Court Finds Coffee Company Used Deceptive Marketing on Product Packaging

Court Finds Coffee Company Used Deceptive Marketing on Product Packaging
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August 28, 2014

A U.S. District Court found that a coffee company misled java lovers by using instant coffee in its coffee pods instead of ground beans.

Specifically, the 7th District court ruled that Strum Foods designed the packaging for its Grove Square Coffee pods to deliberately mislead consumers into thinking coffee pods were filled with fresh coffee like those used in Keurig coffee makers. While Keurig's patent for K-cups expired in 2012, Strum tried to jump on the bandwagon in 2010.

According to the court's decision, Strum Foods tried to circumvent Keurig's patent by designing a coffee pod without a filter. "The lack of a filter created a quandary for Sturm," wrote judges in their opinion. "It made the use of fresh coffee grounds impossible. Sturm decided to put instant coffee into the cups. "

But, as any coffee connoisseur knows, instant, which is freeze-dried coffee, isn't the same as fresh grounds. "Sturm's consultants warned that 'use of the word instant' is a real no no' and should be avoided 'if at all possible' in marketing the GSC product to the only people who would by a K-cup: Keurig machine owners," said the opinion.

Subsequently, the package for the pods described the product as naturally roasted soluble and microground Arabica coffee. Most buyers of the product did not equate the word soluble with instant or were misled by the photos of coffee beans on the box.

At only 10 percent less than Keurig K-cups, Strum Foods even sold the pods at a price intended for higher-quality foods.

According to the opinion, "The public response after the release of GSC was awful," and the legal team was put in charge of customer complaints. Employees were encouraged to write fictitious favorable review online.

Initially, a lower court refused to certify the claim brought by customers, but that decision was also reversed by the court.