Introduction

If you enjoy breakfast foods, you're likely familiar with a popular cereal known as shredded wheat. In 2021, Kellogg's brands like Kashi, Special K, and Frosted Mini-Wheats all include some form of shredded wheat, whether coated with cinnamon, frosted with powdered sugar or plain to their cereal blends.

However, it wasn't always clear whether Kellogg's had a legal right to produce and sell shredded wheat. Let's discuss what happened during a court case in 1938, titled Kellogg Company v National Biscuit Company, where there was a dispute over none other than shredded wheat cereal.

Discussion

In 1938, the Circuit Court of Appeals for the Third Circuit heard a case involving two cereal manufacturers. National Biscuit Company, which acquired the first commercially successful company to produce shredded wheat, argued that Kellogg Company was participating in unfair competition by manufacturing and selling shredded wheat.

National Biscuit Company felt that two of Kellogg's actions, specifically the use of the name shredded wheat and the shape of the cereal, made competition between the two companies unfair.

National Biscuit Company originally received their process for creating shredded wheat from Henry D. Perky, nicknamed the Shredded Wheat King, who invented the ready-to-eat cereal.

When Perky introduced the breakfast cereal in 1893, several companies began making and marketing this product. By 1901, the Natural Food Company had some commercial success selling shredded wheat and built a large production factory for the breakfast food at Niagara Falls, New York.

After Perky died in 1908, Natural Food Company changed its corporate name to The Shredded Wheat Company, which was later acquired in 1930 by National Biscuit Company.

However, before National Biscuit Company acquired The Shredded Wheat Company, Kellogg's had already been manufacturing breakfast cereals.

Kellogg Company was organized in 1905 and began producing a product like shredded wheat in 1912. Yet, in 1919, this product was discontinued until a complete return to manufacturing the product in 1927.

Although Kellogg's and the National Biscuit Company's shredded wheat products were similar, both companies used different manufacturing processes to produce the breakfast cereals. Yet, National Biscuit Company still felt that Kellogg's manufacturing of shredded wheat was still unfair and brought a suit to District Court in 1935.

Several court cases involving the Kellogg Company and the National Biscuit Company were determining whether Kellogg's had a right to manufacture and market shredded wheat cereal.

During the final Circuit Court of Appeals case on May 5. 1938, the court agreed that the name 'Shredded Wheat' is not a trade name and instead is a generic term known by the public that represents wheat biscuits in pillow-shaped form.

Additionally, the court agreed that Kellogg's and other cereal manufacturing companies could produce shredded wheat. Although the National Biscuit Company had a patent outlining the process for manufacturing shredded wheat, that patent expired on October 15, 1912, and became part of the public domain. Therefore, it was within Kellogg's legal right to manufacture this form of breakfast cereal while also having the right to call it by the name 'Shredded Wheat,' which is how consumers identify the product.

Conclusion

There are some cases where companies enter unfair competition by stealing their competitors' processes and product names. However, when the public knows a product by a generic term, and the manufacturing process for that product is in the public domain, it's within any company's right to produce that good. Without this ruling, we'd have fewer delicious cereals to enjoy for breakfast, and this case would forever be remembered as the cereal killer case. Unfortunately for National Biscuit Company, they justified manufacturing shredded wheat was legally sound and followed all competition laws.

Source: https://tile.loc.gov/storage-services/service/ll/usrep/usrep305/usrep305111/usrep305111.pdf

Disclaimer: The views and opinions expressed throughout this blog are the views and opinions of the individual author(s) and/or contributor(s) and do not necessarily reflect the views and opinions of our firm, CIONCA IP Law. P.C.

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