CORPORATE FOCUS: Candy Bar Battle
Debbie and Russel Kruger own a small drugstore and soda fountain in Mandan, North Dakota. Debbie also makes candy. She has created three different candy bars, one of which she calls the Lewis & Clark Bar.Debbie Kruger created the Lewis & Clark bar in 1997 to commemorate the upcoming two-hundredth anniversary of the expedition led by Meriwether Lewis and William Clark up the Missouri River from St. Louis in 1804. Lewis & Clark spent the winter at Ft. Mandan, a forty miles north of the Kruger's drugstore.Debbie Kruger has manufactured roughly 30,000 Lewis & Clark bars. She has sold about 20,000 of them.In September 1999, the Krugers received a letter from a lawyer in Boston. The lawyer said he represented the New England Confectionery Company (Necco) -- the makers of Necco wafers and those little heart candies that say things like "Marry Me," "Be Mine," and "Kiss Me."Necco, which is owned by UIS, a larger conglomerate, recently bought the company that makes the Clark Bar, and the Boston lawyer claimed that the Lewis & Clark Bar infringes on Necco's rights to the Clark Bar name."We want to come to some arrangement with you that permits your limited use of the Lewis and Clark Bar, subject to conditions, and provides for the cancellation of your North Dakota trademark registration or its assignment to my client," wrote Thomas Smurzynski, Necco's lawyer. "The arrangement must acknowledge my client's significant concern about protecting its valuable intellectual property assets."The Krugers' position is that the Lewis & Clark bar is a totally different candy bar with a totally distinctive wrapper. There is no infringement, they claim. And they called their Senator, Byron Dorgan (D-North Dakota), seeking help.Last week, Senator Dorgan took to the floor of the U.S. Senate to argue the case for his constituents."What happened here is wrong, but it happens all the time," Senator Dorgan said. "It is throwing your weight around, if you are big enough to do it.""My message for Necco is -- pick on somebody your own size," Dorgan said."I am one of their customers and I say to Necco -- lay off small businesses. Don't hire blind lawyers. If you can't tell the difference between their Clark bar wrapper and the wrapper for the Lewis & Clark bar, then get a new lawyer."Dominic Antonellis, the President of Necco, says that Senator Dorgan has it all wrong.First of all, he says, Necco is independently run, and Necco is not a large company."There are 380 candy companies in the United States," he said in an interview. "The candy and snack market is a $24 billion market. And five companies -- Hershey, M&M, Nestle, Favorite Brands, and Nabisco -- represent 80 percent of the sale of candies. Of the remaining 375 companies that are left, we are probably in the middle range."Antonellis says that Necco bought the company that makes the Clark bar in June 1999 for $4.1 million."The Clark name for candy is trademarked," he says. "We wrote them a letter. We wanted them to recognize that we own the Clark trademark. We weren't looking for money. I wanted a conversation with them, to allow them to use the mark, but we would have had an interpretation that they couldn't go nationwide with the Lewis & Clark bar.""I have no problem with them selling their product in their area," he says.If he didn't have a problem with selling in North Dakota, why did he demand that the Krugers turn over the Lewis & Clark Bar trademark to Necco?"There would have been an assignment back to them" to allow the Krugers to market in North Dakota, he says.Antonellis says he was concerned that Senator Dorgan and his staff did not call Necco before taking to the Senate floor. "I believe that is wrong," he says.But Senator Dorgan says he wants to a put a stop to corporate bullying."How often do you hear members come to the floor of the Senate and worry about the number of lawsuits in this country?" he asked. "They worry about the lawsuits filed by customers against big corporations. What about this use of lawyers by a big company trying to put a small company out of business? What about that kind of corporate bullying? It is time to stop it."Russell Mokhiber is editor of the Washington, D.C.-based Corporate Crime Reporter. Robert Weissman is editor of the Washington, D.C.-based Multinational Monitor.