Buffett's Dairy Queen chilly on frozen yogurt lawsuit

Berkshire Hathaway chairman Warren Buffett takes a bite of a Dairy Queen vanilla orange ice cream bar at the Berkshire Hathaway annual meeting in Omaha May 1, 2010.

NEW YORK (Reuters) - It's a case that has left Warren Buffett's Dairy Queen business cold.

International Dairy Queen Inc, the ice-cream company owned by the billionaire investor's Berkshire Hathaway Inc, has asked a court to stop a southern California rival from selling a frozen yogurt with a name similar to Blizzard, its biggest-selling menu item.

Yogubliz Inc had on May 17 filed a lawsuit seeking an order that would "eliminate any doubt" its sale of Blizzberry and Blizz Frozen Yogurt products did not infringe any Dairy Queen trademark and was not likely to confuse customers.

The Downey, California-based company said it sued after receiving a letter from Dairy Queen lawyers threatening litigation if it did not stop using "Blizz" and surrender its "Blizzberry" trademark, effectively putting it "out of business."

But in a 30-page response filed Monday in Los Angeles federal court, Dairy Queen said Yogubliz was causing confusion with the Blizzard, a soft-serve ice cream also blended with candy, cookie pieces and other mix-ins.

Bloomberg News earlier reported the filing.

Dairy Queen called Blizzard its "most popular and well-known" menu item, saying it generates $750 million in sales a year and that more than 1.5 billion Blizzard treats have been sold since 1985.

The company said the confusion could worsen if Yogubliz fulfills its "intent" to expand beyond California and Nevada, including its current locations in major Las Vegas casinos.

"It is more than reasonable to conclude that when Yogubliz chose a term whose only significance is a shortened form of Blizzard, Yogubliz did so with every intention of trading on the fame and goodwill of Dairy Queen's mark," wrote Wade Gentz, a lawyer for Dairy Queen.

"Dairy Queen is suffering, and will continue to suffer, irreparable harm," he added. "A preliminary injunction prohibiting the harmful conduct serves the public interest."

Stephen Abraham, a lawyer for Yogubliz did not immediately return a call on Wednesday morning seeking a comment.

A hearing on the matter is set for August 23.

The case is Yogubliz Inc v. American Dairy Queen Corp, U.S. District Court, Central District of California, No. 10-03677.

(Reporting by Jonathan Stempel in New York, editing by Maureen Bavdek)