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Breaking Up Is Hard to Do: Israeli Company Sues Ben & Jerry’s and Unilever To Maintain License

Breaking Up Is Hard to Do: Israeli Company Sues Ben & Jerry’s and Unilever To Maintain License

Licensee claims Ben & Jerry’s and its corporate owner broke their contract by conditioning license renewal on a boycott that violates American and Israeli law.

Ben & Jerry’s Israeli manufacturer-distributor is suing the ice cream company to prevent their upcoming divorce. It is also suing Unilever, which owns Ben & Jerry’s.

In July 2021, the ice cream company announced it would no longer sell its ice cream in what it called “Occupied Palestinian Territory.” Ben & Jerry’s Israeli licensee, who brought the ice cream to Israel some 35 years ago when the Vermont company was young, and who currently both manufactures and distributes Ben & Jerry’s ice cream in Israel, refused to comply, so last August the ice cream company announced it wouldn’t renew the license after it expires at the end of 2022.

In other words, Ben & Jerry’s bought into the idea that territory beyond the Green Line – the ceasefire line at the end Israel’s war of independence, when the nascent state was attacked from every side by Arab armies – which Israel seized defensively during the Six Day War, does not belong to Israel but to “Palestinians”. This is wrong on so many levels, most particularly that international law permits a nation to take land in the course of defending itself from attack; and beyond that, the land did not then and does not now legally belong to any other state.

The refusal to sell over the Green Line is all part of the latest lawfare tactic against Israel, the Boycott, Divestment, and Sanctions movement known as BDS. BDS activists were quick to take credit for Ben & Jerry’s boycott decision. The decision didn’t go down well with many Ben & Jerry’s franchisees, thirty of whom sent the company a letter asking it to reconsider.

Ben & Jerry’s owner Unilever hasn’t been thrilled by its subsidiary’s decision, either. Besides losing income from sales in the “occupied Palestinian territories,” its stock has become less attractive as running afoul of state anti-BDS laws. Arizona, New Jersey, New York, Florida, and Illinois all announced they would divest from Unilever.

In February, Unilever announced that it would come up with a workaround arrangement by the end of the year to continue marketing the ice cream in Israel.

That announcement didn’t go down well with current Israeli licensee American Quality Products Ltd., or with Avi Zinger, the guy behind AQP and its self-described “ultimate beneficial owner,” who promptly filed suit in New Jersey federal district court. The complaint, against Ben & Jerry’s and a couple of American subsidiaries of Unilever, claims breach of contract, wrongful termination, bad faith, and false light invasion of privacy (something like defamation, except that instead of the defendants’ statements being factually false, the plaintiff claims that the defendants’ statements imply false things about him). On March 11, Zinger and AQP requested a preliminary injunction.

AQP’s claim is basically that, by demanding AQP stop selling in lands Israel won in 1967, Ben & Jerry’s and Unilever violated their obligations under a 2001 consent decree with Israel’s antitrust authority, entered when Unilever acquired Ben & Jerry’s. It also says that the demand violates both Israeli and American anti-boycott laws (both federal and state). Therefore, AQP argues, defendants’ refusal to renew was improper because it was predicated on a demand that AQP act illegally, and the court should compel Ben & Jerry’s and Unilever to renew AQP’s license.

Even if AQP’s claims are true that Ben & Jerry’s and Unilever violated anti-boycott laws and the Israeli antitrust consent decree, it’s not clear whether it would therefore be entitled to compel them to renew its license. It also has some procedural hurdles to overcome. For example, it named a couple of U.S. subsidiaries of Unilever N.V. It’s not clear that either one may be sued in place of Unilever, N.V., the actual party to the license agreement. Furthermore, the license requires all signatories to submit disputes to arbitration before the American Arbitration Association, in New York City, and under New York law. It also limits the types of damage claims to actual damages, which would seem to exclude punitive damages, for example. Under limited circumstances, the parties may seek injunctive relief, but it’s not clear whether the injunction may be sought from a court, as opposed to from the arbitrator.

But, if nothing else, the suit should get Unilever’s attention, and maybe change its calculus about the “new arrangement” it promised to work out for sales in Israel. That’s doubtless something Zinger and AQP are counting on.

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Comments

Progress. A shame, a damn shame.

They say that breaking up is hard to do
Now I know
I know that it’s true
Don’t say that this is the end
Give me that chocolate chip cookie dough again

Paul Compton | March 20, 2022 at 6:35 pm

I foresee ‘Joshua BEN JHERRY’s’ Chocolate Chip cookie dough going on sale in Israel, in a familiar looking package, fairly soon!

    The Gentle Grizzly in reply to Paul Compton. | March 20, 2022 at 8:07 pm

    Served in either a sugar kohn, or a yid-dish.

    Milhouse in reply to Paul Compton. | March 21, 2022 at 1:18 am

    That would be a breach of trademark. What I would like to see happen is for the Israeli government to inform Unilever that if AQP’s license is not renewed by, say, Sep-30, the state will seize the Ben & Jerry trademark in Israel and renew the license itself, with the fees going to the state treasury instead of to Unilever.

JohnSmith100 | March 20, 2022 at 6:59 pm

Unilever has other skeletons in their closet.

There is so much really good ice cream available, no one should ever have to suffer the indignity of that nasty meme. I wonder if little Greta has honed a cone of sugar sweetened swill.

Blue Bell, forever, if you can are blessed to be within their market place. Otherwise, Breyer’s has been a reliable variety even though they appear to operate as a distributed license.

    The Gentle Grizzly in reply to NotKennedy. | March 20, 2022 at 8:09 pm

    Breyer’s? Seriously?

      If it has more sugar than Breyer’s you might want to consider “am I killing myself with this taste”.

      Sorry I know this is an ice cream thread so it has to be said, a lot of the “favorites” among Ice Cream connoisseurs are horrible for you. Even the one under discussion isn’t exactly calorie free but at least could be compensated for by a reasonable amount of exercise.

    Subotai Bahadur in reply to NotKennedy. | March 20, 2022 at 9:52 pm

    Something additional for Blue Bell. Here in southern Colorado, we have Fort Carson. A lot of room downrange to play kinetic games. My wife and I ran into a 4th ID soldier, female, who did ordnance. She had just come back from downrange. I asked her about something I had recently seen on I-25. In the middle of an Army convoy there was a Blue Bell truck.

    Blue Bell had just had to shut down here because of a dispute with our Democrat state government. No health hazard at all, just had to s-l-o-w-l-y review all of their health inspections because they contributed to something the government did not like. Took about a week.

    While they were offline, they got a call from a unit of the 4th ID. They were going downrange. There are some materials that go bang that you really want to temperature control while you transport, and the temperature controlled Army truck for the unit was 10-7. Blue Bell as soon as they heard volunteered the use of one of their trucks, for free. And that was what we had seen.

    And the soldier we talked to was in the unit doing the transporting. Good on Blue Bell.

    Subotai Bahadur

I thought we weren’t supposed to eat lard.

To be more serious than a snide remark to remind people that in addition to not being political the rival companies are also a lot healthier why would you want to give your money to a corporation that overtly hates you?

It is impossible to be a Republican and not routinely give your money to people/institutions that hates you but this is not comparable because there are plenty of other Ice Cream brands.

Get a license for a brand that doesn’t hate Jews and doesn’t turn people into land whales.

George_Kaplan | March 20, 2022 at 9:37 pm

Is there any technical reason that would prevent AQP from producing and selling the icecream in Israel sans licence? If an Israeli court finds AQP to be the legal licence holder in Israel then is there anything B&J could actually do?

    Milhouse in reply to George_Kaplan. | March 21, 2022 at 1:24 am

    Only the Israeli trademark laws. Which can be altered, or else the state could simply seize the B&J trademark, just as the USA did with Beyer Aspirin during WW1.

      Danny in reply to Milhouse. | March 21, 2022 at 7:33 pm

      What about Israel’s agreements with the United States pledging to respect American property?

        Milhouse in reply to Danny. | March 21, 2022 at 11:45 pm

        Not relevant when the trademark holder is hostile to Israel, is using it to attack Israel, and especially when it’s violating Israeli law.

    Yes, Israeli and American trademark laws, and Israel’s pro-American foreign policy, and the fact that if the Israeli government seized the patent it would label Israel as unreliable for every European company.

    One of the things that makes Israel such a good cause for support is that Israel respects rule of law and largely respects the agreements it enters.

      Milhouse in reply to Danny. | March 21, 2022 at 11:48 pm

      Israeli trademark law, like that of every country, exists to protect that country’s consumers. When it operates to their detriment it can and should be amended. International agreements have to take this into account, or they’re unworkable.

Based on the docket number, this Case is assigned to Chuck Schumer’s brother in law, Kevin McNulty. Yup, Mr.Fran Schumer of Short Hills, NJ.

Avoid Bendover Jerry’s ice cream: it tastes like is sounds.

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