We may never look at cookies in central Ohio the same again.
Cheryl Krueger has responded to the lawsuit her former company, Cheryl and Co., filed against her and her new venture, C. Krueger’s. She denies that her new bakery makes knock-off Cheryl’s cookies and filed a counterclaim that Cheryl’s, which Krueger sold to 1-800-Flowers for $40 million in 2005, is unfairly trying to quash competition.
“Cheryl’s filed this groundless lawsuit for one reason and one reason only: to drive CKE, a small startup company, out of business,” Krueger’s answer to Cheryl’s lawsuit reads. “The simple fact of the matter is Cheryl’s does not want to compete with a new business that sells superior products so it has filed a meritless lawsuit to disrupt defendants’ business during the peak holiday season.”
Cheryl’s claims in its lawsuit, which was filed last month in federal court in Columbus, that Krueger’s cookies, packaging, frosting swirl and other marks are close copies of Cheryl and Co.’s products. The cookie giant accuses Krueger of making “lookalike cookies.” The company also claims Krueger hired away several of its executives in violation of noncompete and confidentiality agreements.
Krueger denies all of that in her answer. (CKE is the abbreviation for C. Krueger’s.)
“CKE is not a ‘copycat’ business as Cheryl’s alleges. CKE uses new recipes with different ingredients, is working with different vendors and suppliers and is building a new customer base,” Krueger’s answer reads. “CKE and Cheryl’s sell fundamentally different products. CKE’s are substantially larger in both size and weight than Cheryl’s cookies (weighing approximately 20-66% more than Cheryl’s cookies), the majority of them are not frosted.”
Krueger also points out that a few other companies, including Mrs. Fields, use an almost identical swirl of buttercream frosting on packaged cookies.
Kreuger, who left Cheryl’s in 2009, came back to the cookie business this year, opening a small shop in the Short North and a website to sell a variety of baked goods. Both C. Krueger’s and Cheryl’s are based in central Ohio.
Cheryl’s said in its complaint that it is protecting its trademarks and other property.
“Through this lawsuit, Cheryl’s is seeking to protect its important intellectual property and business relationships so that Cheryl’s can compete fairly in the marketplace,” the company said, “instead of having to compete against former employees who are plotting to steal Cheryl’s customers, vendors, intellectual property, confidential and trade secret information, and key employees.”
In her answer, Krueger claims that her non-compete with Cheryl’s expired in 2014, nine years after 1-800-flowers purchased Cheryl & Co. from her. She also claims that Cheryl’s lawsuit is illegal since it is motivated by competition, and not by actual malfeasance. In addition, she said that much of her staff, who were hired away from Cheryl & Co., did not sign non-compete agreements.
“We could go on, but as these examples illustrate, Cheryl’s cannot realistically expect to prevail on the merits of its claims,” the answer reads. “But that does not matter given Cheryl’s motivation to use this litigation, itself, as a means of causing harm to CKE’s business and to gain an unlawful competitive edge for itself.”
In her counterclaim, Krueger is seeking damages, legal fees and other compensation.