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36

Whipped!
 

When tiny Henri's Foods took on Kraft's Miracle Whip salad dressing, it didn't know what it was getting into. Then again, neither did Kraft.
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Late in June of 1976, the high command at Henri's Food Products Inc., of Milwaukee, received a letter from Kraftco Corp. (now Kraft Inc.) senior attorney Dolores Hanna. Ms. Hanna wrote to them on the matter of Henri's recent introduction of Yogowhip, a salad dressing with a yogurt base that had, with some fanfare, joined Henri's general product line of pourable and spoonable salad toppings. Her words were curt and to the point.

"As I am sure you must be aware," she wrote, "the MIRACLE WHIP trademark has been used for many years by Kraft Foods for its salad dressing, and the trademark has been registered in the United States Patent and Trademark Office. MIRACLE WHIP is one of the most important trademarks of the corporation, and we have been diligent in asserting our rights and in objecting to confusingly similar uses." Hanna then asked for Henri's "immediate assurance" that the Yogowhip trademark would be dropped.

Among the inner circle at Henri's -- two brothers and a first cousin, all sons of the company's founders, plus a veteran trial attorney -- the letter drew a sharp reaction, especially the "diligent in asserting our rights" part. All of them assumed that Kraft meant business, meant it to the extent that the $5-billion-a-year food company would threaten legal action. Henri's, the sixty-largest manufacturer of salad dressings in the United States (and the only independently owned company to rank that high), was basically a local operation: Its major distribution radius didn't extend much beyond 500 miles from Milwaukee. With only 54 employees and $9 million a year in revenues, the company's resources to wage a court battle were, by any stretch of the imagination, limited. Something like this, they knew, could easily wind up costing several hundred thousand dollars -- with no guarantee of victory.

Still, as executive vice-president Herbert P. Mahler put it, the general feeling in the boardroom was, "They're not gonna push us around."

"We had already spent a not on Yogowhip, including $50,000 for a television commercial," explains Maphler, now president of Henri's, "and we were encouraged by its reception. At one point we had almost 100% of the Los Angeles market in yogurt dressings. We'd sold in the Southwest and West before, but they had never been profitable areas for us, primarily due to freight costs and distributor discounts. These new dressings were our chance. The idea was to get into [new markets] with them and piggyback other Henri's products on top."

Mahler was disturbed, but the man most outraged by Kraft's blunt warning was Robert Brachman, then Henri's president. Brachman, like Mahler, was a son of one of the company's founders and, also like Mahler, had cut his corporate teeth in the sales division. In the 35 years that Brachman had been selling salad dressings, no competitor had earned his enmity quite the way Kraft had. "Everything we'd been working for -- the innovation of products, the innovation of a new name -- to me was in jeopardy," Brachman would later testify from a federal court witness stand. "I felt that we were threatened by our major competitor, and I saw no reason for this." In a newspaper article preserved in the company's archives, Brachman recalled the early days when he practically had to beg Kraft salesmen for shelf space in stores that also bought dressings from Henri's.

"There's a certain arrogance about Kraft because of their success and size," said Brachman, "and it's festered. Kraft has always had their foot on our necks."

So weeks passed, and no such assurance to attorney Hanna was forthcoming. In its stead came a letter dated August 12, 1976, from William E. Glassner Jr., the trial attorney who served as counsel to Henri's. Although Henri's "has the greatest respect for Kraftco and would like to enjoy a congenial relationship with such a great and good company," wrote Glassner, his client was not about to abandon the name Yogowhip.

"First of all," Glassner contended, "Kraftco's mark is not WHIP but, rather, MIRACLE WHIP. . . . I respectfully suggest that if, by suing my client for its use of YOGOWHIP you attempt to make MIRACLE WHIP into WHIP alone or if you succeed in convincing a court that the two were synonymous, you will seriously jeopardize a very valuable mark." His reply bore the shape of a dropped gauntlet.

Hindsight is clear sight. Had Dolores Hanna looked into a crystal ball instead of a jar of salad dressing, she might have thought twice about trying to put the fear of God into such a small but determined adversary. Because she did not, her letter set in motion a classic piece of free-market litigation, a civilized duel of citations and depositions and a nasty street brawl that inflicted casualties on both sides. By the time it was over, Glassner and his colleagues "knew more about the way Kraft operates than anyone at Kraft did," and had put at least a small dent in the giant's dominance of the market. Yet even that accomplishment would be small solace to the walking wounded at Henri's Foods. Although Henri's executives won the battle, they came very close to losing the war.

At 62, Bill Glassner has cultivated the faintly professorial mien of a corporate counsel headed gracefully for semi-retirement. A founding partner of Charne, Glassner, Tehan, Clancy & Taitelman S.C., one of the more respected law firms in downtown Milwaukee, Glassner might be forgiven at this stage of his career if he went the whole John Houseman route, sitting on a high horse and pontificating to underlings about the good old days. Such posturing does not appear to be part of his nature. He is generous toward colleagues -- and competitors -- in the manner of a man who does not automatically assume he can do the job better.

Glassner was a young pup out of University of Wisconsin Law School when Robert Brachman, one of his wife's old schoolmates, hired him to do some work on a personal insurance matter.

"Bob had a motorboat on Lake Michigan," recalls Glassner. "Some freighter came along and ran over it, sank it like a rock. I barely know what I was doing at the time, but I went to court and got a restraining order on the freighter until we could settle the insurance claim. As you can imagine, the shipping company went nuts. Bob wound up with a 48-foot Chris-Craft.

"He was so delighted," continues Glassner, "he offered me a share, but I had other things on my mind, like paying for an office. So I asked for a retainer from Henri's instead, and that gave me just enough income to get started on my own. We go back a long, long way."

So does his client, Henri's Foods. Back to 1935, when sisters-in-law Henrietta R. Mahler and Helen Mahler Brachman borrowed $25 and a friend's French-dressing recipe and set up shop in an apartment kitchen. Mrs. M. made the dressing; Mrs. B. delivered it. In the depths of the Great Depression, of course, even small dreams were hard to realize. For 12 years, the two women faithfully churned out their bottled dressings, selling them mostly to retail grocers over on Milwaukee's east side. Today there are scrapbooks full of brittle clippings describing the early days of gas burners and sterilized washtubs, of onions peeled by hand and fingers blistered raw from screwing on bottle caps. Three sons grew up in the company family. When they took over, all would remember the tough years as vividly as they remembered the good ones.

"When I joined the company, in 1947," says Mahler, "my mother and Mrs. Brachman had expanded the business and moved it to an east side storefront. But they still had only four other women working for them, making the dressings by hand. Their first big success was with something called Tas-Tee dressing. I began marketing it in Madison, Green Bay, Minneapolis. As you can imagine, we faced some stiff competition, including Kraft."

Kraft offered stiff competition to virtually anyone in the retail food business. By 1933 -- at the ripe old age of 10 -- National Dairy Products Corp., Kraft's predecessor, had grown from J. L. Kraft's little cheese-wagon distributorship into the country's largest dairy processing company. Much of this growth came from the acquisition of hundreds of smaller companies operating in markets National Dairy coveted, like mayonnaise. Seeking broad economies of scale, the company bought up a number of local mayonnaise businesses in the late 1920s. Then, thinking equally big, the newly named Kraft turned the mayonnaise market into the launching pad for one of its best-selling food products of all time: Miracle Whip.

When Miracle Whip made its debut, in 1933, the Depression had already changed American food-buying habits significantly. Mayonnaise, once a popular kitchen staple, was suddenly a luxury item for all but the well-to-do. Miracle Whip, a foamy blend of oil, egg yolks, starch paste, and spices, proved to be a cheap and tasty substitute. Kraft named the dressing after the new Miracle Whip machine used to produce it, and rolled it out with a campaign worthy of Darryl F. Zanuck, including a two-hour, prime-time radio variety show (the forebear of the famous "Kraft Music Hall"), featuring Al Jolson and Paul Whiteman, and a special exhibition at the 1933 Chicago World's Fair. Twenty-two weeks later, Miracle Whip was the country's leading spreadable dressing, all mayonnaises included. "Thousands prefer it to mayonnaise -- yet it costs 1/3 less," read the ad copy reproduced in hundreds of American newspapers.

The same campaign that made Miracle Whip an American institution made salad dressing a generic grocery product, eventually leading the U.S. Food and Drug Administration to establish separate standards of identity for it. From the early 1930s onward, the production and consumption of spoonable dressings accounted for about half the market of all salad toppings; and by 1947, Miracle Whip's share of the spoonable market had hit 63%. Although its sales percentages varied from one region of the country to another, Miracle Whip would continue to grow in consumer popularity over the next three decades, reaching national market shares in the late 1970s of 75% and more. By 1980, over 6 billion units of Miracle Whip had been sold, supported by at least $70 million worth of advertising. No other competing brand claimed even 10% of that same market. Willard F. Mueller, a food-market expert and academic consultant to Henri's during the legal controversy, observed in his analysis of Kraft's marketing strategy that "by the late 1970s, Kraft's Miracle Whip held a larger share of its market than nearly any other grocery product brand with which I am familiar."

With consumer support unflagging, Kraft took pains to make sure that grocers not only stocked the product, but featured it as well. Walter Newhauser, who spent 38 years in merchandising for Kohl's Food Stores, a Milwaukee-based supermarket chain, remembers the pressure retailers felt to carry Miracle Whip and other Kraft items in abundance. "Their advertising was so heavy," he explains, "and their ads and coupon deals so frequent, that customers were upset if they came into your stores and couldn't find Kraft products. Meanwhile, Kraft was selling to us by combined carload -- I think there were 1,100 cases of Miracle Whip per carload -- and at that quantity, you had to feature it to keep it moving."

Newhauser adds that although Miracle Whip was a low-profit-margin commodity, "That's part of the business. With something like Miracle Whip, it's the volume that produces the profit." Today, Miracle Whip is widely identified within the food industry as a "loss leader"; that is, an item regularly sold below retailers' cost in order to lure shoppers into the aisles.

Leslie O'Rourke is no longer with Henri's Foods. He and Bob Brachman "parted ways" in 1981, after five years' litigation had siphoned off too many of the resources O'Rourke wanted for his own end of the business -- marketing and sales. He is now president and chief executive officer of Hudson Industries Inc., in Troy, Ala., a maker of dressings and other condiments for food service companies. In 1974, Les O'Rourke was the one who suggested to Henri's new-products division that it experiment with a line of yogurt dressings.

"It's no mystery, really," says O'Rourke of the products' origins. "My two teenage daughters were bringing yogurt into my own home, so I got interested. At the same time, I was aware of growing concerns about eating healthier foods, reduced-calorie products, and so on. I could see a relationship between these concerns and some possible products. So we did the pourables first, and our of that came my observation that the 'spoonable' category offered very little choice for the consumer. All spoonable dressings were essentially the same. Why not, I thought, a mayonnaise or salad dressing that also used yogurt?"

O'Rourke had been with Henri's since 1969, and held some stock in the company. He didn't have the clout of a Mahler, a Glassner, or the brothers Robert and James Brachman, but his voice, nevertheless, had weight. By and large, Henri's has always been a small, democratically run outfit; even today, with annual revenues of about $17 million, it has only 75 employees. There are not a lot of fancy titles or bureaucratic fiefdoms lying around corporate headquarters at Henri's Foods. Decisions are made in the small conference room upstairs, or in the president's office right next to it. The manufacturing plant is modern and on-site. Employee turnover is low, most workers have a large say in what they do, and there are stock options to sweeten the pot. As vice-president for marketing and sales, O'Rourke was the closest man to the marketplace, and therefore the most finely tuned in to new-product demand. If he said "yogurt dressing," the lab got busy.

Unlike most of Henri's products, Yogowhip was initially contracted out for production to a co-packer in Cincinnati. Today it is made, like the other dressings, at Henri's home plant. The two men directly responsible for the actual manufacturing of Yogowhip are Norman Kidd, director of technical services, and Ted Bayless, director of manufacturing. Kidd, who once worked for Kraft, came up with the flavor profile. Bayless, a refugee plant manager from Miller Brewing Co., supervises the production line. Both are proud of the company's history of innovation, a pride that covers everything from Henri's development of a no-spill, zipper-top packet for dressings used on airplanes to its ability to make standard machinery work better.

"This is the only plant we have," said Bayless on a walking tour of the facility last October, "so it has to keep running. A big company like Kraft can always switch production to another site, but we don't have that luxury. There's hardly a piece of equipment in here that we haven't either modified by hand or built ourselves."

Bayless pointed to a Japanese seal-wrapping machine that slaps tamper-proof plastic wrappers on the necks of pourable-dressing bottles. "The company that makes it, Fuji, had a big problem with this thing," he said. "The seals wouldn't hold. We spent several months on it and solved the problem for them. Now they want to buy our process. Kraft, incidentally, tried to but couldn't solve it, so they went to paper neck bands instead. No big deal, but it gives you some idea of how fast we have to think on our feet around here."

Like others at Henri's, Kidd and Bayless had come to see the development of new products as their one competitive edge in an industry dominated by high-volume dealers and national brand names. To draw blood from a company with the marketing muscle of a Kraft, both knew, would take more than a pale imitation of Miracle Whip; Kidd, for one, thought they had it. It even sounded good. O'Rourke had come up with the name "Yogowhip," as he had for "Yogonaise," a companion spread. Nobody ever had a problem with "Yogonaise." "Yogowhip," however. . . .

"In all honesty," says O'Rourke of the title that launched a 1,700-page trial transcript, "I never gave [it] much thought. 'Yogonaise' was a mayonnaise with yogurt in it. 'Yogowhip" was a whipped dressing with yogurt in it. My mother had made a whipped dressing in her kitchen when I was a kid. To me, 'whip' was just a descriptive term of how a product was made. Besides, I liked the names because they described what the products were."

Raymond Krueger remembers a phone call he took from Morgan Fitch Jr. Fitch is a senior partner in one of the law firms representing Kraft, the kind of lawyer who rings you up when there is serious news to convey. Krueger, a young trial lawyer with Glassner's law firm, heard Fitch saying grimly over the other end of the phone that Kraft had no recourse but to take its complaint to court.

"He sounded like he was firing the last warning shot," says Krueger. "I listened politely but didn't say much. The morning before, we'd filed against Kraft in district court right here -- Fitch, in fact, got served with papers about three hours later. He and I had a nice little chuckle about that afterwards."

Opportunities for such merriment were soon hard to come by. By filing first -- alleging fraud, mislabeling, unfair advertising, and antitrust violations, among other matters -- Henri's headed off the anticipated trademark suit. That saved the company a lot of money in potential legal costs; district court in Milwaukee was a lot cheaper to get to than district court in Chicago, where Kraft is headquartered. It also signaled the company's sober intent to "take Kraft to the mat," as Glassner and his partners phrased it to Brachman. Krueger, now 37, thinks he has learned some "short-form rules" about representing a small company against an industry leader -- rules that could be said to have guided Henri's strategy from the outset.

"Number one," he explains, "the small company must have enough at stake to want to see the fight through. Two, it must make that commitment up front. Three, you conduct the case in such a way that you expect it to go to trial, not settlement. Four, you try to survive the first round intact -- not get buried by [the other side's] dollars. Five, you pick an issue you can win on, legally and practically. Six, you do it. I mean, to the mat."

The contours of that mat began taking shape in 1978, when Forrest Henri Dupre, another colleague of Glassner's, was dispatched to Chicago to look through company documents related to Miracle Whip's trademark and marketing practices. Kraft had arranged for a room to be made available in its general operating headquarters. The room was about 10 feet by 12 feet, with no windows and a single fluorescent light. Into it Kraft had dumped several hundred thousand unsorted documents -- "the emptied file drawers of every appropriate executive they could identify," Dupre surmised. He brought along one paralegal with a microfilm camera. In seven weeks, the two of them marched their way through 1.5 million pieces of paper, a lot of it "horrendous duplication," in Dupre's words, "although there was the occasional gold nugget." Forty thousand pages were reduced to microfiche, and in turn became the database for a computer program painstakingly designed to cross-reference information. As Glassner later noted with a tiny smirk at the corners of his mouth, "Kraft apparently instituted a paper-shredding policy sometime in there, but we got a court order against it. It was a little late, anyway."

Glassner was busy with some matters of his own. While Kraft had methodically been taking depositions, Henri's lawyers had held off deposing their own witnesses until they had sifted through all the material Kraft bequeathed them. That took "nearly two years" to accomplish, says Glassner, "and Kraft must have thought we'd fallen asleep. Actually, we were working furiously behind the scenes. When we hit, we hit them harder than they ever believed possible."

Kraft had first filed for registration of the Miracle Whip mark in August 1933, in accordance with the Trademark Act of 1905. In seeking clear title to the name, Kraft disclaimed the separate mark "whip" apart from the full name, Miracle Whip, for which it sought two product applications: salad dressing and salad spread. Under common law, any trademark containing a descriptive word like "whip" (whip being descriptive of how the product was made) had to carry such a disclaimer. The statute changed -- although it did not supersede common law -- in 1946, at which time Kraft refiled its application, listing "same uses" on the form, although it had not been marketing Miracle Whip Salad Spread under that name for at least five years. Since there was evidence that Kraft's attorneys knew of the discontinuation of the salad spread mark before they refiled, Glassner felt he had the makings of a good fraud case against them. If so, the Miracle Whip mark itself was in serious jeopardy.

But the salient issue wasn't fraud, it was "whip" -- and Kraft's claim to it. Glassner discovered that Kraft had made two false starts at trying to remove the disclaimer from the Miracle Whip registration.And despite the disclaimer, it had missed few opportunities to argue passionately -- sometimes bitterly -- that half a century of good-faith promotion entitled the company to think of "whip" as proprietary when it came to salad dressings.Companies that opposed that view and brought out a "whip" of their own tended, in the immortal words of one of their number, to "get scared and settle."

Case in point: In 1956, Parman-Kendall Corp. brought out an avocado-puree dressing it called Avo-Whip, a name destined to draw Kraft's fire. Kraft, indeed, appealed the mark, but was overruled by the Trademark Office. Kraft turned around and sued Parman-Kendall in U.S. District Court for the Southern District of Florida, seeking judicial relief where no regulatory relief had been forthcoming. When later asked why his company "got scared and settled," Harold Kendall, former Parman-Kendall president, said, "Well, we were a much smaller corporation at that time and much younger in the business. The figures here scared us a lot . . . that the controversy exceeded the sum of $10,000, exclusive of interests and costs, and the cost of defending the suit, and the company's firm in Miami, Sawyer & Mershon -- that's a pretty large firm of attorneys -- and we just didn't feel that we were capable of battling them and battling the big corporation." Counsel for Kraft in the Henri's dispute characterized Kendall's statement as "typical of the disappointed litigant which concluded it could not prevail on the merits." Glassner found it more typical of a small company that read the handwriting on the wall and decided to squeeze a little cash out of a potentially fatal assault on its bank balance.

From the first day of deposition to the opening of trial, there was every reason to believe that the case of Henri's Foods v. Kraft would, like most such matters, be resolved by gentlemen's agreement. Federal judges have ways -- some subtle, some not so subtle -- of encouraging this kind of case disposition; unless new law is being tested, their patience for long-winded technical squabbles grows thin. And no company, large or small, likes to tie up lawyers' time in matters that do not threaten its survival. As Henri's legal fees began to pile up, even Glassner (perhaps especially Glassner, who, as a director, was unusually sensitive to damage inflicted on the company's bottom line) advised Robert Brachman to consider carefully any reasonable settlement offer. Such an offer would logically include the price of a new trademark and enough cash to get it launched. But if Kraft had been counting on the predictable small-company capitulation, it had seriously underestimated Brachman's resolve.

"Robert is a fairly strong personality and a pretty good manager," says Les O'Rourke. "He deserves a lot of credit for building that company. Even though I was ambivalent on some occasions, I also felt that we were right [to continue the suit] unless Kraft made us an incredible settlement offer. But at some point the lawsuit became the dominant factor in the company, and there's no question that it stifled Henri's growth. Since Henri's was very much a family company, I didn't want a 'family situation' arising -- which of course it did."

"I'm not sure when it happened," says Glassner, "but Bob started running the company more and more like it was a one-man show. He wasn't talking to any of the others about the case, either. I was the one keeping Herb [Mahler] and Jim [Brachman] up to speed on it. Les finally reached the point where he wanted to put a halt to it. But Bob was off in a world of his own."

Brachman's stubbornness was spiced by a series of out-of-court negotiations and off-the-cuff remarks that reaffirmed his fear of having Kraft's foot on his collar. The first of these was a comment attributed to one of Kraft's attorneys that Henri's posed no threat: "We'll spend 'em to death" was the gist of the sentiment. The second was a settlement meeting in Waukegan, Ill., at which Glassner tossed out the figure of $14 million, based on his cost estimate of buying and promoting a new mark. Kraft offered no direct response to his proposal, but some time later Glassner was approached by Howard Hoosin, another Kraft lawyer, who asked him what he'd been "smoking" when he'd come up with that figure. Says Glassner, "I was outraged. What had I been smoking? 'Mr. Hoosin,' I said, 'You'll find out what I've been smoking when I see you in court."

Despite these false starts, Glassner still didn't discount the possibility of a negotiated settlement; with his blessing, another group from Henri's traveled to Chicago to renew the peace talks. This time it was Brachman himself who queered the deal by walking out when he was informed that Kraft's CEO would not join him at the table. The final straw came during a July 1981 meeting arranged by a court-appointed Special Master. (In lengthy litigations such as this one, a judge often hires a neutral party to referee evidentiary matters that need not claim the court's own time -- one hope being that the referee's presence will nudge the quarreling parties toward conciliation.) At that meeting in Chicago, James E. Hastings, yet another Kraft lawyer, reportedly turned to Brachman and said, "I'll tell you why we can't settle this thing, Bob. You're like a guy who comes into my garage and steals my car and then calls me up a week later and asks me for the title." Being called -- however obliquely -- a thief by Kraft was, for Robert Brachman, roughly equivalent to Herman Melville's Ahab standing on the deck of the Pequod and taking a spoutful in the face from Moby Dick. At that moment, according to his attorneys, the one man at Henri's with the power to compromise took his final vow nerver to negotiate again.

For a case that had been the focus of such protracted discovery proceedings, the trial of Henri's v. Kraft was almost mercifully brief. On December 8, 1981, what The Milwaukee Journal sardonically referred to as the "Salad Bowl" opened in U.S. District Court, Eastern Wisconsin, before Judge Terence T. Evans. Evans had already agreed, at plaintiff's request, to split off the antitrust charges and hear them later. (In fact, they would never be aired in court at all: Facing the prospect of many more months of evidence gathering, litigation, and appeal, lawyers for the two companies did agree to an undisclosed cash settlement on this and all matters except the trademark issue.) The judge had also taken the unusual step of imposing strict time limitations: Each side would have only 24 courtroom hours, or about one week's trial time, to argue its case. Glassner, fearing that his position as a Henri's board member might entail being called as a defense witness, handed over those duties to Ray Krueger. Krueger was opposed by Francis Higgins, of the Chicago firm of Bell, Boyd & Lloyd.

Standing before an array of spoonable dressings and armed with a grocery list of nondressing "whips" (some 50 in all, including Quaker Whip, Shur-Whip, ProWhip, Zip-Whip, Whip-ee, Whipee, and Whippet), Krueger read into the record a thought that had been much on the minds of anyone even remotely connected to either company. "It's a reasonable question to ask, I believe," he said, "[why] Henri's pursued this case. Who needs five years of litigation with a multibillion-dollar adversary? Surely Henri's does not." Higgins offered Kraft's answer to the question in succinct terms. "There's absolutely no reason in the world," he said, "why a company in the place of Henri's has to go out and of all the universe of potential marks put 'whip' on its label."

For the next two weeks, these questions would dominate a courtroom discussion so detail-driven that at one point Judge Evans likened it to a 33 1/3 rpm record being played at 45 rpm. As the parade of witnesses passed by -- food chemists, production managers, market researchers, trademark lawyers, dictionary experts -- the makeup, consistency, and manufacturing processes of both Yogowhip and Miracle Whip were debated as if they were elements of canonical law being chewed over by a particularly polarized ecclesiastical council. The metaphysics grew dazzling: What is a whip? A foam? A blend? Can two substances called Beatreme 3315 and San a NF be combined to make "yogurt," and if so, is that a food or a flavoring agent? Does "whip" as applied to food products imply the introduction of air to achieve a desired consistency, or is it merely a common action verb? What, indeed, is a verb? A noun? A gerund? What constitutes "likelihood of confusion" between competing products? What constitutes trademark-application fraud?Who at which company knew what, when did they know it, and how did that make a dime's worth of difference to the salad eaters of America? Glassner may have been soft-pedaling the issue when he observed that Henri's lawyers probably practiced "overkill." "I have the distinct feeling," he says today, "that Evans thought the whole question was a pretty simple one, really: Has 'whip' acquired a secondary meaning [on salad dressings], and if so, is Kraft entitled to its exclusive use? The rest seemed like window dressing."

Evans evidently concurred. In a decision handed down the following August, he dismissed Henri's charges of fraud, mislabeling, and unfair advertising. He did, however, enter a declaratory judgment that Yogowhip's trademark did not infringe upon Miracle Whip's, that "whip" is descriptive of the manufacturing process and characteristics of spoonable dressings, and that Yogowhip was not confusingly similar to Miracle Whip. While affirming the validity of the Miracle Whip trademark, he denied all counterclaims by Kraft. Evans's opinion was upheld a year later, in August of 1982, on a split decision by a three-member panel of the Seventh Circuit Court of Appeals.

On the day of decision, there should have been unrestrained jubilation in the boardroom at Henri's Foods: champagne, cigars, a sweet sense of vindication. In truth, there was little glee. "I think I took a long lunch hour that day," shrugs Norm Kidd, "but that was about it. It was such a long period of time, you know, that winning seemed almost anticlimactic." Says Ted Bayless: "I was a little disappointed. I mean, we'd taken on a tremendously powerful adversary and won, but we didn't get any money out of it. I guess it boosted our morale for a while, but after a month or so, it really wasn't much of a topic around the office."

What was a topic of discussion around the office was the exorbitant price of victory. By the end of fiscal 1982, Henri's was staring at an anomalous six-figure operating loss. Legal bills for the seven-year holy war with Kraft had come to a whopping $1.2 million, and while the two sums were not directly related, "it was hard not to draw a connection [between them]," as one member of the company family put it. But money -- or profit -- was not the only worry. Preoccupied with the lawsuit, Henri's directors had allowed new-product development to slow, if not stall completely. Even Yogowhip, the commodity on which such great stakes had been wagered, had begun to resemble an orphaned child: With no advertising to support it and its trademark status cloudy, the dressing had all but disappeared from grocers' shelves. Worst of all, many at Henri's had come to feel that the same drive pushing Robert Brachman to take Kraft to the canvas had pushed him apart from his own management team. Glassner, for one, thought Brachman was "running a dictatorship." Les O'Rourke, for another, pushed Brachman for more marketing support and got pushed out of the company instead. Herb Mahler was unhappy, and told Brachman so. Jim Brachman was "concerned."

By early 1984, the situation was rapidly deteriorating. Sales had rebounded from the year before -- up about $1 million, or enough to show a pretax profit of $800,000 -- but the board was badly split over policy issues. In July, neither Glassner nor Bob Brachman was reelected to the board. Glassner advised Brachman to hire his own attorney. The advice was timely. Although Brachman had the resources to effect a stalemate -- he and Mahler each controlled 50% of the employees' stock -- he had lost his leadership consensus, and in a family business like Henri's Foods such a loss proved paralyzing. There was talk of finding a third party to come in and run the company. There was talk of selling the business outright. Each new option seemed even more unappetizing than the last.Finally, reluctantly, Jim Brachman threw his lot in with the Mahler faction, and his brother was out. "I wasn't around much then," says Glassner, "but it must have been hell up there."

Robert Brachman moved on to become an independent food consultant in Milwaukee. He does not care to discuss the case. "It's past history for me," he says. "there are others with a far better memory for detail than I have." And neither Herb Mahler nor Jim Brachman will go into much detail in recalling the painful time.

As for the Kraft attorneys who tasted the mat, they, too, are tight-lipped about particulars. "When you talk about pursuing trademark cases," says Donald Carlin, senior vice-president and general counsel, "it's really more appropriate to talk about protecting the consumer -- the consumer out there who is loyal to Kraft products and who may be purchasing something he thinks is made by Kraft but is not. It's not a question of protecting sales or profit figures; it's consumer trust and confidence we're worried about. We're on the horns of a dilemma. If you don't sue, the mark tends to get diluted. If you sue and lose, the court kind of draws a circle around your mark and says you've gone too far. The only way to avoid that, of course, is to sue and win, but you can never be sure about [the outcome].

"The size of the [competitor] really isn't relevant," Carlin adds, "because small companies often get acquired by larger ones, and suddenly a product that's pretty local becomes a national one. Sure, litigation gets expensive. And you shouldn't have a system where a small company cannot assert its legal rights. But you shouldn't necessarily sympathize with that small company if it's trying to get into a market with a product that looks or sounds just like another product. Just as you cant't settle with everyone who sues you, even if it would be cheaper to do so."

Out in Milwaukee these days, the reverberations of the lawsuit are still echoing through the corridors. Sensing the futility of marketing Yogowhip as a direct competitor to Miracle Whip, Henri's has decided to reposition the product as a "reduced calorie dressing," an effort that is still in its infancy. With a new blue label ("Tastes Like Salad Dressing") featuring a tape-measure motif and a modest ad budget, Yogowhip is being reintroduced this winter in a few select test markets. "It's part of our whole line of reduced-calorie yogurt dressings," explains vice-president of sales Al Costigan, "and we won't know until spring how the whole campaign's going. We do know one thing: The product tastes good, and it should be attractive to the health-conscious consumer. But we also want it to be a profitable item for the retailer. You won't see Yogowhip as a loss leader."

You won't see the scars on the label, either, but they are there. Late last year came intimations of another power struggle between managers and board members over which market -- retailers or the foodservice industry -- would get the lion's share of Henri's limited resources. Again, Glassner feared that the only sane recourse might be to engineer the sale of the company. In early December, however, he was a catalyst in reopening negotiations between the two factions -- Mahler and Brachman -- whose feud had, in many senses, begun with Kraft attorney Dolores Hanna's dire warning of eight and a half years ago. Who will play what role in helping to put Henri's back on an even keel is still a matter of doubt. But one corporate hope is to make a major penetration of the fast-food-franchise market with their new, easy-pour, flexible packets.

"After all these years," says Glassner, "we're moving back toward exploiting our advantages in retail packaging. Henri's has come full cycle." Those years now number 50, and surviving the last 9 of them legitimately qualifies as a minor miracle.

Last updated: Feb 1, 1985




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