HUFFINGTON POST

Nutella Goes After Boloco, Small Burrito Chain, Over 'Nutella Milkshake'

10/18/2012 04:30 pm ET

If ever there was a legal case that made you want to scream, a recent one brought by Nutella against a small burrito chain might be it.

Ferrero, which owns Nutella, recently sent a cease and desist order to Boston-based Boloco, which sold a "Nutella Milkshake" made with Nutella, skim milk, and frozen yogurt for 14 years without incident.

Boloco CEO John Pepper sent out a Tweet earlier this month expressing his frustration:

Pepper told the Boston Herald that Nutella's legal team is fine with him selling the product, but doesn't "endorse the use of Nutella or the Nutella brand in frozen beverages."

It's possible the cease-and-desist letter was partially motivated by broader concerns of Ferraro's. Earlier this year, the company paid $3 million to settle a class-action lawsuit that alleged that Ferraro overstated the health benefits Nutella in its advertisements. So being associated with a milkshake might not be the best look for Nutella right now.

The Citizen Media Law Project blog points out that Ferrero is making its claims on trademark grounds. But it points out a 1924 Supreme Court case ruling in which an overreaching claim was struck down:

[W]hat new rights does the trade-mark confer? It does not confer a right to prohibit the use of the word or words. It is not a copyright. . . . A trade-mark only gives the right to prohibit the use of it so far as to protect the owner's good will against the sale of another's product as his. . . . When the mark is used in a way that does not deceive the public we see no such sanctity in the word as to prevent its being used to tell the truth. It is not taboo.

Regardless, it seems Pepper will stop selling Nutella to avoid trial. The change will come at a price, however:

"... we’re going to lose business because of this. People love Nutella. It’s a top seller of all our shakes and smoothies by some margin.”

Pepper also told the Boston Herald that his company may spend tens of thousands of dollars on menu reprints and new menu boards.

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