The "food fight" between Cracker Barrel Old Country Stores and Kraft Foods is getting messier.
Kraft is crying foul after the Lebanon, Tenn.-based restaurant chain earlier this month began selling Cracker Barrel-branded hams in grocery stores in several states despite Kraft's pending lawsuit challenging it, court records show.
Kraft wants a judge to stop the restaurant chain from further entering the grocery market, saying it would irreparably harm Kraft's Cracker Barrel brand of cheese. The restaurant chain is fighting back, however, with a countersuit that accuses Kraft of infringing on its trademarks. It's unclear when a decision could be expected in the case.
Late last year, Cracker Barrel announced a licensing agreement to expand the sale of its branded food items from its retail stores to supermarkets and other mass merchandisers. The company said at the time that it planned to launch the grocery line in the latter half of 2013.
Kraft objected, saying those plans infringed on its cheese brand's trademark, would cause confusion among consumers and amounted to unfair and deceptive trade practices. Kraft, based in Northfield, Ill., then filed a federal trademark-infringement lawsuit in Chicago on Jan. 31.
In court filings, Kraft said it did not immediately seek an injunction or restraining order and even gave Cracker Barrel more time to respond to the suit because it believed Cracker Barrel would not launch its grocery line until much later in the year.
But on March 2, a Cracker Barrel attorney notified Kraft that her client had launched the line. John Morrell Food Group, Cracker Barrel's licensing partner, shipped 40,000 pounds of spiral-cut hams to 325 grocery stores in six states as the "first wave," the attorney wrote in an email.
That, according to court records, prompted Kraft to file an amended lawsuit within a week that seeks a permanent injunction against the restaurant chain.
The suit claims Kraft's Cracker Barrel mark "will die a thousand deaths" as a result of the influx of Cracker Barrel-branded product.
It adds, "Absent immediate injunctive relief, by the time the case is disposed of, Kraft's ... brand may not be able to be resuscitated, regardless of any monetary award."
According to the suit, Kraft launched its line of cheese in 1954 and has sold more than $100 million of it since 2000.
In response, the restaurant chain, which was launched in 1969, contends its logo and the cheese brand logo are different enough that consumers won't confuse them. It also contends that Kraft never objected during the decades that Cracker Barrel-branded meats, syrups and other food products were sold through its stores, website and catalogs.
Kraft's legal efforts also are a threat to the restaurant chain's rights to use its trademarks as it sees fit, Cracker Barrel also said in the response.