearing the \u201cHolsum\u201d mark. Long wrote Holsum Baking requesting that it cease any further use of the mark. Holsum Baking did not respond. Long opted to contact its packaging suppliers, Mobil Chemical Co. (Mobil), Princeton Packaging Co. (Princeton) and James River Paper Co. (James River), and advised them not to sell packaging bearing the \u201cHolsum\u201d mark to Holsum Baking because Holsum Baking was not licensed by Long. The three suppliers acceded to Long\u2019s request which triggered Holsum Baking\u2019s filing this lawsuit. Because of Long\u2019s action, Holsum Baking could obtain packaging with only the Sunbeam label.\nIn its complaint, Holsum Baking alleged that its 1944 agreement with Long had been breached or abandoned by the parties in 1946 and that Holsum Baking had acquired its rights to the \u201cHolsum\u201d mark in the territory it has continuously served over the past forty-four years. Holsum Baking further claimed a valid contractual relationship and business expectancy with its packaging suppliers, Mobile, Princeton and James River, and that Long had intentionally interfered with that relationship by cutting off its packaging and causing a loss in its bread sales. It also alleged that Long was liable for tortious interference with prospective economic advantage, fraud and conversion and prayed that Long and the three suppliers be enjoined from any acts preventing Holsum Baking from obtaining packaging bearing the \u201cHolsum\u201d mark.\nThe trial court granted Holsum Baking a temporary restraining order and one month later, a preliminary injunction from which Long brings this appeal. Long argues the trial court erred in issuing injunctive relief because Holsum Baking failed to show that it would be irreparably harmed or that it would likely succeed on the merits of its tortious allegations.\nIn arguing Holsum Baking suffered no irreparable harm, Long claims the trial court was clearly wrong in finding Holsum Baking suffered any damages because Holsum Baking continued selling its bread products under the Sunbeam label at the same price as it did under the Holsum mark. Citing Kreutzer v. Clark, 271 Ark. 243, 607 S.W.2d 670 (1980), Long also argues that, even if Holsum Baking had suffered some damages, the harm could be recouped through money damages and therefore cannot be considered irreparable.\nAt trial, Holsum Baking did present evidence reflecting monetary loss in the weekly sum of $1,975 due to its inability to sell Holsum Grains bread. In order to market this bread, Holsum Baking had to introduce a Sunbeam Sandwich Wheat, which took several weeks. Other like testimony bearing on money damages was mentioned at trial, but Holsum Baking argues its irreparable harm results from Long\u2019s actions in preventing Holsum Baking\u2019s use of its common law trademark right in the \u201cHolsum\u201d mark\u2014 a right it acquired over the years since 1946.\nMr. David Allen, a trademark expert, testified that the 1944 agreement between Holsum Baking and Long was invalid, because Long had attempted to grant a license without controlling the quality of the goods sold under the \u201cHolsum\u201d mark. Also, Allen opined the parties\u2019 agreement was unenforceable because the agreement was unlawfully tied to Holsum Baking\u2019s purchase of advertising materials from Long. In sum, because the parties\u2019 agreement was invalid but Holsum Baking continued to use the \u201cHolsum\u201d mark when marketing its products in the 'territory it served, Allen concluded Holsum Baking established a valid trademark in the \u201cHolsum\u201d label in its market area. Based upon its acquired rights in the \u201cHolsum\u201d mark, Holsum Baking analogizes its situation to the trademark infringement cases where a trademark represents intangible assets such as reputation and goodwill, and a showing of irreparable harm can be satisfied if it appears that the movant for a preliminary injunction can demonstrate a likelihood of consumer confusion. General Mills, Inc. v. Kellogg Co., 824 F.2d 622 (8th Cir. 1987). Proof of actual confusion is not essential to demonstrate trademark infringement. Id. Further, the movant\u2019s burden at the preliminary injunction stage is slight. International Kennel Club v. Mighty Star, Inc., 846 F.2d 1079 (7th Cir. 1988).\nLong counters Holsum Baking\u2019s contention, stating the rules in trademark infringement actions are inapplicable because neither Long nor anyone else is advertising or making sales in Holsum Baking\u2019s marketing area under a trademark which infringes on any purported trademark rights of Holsum Baking. Stripped of such assertions, Long argues that Holsum Baking\u2019s lawsuit is reduced merely to tortious claims that could be satisfied by money damages. Long further argues that, in trademark infringement cases, the likelihood of consumer confusion that leads to the threat of irreparable injury results from the use of a similar mark by another in the same market area thereby damaging the trademark owner\u2019s goodwill and reputation. Here, Long asserts that no such confusion was shown nor was it found by the trial court.\nWhen Long claimed knowledge of Holsum Baking\u2019s use of the \u201cHolsum\u201d mark, it could have sued Holsum Baking then, claiming it was infringing on Long\u2019s trademark. Instead, Long chose to cut off Holsum Baking\u2019s packaging supply, by asking Mobile, Princeton and James River not to furnish Holsum Baking any more packaging with the \u201cHolsum\u201d label. Thus, instead of joining issues and differences in a trademark infringement lawsuit, Holsum Baking was forced to obtain other type relief in order for it to avoid losing its asserted right to the \u201cHolsum\u201d mark which it had long used in its service area. If Holsum Baking acceded to Long\u2019s and its suppliers\u2019 actions, it stood to lose any right it possessed to the \u201cHolsum\u201d mark.\nPlaced in this position, Holsum Baking, unable to file an infringement action, sought injunctive relief in order to reinstate its packaging source with its \u201cHolsum\u201d mark. Holsum Baking\u2019s acquired goodwill and reputation gained over the years through the use of the \u201cHolsum\u201d mark is no less significant or relevant merely because the mark\u2019s use is questioned in an action other than one involving trademark infringement.\nContrary to Long\u2019s contention, we also believe that, because it was forced to market its bakery products without the \u201cHolsum\u201d label, Holsum Baking showed consumer confusion would likely arise if it was not afforded relief. For instance, since Holsum Grains was removed from the market, the consumer cannot know if the Holsum Grains bread he or she once bought is the same bread as Holsum Baking now shelves as Sunbeam Sandwich Wheat. Also, if Shipley or another Long licensee moves into the Pine Bluff area and markets \u201cHolsum\u201d products, such an event will likely undermine and confuse the association between Holsum Baking\u2019s products and the \u201cHolsum\u201d trademark in the mind of the public. The trial court found that Holsum Baking\u2019s loss was not only monetary but also included the unredeemable loss of goodwill. From our de novo review, we believe the record supports the trial court\u2019s finding of irreparable harm. Thus, we are unable to say that the chancellor abused his discretion in granting a preliminary injunction. Smith v. American Trucking Assn, 300 Ark. 594, 781 S.W.2d 3 (1989).\nLong next argues that Holsum Baking failed to show that it would likely prevail on the merits of any of its tortious claims. Of course, in order to justify a grant of preliminary injunction relief, a plaintiff must establish that it will likely prevail on the merits at trial. Smith v. Arkansas Trucking Ass\u2019n, 300 Ark. 594, 781 S.W.2d 3 (1989). Here, the trial court, in issuing its temporary restraining order and preliminary injunction, found that Holsum Baking will likely prevail in its efforts to establish both that Long and Shipley have impermissibly and fraudulently interfered with Holsum Baking\u2019s contractual relations with its suppliers. The court further found that Long and the other defendants had joined in combination to convert Holsum Baking\u2019s accumulated goodwill by disrupting Holsum Baking\u2019s business expectancy in its dealings with retail consumers.\nIn alleging that Long committed tortious interference with Holsum Baking\u2019s business relationships with its packaging suppliers, Holsum Baking had to show (1) the existence of a valid contractual relationship or a business expectancy, (2) knowledge of the relationship or expectancy on the part of the interferor, (3) intentional interference inducing or causing a breach of termination of the relationship or expectancy and (4) resultant damage to the party whose relationship or expectancy has been disrupted. Mid-South Beverages, Inc. v. Forrest City Grocery Co., 300 Ark. 204, 778 S.W.2d 218 (1989). Clearly, Holsum Baking had a business expectancy with its suppliers, Mobil, Princeton and James River, since it had been doing business with them, especially Mobil, for years. Equally clear is the fact that Long interfered with the relationship between Holsum Baking and these suppliers when Long contacted the suppliers, instructing them to stop selling \u201cHolsum\u201d trademark packaging to Holsum Baking. As previously discussed, Holsum Baking sustained damages as a result of Long\u2019s interference. From our review at this stage of the proceedings, we believe the record supports the trial court\u2019s finding that Holsum Baking will likely prevail on the merits of this underlying tortious claim.\nLong argues that it cannot be sued for tort of interference merely because it attempted to enforce its own contract with Mobile, Princeton and James River. In this regard, Long points to its agreement with these suppliers that reflects they will not sell trademark packaging which is confusingly similar to Long\u2019s trademark or is substantially similar to Long\u2019s packaging rights. Of course, Long\u2019s argument begs the very question and controversy that led to the filing of this lawsuit \u2014 whether Long has any claim to the \u201cHolsum\u201d mark in the territory served by Holsum Baking. Based upon the evidence presented below by Holsum Baking, Long has since abandoned such a right, and Holsum Baking has acquired it.\nAlthough briefed, we need not discuss the remaining counts alleged and argued in Holsum Baking\u2019s lawsuit since what we have considered is sufficient to uphold the trial court\u2019s decision to issue a preliminary injunction. A final hearing in this matter is yet to be held. At this point, Long has offered no witnesses of its own. Additional evidence and argument are sure to follow this interlocutory appeal. Suffice it to say, the trial court\u2019s issuance of its temporary restraining order and preliminary injunctive relief is amply supported by the law and the facts at this stage of the proceedings.\nFor the reasons stated above, we affirm.\nHolsum Baking was previously known as Arkansas Baking Company.\nShipley\u2019s and Holsum Bakery\u2019s marketing areas actually overlap in Conway, Arkansas.", "type": "majority", "author": "Tom Glaze, Justice." } ], "attorneys": [ "Ramsay, Bridgforth, Harrelson and Starling, by: Phillip A. Raley and William S. Roach, for appellant.", "Rose Law Firm, A Professional Association, by: Hillary Rodham Clinton and James H. Druff, for appellee." ], "corrections": "", "head_matter": "W.E. LONG CO. \u2014 Independent Bakers\u2019 Cooperative v. HOLSUM BAKING CO.\n91-125\n820 S.W.2d 440\nSupreme Court of Arkansas\nOpinion delivered November 25, 1991\nRamsay, Bridgforth, Harrelson and Starling, by: Phillip A. Raley and William S. Roach, for appellant.\nRose Law Firm, A Professional Association, by: Hillary Rodham Clinton and James H. Druff, for appellee." }, "file_name": "0345-01", "first_page_order": 371, "last_page_order": 379 }