UPDATE 1-Fresh Del Monte wins injunction in fruit licensing battle

Thu Mar 28, 2013 4:47pm EDT

* Fresh Del Monte sued Del Monte Foods

* Lawsuit claimed consumer confusion over fruit products

* Jury had awarded Fresh Del Monte $13.15 mln

By Jonathan Stempel

March 28 (Reuters) - A federal judge on Thursday awarded Fresh Del Monte Produce Inc a permanent injunction in its long-running licensing dispute with Del Monte Foods Co, the canned produce and pet food company that spun it off in 1989.

U.S. District Judge Sidney Stein in Manhattan awarded Fresh Del Monte much of the relief it requested, after a federal jury last April 6 ordered Del Monte Foods to pay the fresh fruit and vegetable company $13.15 million of damages.

A growing number of consumers have in recent years been seeking out fresh fruit products, amid increasing awareness of the importance of maintaining a healthy diet.

In a 2008 lawsuit, Fresh Del Monte claimed it had an exclusive right to sell fresh fruits and vegetables under the Del Monte name.

The Coral Gables, Florida-based company also accused Del Monte Foods of infringing its trademark right by selling preserved fruit in plastic cups, and misleading consumers into believing that the fruit was fresh.

In awarding damages, the jury found that San Francisco-based Del Monte Foods breached the companies' licensing agreement in selling products that contained bananas, berries, melons, papayas and pineapples.

It also said Del Monte Foods violated a federal trademark law known as the Lanham Act in packaging and selling its Fruit Bowl, Fruit Naturals, SunFresh and Superfruit products, and in print advertising calling its products "Fruit Undressed."

Following the verdict, Fresh Del Monte asked for a permanent injunction against further licensing and Lanham Act violations.

The injunction that Stein issued bans Del Monte Foods from using the Del Monte trademark on products containing any of the five fruits and intended to be chilled at the point of sale, and from entering into related sales and distribution agreements.

It also bans Del Monte Foods from pasteurizing or adding preservatives to its fruit products without stating this on the labels, and from telling consumers that its fruit products "must be refrigerated" unless it has test results to back it up.

The "Fruit Undressed" campaign was also halted but future ad campaigns need not say Del Monte Foods products are preserved.

Stein rejected Fresh Del Monte's request for more regulation of Del Monte Foods' shipping and storage procedures.

He also declined to award Fresh Del Monte attorneys fees and interest on the Lanham Act claims, but awarded interest on the breach of contract claim.

Anthony Dreyer, a partner at Skadden, Arps, Slate, Meagher & Flom representing Fresh Del Monte, said he was pleased with Stein's decision. "Issuance of a permanent injunction is an important ruling not just for Fresh Del Monte, but for consumers of fresh fruit products as well," he added.

Arturo Gonzalez, a partner at Morrison & Foerster who represents Del Monte Foods, also said he was pleased with the decision, and that the company has "already voluntarily taken all of the corrective measures" the court requested.

Del Monte Foods brands include Del Monte, College Inn, Contadina, Meow Mix, Milk-Bone and 9Lives. It was bought in 2011 by investors including private equity firms Kohlberg Kravis Roberts & Co, Vestar Capital Partners and Centerview Capital LP.

The case is Fresh Del Monte Produce Inc v. Del Monte Foods Co et al, U.S. District Court, Southern District of New York, No. 08-08718.

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