United States: Marshmallow Justice: 10 Tales Of Legal Fluff And Other Stuff

Last Updated: September 29 2015
Article by David A. Kluft

Just about one hundred years ago, Archibald Query of Somerville, Massachusetts invented the first commercial marshmallow cream, which he pedaled door-to-door in Union Square. Around 1917, he sold the recipe for $500 to two candy makers in Lynn who had just returned from World War I, and their company (Durkee-Mower) still makes Marshmallow Fluff today. In 2006, Union Square boosters began celebrating Query's achievement with the Fluff Festival, a day of activities literally and figuratively stuffed with marshmallows. In honor of the 10th annual Fluff Festival, which takes place on Saturday, September 26, 2015, we made good use of our state of the art legal research facilities to track down 10 interesting (to us) legal stories about marshmallows. Enjoy.

1. Marshmallow Dainties and Nazis have at least one thing in common. Around 1898, the National Biscuit Company (Nabisco) revolutionized the baked goods market by selling directly to consumers small amounts of treats, including Marshmallow Dainties, sealed in wax paper and packaged in boxes marked with the Nabisco red and white "in-er-seal" logo, which purportedly was derived from pagan and early Christian religious symbolism signifying spiritual triumph over the material world. In 1907, Portland-based Pacific Coast Biscuit Company started selling "Marshmallow Dainties" and other products in similar containers with another religiously inspired red and white logo: the swastika. In National Biscuit v. Pacific Coast Biscuit, Nabisco brought suit in the New Jersey Court of Chancery for trademark infringement and unfair competition, and the Court issued an injunction against further copycat packaging by Pacific Coast. In the 1920's, the Nazi party first began using the swastika symbol, but Pacific Coast was spared having to decide whether to abandon its mark as a show of patriotism, because in 1930 it was purchased by and absorbed into Nabisco.

2. The Marshmallow Diet is not endorsed by the City of New York. In 1984, food writer Carlson Wade sold an article to the GLOBE tabloid entitled "The Marshmallow Diet," which boasted of an "amazing new diet based on marshmallows," which are "jam-packed with appetite-slashing carbohydrates and proteins." In formulating the diet, Wade took an unrelated diet previously endorsed by the New York City Department of Health, substituted marshmallows for various ingredients, and then interviewed experts, including Diane Nelson, a New York City staff nutritionist. The final article stated that Nelson was "instrumental in preparing this marshmallow-based diet to help GLOBE readers lose up to a pound a day."Nelson, allegedly horrified to be professionally associated with Wade's made-up diet, sued the GLOBE (but not Wade) for defamation. In Nelson v. Globe, the Southern District of New York held that Nelson was not a public figure, and therefore the standard of fault applicable to the claim was "gross irresponsibility," not the higher bar of constitutional malice. However, summary judgment nevertheless was granted against Nelson's claim because any gross irresponsibility by Wade – an independent contractor – could not be imputed to the GLOBE.

3. Double-stuff s'mores are obvious. In 2013, inventor Michale J. Ure applied to patent a method for making an "incomparably delicious and kid-friendly campfire" confection that involved "skewering a first marshmallow; skewering one or more chocolate pieces having preformed indentations . . . skewering a second marshmallow," then roasting the combination and sticking it in between two graham crackers. The crux of the idea was that "traditional campfire s'mores are sub-par for the reason that the chocolate usually remains unmelted," whereas Ure's invention reconfigured the chocolate bar to produce "Smorsels," chocolate pieces better-suited to the process. There was already a registered patent related to making s'mores with heated chocolate, but Ure argued that his patent was different because it involved two marshmallows. In 2015, the Patent Trial and Appeal Board found that the addition of a second marshmallow was obvious, absent unexpected results (none were shown), and affirmed the rejection of the application.

4. Fishermen are attracted to marshmallows; fish not so much. Brown Bear Baits purchased marshmallows in bulk, added mineral oil, dusted them with a neon coloring, and then sold them to anglers as marshmallow-shaped bait. Why did Brown Bear retain the marshmallow shape? The Treasury Department determined that this shape resembled the fish pellets used by certain fisheries to feed young trout; therefore, the bait was "processed so as to resemble [an] article considered more attractive to fish," and it was subject to a tax imposed on "artificial bait." Brown Bear argued, on the contrary, that the marshmallow shape was retained because it appealed to the fishermen, not to the fish. In 1994 the Court of Federal Claims, in Brown Bear Baits v. United States, agreed with Brown Bear that the product should not be taxed as artificial bait.

5. Size doesn't matter . . . anymore . . . in New York . . . for tax purposes. Speaking of taxes, the tax treatment of marshmallows in New York was once cited as a prime example of hypertechnical regulatory overreach or, as the New York Times reported, "a notorious symbol of all that was wrong with New York's ample bureaucracy." New York tax law used size as a proxy for function, so mini-marshmallows were tax exempt as a baking item, while large regular-sized marshmallows were taxed as a candy, prompting cries of "you can't make this stuff up" from journalists, shopkeepers and politicians alike. In 1998, after years of outrage, the New York legislature finally eliminated this "marshmallow discrimination." All marshmallows "of any size" are now exempt, perhaps a boon to small businesses, but no doubt a tragedy for demagogues who have one less thing to get indignant about.

6. Marshmallow Peeps are not likely to be confused with live puppies. In 1993, Just Born, Inc., the maker of Marshmallow Peeps, brought a state trademark dilution claim against the Farnam Companies, which marketed JUST BORN milk replacement products for infant pets. In response to Just Born's motion for an injunction, Farnam argued that the candy company would never be able to show secondary meaning in the animal feed industry, and therefore had no likelihood of success. Just Born argued that it need not show secondary meaning because its mark was arbitrary, not descriptive. The Eastern District of Pennsylvania refused to enjoin Farnam on two grounds. First, the Court found that Just Born didn't use its name prominently on its candy packaging, so the JUST BORN mark (as opposed to the clearly famous names of the company's candies) was not strong enough to be diluted. Second, the Court found that JUST BORN was in fact probably descriptive: the name described the fact that candy maker Sam Born had broken away from a business partner to found the company, so he called it "Just Born" – get it? Interestingly, the company's website contains a completely different – but just as plausible – explanation of the origin of the name.

7. Nuclear Marshmallows are synonymous with passive bad faith. The ICANN Uniform Dispute Resolution Policy (UDRP) for disputed domain names went into effect on December 1, 1999. Under the new process, a party could force the transfer of a domain name from the registrant if it could show that the domain had been both registered in bad faith and used in bad faith. One of the first cases subject to the process was brought by the Telstra Corporation, which was attempting to wrestle telstra.org away from a registrant identified as "Nuclear Marshmallows." Nuclear Marshmallows had not made use of the domain (i.e., it did not put up a website), never responded to the UDRP complaint, and basically didn't appear to exist at all other than as the mysterious registrant of telstra.org. The UDRP arbitration panel had no trouble finding that the domain had been registered in bad faith, but how could they find that it had been used in bad faith when it wasn't really being used at all? In a precedent-setting decision, the panel decided that passivity could amount to bad faith use. Here, Nuclear Marshmallows' passive holding of a domain name containing the trademark of a well-known company (at least in Australia), combined with the lack of evdience of good faith and the concealment of Nuclear Marshmallows' true identity, was sufficient for a determination of use in bad faith. Passive bad faith turned out to be an important concept in the domain name dispute arena, where registrants frequently conceal their identity and fail to answer the complaint, and consequently Telstra v. Nuclear Marshmallows has become the most cited case in the history of the UDRP process.

8. Marshmallow brands are only circumstantial evidence. On the night of February 16, 1933, a warehouse in Angelina County, Texas was robbed. A crate of Angelus brand marshmallows had been ripped open and two or three bags removed. A short time later, police pulled over Joe Yowell and, upon searching his car, found a bag of Angelus marshmallows under the seat. At trial, the arresting officer testified that "I did not find anything in that car other than that little package of marshmallows that was stolen." Yowell's counsel objected to this testimony, because there had been no proof offered that the marshmallows in Yowell's car were the ones from the warehouse. In Yowell v. State, the Texas Criminal Court of Appeals agreed that the officer's testimony was a legal conclusion based on purely circumstantial evidence, and reversed Yowell's conviction.

9. The Marshmallow Cream market used to be "nice, sleepy and cozy". In the 1960's, the National Dairy Company started a program to increase its share of the markets for fruit spread (which it already dominated) and marshmallow cream (which it had just entered). The program involved offering deep discounts in certain markets, thus eroding the market share of regional competitors. In the New England market, the marshmallow cream competitors were Durkee-Mower (Marshmallow Fluff controlled 92% of the market), Tweet, Inc. of Cambridge, and the Pennsylvania-based Cremo Manufacturing Company. The Federal Trade Commission found that National Dairy's discount program had a positive effect on competition in the marshmallow cream market, which previously had been "nice, sleepy and cozy." However, the FTC found that the same program with respect to fruit spread, a market which National Dairy already dominated, violated the price discrimination provisions of the Clayton Act. In 1967, FTC ordered National Dairy, in very broad terms not limited to fruit spreads, to knock it off. In National Dairy v. Federal Trade Commission, the Seventh Circuit affrimed the FTC's ruling with respect to fruit spread, but held that the FTC went too far in fashioning an order broad enough to encompass marshmallow cream.

10. The Fluffernutter is still not the official Massachusetts state sandwich. In 2006, Massachusetts State SenatorJarrett Barrios learned that his son's school cafeteria carried Fluffernutters (peanut butter and marshmallow cream sandwiches) not as a rare treat, but as a daily staple. Barrios proposed a bill that would limit the offering to once a week, which drew peals of parochial horror from legislators who just happened to represent the district where Marshmallow Fluff is made, and who retaliated by proposing a bill to make the Fluffernutter the official state sandwich. Barrios, whose district included part of Archibald Query's old stomping grounds, made it clear that he was NOT anti-fluff (he even co-sponsored the state sandwich proposal); he just didn't want his kids eating it every day. The resulting controversy, known as Fluffgate, ended in a draw of sorts. Barrios withdrew his bill, but the Fluffernutter is still not the state sandwich (although efforts in that regard continue). By the way, if you are not hip to Massachusetts cuisine and think the Fluffernutter is a strange idea, you should see what my relatives in Fall River call a sandwich.

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