Wegmans Food Market (“Wegmans”) announced a settlement Friday with Walgreens Co. (“Walgreens”) over a trademark dispute initiated by the latter company in October 2010.   Walgreens, a pharmacy/drugstore chain, filed a lawsuit in the United States District Court for the Eastern District of Virginia that alleged trademark infringement, unfair competition and dilution by blurring through use of the “Wegmans” script and “W” logo.

Walgreens’ infringement claim was not without merit, but the settlement was ultimately a result of Wegmans unwillingness to incur high litigation costs.  In a recent press release, Wegmans’ Director of Media Relations, Jo Natale, said “the cost of making relatively minor changes to a limited number of products was much less than the cost of litigating this case to the end.  We wanted to return to a logo we had used many decades ago.  There was never any intent on our part to make our products or logos resemble those of Walgreens.”  The settlement requires Wegmans to discontinue its use of the “W” logo by June 30, 2012 – the supermarket retains the right, however, to freely use the “Wegmans” name in script.  The deal does not confer any liability on Wegmans.

The two marks, to me, are not easily confused.  The relevant consumer shopping at either store should be reasonably aware that Wegmans does not sell Walgreens-brand items and vice versa.  Further, the Walgreens mark has a loop in the W, while the Wegmans logo does not.  Had the matter gone to trial, the court would have dissected Walgreens’ customer confusion analysis, but the company would have countered any arguments with the striking similarities between some mark uses.   Adding to the pharmacy chain’s case is the likeness in goods that bear the registered mark.

Walgreens had a mediocre case on mark similarity, but Wegmans use of the mark on soda – something that Walgreens produces and sells, is what necessitated the claim.  Had Walgreens not sued, the pharmacy risked losing their trademark.  It is interesting to me to see where trademark law seems to necessitate defense of a registered mark.  The drugstore company has never filed a complaint against the Washington Nationals, whose mark, I would argue, is nearly identical to the pharmacy’s logo.  The Nationals have used their “W” for nearly fifty years (without registering it) and Walgreens has not brought an action, assumedly because the two companies operate in separate business realms.  This line is quickly blurring, however, with the rapid expansion of MLB licensing.  If the Nationals began using their “W” mark on household items, Walgreens would likely have to file a lawsuit.  Ultimately, Walgreens, and trademark law in general, seem to put much more weight on how the mark is used rather than the similarities between the marks.

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