Rebel Creamery Files for Bankruptcy After Losing $23.8 Million Packaging Lawsuit
The ice cream maker was ordered to pay rival Van Leeuwen after a judge found its packaging intentionally copied.
Rebel Creamery has filed for Chapter 11 bankruptcy protection after a court ordered the company to pay $23.8 million to rival Van Leeuwen in a packaging dispute. The Utah-based ice cream maker, known for its low-carb options sold at retailers like Walmart and Target, filed its petition with the US Bankruptcy Court for the District of Utah on Friday.
The company reported assets and debts in the range of $10 million to $50 million. This bankruptcy filing comes less than a month after US District Judge Eric Komitee ruled that Rebel Creamery had intentionally copied Van Leeuwen's packaging, ordering the company to surrender profits and redesign its products.
Van Leeuwen sued Rebel Creamery in 2021, alleging that the Utah company's packaging, which features pastel-colored, monochrome pints with matching lids and minimalist design, infringed on their own distinctive trade dress. Van Leeuwen introduced its current packaging in 2016. Rebel Creamery was founded in 2017, and its pints began appearing in stores in 2018.
Judge Komitee found that Rebel's packaging was sufficiently similar to cause actual confusion among consumers. He determined that Rebel Creamery infringed and diluted Van Leeuwen’s trade dress intentionally. In his ruling, Komitee stated, "The evidence at trial left no doubt that Rebel infringed and diluted Van Leeuwen’s trade dress and did so intentionally." He ordered Rebel to cease selling infringing products and to redesign its packaging to prevent further infringement.
"As a result, Rebel will be enjoined from selling the infringing products and required to redesign its packaging to avoid any further infringement," Komitee wrote. The judge also mandated that Rebel Creamery disgorge profits earned from the sale of the infringing pints, totaling $23.785 million.
Rebel Creamery denied the allegations, with its founders claiming they had not seen Van Leeuwen's packaging when developing their own design. However, Judge Komitee rejected this explanation, calling the testimony about the design process fabricated and stating that the similarity between the brands was unlikely to be coincidental.
Rebel Creamery appealed the judgment on August 12, two days prior to filing for bankruptcy. Van Leeuwen, founded in New York City in 2008, has grown to approximately 100 scoop shops across the United States.