'Local' Bread Baked Out of State Not False Advertising

June 1, 2022

Douglas R. Wolf

Author: Doug Wolf, Wolf Greenfield
Verifier: Brian Darville, Oblon, McClelland, Maier & Neustadt, LLP

In a dispute between two baked goods companies, the U.S. Court of Appeals for the Tenth Circuit recently held that use of “local” in the tagline “Fresh. Local. Quality.” for bread baked in a different state was an inadequate basis for a false advertising claim under the Lanham Act. Bimbo Bakeries USA, Inc. v. Sycamore, case nos. 18-4062; -4031; -4040 (10th Cir. Mar. 18, 2022).

The plaintiff, Bimbo Bakeries USA, Inc. (Bimbo Bakeries), sued the defendant, United States Bakery (USB), inter alia, in the U.S. District Court for the District of Utah, claiming:

1. Misappropriation of its trade secret when USB launched a comparable bread product;
2. Trade dress infringement from USB’s packaging for the bread product; and
3. False advertising in USB’s tagline “Fresh. Local. Quality.”

The district court granted summary judgment in favor of USB on the trade dress claim, and the jury returned a verdict in favor of Bimbo Bakeries on its trade secret and false advertising claims.

On appeal before the Tenth Circuit, Bimbo Bakeries argued the district court erred in granting USB’s summary judgment motion on Bimbo Bakeries’ trade dress infringement claim, and that the district court should not have remitted the damages awarded for Bimbo Bakeries’ false advertising claim. USB argued the district court should have granted its renewed motions for judgment as a matter of law as to its trade secret and false advertising claims.

The Tenth Circuit affirmed the district court’s grant of summary judgment in favor of USB as to Bimbo Bakeries’ trade dress infringement claim, concluding Bimbo Bakeries’ defined trade dress in the bread packaging was generic and unprotectable. Bimbo Bakeries offered no countervailing evidence for what is customary in the industry to distinguish and clarify the scope of its claimed trade dress.

The Tenth Circuit reversed the district court’s denial of USB’s renewed motions for judgment as a matter of law as to Bimbo Bakeries’ trade secrets misappropriation claim, finding no reasonable jury could have found Bimbo Bakeries’ recipe was “not generally known or readily ascertainable” to USB, as required under the Utah Uniform Trade Secrets Act.

The Tenth Circuit also reversed the district court’s denial of USB’s renewed motion for judgment as a matter of law with respect to Bimbo Bakeries’ false advertising claim. Bimbo Bakeries argued USB’s use of the word “local” in its “Fresh. Local. Quality.” tagline constituted false advertising, contending consumers would believe USB’s products were baked in the same state where they are sold, when in fact they were not. In rejecting the false advertising claim, the court reasoned that “local” is too vague to constitute a factual claim that may be deemed false or misleading—as required under Section 43(a) of the Lanham Act—by being subject to too many interpretations. The court cited numerous definitions for “local” to show this term “is simply a statement of opinion with which others may agree or disagree without generating legal liability.”

The Tenth Circuit affirmed in part, reversed in part, and remanded for further proceedings, finding that all of Bimbo Bakeries’ claims failed as a matter of law.

This article was first published by the International Trademark Association on inta.org.