The U.S. Court of Appeals for the Seventh Circuit issued a mixed ruling in a trademark infringement case between Illinois Tamale Company and Little Caesars, reversing part of a lower court's preliminary injunction while affirming other portions of the decision.
In a decision issued Jan. 16, 2026, the three-judge panel held that the U.S. District Court for the Northern District of Illinois erred when it granted a preliminary injunction preventing Little Caesars from using 'Pizza Puff' in its product names and advertising. However, the appeals court affirmed the district court's denial of injunctions regarding the terms 'Crazy Puff' and 'Puff.'
Illinois Tamale Company, operating as Iltaco, filed the trademark infringement lawsuit against LC Trademarks Inc. and Little Caesar Enterprises Inc. The Chicago-based food company claimed that Little Caesars' 'Crazy Puffs' product and its marketing created substantial likelihood of confusion with Iltaco's trademark-protected 'Pizza Puff' product.
The dispute centers on product names in the competitive food industry, where brand recognition and consumer identification play crucial roles in market success. Iltaco argued that Little Caesars' use of similar terminology would confuse consumers and dilute the value of its established trademark.
Founded in 1927, Iltaco has deep roots in Chicago's food scene. The company began selling its signature pizza puff product in 1976, creating what it describes as a calzone-like item made from flour tortilla wrapped around pizza toppings that can be fried or baked. The company has since expanded its pizza puff sales nationwide, building brand recognition around the product name over nearly five decades.
The case proceeded through multiple phases in federal court. Iltaco initially sought broad relief through a preliminary injunction that would have prevented Little Caesars from using 'Crazy Puff,' 'Pizza Puff,' and 'Puff' in any product names or advertising materials. Such preliminary relief would have provided immediate protection for Iltaco's claimed trademark rights while the underlying infringement case proceeded.
District Judge Jeremy C. Daniel issued a split decision on Iltaco's injunction request. The trial court found that Iltaco failed to demonstrate sufficient likelihood of success on its trademark infringement claims regarding 'Crazy Puff' and 'Puff,' denying the preliminary injunction for those terms. However, Judge Daniel granted the injunction specifically for 'Pizza Puff,' finding that Iltaco had shown adequate likelihood of proving trademark infringement for that exact phrase.
The appeals court, in a decision written by Circuit Judge Amy J. St. Eve, disagreed with the district court's analysis regarding 'Pizza Puff.' The Seventh Circuit panel, which also included Circuit Judges David F. Scudder and Candace Jackson-Akiwumi, concluded that the lower court erred in finding Iltaco likely to succeed on the merits of its trademark infringement claim for that specific term.
The ruling represents a significant development in trademark law within the food industry, where companies frequently battle over similar product names and marketing language. The decision suggests that courts must carefully analyze each claimed trademark term individually, rather than applying broad protections across related phrases.
For Iltaco, the mixed ruling means the company retains some protection against Little Caesars' use of certain terminology while losing the injunctive relief it sought for what may be its most valuable trademark asset - the exact phrase 'Pizza Puff.' The company can continue pursuing its underlying trademark infringement claims in district court, but without the immediate protection of a preliminary injunction.
Little Caesars benefits from the appeals court's reversal, regaining the ability to use 'Pizza Puff' in its marketing and product descriptions. The pizza chain successfully defended against injunctions for 'Crazy Puff' and 'Puff' at both the district and appellate levels.
The case illustrates the complex analysis courts must undertake in trademark disputes, particularly when evaluating preliminary injunctions that provide immediate but temporary relief. Courts must balance the trademark holder's rights against the potential harm to defendants who may be operating legitimately in the marketplace.
The Seventh Circuit's decision follows oral arguments held Nov. 14, 2025, giving the parties approximately two months to await the outcome. The case involved multiple appeal numbers - 24-3317, 25-1072, 25-1076, and 25-1112 - suggesting various procedural motions and cross-appeals were consolidated for the appeals court's review.
This trademark dispute reflects broader challenges in the food industry, where companies must navigate increasingly crowded brand spaces while protecting their intellectual property rights. The outcome may influence how other food companies approach similar trademark conflicts involving descriptive product names.
The case now returns to the district court for further proceedings on the underlying trademark infringement claims, with the preliminary injunction landscape significantly altered by the Seventh Circuit's ruling.