Bimbo Bakeries v. Sycamore: Who’s the breadwinner?

Bimbo Bakeries v. Sycamore: Who’s the breadwinner?

Bimbo Bakeries’ Grandma Sycamore’s Home-Maid Bread
U.S. Bakeries’ Grandma Emilie’s Old Fashioned White Bread

Although I’d like to get my hands on the Oreos recipe, there’s a reason I can’t bake “Milk’s Favorite Cookie” in my oven: Oreos are a trade secret. Trade secrets offer an economic benefit to the company that makes them because they’re known only to a select few individuals. Nabisco does not share the Oreos recipe with the general public, so we keep buying their product. But what happens when someone, perhaps a former employee, shares the secret recipe?

A similar situation prompted the recent case of Bimbo Bakeries USA, et al. v. Sycamore et al. In 1979, a baker named Leland Sycamore started baking a white bread that he called Grandma Sycamore’s Home-Maid Bread. Leland later transferred the rights for his recipe to Bimbo Bakeries. Years later, he began working with U.S. Bakeries to produce another white bread called Grandma Emilie’s. 

Recognizing the similarity of the newly created white bread to Grandma Sycamore’s, Bimbo Bakeries sued Leland Sycamore and U.S. Bakeries in the district court of Utah for trademark infringement, misappropriation of trade secrets, and false advertising. Firstly, Bimbo Bakeries argued that the packaging for Grandma Emilie’s resembled their own product with its red lettering, white outline, and similar font (see the pictures above). According to Bimbo, this analogous packaging constituted trademark infringement under the Lanham Act, a federal statute that protects companies with registered marks from the use of similar marks that might cause consumer confusion. Bimbo also alleged that U.S. Bakeries had stolen its trade secret and misled customers by claiming in the tagline to produce “local” bread when in reality Grandma Emilie’s was shipped from out of state.

The district court ruled at summary judgment that the Grandma Emilie’s packaging did not constitute trademark infringement because red lettering and an italicized font were fairly common for white bread packaging. At trial, however, a jury found that U.S. Bakeries had stolen the trade secret for Grandma Sycamore’s Bread and that the “local” label misled consumers. For this combination of trade secret misappropriation and false advertising, U.S. Bakeries had to pay over ten million dollars—who knew white bread could be so expensive?

An appeal brought the case to the 10th Circuit, which agreed with the district court finding of no trademark infringement. But in contrast to the initial ruling, the court ruled in favor of U.S. Bakeries regarding trade secret misappropriation and false advertising. The Circuit found that the recipe for Grandma Sycamore’s was simple enough that someone else in the industry could reasonably have created a similar formula. In other words, white bread isn’t rocket science; it’s easy to make, and companies will rely on similar ingredients and ratios to create their products. Thus, U.S. Bakeries might have developed their own recipe that happened to resemble Grandma Sycamore’s due simply to the nature of baking white bread. On the issue of false advertising, the 10th Circuit decided that the word “local” was subjective, so U.S. Bakeries should not have to pay damages for false advertising over a word with many possible interpretations.

There are limits to trademark and trade secret protection. Certainly, Bimbo could win cases against companies using identical logos and recipes to its own. But a simple recipe with a generic mark may naturally resemble many other products on the market, and thus, companies cannot expect as broad-sweeping intellectual property protection for white bread as they could for, say, Dr. Pepper.