The Candy Wars Part I: Reese’s v. Peanut Butter M&M’s in a Trade Dress Showdown

M&Ms by Czapp Arpad

The Candy Wars:  Background

Mars Inc. (“Mars”) is an American manufacturer in the food, candy, pet care, and pet services industry.  [1].  Some of Mars’ most popular brands include [Uncle] Ben’s Original Ready Rice, the pet food brands Pedigree and Iams, and of course, several candy brands including M&M’s, Snickers, Orbit, and Skittles.  [2].  The company’s roots stretch all the way back to 1911, when Mars family patriarch and founder Frank C. Mars began selling butter cream candy out of his kitchen.  [3]. 

The Hershey Company (“Hershey’s”) has an equally rich American history; the company was founded in 1894 by founder and family patriarch Milton Hershey, with the launch of the famous Hershey’s milk chocolate bar coming shortly thereafter in 1900.  [4].  Hershey’s is best known for their chocolate candy products, including Hershey’s Milk Chocolate Bar, Hershey’s kisses, Reese’s, KitKat, and Almond Joy.  [5].  However, the company also dabbles in the food industry, and owns the snack brands Skinny Pop Popcorn and Dot’s Homestyle Pretzels. [6].

While the relationship between Mars and Hershey’s today is rather litigious, it was not always that way.  Back in the 1920s, a part of Hershey’s business was selling chocolate coatings and flavorings to other food manufacturers.  [7].  One such business was Nabisco, who used Hershey’s chocolate to flavor its Oreo cookies.  [8].  Mars was another, who used different variants of Hershey’s chocolate for its candy bars, including Milky Way and Snickers.  [9].  In fact, at one point, Mars was one of Hershey’s biggest clients, buying up to $7.5 million in chocolate annually.  [10].  Frank Mars maintained a friendly, and lucrative, relationship with Milton Hershey until Frank’s death in 1933.  [11].

“Hersheys everywhere” by loop_oh is licensed under CC BY-NC-SA 2.0.

The relationship between the two companies continued into the next generation.  In the summer of 1939, Forrest Mars, son of Frank Mars, approached William Murrie with a business opportunity.  [12].  William Murrie was the President of Hershey’s from 1908 to 1947 and was Milton Hershey’s lifelong friend and confidant until Milton’s death in 1945.  [13].  During the meeting, Forrest pulled a dozen brightly colored chocolate candies from his pocket and showed them to William, explaining the candies had been in his pocket all day, but hadn’t melted into a mess.  [14].  Forrest explained that he wanted to team up with one of William’s sons, Bruce Murrie, to start a new business venture to make and sell these new non-melting candies all over the world.  [15].  Forrest already had the warehouse and the equipment, all he needed was a partner and the ingredients: sugar and of course, chocolate.  [16]. 

To sweeten the deal, Forrest proposed that the company, and the candies themselves, be named after their joint business venture: M&M’s, for Forrest Mars and Bruce Murie.  [17].  Bruce agreed to go into business with Forrest, and in the spring of 1940, M&M Ltd. opened for business and it appeared that Mars and Hershey’s were poised to continue their amiable and profitable business relationship for years to come.  [18]. 

However, Bruce Murrie struggled mightily working with Forrest Mars because of his demeanor.  [19].  Their business relationship soured over the passing years, and in the summer of 1949, things came to a head when Bruce confronted Forrest demanding he treat him with some respect.  [20].  The confrontation delved into a screaming match and eventually ended with a brawl between the two men.  [21].  Bruce resigned and Forrest bought out Bruce’s minority stake, putting a nail in the coffin of Mars and Hershey’s relationship.  [22]. 

Mars Eyes Hershey’s Peanut Butter Success

Bowl of chocolate candy by pixabay.

Fast forwarding to 1988, Ronald Reagan is president, “Faith” by George Michael is the number one song on the Billboard Hot 100, and for the first time in its history, Mars Inc. is no longer the top candy manufacturer in the United States.  [23].  Hershey’s, now Mars’ biggest competitor, overtook them for the first-place ranking after acquiring Peter Paul, which made the successful Almond Joy and Mounds candies.  [24]. 

In November of that year, the top brass at Mars greenlit a proposal to launch a peanut butter M&M’s variety.  [25].  The launch of a peanut butter candy by Mars was significant because the company had only one other peanut butter product, the PB Max, which was only on the market for two years from 1990 to 1992.  [26].  John Mars and Forrest Mars Jr., the sons of Forrest Mars, were raised in England and did not grow up eating peanut butter, which is heavily disfavored on that side of the pond.  [27]. 

The Mars brothers evidently softened on their anti-peanut butter stance; the 1988 proposal read in part that the new “[Peanut Butter M&M’s] marries the benefits of two best selling brands - ‘M&M’s’ Chocolate Candies and Reese's Peanut Butter Cups - to grow M&M/Mars share of the chocolate candy market.”  [28]. Reese’s was, and still is, the most popular candy brand of Hershey’s.  [29]. 

From 1988 to 1997, Mars experimented with multiple different packaging designs and marketing strategies for its new Peanut Butter M&M’s.  [30].  During this time, Hershey’s objected to many of Mars’ proposed packaging designs, claiming they were too close to Hershey’s federally registered trade dress for its Reese’s candy, and the two parties engaged in on-again-off-again negotiations during that time.  [31].  Eventually, the negotiations broke down, and on November 10, 1997, Hershey filed a lawsuit against Mars, alleging that the trade dress for its Peanut Butter M&M’s “dilutes by blurring the Reese's trade dress”.   [32].

Background: Trade Dress & Dilution

“Hershey's Kisses and Cherry Cordial Creme Kisses” by IvoShandor is licensed under CC BY-SA 3.0.

Recall that trademarks are “word[s], name[s], symbol[s], or device[s], or any combination thereof” which are used to identify the source of goods.  [33].  Trade dress is a particular type of trademark, in that it is also used to identify the source of goods.  [34].  However, instead of being a logo, slogan, or a color, a trade dress is the “total image of a product and may include features such as size, shape, color or color combinations, texture, graphics, or even particular sales techniques” (emphasis added). [35].  Trade dress protection does not extend to functional features of a product, which are features that are “essential to the use or purpose of the device or when it affects the cost or quality of the device.”  [36].  This ensures that competitors aren’t put at an unfair disadvantage when a trade dress is registered with the U.S. Patent and Trademark Office.  [37]. 

In short, trade dress is a type of trademark which protects one or more non-functional features of an “image” of a product that is used to identify the source of that product. 

The Lanham Act, or the Trademark Act, provides trademark owners different causes of action for asserting their trademark registration against infringers.  One cause of action is dilution.  When a trademark owner alleges dilution, they are claiming that another’s use of a mark, which is the same or similar to the registered trademark, is causing their registered trademark to lose its distinctiveness.  [38].  A unique aspect of a dilution claim is that it does not consider whether the other person’s use of the same or similar mark is actually causing confusion or would cause confusion amongst consumers.  [39].  What that means is a trademark owner for SNAZZY FRAZZLE for a candy bar can sue to stop a medical device company from selling MRI machines under the name SNAZZY FRAZZLE, even if consumers don’t believe that the same company that produces candy bars makes MRI machines.  That is to say, the dilution claim does not prevent a likelihood of confusion amongst consumers, but rather it is prevents the fame of a trademark or trade dress from being diluted by another’s use.    

With that in mind, we return to our case! 

Hershey Foods Corp. v. Mars, Inc.

According to the lawsuit, the Peanut Butter M&M’s trade dress:

“[U]ses the same orange background as used by Hershey in its Reese's trade dress, a brown M&M's logo slightly off center to the left of the package, cascading M&M's candies on the right of the package and a tannish yellow lozenge keylined in brown containing the words "Peanut Butter" in brown.” [40].

A 1993 advertisement for Peanut Butter M&M’s showing the Peanut Butter Trade Dress at issue in this case. https://www.youtube.com/watch?v=QxKggTSUpgA (Jeff J. Marks)

At the time of the lawsuit, Hershey had a registered trademark, Reg. No. 1,574,070, for the “complete” Reese’s trade dress, which was:

“[A] particular shade of background orange, the Reese's logo . . . in a slanted handwritten style in bright yellow with . . . the yellow letters outlined in brown[] and a brown bar with a sawtoothed top (imitating in two dimensions the top edge of a peanut butter cup) directly underneath the logo with the bar containing the message in bright yellow letters ‘2 peanut butter cups.’”  [41]. 

A Reese’s candy wrapper from the late 1980s to early 1990s showing the Reese’s Trade Dress, courtesy of Jason Liebig.

However, Hershey claimed that certain parts of the complete Reese’s trade dress were so famous and so distinctive, those parts were also entitled to separate trade dress protection (the “abbreviated” trade dress).  [42].  The abbreviated trade dress “consists of a unique shade of orange as the principal element in combination with and in juxtaposition to the colors yellow and brown, in an arrangement creating a distinctive overall appearance.”  [43].  Unsurprisingly, Hershey’s proposed abbreviated trade dress, if accepted to be a valid trade dress by the court, would cover the above-defined Peanut Butter M&M’s Trade Dress.

The question before the Court was whether Mars’ Peanut Butter M&M trade dress diluted Hershey’s abbreviated trade dress.  [44].  A claim of dilution is defined under the Lanham Act to be “the lessening of the capacity of a famous mark to identify and distinguish goods or services” (emphasis added) [45].  Thus, in order for Hershey to successfully argue that Mars’ Peanut Butter M&M trade dress is diluting its abbreviated trade dress, Hershey must first establish that its abbreviated trade dress is famous. 

Unfortunately for Hershey’s, the court found that the abbreviated trade dress “does not seem worthy of protection as famous,” and therefore concluded Hershey’s had failed to establish a claim of dilution under the Lanham Act.  [46].  Mars argued that there were several products in the food industry that use a trade dress similar to the abbreviated trade dress, and the court agreed.  [47].  Why is this relevant?  Because if a large number of third-parties are all using a similar design, then that tends to show that a design is indistinct, not famous.  [48]. 

Thus, in the first battle of the Candy Wars, Mars took home the W.  But there are many more intellectual property disputes to cover between Mars and Hershey’s.  Stay tuned for the next installment in the Candy Wars series!

Sources

[1] “All About Mars” Mars, Incorporated and its Affiliates. Accessed December 4, 2024. <https://www.mars.com/about/>.

[2] “Our Brands” Mars, Incorporated and its Affiliates. Accessed December 4, 2024. <https://www.mars.com/our-brands>.

[3] “Mars, Incorporated: History in the Making” Mars, Incorporated and its Affiliates. Accessed December 4, 2024. <https://www.mars.com/about/history>.

[4] “A History of Goodness” The Hershey Company. Accessed December 2, 2024. <https://www.thehersheycompany.com/en_us/home/about-us/the-company/history.html>.

[5] “Choose your Moment” The Hershey Company. Accessed December 2, 2024. <https://www.thehersheycompany.com/en_us/home/brands.html>.

[6] Id.

[7] Joel Glenn Brenner. The Emperors of Chocolate 28 (1998).

[8] Id.

[9] Id. at 58-59.

[10] “Frank C. Mars” Candy Hall of Fame. Accessed November 16, 2024. <https://candyhalloffame.org/inductee/frank-c-mars/>.

[11] Brenner, supra note 7 at 57-59; see Candy Hall of Fame, supra note 10.

[12] Brenner, supra note 7 at 149

[13] Id. at 72-73, 153-55

[14] Id. at 151.

[15] Id.

[16] Id.

[17] Id.

[18] Id. at 152.

[19] Id. at 148, 152, 160.

[20] Id. at 160.

[21] Id. at 160-161.

[22] Id. at 161.

[23] Hershey Foods Corp. v. Mars, Inc., 998 F. Supp. 500, 505 (M.D. Pa. 1998).

[24] Id.; Brenner, supra note 7 at 32; See Cara Baruzzi. Hershey's to close Naugatuck plant. 26 April 2007. <https://www.middletownpress.com/news/article/Hershey-s-to-close-Naugatuck-plant-11887049.php>.

[25] Hershey Foods Corp., supra note 23 at 506.

[26] Brenner, supra note 7 at 39.

[27] Id.

[28] Hershey Foods Corp., supra note 23 at 506.

[29] See Camille Fine. Each state's favorite (and least-popular) Halloween candy: From Candy Corn to Kit Kats. 10 October 2023. <https://www.usatoday.com/story/news/nation/2023/10/10/most-popular-halloween-candy/71120980007/>.

[30] Hershey Foods Corp., supra note 23 at 506-509.

[31] Id.

[32] Id. at 502, 508.

[33] 15 U.S.C. § 1127

[34] CTB, Inc. v. Hog Slat, Inc., 954 F.3d 647, 656 (4th Cir. 2020).

[35] Id. (quoting Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 764 n.1, 112 S. Ct. 2753, 120 L. Ed. 2d 615 (1992)) (quotations and citations omitted) (emphasis added).

[36] Pocket Plus, LLC v. Pike Brands, LLC, 53 F.4th 425, 432 (8th Cir. 2022) (quoting TrafFix Devices, Inc. v. Mktg. Displays, Inc., 532 U.S. 23, 33, 121 S. Ct. 1255, 149 L. Ed. 2d 164 (2001)).

[37] Id. at 433.

[38] 1 Gilson on Trademarks § 2A.06 (2024).

[39] Id.

[40] Hershey Foods Corp., supra note 23 at 508.

[41] Id. at 509, 513; see Trademark Status and Document Retrieval (TSDR) for U.S. Registration No. 1,574,070.

[42] Hershey Foods Corp., supra note 23 at 513-14.

[43] Id. at 514.

[44] Id. at 502.

[45] 15 U.S.C. § 1127.

[46] Hershey Foods Corp., supra note 23 at 517-18.

[47] Id. at 517.

[48] Id.