Addressing the issue of the effectiveness of disclaimers, the U.S. Court of Appeals for the Second Circuit held that a junior party could be enjoined from referring to Weight Watcher’s "Points" trademark in its packaging of frozen food unless it could prove the effectiveness of its disclaimer in avoiding a likelihood of confusion. Weight Watchers International, Inc. v. Luigino’s, Inc., Case No. 04-4103-CV (Second Cir. Sept. 12, 2005) (Kaplan, D.J., sitting by designation).
Weight Watchers registered the marks "Points" and "Winning Points" in connection with its diet program wherein certain foods are assigned point values based on calorie and fat content. Luigino’s markets frozen meals that prominently display a point value related to the fat and calorie content of the product. Next to the word "Points" on the front of the package, Luigino’s puts an asterisk that corresponds to a disclaimer on the back of the package identifying Weight Watchers as the owner of the "Points" trademark.
Weight Watchers sought a preliminary injunction against Luigino’s use of the packaging. Finding a likelihood of confusion, the district court granted the injunction but held that Luigino’s was entitled to convey factual information regarding the point value of its product as long as it stated that Luigino’s calculated the values.
The new packaging stated that Luigino’s calculated the point value. Otherwise, the packaging remained the same. Weight Watchers objected that the new packaging did not overcome the likelihood confusion and moved the district court to modify the injunction to include the new packaging. The district court denied the motion except for requiring the disclaimer on the back to be in larger print. Weight Watchers appealed.
The Second Circuit vacated and remanded. The Court held that since the district court had already found a likelihood of confusion in the packaging and the new packaging was "very similar" to the initial packaging, there was a "substantial" likelihood of confusion that required Luigino’s to establish the disclaimer’s effectiveness in curing the confusion. Under these circumstances, the Court held the district court had not properly shifted the burden to Luigino’s to prove the effectiveness of the disclaimer. Luigino’s having not sustained its burden, the Court held the lower court lacked a sufficient basis to deny the motion to modify. The Court further held that Weight Watchers’ one-month delay in moving to modify the injunction did not rebut the presumption that it had suffered irreparable harm from the likelihood of confusion caused by Luigino’s packaging.
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