Kellogg Co. V. National Biscuit Co. - Opinion of The Court

Opinion of The Court

In a 7–2 opinion written by Justice Brandeis, the U.S. Supreme Court rejected Nabisco's arguments, and allowed Kellogg to continue to manufacture its shredded wheat cereal, and name it "Shredded Wheat".

On the protection of the cereal's shape, the Court decided that the shape was functional and that there was a right to copy it after its patent expired, as the use of unfair competition and trademark laws could otherwise be used to impede the ability of rivals to create any competitive product, even though the patent had expired.

On the picture of the two shredded wheat biscuits in the bowl of milk, the Court noted that "the name Kellogg was so prominent on all of the defendant's cartons as to minimize the possibility of confusion", and hence there was no fraudulent "passing off" of Kellogg's cereal biscuits as having been created by Nabisco.

On the use of the term "Shredded Wheat", the Court ruled that the term was generic and not trademarkable; and dismissed a claim by Nabisco that it had acquired a "secondary meaning" under case law.

The Court concluded:

Kellogg Company is undoubtedly sharing in the goodwill of the article known as 'Shredded Wheat'; and thus is sharing in a market which was created by the skill and judgment of plaintiff's predecessor and has been widely extended by vast expenditures in advertising persistently made. But that is not unfair. Sharing in the goodwill of an article unprotected by patent or trade-mark is the exercise of a right possessed by all - and in the free exercise of which the consuming public is deeply interested.

Justice McReynolds and Justice Butler dissented, writing that Kellogg was "fraudulently seeking to appropriate to itself the benefits of a goodwill built up at great cost by the respondent", which should be viewed as illegal.