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Hershey's Wishes Bad Karma for EASTER CREME EGG.

HARRISBURG, June 18, 2009 -- Karma Candy Inc.'s EASTER CREME EGG has become the target of federal lawsuit brought by The Hershey Company in the U.S. District Court for the Middle District of Pennsylvania.

Hershey's alleges the packaging and the trademark of the EASTER CREME EGG is confusingly similar to the Hershey produced candy sold under CADBURY'S CREME EGG and CREME EGG trademarks and trade dress, both being federally registered.

Both candy eggs are packaged in a yellow, blue, red, and green foil wrapper. Hershey's has federally registered its packaging as trade dress capable of identifying the source of the candy.

Hershey's is seeking compensatory and punitive damages for trademark infringement, trademark dilution, trade dress infringement, false designation or origin and unfair competition in addition to the recall, confiscation and destruction of all "colorable imitations" of the Cadbury's Creme Egg produced by Karma.

If Hershey's is success in proving willful infringement by Karma, the court must, unless the court finds extenuating circumstances, enter judgment for three times such profits or damages, whichever is greater, together with a reasonable attorney’s fee unless the Plaintiff elects for statutory damages up to $1,000,000 per counterfeit mark

The primary purpose of trademark infringement laws is to prevent consumer confusion regarding the source of goods and services. As a general rule, the first party to use a trademark has the superior claim of ownership and can prevent others from using a confusingly similar mark in connection with similar goods or services. If the later mark is so similar, it is deemed to infringe on the prior mark.

An issue in the case may be whether the words "creme egg" are synonymous with the goods themselves, rendering the trademarks generic and not entitled to protection.

The packaging or overall appearance of a product, known as trade dress, can be so unique as to serve as an identifier of the source of the product which is entitled to protection under the law. Like a trademark, the first party to adopt a trade dress has the superior claim of ownership and can prohibit others from using something similar.

Both trademarks and trade dress can be registered with the U.S. government. Registration offers the registrant benefits such as: notice to the public of use and ownership, the ability to recovery attorneys fees, and punitive damages against willful infringers.

In the complaint, Hershey's claims the Cadbury Creme Egg was introduced in the 1970s and the trademarks were put into use in 1980.