US judge weighs Ben & Jerry’s claim against Israeli business owner

New York, Aug 8, 2010 (FBC) – A US judge on Monday appeared skeptical that Ben & Jerry’s should issue an immediate injunction against parent Unilever Plc to stop it from marketing its ice cream in the Israeli-occupied West Bank. They said. It was against his values.

U.S. District Judge Andrew Carter said at a court hearing in Manhattan that he was not sure Ben & Jerry’s faced “imminent harm” following Unilever’s June 29 sale of the ice cream maker’s Israeli business to local licensee Avi Zinger.

The unusual disagreement highlights the challenges Unilever faces in encouraging its more than 400 brands to have social missions that the company says help boost sales.

Ben & Jerry’s independent directors sued Unilever on July 5, nearly a year after the maker of Half Baked and Cherry Garcia faced backlash over its decision to end sales in the Israeli-occupied Palestinian territories as “contrary” to its values. Although the lawsuit seeks to stop the sale entirely, Monday’s hearing focused on whether Ben & Jerry’s deserves a temporary injunction barring it from selling new or improved products using its English-language trademarks.

Ben & Jerry’s attorney Shahmer Halepota said in court that Zinger would create “exactly the opposite position” of new products and cause consumer confusion.

“You could make ‘Tank Pops’ instead of Peace Pops,” Halepota said, and shoppers would see both walking down the same grocery aisle.

The judge did not immediately rule, but told a Ben & Jerry’s attorney, “I haven’t heard anything that has been filed.” It doesn’t look like… anything will happen in the next two weeks.

He did not say when he would buy it.

When Unilever bought Ben & Jerry’s in 2000, it let the brand’s board take primary responsibility for overseeing the ice cream maker’s social mission. Ben & Jerry’s board said the sale to Zinger would undermine its right to do that. The two Unilever appointees disagreed.

“This is an American institution that has built its credibility over the past 40 years on the integrity of this social mission,” Halepota said.

Unilever, on the other hand, has reserved the right to make operational decisions for Ben & Jerry’s and said the sale is irrevocable.

Unilever’s lawyer, David Marriott, said: “There is no reason to believe that the ice cream sales will cause any continuing harm.”

Ben & Jerry’s sales topped 1 billion euros ($1.02 billion) for the first time last year.

Jeff Furman, who helped build the business and served on the Ben & Jerry’s board for 40 years, said the company had never sued Unilever before, but considered it once it discovered quality issues in its ice cream, which were later settled.

“We have fingers – this is part of the job – to be alert and worry about everything,” he said.

Last week, Ben & Jerry’s Unilever said it had suspended compensation for independent directors. Read more

Two weeks of mediation broke down before Monday’s hearing to reach an out-of-court settlement. Read more

Reporting by Jonathan Stempel and Jessica DiNapoli in New York; Editing by Grant McCool

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