In McNeil Nutritionals v. Heartland Sweeteners, the Third Circuit ruled that store brand copies of national brands can have packaging that comes closer to that of the national brands than a competing national brand could, provided the store brand packaging displays the well-known store brand and does not copy the national brand’s packaging. Explaining the case, Anne Gilson LaLonde writes:

 

     McNeil Nutritionals sells SPLENDA artificial sweetener, which is made from sucralose, in boxes of individual packets and bagged in granular form. Heartland Sweeteners makes and packages store brand artificial sweeteners in both forms for several retailers, including Food Lion, Safeway, Giant and Stop & Shop. The products are sold next to each other on store shelves.

 

     McNeil sued Heartland for trade dress infringement under Section 43(a)(1)(A) of the Lanham Act, among other claims. The district court in the Eastern District of Pennsylvania denied McNeil’s motion for a preliminary injunction as to all of the defendant’s packaging, holding that it had “failed to demonstrate that the Heartland packaging of any of the products at issue in this case is likely to cause consumer confusion in an appreciable number of ordinarily prudent consumers.” McNeil appealed, solely on the issue of trade dress infringement under federal law.

 

     The Court of Appeals reversed the district court’s denial of preliminary relief in part, on the ground that consumers were likely to experience source confusion between the [parties’] packaging . . . .

     . . . .

 

     However, store brand packaging treads a fine line between fair and unfair competition. Store brand packaging may infringe the trade dress of the name brand product, as some did in the McNeil case. In order to show trade dress infringement, a plaintiff must prove that its trade dress is distinctive and nonfunctional and that consumers are likely to confuse the source of the plaintiff’s product with that of the defendant.

(citations omitted.)