Ben & Jerry’s Independent Directors Lose Request for Injunction Over Israel Business

A judge for the Southern District of New York ruled Monday that Ben & Jerry’s had failed to demonstrate irreparable harm in its request for a preliminary injunction against Unilever. Ben & Jerry’s board members earlier this month had asked the court to stop Unilever from making the transfer, arguing in a court hearing that the move could allow the brand’s products to be used to oppose social issues that it supports.

Representatives for Ben & Jerry’s independent board members and Unilever didn’t immediately respond to requests for comment. A lawsuit, in which the ice cream maker’s independent board members are seeking to clarify their rights regarding protecting the brand integrity and social mission, is slated to be separately heard at a later date.

The rare legal battle between subsidiary and parent has its roots in a move by Ben & Jerry’s last year to stop selling its products in Jewish settlements in the West Bank and parts of East Jerusalem once the existing license arrangement expired. It said such sales were inconsistent with its values.

Unilever acquired Ben & Jerry’s in 2000. Part of the deal involved agreeing to let Ben & Jerry’s independent board make its own decisions about its social mission.

The move by Ben & Jerry’s triggered a backlash, both inside and outside Israel. Naftali Bennett, then Israel’s prime minister, and some U.S. politicians criticized the decision. A handful of U.S. state investment funds sold or threatened to sell Unilever shares.

Then, Unilever said it would sell the rights to the brand in Israel to the local licensee, saying Ben & Jerry’s would be sold throughout Israel and the West Bank under its Hebrew and Arabic names.

While that sale has closed, leaving Ben & Jerry’s unable to block it outright, lawyers for independent board members sought to stop Unilever from transferring know-how and trade dress—referring to trademark law that protects the look and feel of a product and distinguishing it from other similar products—about new products.

Members of Ben & Jerry’s independent board said the sale of the Israeli business was made without their consent. The brand had argued that the local licensee could launch products using Ben & Jerry’s recipes but branded with names that opposed a social mission the Vermont-based ice cream maker was backing.

Unilever’s lawyers countered that Ben & Jerry’s arguments were highly speculative. On Monday, the judge agreed with Unilever, ruling that the potential harm outlined by Ben & Jerry’s was “too speculative to constitute irreparable harm,” given it was based on a “hypothetical scenario involving several speculative steps.”

Ben & Jerry’s lawyers had also said an injunction was needed to prevent consumer confusion over who owns Ben & Jerry’s social mission. The judge said the prospect of confusion was “remote” and that Ben & Jerry’s had offered no evidence of such confusion or the impact of it.

Write to Saabira Chaudhuri at saabira.chaudhuri@wsj.com

A judge for the Southern District of New York ruled Monday that Ben & Jerry’s had failed to demonstrate irreparable harm in its request for a preliminary injunction against Unilever. Ben & Jerry’s board members earlier this month had asked the court to stop Unilever from making the transfer, arguing in a court hearing that the move could allow the brand’s products to be used to oppose social issues that it supports.

Representatives for Ben & Jerry’s independent board members and Unilever didn’t immediately respond to requests for comment. A lawsuit, in which the ice cream maker’s independent board members are seeking to clarify their rights regarding protecting the brand integrity and social mission, is slated to be separately heard at a later date.

The rare legal battle between subsidiary and parent has its roots in a move by Ben & Jerry’s last year to stop selling its products in Jewish settlements in the West Bank and parts of East Jerusalem once the existing license arrangement expired. It said such sales were inconsistent with its values.

Unilever acquired Ben & Jerry’s in 2000. Part of the deal involved agreeing to let Ben & Jerry’s independent board make its own decisions about its social mission.

The move by Ben & Jerry’s triggered a backlash, both inside and outside Israel. Naftali Bennett, then Israel’s prime minister, and some U.S. politicians criticized the decision. A handful of U.S. state investment funds sold or threatened to sell Unilever shares.

Then, Unilever said it would sell the rights to the brand in Israel to the local licensee, saying Ben & Jerry’s would be sold throughout Israel and the West Bank under its Hebrew and Arabic names.

While that sale has closed, leaving Ben & Jerry’s unable to block it outright, lawyers for independent board members sought to stop Unilever from transferring know-how and trade dress—referring to trademark law that protects the look and feel of a product and distinguishing it from other similar products—about new products.

Members of Ben & Jerry’s independent board said the sale of the Israeli business was made without their consent. The brand had argued that the local licensee could launch products using Ben & Jerry’s recipes but branded with names that opposed a social mission the Vermont-based ice cream maker was backing.

Unilever’s lawyers countered that Ben & Jerry’s arguments were highly speculative. On Monday, the judge agreed with Unilever, ruling that the potential harm outlined by Ben & Jerry’s was “too speculative to constitute irreparable harm,” given it was based on a “hypothetical scenario involving several speculative steps.”

Ben & Jerry’s lawyers had also said an injunction was needed to prevent consumer confusion over who owns Ben & Jerry’s social mission. The judge said the prospect of confusion was “remote” and that Ben & Jerry’s had offered no evidence of such confusion or the impact of it.

Write to Saabira Chaudhuri at saabira.chaudhuri@wsj.com