Written Assignment #2: Kyle is looking to move Alabama Sunshine to the next level. His canned and dried produce lines are growing but he wants to push his new hot sauce, salsa, and condiment lines. He sees the organically grown produce operation as gaining a solid, well-rooted consumer base; however, Kyle wants to expand beyond seasonal produce. He needs a way to communicate an identity for his new products and, after considerable thought, settles on the name Kyles Fiery Condiments, a name that Kyle believes will stick to the plates and palates of his patrons. Kyle has successfully gotten the hot sauce, salsa, and condiment lines into the United Nutrition Associates (UNA) grocery stores in Huntsville, Madison, and Birmingham, AL, and has placed red and white billboards along I-22 in Alabama and US 43 in Tennessee advertising his new products; his original market in Weston, AL; and his new company website (KFC.com). The slogan of his new venture, which he uses in radio and TV ads, is “KFC, your assurance of farm fresh, family-focused, affordable food.” Shortly thereafter, Kyle received a certified letter from a well-know, nation-wide chain restaurant, Kentucky Fried Chicken (KFC), alleging harm to its business interests, including infringement of and dilution of its trademark and trade name.
Undeterred and determined to put some spice into his profit margin and give customers a new taste, Kyle decided to kick off the upcoming Thanksgiving holiday season by introducing a variety pack of his hot sauce, salsa, and condiments, spicy enough to take the chill out of the air, calling it the KFC Holiday Pack. The variety packs are now stocked in all of UNA’s grocery stores and prove to be so successful that the stores quickly sell out and UNA wants more of Kyle’s variety packs. UNA’s chief financial officer (CFO), Candace B. Ritenoff, calls Kyle promising to buy all of the KFC Holiday Packs that Alabama Sunshine can produce within the next 30 days and promises to mail a deposit of $10,000 immediately to seal the deal. Unfortunately, Kyle was out-of-town, having decided to celebrate the forthcoming holiday season early by touring the Mobile Bay area to relax and look for new business opportunities. The CFO left the offer on Kyle’s office phone voice mail and Kyle did not get the message until a week later when he returned to Weston. He immediately called Scooter, his production manager, telling him to crank up production of the variety packs by running the plant 24 hours a day, seven days a week, and promising Scooter a hefty bonus if UNA’s needs are met. The sudden activity, promise of the bonus, and associated pressures caused Scooter to relapse back to his old habit of substance abuse, requiring that he be admitted to a residential detox facility in Savannah, TN, but not before he had gotten the revised production schedule operational at the plant.
Kyle is concerned about the letter from the restaurant company, doesn’t want to get in a protracted and costly legal battle, and comes to you, his faithful college friend, for counsel. Kyle mentions that, after telling his farm field production workers about restaurant’s letter, some of them threw overripe tomatoes and cabbages at passing KFC trucks, causing one of the drivers to run off the highway, striking several utility poles. Kyle is also concerned that, since he has contracts with AubumAdvantage Advertising for the billboards and WLEO radio station for “on-air” commercials, he could wind up losing a lot of money. As a passing comment, Kyle mentions that he also has a contract with Crimson Tide Computer Services for the maintenance of the Alabama Sunshine/Kyle’s Fiery Condiments website and asks your counsel about the offer from UNA’s CFO and whether he may have to pay Scooter the bonus as promised.