Legal Roundup: Mike and Ike’s Empty Boxes, Apple’s Beef With Swatch, Disney Discrimination and More

A look at some of the recent court cases and legal decisions that have an impact on the industry.
By: | April 7, 2019 • 4 min read

Mike and Ike’s Sued Over Half-Full Candy Boxes

The Case: The maker of Mike and Ike and other popular candy brands have been sued over half-empty boxes. A U.S. District Court judge has ruled that a class action lawsuit against parent company Just Born Inc. can proceed. Just Born also makes Hot Tamales and Peeps.

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PhillyVoice reported: “Stephanie Escobar filed the suit after she purchased a 5-ounce box of Mike and Ike candy at a movie theater and found the box only half-full of candy. Escobar claims there is ‘no functional or lawful purpose for the empty space’ in the candy box and that the amount of space — which is apparently often called’“non-functional slack-fill’ — misrepresents the amount of actual candies in the boxes, according to the class action order filed this week.”

Scorecard: The granting of the motion for class certification is a major hurdle in the case and signifies there could be a long fight ahead. Just Born said: “Our products and labels comply with all FDA regulations and provide consumers with the information they need to make informed purchase decisions.”

Takeaway: Consumers are being increasingly protective of their hard-earned dollars and targeting consumer-packaged-good brands if they believe they’re acting inappropriately.

Microsoft Insurer Fails to Recoup $175 Million for XBox One Issues

The Case: A jury in U.S. District Court in Seattle found that Microsoft’s captive insurer can’t recoup $175 million from chip manufacturer SK Hynix. The insurer, Cypress Insurance, alleged a breach of contract after SK Hynix allegedly failed to deliver products critical to the launch of popular gaming console Xbox One.

The Captive Insurance Times explained: “As a result of the issue, Microsoft then secured substitute products at a higher price in order to support its shipment requirements. These substitutions caused Microsoft to incur damages, and Cypress paid Microsoft policy benefits $175 million as a result of those damages.”

Scorecard: The jury decided that SK Hynix had not breached its supply contract — meaning Cypress Insurance could not recoup cash for the claim they paid to Microsoft.

Takeaway: Supply chains are precious. Even major players like Microsoft rely on partnerships with other companies to create and distribute innovative new products. Any interruption causes serious problems, but finding blame when supply chains break down is no easy task.

Disney Sued for Gender Pay Discrimination

The Case: Two women have filed a lawsuit in Los Angeles County Superior Court claiming that Walt Disney Co. is paying women less than men for similar work. One of the plaintiffs, LaRonda Rasmussen, worked as a project development manager in Glendale, Calif. making $109,958 per year.

“Six other men who held the same title were paid $16,000 to nearly $40,000 more, according to the lawsuit,” the Los Angeles Times reported. “Five months after she brought up the issue, Rasmussen said, Disney asserted that her salary amount ‘was not due to gender,’ but in November 2018, the company boosted Rasmussen’s pay by $25,000, the lawsuit claims. Even with the pay adjustment, Rasmussen believes she is still making less than men doing similar work.”

Scorecard: Attorneys for the plaintiff are seeking class action status for the lawsuit, inviting women who’ve worked for Walt Disney Studios over the past four years to participate if they feel they’ve been paid less than men in similar positions. Disney has vehemently denied the claims, according to the Los Angeles Times: “Disney said the lawsuit was ‘baseless.’ In a statement, the company said it maintains ‘robust pay equity practices and policies’ and has a specialized team of compensation professionals and lawyers to address the matter.”

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Takeaway: As more pay discrimination laws come on the books and gender pay equality becomes a bigger and bigger issue, expect to see more cases like this — or companies voluntarily auditing themselves to insure pay equality.

Think Different? Tick Different? Swatch Wins Trademark Dispute Against Apple

The Case: Is Swatch’s slogan “Tick Different” a violation of Apple’s “Think Different” trademark? That was the center of a case brought by the tech giant against the watchmaker. Swatch used “Think Different” in a 2017 campaign for its Bellamy watch.

Scorecard: The Swiss court ruled that Swatch is allowed to use “Tick Different” in its ad campaigns. TechSpot explained: “While it might have been popular in the U.S., the campaign and its slogan weren’t as well known in Switzerland, according to the country’s Federal Administrative Court. It said that Apple had not produced documents that sufficiently prove more than 50 percent of local consumers associate ‘Think Different’ with the company.”

Takeaway: Trademark infringement (at least in Switzerland) is predicated on potential customers associating the slogan with a particular brand.

Jared Shelly is a journalist based in Philadelphia. He can be reached at [email protected]

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The R&I Editorial Team can be reached at [email protected]