A jury’s finding Friday that Del Monte Corporation breached a licensing agreement with Fresh Del Monte Produce could mean more than just a $13.15 million verdict.
After a day and a half of deliberations, a six-person jury in Manhattan federal district court ruled for Fresh Del Monte in the latest installment of a series of lawsuits lodged by the company against its rival. Fresh Del Monte was spun off from Del Monte Produce in 1989.
“Fresh Del Monte will also seek injunctive relief,” said Anthony Dreyer, a partner at Skadden, Arps, Slate, Meagher & Flom, who tried the case with partners Lauren Aguiar and Raoul Kennedy.
Del Monte counsel Arturo Gonzalez of Morrison & Foerster, meanwhile, said he was weighing an appeal. Gozalez-whose firm was the third to take on the case after Del Monte initially turned to Quinn, Emanuel, Urqhart & Sullivan and Debevoise & Plimpton–played down the size of the award, noting that Fresh Del Monte had asked for as much as $270 million. Del Monte had argued that if it were found liable, damages shouldn’t exceed $10.2 million.
An injunction could affect four of the five disputed Del Monte refrigerated fruit lines, which generated $1 billion in revenue over the last eight years. But Gonzalez said even with an injunction, Del Monte could possibly continue to sell these products under a different brand or partner with another company, including Fresh Del Monte. “I think at this point you have to consider all options,” he said.
The dispute stems from the 1989 split-up of Del Monte’s business by Kolberg Kravis & Roberts, which had acquired the product lines as part of its infamous takeover of RJR Nabisco. After the split, Del Monte Foods sold canned and preserved fruit; Fresh Del Monte sold fresh produce and retained the right to use the Del Monte brand.
Problems arose with the advent of fruit cups and other refrigerated products that did not fit nicely into the framework of the contract. The current lawsuit began in 2008, when Fresh Del Monte sought to enjoin a pair of print advertisements in which Del Monte claimed that its refrigerated processed cut-fruit products were “[bursting] with the same essential nutrients as fresh picked fruit.”
After Manhattan federal district court judge Sidney Stein denied the injunction, Fresh Del Monte’s lawyers at Skadden filed an amended complaint alleging more broadly that Del Monte had breached the licensing agreement by selling products packaged to appear as though they are fresh rather than processed. The suit also alleged false advertising based on a different set of ads.
Following two weeks of trial, the jury found that Del Monte had willfully violated the Lanham Act for four of the five product lines at issue and awarded Fresh Del Monte $7.2 million. The jury further awarded another $5.95 million after finding Del Monte had breached the licensing agreement by selling refrigerated products containing pineapple, melon, berry, papaya or banana.
