Promotion in Motion (PIM) launched legal action against its former contract manufacturer Ferrara Candy in the district court in Delaware in March 2015.
It alleges Ferrara Candy stole trade secrets, breached a confidentiality agreement and infringed its ‘small boy’ trademark design of Sour Jacks by producing private label product Sour Buddies for the retailer Target.
PIM also claims Ferrara has violated trade secrets on Welch’s Fruit Snacks by producing another private label brand for Target and by making its own fruit snack SKU under Ferrara's Black Forest line.
Ferrara denies the allegations and counterclaims that PIM’s Sour Jacks trademark should be declared void. It also seeks relief for 800,000 pounds of Welch’s Fruit Snacks, which it claims PIM refused to accept in late 2014.
Ferrara admits it signed a confidentiality agreement with PIM, but says it was not breached as it claims PIM never developed or owns trade secrets for Sour Jacks and Welch’s Fruit Snacks.
PIM will take deposition (oral statements under oath) from eight Ferrara employees including its president, plant manager and R&D manager from September 8 to 16 this year.
Ferrara will take its own oral statements from PIM’s R&D manager, COO and CEO, according to recently-filed court documents.
PIM CEO Michael Rosenberg was scheduled to give a statement to Ferrara Candy’s lawyers last Thursday.
Sour Jacks and Sour Buddies
PIM alleges Ferrara’s Sour Buddies – produced for Target – breaches a confidentiality agreement for Sour Jacks and claims Sour Buddies uses Sour Jacks’ trademarked little boy design.
PIM says it began to manufacture Sour Jacks in the late 1980s and chose Ferrara Candy’s predecessor firm Ferrara Pan Candy Co as its contract manufacturer.
Ferrara manufactured the product from 1990 until 2004, according to PIM.
PIM claims Ferrara’s product in the initial years didn’t meet PIM’s expectations on texture and consistency and says Ferrara Pan was forced to issue credits to PIM for creating an “unmarketable product”, claims denied by Ferrara.
PIM says it employed in-house staff in 1997 to solve the alleged formulation problems for Sour Jacks and claims it developed its own proprietary formula to be used by contract manufacturer Ferrara.
Ferrara denies that PIM ever developed any trade secrets for Sour Jacks and says the formula never gave it a competitive advantage when producing Sour Buddies for Target.
PIM began producing Sour Jacks in house after it constructed its own production facility in 2004, but Ferrara Candy remained its contract manufacturer for some other products - including Welch's Fruit Snacks - until 2014.
Welch’s Fruit Snacks and Juicy Burst
PIM also alleges Ferrara’s own-brand ‘Juicy Burst’ within the Black Forest Line and Ferrara’s private label brand ‘Market pantry Fruit Flavored Snacks’ for Target violates trade secrets for Welch’s Fruit Snacks.
PIM says it spotted a market for ‘better for you’ snacks in the mid-90s and developed a formulation for fruit snacks.
It claims its formula was licensed to Welch Foods in 2000 and the brand was produced by contract manufacturer Ferrara Pan. But Ferrara denies PIM developed any trade secrets for Welch’s Fruit Snacks.
Ferrara Pan produced Welch’s Fruit Snacks from 2000 to 2004 when PIM built its own plant. Ferrara continued to supply Welch’s Fruit Snacks when PIM could not meet production needs up until 2014.
Ferrara Candy declined to comment on the case when contacted by ConfectioneryNews. It also refused to disclose the dates it began manufacturing Juicy Burst and the two products for Target.
PIM also said it does not comment on current litigation.
[Case no.: 1:15-cv-00212-RGA]