Judge rules against Ben & Jerry’s in Israel licensing case

A US district judge has refused to grant a preliminary injunction to block the licensing, sale or distribution of Ben & Jerry’s products in Israel and the West Bank.

Earlier this year, the ice cream maker announced its intentions to pull out of the ‘Occupied Palestinian Territory’ for being ‘inconsistent with the essential elements of the brand’s integrity’ – a decision that attracted the ire of its territorial distributor, who sued the firm and its parent company, Unilever, for unlawfully terminating their business arrangement.

On 23 June, Unilever informed Ben & Jerry’s that a franchise deal had been in the works to transfer certain B & J brand rights to a third-party, who would continue to sell the company’s ice cream in the boycotted territories.

This triggered another lawsuit, filed on 5 July, in which the maker of Peanut Butter Cup ice cream alleged breach of the merger agreement and breach of the shareholders’ agreement, stating Unilever had made the licensing call without consulting the Ben & Jerry Board of Directors.

The manufacturer argued that granting sale rights to a third-party would cause ‘irreparable harm’ to the ice cream brand’s integrity, the safeguarding of which is within the scope of Ben & Jerry’s own Board as per the merger agreement with Unilever. The ice cream maker also feared a new owner would ‘undermine [Ben & Jerry’s ability to protest certain issues by launching products] by launching [the] exact same quality products with the exact opposite social mission stance’.

Ben & Jerry’s motion further argued a new owner would have control over the marketing of ‘new mission-driven products’, which could present a ‘contrary message to consumers’ and lead to ‘customer confusion as to who owns Ben & Jerry’s social mission’.

‘Too speculative’

But the presiding judge Andrew L. Carter slammed the complaint, stating that ‘[s]uch purported harm is too speculative to constitute irreparable’.

‘The injunctive relief sought cannot issue on the basis of a hypothetical scenario involving several speculative steps, namely that (1) new products will be introduced, (2) those products will seek to convey a particular message, and (3) the new owners then will market those products to convey a contrary message,’ the judge wrote.

Carter criticized the lack of evidence produced by the manufacturer to support its arguments and stated its claim about potential customer confusion was ‘also remote’ due to Ben & Jerry’s well-publicized position and the fact that any new products sold in the boycotted territories would use Hebrew and Arabic trademarks rather than the globally-recognized English branding.

Ben & Jerry’s and Unilever have been approached for comment.