General Merchandise/HBC

Shadow of Litigation Lifted

P&G, McLane reach settlement

CINCINNATI and TEMPLE, Texas -- The Procter & Gamble Co. and McLane Co. Inc. jointly announced that they have reached a settlement in the lawsuit filed by P&G on Dec. 21, 2005, thatas reported in CSP Daily Newsalleged trade dress infringement on four of P&G's brands and unfair competition by McLane.

McLane and its subsidiaries denied those contentions, but have agreed to a Consent Order submitted to the court and will immediately redesign the packaging of their products. The remaining terms of the agreement were not disclosed.

"Our objective was to put an end to what we view as infringement of our package designs," said Jim Johnson, P&G's chief legal officer. Johnson added, "We simply must protect our brand designs. This settlement addresses our infringement concerns and we are gratified McLane will now compete in the marketplace with different package designs."

Bill Fendrick, vice president of merchandising for McLane's Grocery Distribution division, said, "We are pleased to have reached a settlement that enables both companies to move forward without the shadow of protracted litigation. As one of America's largest distributors of consumer goods, we value our longstanding relationship with P&G, America's largest consumer goods company and one of our largest suppliers. We believe this settlement is in the best interests of both companies and look forward to continuing the positive and productive relationship that puts dozens of P&G product lines into convenience stores and other retailers nationwide."

P&G sued McLane for selling products that P&G alleged look similar to some of its brands. The suit asked for a preliminary order to stop McLane, a subsidiary and a vendor from selling four products it says illegally copy P&G packaging. The suit also demanded the defendants tell retailers to impound or return the products, and asks for unspecified damages. P&G alleged that paper towels called Towels copied its Bounty packaging, toilet paper called Soft N Plush copied Charmin and over-the-counter cold medicines called DayTime and NightTime mimiced Vicks' NyQuil and DayQuil LiquiCaps brands.

The suit said P&G has spent large sums of money marketing its products, and that the defendants were confusing consumers in order to cash in on the P&G products' "substantial reputation and goodwill.

Cincinnati-based P&G's brands include Pampers, Tide, Ariel, Always, Whisper, Pantene, Mach3, Bounty, Dawn, Pringles, Folgers, Charmin, Downy, Lenor, Iams, Crest, Oral-B, Actonel, Duracell, Olay, Head & Shoulders, Wella, Gillette and Braun.

Temple, Texas-based McLane provides distribution services throughout the United States, delivering food and nonfood products to more than 50,000 customer locations, including the c-store, drug store, mass merchandise, quick-service restaurants and movie theater industries. It operates 19 grocery distribution divisions and 18 foodservice distribution centers as well as an industry specific software company. McLane is a wholly owned subsidiary of Berkshire Hathaway Inc., Omaha.

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