Frito-Lay Loses Texas Lawsuit Over Bowl-Shaped Chips

A Dallas jury found against Frito-Lay in the company’s lawsuit against a competitor who made bowl-shaped chips similar to Frito-Lay’s Tostitos Scoops.

The lawsuit was filed in U.S. District Court against Ralcorp Holdings and its subsidiary Medallion Foods. Ralcorp makes private-label products that carry the name of the store where they are sold. Ralcorp’s Cupz brand chips are sold in Kroger stores and its Bowlz brand is carried by Wal-Mart. Both brands of chips are bowl-shaped for easier dipping, similar to Tostitos Scoops.

Frito-Lay, owned by PepsiCo, argued that the Ralcorp chips were too similar to its own chips in design and manufacture, and infringed on the company’s intellectual property. The plaintiff sought $4.5 million in damages and a court order prohibiting the defendants from manufacturing their chips. According to Frito-Lay, the Scoops brand was introduced in 2001 and generates tens of millions of dollars in annual sales.

After a two-week trial, the jury of seven women and three men deliberated for about five hours before finding for the defendants. The jury found no infringement of patent or trade dress and awarded no damages to Frito-Lay. A PepsiCo spokesperson said the company was considering its post-trial options.

Frito-Lay argued that the defendants obtained trade secrets from a vendor and former employees, but the company did not call any witnesses who saw employees take trade secrets. The jury found that the defendants’ chips were sufficiently dissimilar to the plaintiffs’ product such that consumers would not be confused.

Frito-Lay, based in Plano, Texas, has been a wholly-owned subsidiary of PepsiCo since 1965. Ralcorp, based in St. Louis, was purchased recently by ConAgra Foods for $5 billion.