Can the argument that third party users of a term are engaged in nominative fair use defeat a genericism claim?

Illinois Tamale Co. v. El-Greg, Inc., 2018 WL 1534971, No.
16 C 5387 (N.D. Ill. Mar. 29, 2018)
This case raises the interesting question of whether it’s
possible to distinguish nominative fair uses from generic uses when looking at online
comments/reporting; the jury may not get much guidance on how to do that!
Illinois Tamale owns a registered trademark for PIZZA PUFFS
for “a frozen, hand-held stuffed sandwich or dough pocket filled with meat,
cheese, and sauce,” among other PUFFS trademarks. El-Greg used theproduct names
“Pizza Pies (Puffs),” “Chili Cheese Puff,” and “Veggie Pizza Puff,” and
allegedly similar slogans and packaging. The court denied El-Greg’s motion for
summary judgment on genericism and Illinois Tamale’s motion for summary
judgment on fair use.
Illinois Tamale’s slogan is “MAKERS OF THE ‘ORIGINAL’ PIZZA
PUFFS.” Although the word “pizza” is disclaimed, Illinois Tamale owns an
incontestable registration for PIZZA PUFFS. On its website, Illinois Tamale
describes its Pizza Puff as “Pork Sausage and Mozzarella Cheese with our
Home-Style Pizza Sauce Wrapped [in] a Soft Flour Tortilla.”
El-Greg sells the “Pizza Pie,” a copy of Illinois Tamale’s
Pizza Puffs product, described in El-Greg’s advertising as “Cooked Pork, Real
Mozzarella Cheese, Homemade Pizza Sauce with our blend of fresh spices wrapped
in a flaky tortilla pocket.” The parties have sold their products to Restaurant
Depot, a restaurant supply firm, for many years; the products are sold
side-by-side. In 2010, El-Greg changed its Pizza Pie label, but only for
products sold at Restaurant Depot, now referring to the product as “PIZZA PIES
(PUFFS).” El-Greg’s modified label has a layout similar to Illinois Tamale’s
Pizza Puffs label, and it includes the slogan “MAKERS OF THE ‘ORIGINAL PUFFS.’”
The parties’ Restaurant Depot labels:
 

Defendant’s Pizza Pies (Puffs)

Plaintiff’s Pizza Puffs

The parties sell other
products, including
variations on the same stuffed sandwich / dough
pocket theme. Additional stuffed sandwich items from Illinois Tamale include
Sloppy Joe Puffs; Taco Puffs; Gyro Puff; Ham & Cheese Puff; Pepperoni Pizza
Puff; Beef Pizza Puff; 4-Cheese Pizza Puff; Ham, Cheese & Jalapeno Puff;
BBQ Pulled Pork Puff; Reuben Puff; and Breakfast Puff, with registrations for a
number of these products, including Taco Puffs and the Gyro Puff. El-Greg sells
a similar “Chili Cheese Puff” item and phyllo dough “Spinach Puff” hors
d’oeuvres.
Whether or not a term is generic is a question of fact, but
it may be resolved on summary judgment “if the evidence is so one-sided that
there can be no doubt about how the question should be answered.” Though the
Seventh Circuit hasn’t decided who has the burden of persuasion for a
registered mark, it has noted that “an incontestable registration is more like
a bursting-bubble presumption of non-generic-ness” than an “indomitable
presumption” overcome only by strong evidence of actual generic usage of the
term. The court put the burden of persuasion on genericness on the defendant for
incontestable trademarks.
El-Greg’s evidence of genericness was (1) the PTO’s apparent
approval of use of the term to denote a type of good (in six registrations not
currently in force); (2) manufacturers’ and restaurants’ use of the term to
denote a type of good (two other manufacturers and nearly 400 restaurants); (3)
use of the term to denote a type of good in about 100 recipes published online;
(4) dictionary definitions (Urban Dictionary and Wiktionary); (5) use of the
term to denote a type of good in newspapers and other publications (over 200
times); and (6) use of the term to denote a type of good in connection with
other products and services (just under 90 examples in TV shows/ads for other
goods or services).
Illinois Tamale disputed the relevance of much of this
evidence, arguing that it does not compete with restaurants because it sells
Pizza Puffs only to wholesalers and retailers. The court
disagreed—noncompetitors’ uses can be considered “where that use contributes to
consumers’ common understanding of the meaning of the term.”  However, Illinois Tamale’s argument that the
“pizza puff” item on menus and in news articles could be designating Illinois
Tamale’s product, rather than a category of food, was better aimed.  Where the menus didn’t designate the source
of the “pizza puff” product or indicate that it is homemade, they could be
referring specifically to Illinois Tamale’s Pizza Puffs brand, as could many of
the articles that reference pizza puffs. [Capitalization appears not to matter
to the court here.]  “That said, the vast
majority of the articles and menus cited make no reference to Illinois Tamale,
nor do they otherwise suggest that they are referring to ‘pizza puffs’ as a
brand rather than a type of food product.”
Here’s what caught my eye: in responsing to the “pizza
puffs” recipes, Illinois Tamale argued that there are also thousands of recipes
for a homemade version of Hot Pockets; this might just show that Hot Pockets
are a “well-known brand[ ] [that] home cooks want to replicate.” There was also
variation in the recipes—some produced pizza-themed foods that bore little
resemblance to the Pizza Puffs product at issue, allegedly indicating that
consumers don’t use the term “pizza puff” to denote any particular type of food
product. Such use didn’t preclude genericness, but it wasn’t helpful to El-Greg
either.
Illinois Tamale also showed that a number of similar stuffed
sandwich / filled dough pocket products on the market are not named or
described as “pizza puffs,” and El-Greg sold its competing product as “Pizza
Pies” for over 20 years before changing its Restaurant Depot label. The term
“pizza puff” does appear in any dictionaries other than the crowd-sourced ones above,
and definitions of the word “puff” don’t encompass Illinois Tamale’s product. Several
recent news articles expressly identify Illinois Tamale as the source of the
Pizza Puff brand.
Ultimately, the court denied summary judgment to both sides;
there was “significant evidence” of generic use, but no showing that there was
no other name for the product. Thus, a reasonable juror could find either
way.  Similarly, the court denied summary
judgment on the issue of whether Illinois Tamale owned a “Puffs” family of
marks.
So too with descriptive fair use. On factor 1 of the
statutory test, Illinois Tamale argued that El-Greg couldn’t prove it uses
“Pizza Pies (Puffs)” in a non-trademark way because it was featured prominently
on the product label, but that wasn’t dispositive. But a jury could accept
El-Greg’s argument that putting “(Puffs)” after Pizza Pies on the label was not
trademark use, because of its placement and the parentheses, and that El-Greg’s
logo on the box served as the trademark. 
On factor 2, Illinois Tamale argued that “puffs” wasn’t merely
descriptive of its product, because it wasn’t a light, fluffy pastry, and
El-Greg only used the word “puffs” on its label for Restaurant Depot, where the
parties compete side by side. But a jury could agree with El-Greg, and
examining attorneys at the PTO, that “puffs” is descriptive for the
product. 
On factor 3, Illinois Tamale argued that El-Greg lacked good
faith because El-Greg had been involved in other disputes with Illinois Tamale
relating to its use of the word “puffs,” and also because the rest of El-Greg’s
product label clearly demonstrated an intent to copy Illinois Tamale’s label,
which El-Greg admits to having seen prior to creating its own label. [They both look to me exactly like the generic informative labels you’d expect to find
in a food warehouse that isn’t consumer-facing.] El-Greg argued that it added
the “puffs” descriptor because Restaurant Depot complained that people were
opening the boxes to identify the contents, and that it designed its label in
accordance with Restaurant Depot’s requirements. Though Restaurant Depot didn’t
require adding the word “puffs” to the label, that didn’t mean that El-Greg didn’t
make the change to address the problem of customers opening boxes to identify
the product.  A defendant’s good faith
can be judged “only by inquiry into its subjective purpose.” El-Greg’s
awareness of Illinois Tamale’s “Pizza Puffs” trademark and label was
insufficient to prove bad faith, even though “the similarities between the
parties’ labels and slogans is striking and could quite possibly be interpreted
as evidence of bad faith.” 

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