If you search on the Internet for Hershey’s Cake Pan a number of products come up. You can buy a Hershey’s Chocolate Bar Style Cake Pan in Silicone or a Hershey’s Kiss shaped silicone pan. On the packaging for the cake pan it states “The Hershey’s Trademarks and Trade Dress are Used Under License”. When used to make a cake, the final product comes out bearing the Hershey’s trademark.
So if a baker were to purchase this pan would they be allowed to sell “Hershey’s” branded cakes? Or Hershey’s Kiss shaped cakes? And could Hershey’s stop them as it has impliedly and on the packaging granted a license to use these trademarks and trade dress.
Usually when a company licenses its trademarks to a third-party it is required to maintain certain quality controls over the company using the mark. The licensor must ensure that the licensee doesn’t do anything to tarnish the brand or lessen the distinctiveness of the trademark. A “naked” trademark license is one in which the licensor allows the licensing to do whatever they want with the trademark, which can lead to major problems for the trademark owner.
Allowing third parties to use the Hershey’s trademark in any way they want in baking, if considered a naked license, could actually constitute abandonment of its mark, which is certainly not Hershey’s intention. A naked license shows that the trademark owner did not exercise sufficient control over the licensee such that the trademark no longer represents the quality of the goods which consumers have come to expect from Hershey’s.
In litigation, courts will look to whether there was a contract requiring the licensee to act in certain ways to maintain the distinctiveness of the mark and whether the licensor had the right to control how the licensee used its mark. Courts will also look to whether the trademark owner took sufficient steps to ensure that the licensee maintained the quality and distinctiveness of the mark. Failure to do the foregoing can result in a company, like Hershey’s to lose the exclusive right to use their trademark. This was clearly not the intent of Hershey’s in releasing its branded cake trays.
Hershey’s, however, cannot reasonably or feasibly control how the users of its cake pans will use the resulting products branded as “Hershey’s”. Clearly, a home use would not infringe on Hershey’s marks. However, if home users begin selling “Hershey’s branded products at bake sales, this could become a problem. As in the example above, if a baking or catering company were to begin selling “Hershey’s” branded products, this would also hurt Hershey’s trademark.
Hershey’s can also be considered to be diluting its own trademark rights. Trademark Dilution is is when the use of another’s mark lessens the distinctiveness of a famous trademark in the minds of consumers. Hershey’s is clearly a famous or well-known mark. The types of trademark dilution are blurring and tarnishment. Tarnishment would occur when a home user of the Hershey’s cake pan adds designs to the cake and sells the to the public, who understands the designs to be those of Hershey’s. Perhaps a new form of cake is created using insects, something that Hershey’s has not yet done or tested. Consumers who did not like these products would associate their dislike with the Hershey’s brand.
With respect to blurring, this would be the weakening of the Hershey’s mark by negative association with the brand. If home bakers are selling product with the Hershey’s branded logo, consumers might make the association between the brand and the inferior product. Whereas Hershey’s would conduct tests and consumer surveys to determine whether a new product is viable and supports their brand, allowing any purchaser of one of the Hershey’s baking pans allows any variation of product bearing the Hershey’s logo – and Hershey’s, without a lawsuit or a strongly worded cease and desist letter, has no control over this.
In all, why this may seem a dubious way to increase Hershey’s brand awareness by selling pans that create cakes or cupcakes with the Hershey’s logo, in reality unless a commercial use is made of these pans it is unlikely that there will be litigation concerning this matter. On can definitely see Hershey’s suing over a bakery selling cakes with the Hershey’s trademark (even though a license is granted on the packaging), but it seems unlikely that Hershey’s would go over the general consumer use, even through small sales of the products. Then again, this might be true, as I am aware of a major comic book conglomerate suing a small hut in Brazil which had hand made paintings of certain comic book heroes.
Hershey’s is such a well-known and famous brand that they will likely have no problems with their branded cake pans and the like. However, the decision to do so must have come with the realization that they might have been creating potential legal problems for themselves in the future. But of course, they can handle them as they come up.