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Pace, Old El Paso End Hot Battle

January 12, 1988 GMT

SAN ANTONIO, Texas (AP) _ The makers of Pace and Old El Paso picante sauces have cooled their 15- month sizzling feud over the design and labeling of their products, company officials said Monday.

In an out-of-court settlement, Pet Inc., makers of Old El Paso, agreed to change the shape of their hot sauce bottle and label design and acknowledged that San Antonio-based Pace was the owner of the hourglass-shap ed bottle.

Pace had filed suit in federal court in San Antonio in October 1986, charging that Pet copied its bottle design and vegetable-laden label. Pace sought a temporary injunction, asking that Pet remove the products from the shelves and forfeit the profits from those products.

A civil trial was scheduled for April in federal court in San Antonio.

″No money changed hands, but we’re very happy that they agreed to put an end to the confusion that the Pet package was causing to our customers,″ Pace spokesman Rod Sands said.

Pet will phase in gradually its new bottle designs and labels in Texas, Denver and Atlanta, three markets in which Pace said it lost business.

Pet spokesman Les Landes said no Old El Paso products would be taken off the shelf.

″Nobody won. Nobody lost,″ Landes said. ″We just decided that it was time for us to come to a mutual agreement and we were able to do so.″

In 1986, U.S. Magistrate Jamie Boyd recommended that a preliminary injunction not be imposed on Pet.

In April 1987, U.S. District Judge H.F. ″Hippo″ Garcia denied the preliminary injuction and Pace attorneys took their case to the 5th U.S. Circuit Court of Appeals in New Orelans.

Pace and Old El Paso share about 26 percent each of the $200 million-a-year Mexican hot sauce market.