September 14, 2010 / 1:30 PM / 9 years ago

Buffett's Dairy Queen loses frozen yogurt ruling

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. REUTERS/Rick Wilking

NEW YORK (Reuters) - International Dairy Queen Inc, owned by Warren Buffett’s Berkshire Hathaway Inc (BRKa.N) (BRKb.N), has lost a bid to stop a Southern California rival from selling a frozen yogurt with a name similar to its top-selling Blizzard.

U.S. District Judge R. Gary Klausner denied Dairy Queen’s request for a preliminary injunction to stop Yogubliz Inc, which operates stores in the Los Angeles area and in Las Vegas, from selling its Blizzberry and Blizz Frozen Yogurt products.

Dairy Queen had alleged the products could cause confusion among customers with the Blizzard, a soft-serve ice cream also blended with candy, cookie pieces and other mix-ins.

But Klausner concluded in a September 3 order that while Blizz and Blizzard “do sound alike,” Dairy Queen was unlikely to succeed on the merits of any claims against its smaller rival, including trademark infringement and unfair competition.

“Products often are marketed under names that are nonsense or invented words,” he wrote. “Thus, like Pez, Pringles, or a host of other brand names, it is unclear that Blizz has any independent meaning aside from the product it is attached to.”

Lawyers for Dairy Queen and Yogubliz did not immediately return calls seeking comment.

Dairy Queen has called Blizzard its “most popular and well-known” menu item, with more than $750 million of annual sales. It said it has sold more than 1.5 billion Blizzard treats since 1985.

Yogubliz began operating stores last year, and has warned it could go out of business if it lost this case. The company is based in Downey, California. Dairy Queen is based in Minneapolis, and Berkshire is based in Omaha, Nebraska.

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 Dave Zimmerman

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