Wm Wrigley Jr Company v. Swerve IP LLP

Filing 55

MEMORANDUM OPINION AND ORDER: Signed by the Honorable Harry D. Leinenweber on 9/28/2012:Mailed notice(wp, )

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

WM. WRIGLEY JR. COMPANY,
Plaintiff and
Counter-Defendant,

Case No. 11 C 9274
Hon. Harry D. Leinenweber

v.
SWERVE IP, LLC,
Defendant and
Counter-Claimant.

MEMORANDUM OPINION AND ORDER
Before the Court is Swerve IP’s Motion for a Preliminary
Injunction,
Hearing.

and

Wrigley’s

Motion

to

Strike

and

Motion

for

a

For the reasons contained herein, Wrigley’s Motions are

granted in part and denied in part, and Swerve’s Motion for a
Preliminary Injunction is continued pending a hearing.
I.

BACKGROUND

Defendant and Counter-Claimant Swerve IP, LLC (“Swerve IP”)
moves for a preliminary injunction, barring Plaintiff and CounterDefendant Wm. Wrigley Jr. Co. (“Wrigley”) from allegedly infringing
Swerve’s federally registered trademark.
Swerve IP holds a word mark (SWERVE), the name of its “allnatural” erythirtol-based non-sugar sweetener.
mark since 2001.

It has used the

The United States Patent and Trademark office

(the “USPTO”) registered it in September 2009. (Swerve IP acquired

the rights to the mark via assignment in 2011, evidently when the
sweetener part of the business changed hands.)

That registration

covers

Class

“natural

sweetener”

in

International

030

(which

includes a large number of food and candy products).
Swerve sweetener is sold (in one-pound bags and in single-use
packets) through online retailers such as Amazon.com and certain
physical stores like Whole Foods. Similar sweeteners are evidently
sold in convenience stores, and Swerve IP hopes to expand to those
stores in the near future.
commercial

manufacture

of

The sweetener is also used in the
some

food

products,

including

diet

pralines, but Swerve IP hopes to expand into more mainstream
markets, including chewing gum.

The sweetener is promoted via

social media sites such as Facebook and Twitter.
Wrigley manufactures and sells the popular “5” brand of
chewing gum.

There are a dozen different flavors, one of which is

called “Swerve” — because, Wrigley claims, it changes from a
“tangy” to a “sweet tropical” flavor when chewed.

The gum is not

“all-natural” but is sugar-free, and is marked as containing
natural and artificial flavors.

Wrigley markets 5 Gum as an

extreme sensory experience, targeting customers in their teens and
20s.

5 Gum is sold mainly in grocery and convenience stores,

though it is also available through Amazon.com.
In October 2010, Wrigley learned of Swerve IP’s mark.

That

month, it applied to register “swerve” in International Class 030,

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covering “chewing gum.”
all

appearances,

the

Swerve IP opposed the registration.
opposition

is

still

pending

before

By
the

Trademark Trial and Appeal Board (the “TTAB”).
In July 2011, Wrigley launched the Swerve flavor of 5 Gum.
The flavor is featured on its website and social media outlets, and
was advertised individually (but is no longer).

In late 2011,

Swerve IP sent Wrigley a cease-and-desist demand regarding the
Swerve mark. Evidently after settlement discussions arising out of
the TTAB proceeding failed, Wrigley filed a declaratory judgment
action before this Court regarding its use of the Swerve term.
Swerve IP has moved for a preliminary injunction.
II.

LEGAL STANDARD

“A party seeking a preliminary injunction is required to
demonstrate a likelihood of success on the merits, that it has no
adequate remedy at law, and that it will suffer irreparable harm if
the relief is not granted.”

Promatek Industries, Ltd. v. Equitrac

Corp., 300 F.3d 808, 811 (7th Cir. 2002).

If it meets that

standard, the court then also must consider whether and to what
extent the injunction would harm the enjoined party and/or the
public.

Id.

These factors are evaluated on a sliding scale; the

more likely a movant is to prevail on the merits, the less heavily
the balance of harms needs to tip in its favor. Id.

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III.

DISCUSSION

As this briefing is largely under seal the Court discusses the
evidence in only general terms.
A.

Motion to Strike

Wrigley has moved to strike portions of Swerve IP’s reply,
contending that it includes new evidence and new arguments which
could have been raised in the original motion.

Swerve IP contends

that its evidence and argument are in proper response to issues
raised in Wrigley’s response, and was obtained in discovery after
Swerve IP filed its motion.
Replies are not to be used to “patch holes” in the original
briefing.

E2Interactive, Inc. v. Blackhawk Network, Inc.¸ No. 09-

CV-629, 2010 WL 1981640, at *1 (W.D. Wis. 2010).

However, at this

stage, unlike summary judgment, the record is not necessarily
complete before the motion is filed.

Cf. Black v. TIC Inv. Corp.,

900 F.2d 112, 116 (7th Cir. 1990) (new evidence in a summary
judgment reply should not be considered, unless the other side had
a chance to respond).
“new”

facts

and

Accordingly, district courts permit some

arguments

in

replies,

if

they

are

directly

responsive to issues raised in a response and do not prejudice the
other side.

See, e.g., Wynn v. Express, LLC, No. 11 C 4588, 2012

WL 386716, at *3 (N.D. Ill. Feb. 6, 2012) (collective action
preliminary certification). The Court discusses each item of “new”
evidence as necessary below.
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B.

Motion for Hearing

Wrigley claims that the Court must hold a hearing, so that it
can confront the factual issues created by Swerve IP’s reply brief.
It claims that, because the Court opted to rule on the Motion to
Strike simultaneously with the Injunction Motion, Wrigley needs a
hearing “to be assured that the Court will not consider” the
challenged material in ruling on the injunction. Wrigley’s Request
for Hrg. 2.

Wrigley’s fear that the Court will rule against it on

the Motion to Strike is not a valid basis for holding a hearing.
See Promatek, 300 F.3d at 814 (preliminary injunction hearing is
required if the nonmoving party’s evidence raises genuine issues of
material fact.)

Furthermore, Wrigley’s refusal to detail all of

the fact issues that it believes exist, Request for Hrg. 2 n. 2, is
grossly insufficient.

As noted, the Court will not consider new

evidence and argument that would unfairly prejudice Wrigley.
Court

will

note

when

and

if

it

finds

questions

of

The
fact

necessitating a hearing.
C.

Preliminary Injunction

The parties agree that, at this stage, Swerve IP’s state law
claims

stand

or

fall

with

separately briefed them.

the

federal

claims,

and

have

not

The Court follows suit.

As noted above, a party seeking a preliminary junction must
demonstrate a likelihood of success on the merits.
F.3d at 811.

Promatek, 300

The parties appear to agree that irreparable injury
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may be presumed from trademark infringement.

The Seventh Circuit

arguably cast doubt on that proposition in a recent copyright case.
Flava Works, Inc. v. Gunter, --- F.3d ----, 2012 WL 3124826, at *1
(7th Cir. 2012) (citing eBay Inc. v. MercExchange, L.L.C., 547 U.S.
388, 392–93(2006)).

But cf. Am. Taxi Dispatch, Inc. v. Am. Metro

Taxi & Limo Co., 582 F.Supp.2d 999, 1005 (N.D. Ill. 2008) (applying
the presumption and citing, inter alia, eBay.).

Given that the

Court is ordering a limited hearing, below, the Court applies the
agreed standard to this motion, but will entertain argument as to
the impact of eBay at that time.
1.

Likelihood of Success on the Merits

At this initial phase, the Court need only find that Swerve IP
has a non-negligible likelihood of success on the merits. Ty, Inc.
v. Jones Grp., Inc., 237 F.3d 891, 896-97 (7th Cir. 2001).
prevail on the merits, Swerve IP must show that:

To

(1) it has a

protectable trademark, and (2) there is a likelihood of confusion.
Id. at 897.

This is a “reverse confusion” case – one in which a

junior user uses its size and market power to overwhelm a senior,
but smaller, mark user. See Custom Vehicles, Inc. v. Forest River,
Inc., 476 F.3d 481, 484 (7th Cir. 2007).
Wrigley contends that the Court need not conduct the ordinary
analysis, because the Swerve IP’s feared harm is not actionable as
trademark infringement.

Wrigley points to the deposition of Ivan

Echegarrua as establishing that the only harm Swerve IP fears is
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unrelated to the concern that its sweetener will be mistakenly
affiliated with Wrigley.

Without going into confidential details,

the Court finds the testimony is not inconsistent with the kind of
confusion and loss of goodwill remediable under the Lanham Act.
The testimony reflects a concern that Swerve gum’s flooding the
market would undermine the sweetener’s independent reputation for
being all-natural.

Such a fear, the Court finds, implicitly

reflects the assumption that the customer would connect the brands,
consistent with a reverse confusion theory.

Cf. Sands, Taylor &

Wood Co. v. Quaker Oats Co., 978 F.2d 947, 957 (7th Cir. 1992)
(noting that senior users are harmed when the “public comes to
assume that the senior user’s products are really the junior user’s
or that the former has become somehow connected to the latter.”).
a.
“The
ascending

law

Mark is entitled to Protection

recognizes

order

of

five

categories

distinctiveness:

suggestive, arbitrary, and fanciful.”

of

trademarks,

generic,

in

descriptive,

Packman v. Chicago Tribune

Co., 267 F.3d 628, 638 (7th Cir. 2001).

Swerve IP notes that the

mark’s

facie

federal

registration

is

prima

validity, see 15 U.S.C. § 1115(a).

evidence

of

its

Wrigley does not argue that

“swerve” is not protectable, but claims that it is weak because it
is an English word and “not as arbitrary or fanciful as [the names
of] sweeteners like SPLENDA or NUTRASWEET.”

Wrigley’s Opp’n to

Prelim.

from

Inj.

23.

The

Court

finds

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that

the

consumer

perspective,

the

mark

is arbitrary

suggestive as to the gum.
b.

as

to

the

sweetener,

but

It is therefore protectable.

Likelihood of Confusion

“Seven factors comprise the likelihood of confusion analysis:
(1) similarity between the marks in appearance and suggestion; (2)
similarity of the products; (3) area and manner of concurrent use;
(4) degree of care likely to be exercised by consumers; (5)
strength of the plaintiff’s mark; (6) actual confusion; and (7)
intent of the defendant to “palm off” his product as that of
another.”

Packman v. Chicago Tribune Co., 267 F.3d 628, 643 (7th

Cir. 2001).

No factor is dispositive, and which factors are most

important varies from case to case. Id.
“Reverse confusion” protects senior mark holders from the risk
of losing “the value of the trademark — its product identity,
corporate identity, control over its goodwill and reputation, and
ability to move into new markets” if the public comes to assume
that its product is that of, or connected with, the junior user.
Sands, Taylor & Wood Co., 978 F.2d at 957-58.

If it appears

extremely likely that the mark holder will soon enter the junior
holder’s field, this factor weighs heavily in favor of injunctive
relief.

Id. at 958.

Furthermore, the protection applies to

products “closely related” to the senior user’s product – that is,
products which the public might think came from, or were affiliated
with, the same source.

Id. at 958.
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i.

Similarity Between the Marks

Swerve IP argues that the word marks are identical.

Wrigley

argues that, as presented in the marketplace, they are quite
different:

Swerve IP uses “swerve,” in orange script, as a brand

name accompanied by the image of a multicolored bird.

5 Swerve

Gum, it notes, uses a different font and sleek, black, futuristic
packaging with a “pop” of color (mostly orange).

Furthermore, it

notes that it makes “swerve” subordinate to the 5 and Wrigley
marks, placing it where 5 Gum consumers know to look for the gum’s
flavor, not its sweetener.

Swerve IP rejoins that very few

consumers will make a side-by-side comparison, and that where one
word is particularly salient, it receives more weight.

See Ty,

Inc., 237 F.3d at 898-99.
The Court finds that Wrigley’s consistent association of
“swerve” with its other marks weighs in Swerve IP’s favor.
Taylor & Wood Co., 978 F.2d at 960.

Sands,

Nonetheless, as presented to

consumers, the marks are sufficiently different that this factor
tips slightly in Wrigley’s favor. The Court does not hold that the
marks are dissimilar as a matter of law.

Cf. Chattanoga Mfg., Inc.

v. Nike, Inc, 140 F.Supp.2d 917, 925 (N.D. Ill. 2001) (declining to
find marks dissimilar as a matter of where the words were nearly
identical, and the other markings may not have fully mitigated the
similarity.)

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ii.

Product Similarity

The key issue here as to product similarity is whether the
products are related enough that the public might attribute them
(in source or affiliation) to a single producer.
F.3d at 900.
customers’

Ty, Inc., 237

The parties have focused extensively on their

demographics;

although

that

information

is

not

an

intuitive fit with this factor, other courts have considered it,
and the Court will do likewise.

See Pathfinder Commc’ns Corp. v.

Midwest Commc’ns Co., 593 F.Supp. 281, 286 (D.C. Ind. 1984).
Swerve IP contends that the products are related, particularly
because of the “close relationship between sugar-free food products
and the non-sugar sweeteners (typically artificial) that such
products use.”

Mem. in Supp. of Prelim. Inj. 8.

Indeed, it

argues, Wrigley previously co-branded one of its gum brands with
the artificial sweetener NutraSweet.

It offers examples of other

sugar-free gum and candy makers similarly co-branding (by, it
claims, putting a sweetener’s trademark in the same area of the
package where Wrigley puts “swerve” on 5 Gum).

Furthermore, it

argues, the Lanham Act protects a mark holder’s ability to move
into a related field, and it plans to move Swerve sweetener further
into the mainstream gum and candy market.
Wrigley is correct that not all food products are related. It
argues that artificially flavored gum and all-natural sweeteners
are not related and that there is no evidence that consumers

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attribute them to a single source.
a separate factor.)

(Actual confusion, however, is

Wrigley makes no sweeteners, and knows of no

sweetener company that makes gum; it has not co-branded its gum
with a sweetener since the 1980s, and even then, the sweetener mark
was accompanied by “sweetened with —.”
It also claims that Wrigley and Swerve IP’s customer bases are
very different: the sweetener targets diabetic- and health-friendly
companies and women ages 38-60+, while 5 Gum is mass marketed,
targeting users in their teens and twenties, not to a healthconscious population set. 5 Gum, it claims, is underrepresented in
gum sales to adults 35 and over.
Wrigley

further

argues

no

mass-marketed

all-naturally

sweetened chewing gum exists, because all-natural sweeteners cannot
cost-effectively provide the intensity and duration of sweetness
that mass-market customers demand.

In addition to its expense and

short chewing life, erythritol “faces obstacles” to use in gum from
“numerous patents and patent applications” (some of which, it
seems, are Wrigley’s).

These obstacles, Wrigley claims, defeat

Swerve IP’s hope to enter the chewing gum market – and indeed,
after 10 years, the sweetener’s only candy application seems to be
one “regional” diet praline company.
In reply, Swerve IP argues that Wrigley’s relatedness argument
is

hypocritical,

given

that

it

previously

opposed

other

030

trademark registrations for fear of confusion with its own Citrus

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Mint gum flavor.

The Court declines to consider this new evidence

until Wrigley has a chance to respond in the hearing.
Swerve IP next argues that Wrigley is wrong to claim that
there is no evidence of overlap between gum and sweetener makers,
pointing

to

several

trademarks

(like

NutraSweet)

registered for both sweeteners and chewing gum.

which

are

The Court grants

the Motion to Strike Exhibits 12-15, however, because they do not
directly respond to Wrigley’s argument; such cross-registrations,
especially

without

evidence

of

their

use,

do

not

illuminate

consumer perceptions.
Swerve IP next attacks the claim that there are no massmarketed naturally sweetened chewing gums, arguing that Glee gum is
all-naturally sweetened and available in the same stores as Swerve
gum, and that Trident is sweetened with xylitol.

(This evidence

appears to be disputed – as to where Glee is sold and whether
Trident’s xyltiol is synthetic – and is presented for the first
time

in

reply;

the

Court

therefore

sets

it

aside

until

the

hearing.) Swerve also argues that Wrigley ignores a number of gums
which

advertise

their

however, is unclear.

all-natural

sweeteners;

their

market,

As to whether gums ever co-brand with

sweeteners, Swerve IP notes that it is currently negotiating with
a Wrigley competitor for possible Swerve sweetener use in, and cobranding with, a gum product.

Those talks, however, have not yet

progressed to discussing terms.

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Swerve also argues that the products’ customer groups overlap.
It notes that even if 5 Gum is under-represented in the adult
market, sales to that group are still substantial; therefore, even
if Swerve sweetener is generally marketed at retail to women
aged 38-60+, the customer bases overlap.
Wrigley

is

unlikely

to

be

prejudiced

The Court finds that
by

Swerve

IP’s

Reply

Exhibit 18, which responds to Wrigley’s argument and which Wrigley
produced in discovery; nonetheless, the Court takes Swerve IP’s
point, even without that exhibit.

This, however, does not throw

open the door to all demographic evidence; Swerve IP’s new evidence
regarding the target demographics of magazines in which Wrigley has
advertised (Exs. 18-24) is appropriately disregarded at this stage.
Finally, Swerve IP argues, any “incidental distinction between
the target demographics here fails” when one considers that Swerve
gum is displayed at the checkout lines of mass-market stores, and
is therefore exposed to all demographics.
Even having declined to consider nearly all of Swerve IP’s
evidence in reply, the Court finds that this factor favors Swerve
IP.

It appears that other manufacturers, and even Wrigley in the

1980s, have co-branded gum and candy products with sweeteners.
Accordingly, the public may well believe that Swerve sweetener has
somehow become affiliated with sugar-free Swerve gum. Furthermore,
Wrigley’s own evidence tacitly acknowledges that the customer
groups may overlap.

Therefore, while the Court reserves judgment

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on the final strength and weight of this factor until the hearing,
it currently favors Swerve.
iii.

Area and Manner of Concurrent Use

Several factors are relevant to whether to products are
related in terms of use, promotion, sales or distribution such that
their area and manner of concurrent use supports a finding of
confusion, including:

their geographical distribution areas, any

competition between them, whether they are sold in the same section
and type of store, and whether they are sold through the same
marketing channels.

See Ty, Inc., 237 F.3d at 900.

Swerve IP contends that both products are sold nationwide, and
through online retailers such as Amazon.com.

Furthermore, it

argues, Swerve gum is sold in the same physical stores, like
convenience stores, as other sugar substitutes.
through

same

social

media

channels

Both are marketed

(Facebook

and

Twitter).

Accordingly, it contends, the products will likely be encountered
by the same consumers.
Wrigley claims that being sold through the same online megaretailer hardly makes the products similar.

Wrigley emphasizes

that it sells chewing gum and candy, not their ingredients, and
does not sell goods in health or specialty stores (which comprise
most of Swerve IP’s retail presence).

It emphasizes that Swerve

Sweetener is carried in only a few “regional” grocery stores, and
that even if it gains wider distribution, it would likely still be

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in the baking or health food aisles.

Finally, Wrigley argues any

overlap is limited by Swerve IP’s “extreme regionality.”
In reply, Swerve IP stresses that the products are sold in the
same “specialty section” of Amazon.com.

Furthermore, it contends,

Wrigley admits that both products are sold in “grocery stores”; the
fact that the sweetener is not yet sold in the biggest chain stores
“is but a consequence of its size.”

Reply 14 n.9.

It stresses

that Swerve gum and some “natural sweeteners” may be sold in the
same general area of physical stores, and that even if they are
sold in different aisles, Swerve gum gains wide exposure by being
sold in checkout aisles.

Finally, it contends that even if Swerve

gum is no longer advertised, it has already reached a high market
saturation.
The Court agrees that being sold through Amazon.com, or
marketed through social media, is hardly unique, and that a very
small portion of Wrigley’s sales are online.

Though neither party

discusses it as such, however, the Court notes that online stores
operate in part through keyword searches, which seems to increase
the likelihood that customers will encounter the products and
promotional materials together.

Furthermore, Wrigley appears to

concede

grocery

that

a

few

“regional”

stores

products, though where in the store is unclear.

may

sell

both

This factor is too

close to weigh heavily in favor of either party, but slightly
favors Swerve IP.

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iv.

Degree of Care Exercised by Consumers

The level of care exercised by consumers is a significant
factor in assessing the likelihood of confusion.

Rust Env’t &

Infrastructure, Inc. v. Teunissen, 131 F.3d 1210, 1217 (7th Cir.
1997). Although in forward confusion cases both parties’ customers
are relevant, see CAE, Inc. v. Clean Air Eng’g, Inc., 267 F.3d 660,
682-83 (7th Cir. 2001), the Court finds persuasive those cases
which find the senior user’s customers more important in reverse
confusion

cases.

Matrix

Motor

Co.,

Inc.

v.

Toyota

Jidosha

Kabushiki Kaisha, 290 F.Supp.2d 1083, 1095 (C.D. Cal. 2003).

The

less expensive the product, the less care consumers are expected to
use.

CAE, Inc., 267 F.3d at 682-83.
Although Swerve may be more expensive than some other sugar

substitutes, the Court agrees that both products are cheap enough
not to trigger a great deal of consumer scrutiny.

Wrigley further

objects, however, that Swerve IP conceded that its customers – like
most consumers of health food and diet-related products – shop
somewhat carefully.
In reply, Swerve IP contends that “[i]t is precisely because
[Swerve IP’s] customers care about the type of sweeteners that are
in the products they buy that the loss of control over the mark is
so important.

Consumers who care about natural ingredients are

more likely to draw upon their recollections about the ingredients
than consumers who are unconcerned with an artificial sweetener.”
- 16 -

Reply 15.

It is unclear, however, how that leads to confusion –

whether, for example, consumers will see the Swerve mark on the
front of the gum package and notice the lack of natural sweeteners,
or will be drawn initially to swerve gum by the association with a
natural sweetener.

Cf. Promatek, 300 F.3d at 812-13 (explaining

initial interest confusion).

(Absent any other discussion of

initial interest confusion, the Court presumes former.)

In any

event, given the lack of dispute that Swerve IP’s customers - the
more relevant group here – use some degree of care, this factor
tips slightly in favor of Wrigley.
Swerve IP further argues that it is currently negotiating with
a Wrigley competitor, and once swerve sweetener is introduced as an
ingredient in mass market gums and candies, any distinction between
the parties’

customers

will

disappear.

This

motion

preliminary, rather than permanent, injunction, however.

seeks a
Absent

any indication that such production is likely during the pendency
of this case, the Court concludes that it need not factor in that
scenario at this time.
v.
The

Strength of Complainant’s mark

“strength”

of

a

trademark

refers

to

the

mark’s

distinctiveness and ability or tendency to identify the goods sold
under that mark as originating from a particular source.
Taylor & Wood Co., 978 F.2d at 959.

In reverse confusion cases,

the focus is on the junior use of the mark. Id.
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Sands,

If the marks are

identical and the products closely related, this factor matters
little, but this Court has already found that the marks are
presented differently to the public.
noted,

that

the

mark

is

The Court has also found, as

arbitrary

as

to

the

sweetener,

and

suggestive as to the gum.
Swerve IP argues that the mark is commercially strong because
Wrigley, a leading gum manufacturer, has promoted 5 Gum nationwide.
Wrigley objects that the Swerve gum mark has not reached a market
saturation sufficient to create reverse confusion.

It offers no

authority for what that point is, but stresses that it does not
now,

and

does

specifically.

not

plan

to,

advertise

the

Swerve

flavor

Wrigley is skeptical that the Swerve flavor has

unique goodwill, and that gum flavors (as opposed to brands) become
famous.

It emphasizes that the flavor name is always subordinate

to the Wrigley and 5 Gum marks in packaging and past advertising
(as noted above, however, this does little to help its case).
Swerve IP rejoins that, Wrigley’s own evidence makes 5 Gum the
third most popular in the country (though, the Court notes, that
includes all 5 Gum flavors). The Court declines to consider Swerve
IP’s newly-offered Exhibits 19 and 26, but finds adequate support
for

5

Gum’s

large

market

presence,

and

the

swerve

flavor’s

notoriety within that brand (see, e.g., the February 2012 Swerve
advertisement in Rolling Stone) in the previous evidence. Although

- 18 -

Swerve gum may not dominate the chewing gum market, this factor
weighs marginally in Swerve IP’s favor.
vi.

Actual Confusion

There appears to be no dispute that there is no evidence of
actual confusion.

Although actual confusion is not necessary, see

Id. at 960, this factor weighs in favor of Wrigley.
vii.
Intent
(Whether

is

irrelevant

Wrigley

knowingly

in

Intent
a

reverse

ignored

confusion case.

Swerve

relevant – just in balancing the harms.

IP’s

trademark

Id.
is

Ideal Indus. Inc. v.

Gardner Bender, Inc., 612 F.2d 1018, 1026 (7th Cir. 1979)).
Although many of these factors present close questions and not
all of them favor Swerve IP, the Court concludes that Swerve IP has
shown a better than negligible chance of prevailing.
2.

No Adequate Remedy at Law/Irreparable Harm

Swerve IP also must prove that it has no adequate remedy at
law,

and

will

suffer

irreparable

Promatek, 300 F.3d at 813.

harm

absent

an

injunction.

The parties agree that there is a

presumption of irreparable damages in trademark infringement cases.
The debate is whether Wrigley overcame that presumption.
Wrigley

argues

that,

by

its

ever-increasing

settlement

demands, Swerve IP admits that any harm to it is compensable.
Wrigley claims to offer the settlement evidence to prove Swerve
IP’s financial motive for this injunction, not to prove that
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confusion is unlikely.

The Court nonetheless finds the evidence

barred by FED. R. EVID. 408, which excludes evidence of settlement
negotiations offered “to prove or disprove the validity or amount
of a disputed claim” or to impeach a witness.

Although this

situation is an awkward fit with the Rule’s language, the Rule is
to be interpreted to further its purpose of encouraging settlement.
Bankcard Am., Inc. v. Universal Bancard Sys., Inc., 203 F.3d 477,
484 (7th Cir. 2000).
Wrigley essentially asks the Court to use the settlement
evidence to reject the type, rather than the “amount,” of claimed
damages.

Nonetheless, the Court finds that it would better serve

the purpose of the Rule to exclude this evidence than to allow any
settlement talks involving financial consideration to undermine a
claim for injunctive relief.

That the talks originated around the

TTAB proceeding does not change the result. The TTAB proceeding is
closely tied to this one, and the Court is aware of no strong
policy favoring admission under these circumstances.

Cf. Zurich

Am. Ins. Co. v. Watts Indus., Inc., 417 F.3d 682, 690 (7th Cir.
2005) (finding that the policy behind Rule 408 was not thwarted “in
the instant case” by admitting a letter from a “not totally
unrelated” case).
Apart from the settlement evidence, Wrigley argues the Swerve
IP peddles the sweetener to food manufacturers, on a branded or
unbranded basis, regardless of whether the end product would be (or

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is) all natural.

It has thus, Wrigley claims, put its reputation

and goodwill up for sale.

The Court agrees with Swerve IP,

however, that there is a critical distinction between licensing an
all-natural sweetener for use in a product that is not all-natural,
and associating the brand with a product which uses only artificial
sweeteners.
Wrigley’s cited cases do not support it.

The discussion to

which it cites in 20th Century Fox Film Corp. v. Marvel Enter.,
Inc.,

155

F.Supp.2d

1,

43-44

(S.D.N.Y.

injunction on a breach of contract claim.

2001)

addressed

an

In Johnson Pub. Co.,

Inc. v. Willitts Designs Intern., Inc., No. 98 C 2653, 1998 WL
341618, at *8 (N.D. Ill. June 22, 1998), the court noted that the
presumption was sufficient to establish irreparable injury, despite
finding the case weakened by the moving party’s delay in seeking
relief.

Although Wrigley suggests some delay, see Opp’n at 7, it

makes no concerted argument to that end, or about being lulled into
a false sense of security.

See Ty, Inc., 237 F.3d at 902-03.

Accordingly, assuming that the presumption of irreparable harm
applies, Wrigley has failed to overcome it.
3.

Harm to Wrigley

Wrigley contends that it would be irreparably harmed both
financially and intangibly by an injunction.
immediate

financial

loss

would

exceed

$2

It contends that its
million,

including

packaged inventory, “raw materials, lost sales, and rebranding
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costs.”

Wrigley

Opp’n

14.

Furthermore,

it

contends,

its

relationships with distributors and retailers, including its share
of shelf space, would irreparably suffer.
Wrigley’s supporting evidence, however, is very general, and
plays coy regarding important issues such as the breakdown of these
financial harms, the projected life of the Swerve flavor, and what
if any alternate products are in development.

Furthermore, there

appears to conflicting evidence regarding whether the Swerve flavor
could

be

replaced

in

stores

by

another

Wrigley

product.

Accordingly, the Court finds that the question of Wrigley’s likely
harm, and therefore the balancing of the harms to the respective
parties (and the public), and setting the amount of any necessary
bond, requires a hearing.
IV.

CONCLUSION

For the reasons stated herein, Wrigley’s Motions to Strike and
for a Hearing are granted in part and denied in part.

Swerve IP’s

Motion for a Preliminary Injunction is continued, pending a hearing
on the issues identified herein.
IT IS SO ORDERED.

Harry D. Leinenweber, Judge
United States District Court
DATE:9/28/2012
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