## Facts

- Hormel Foods Corp. owned the SPAM trademark for canned luncheon meat, used since 1937 and widely recognized through extensive sales and advertising.
- Jim Henson Productions produced *Muppet Treasure Island* and created “Spa’am,” a wild boar “high priest” character used in the film and on related merchandise.
- “Spa’am” was intentionally evocative of SPAM as a humorous reference; the name was spoken only once in the movie and the character was depicted in a comic, positive, farcical manner.
- Hormel sued alleging that Spa’am-branded merchandise would cause consumer confusion as to sponsorship or licensing and would dilute SPAM by blurring or tarnishment.
- After a bench trial, the district court denied a permanent injunction, finding no likelihood of confusion and no dilution under N.Y. Gen. Bus. Law § 368-d.
- On appeal, Hormel limited its challenge to the merchandising use of “Spa’am,” not the film use.

## Issues

1. Whether Henson’s use of “Spa’am” on *Muppet Treasure Island* merchandise created a likelihood of consumer confusion as to source, sponsorship, or affiliation under trademark infringement principles.
2. Whether the Spa’am character and merchandise diluted the SPAM mark under N.Y. Gen. Bus. Law § 368-d through blurring or tarnishment.

## Decision

- The Second Circuit affirmed the judgment for Henson.
- The court held there was no likelihood of confusion from the merchandising use when evaluated in context under the Polaroid factors.
- The court held the use did not violate New York’s anti-dilution statute because Hormel failed to show blurring or tarnishment.
- Hormel was denied injunctive relief; Henson could continue using “Spa’am” on related merchandise.

## Legal Principles

- Likelihood of confusion is assessed under the Polaroid multi-factor test, including mark strength, similarity, product proximity, bridging the gap, actual confusion, defendant’s intent, product quality, and buyer sophistication.
- A deliberate reference to a famous mark may support parody; parody, context, and clear branding can reduce the risk that consumers will infer sponsorship or affiliation.
- Under N.Y. Gen. Bus. Law § 368-d, a plaintiff must show dilution by blurring (weakening the mark’s distinctiveness) or tarnishment (harming the mark’s reputation); a humorous association alone is insufficient without evidence of such harm.
- Prominent labeling and context indicating the defendant’s own source can weigh against both confusion and dilution.

## Conclusion

The Second Circuit concluded that “Spa’am” functioned as a recognizable parody used in a clearly Muppet-branded setting, making consumer confusion unlikely and leaving the SPAM mark’s distinctiveness and reputation unimpaired under New York dilution law.


Hormel Foods Corp. v. Jim Henson Prods., Inc., 73 F.3d 497 (2d Cir. 1996)