Fruit giants Del Monte Corporation and Fresh Del Monte Produce were sliced into separate companies nearly 25 years ago. But the ensuing litigation has proven to have quite a shelf life.
On Thursday U.S. District Judge Sidney Stein in Manhattan partially granted Fresh Del Monte’s request for an injunction in the companies’ latest dispute, a five-year-old trademark and false advertising battle over refrigerated fruit products. Stein’s ruling comes a little less than a year after a jury found that Del Monte breached its licensing agreement with Fresh Del Monte and willfully violated the Lanham Act, awarding Fresh more than $13 million.
The tale of the two Del Montes dates back to the late 1980s, when private equity giant Kolberg Kravis & Roberts split the companies apart after acquiring them as part of its well-chronicled takeover of RJR Nabisco. Post-split, Del Monte Foods sold canned and preserved fruit while Fresh Del Monte sold fresh produce and retained rights to the Del Monte brand.
The two companies wound up at odds, however, after the development of fruit cups and other refrigerated products that didn’t easily fit into the scope of their licensing agreement. Fresh Del Monte brought the current suit back in 2008, when Del Monte ran print advertisements claiming its processed cut-fruit products were bursting "with the same essential nutrients as fresh picked fruit." As we previously reported, Fresh Del Monte and its counsel at Skadden, Arps, Slate, Meagher & Flom convinced a jury last April that Del Monte had breached a trademark license agreement with Fresh by selling Del Monte-branded refrigerated products containing pineapple, melon, berry, papaya or banana. The jury found that Del Monte had willfully violated the Lanham Act by falsely advertising that most of the accused product lines were fresh when they were actually preserved.
Thursday’s 19-page ruling from Judge Stein granted Fresh Del Monte an injunction enjoining Del Monte from pasteurizing or adding chemical preservatives to its products without stating that fact on the label. Del Monte also can no longer say that any preserved fruit product "Must be Refrigerated" without test results establishing that the product is not shelf stable. Under the injunction, Del Monte also has to list that sodium benzoate or potassium sorbate are preservatives, but it doesn’t have to add that the product "Contains Preservatives" on its front as Fresh Del Monte had asked.
Judge Stein awarded Fresh Del Monte prejudgment interest on its breach of contract claims, potentially adding more than $2 million to the final judgment. But he denied Fresh Del Monte’s request for attorneys fees and prejudgment interest on its Lanham Act claims.
Skadden’s Anthony Dreyer passed along the following statement by e-mail: "We are pleased with the court’s thoughtful and well-reasoned opinion which reflects the jury’s findings that Del Monte Foods engaged in willful false advertising. The issuance of a permanent injunction is an important ruling not just for Fresh Del Monte, but for consumers of fresh fruit products as well."
Del Monte’s lead lawyer, Arturo Gonzalez of Morrison & Foerster, sent us this statement: "We are pleased with the Court’s ruling, specifically that Judge Stein denied the request for legal fees as well as the request for prejudgment interest on the advertising claims. Further, Del Monte has already voluntarily taken all of the corrective measures that the Court has asked them to take via the permanent injunction order. Del Monte is glad that this matter is resolved and looks forward to continuing to provide consumers with the healthy and delicious products they expect from the company."