Welch Foods, a cooperative corporation owned by more than 750 farmer families, filed suit against its former licensee Healthy Food Brands ( 201cHFB 201d), accusing it of violating its contract with Welch and of trademark infringement in connection with HFB 2019s continued marketing and sale of licensed products post-termination. Welch owns a number of federal trademark registrations to marks that include the term 201cWELCH 2019S 201d for a variety of food products and services. In 2014, Welch and HFB entered into a license agreement under which HFB would develop, manufacture and sell products such as dried and freeze-dried fruits and trail mixes under the WELCH 2019S BRAND. The license granted exclusivity in this area. The agreement provided for the payment of royalties based on sales, with certain minimum royalties established, and also sets forth reporting requirements on HFB sales. Welch asserts that HFB has missed a number of royalty payments and has never provided the required sales information, with the purpose of hiding the actual level of sales. After providing written notice of these breaches and allowing the passage of the required time to cure, Welch terminated the agreement in June, 2019. While the agreement requires the return or destruction of all WELCH 2019S-branded products upon termination, Welch asserts that HFB has instead continued to sell these products. Welch asserts breach of contract, breach of the covenant of good faith and fair dealing that is inherently applied to Massachusetts contracts, quantum meruit, unjust enrichment, trademark infringement, false association, unfair competition and dilution under the Lanham Act, and violation of Mass. G.L. c. 93A. Judge Stearns has been assigned the case.
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