By Erin Geiger Smith

(Reuters) - A court fight over bowl-shaped tortilla chips has ended with a jury finding that Frito-Lay North America's intellectual property was not infringed by a smaller rival now owned by ConAgra Foods.

A jury in U.S. District Court in the Eastern District of Texas ruled against Frito-Lay on all of its claims tied to the design of its Tostitos Scoops chips.

Frito-Lay had asked the jury in Sherman, Texas, to find that Medallion Foods Inc, which sells Bowlz chips, violated its trade dress and patent rights, as well as stole trade secrets after hiring a former Frito-Lay employee.

Magistrate Judge Amos Mazzant conducted the trial and the jury returned its verdict on Friday.

Frito-Lay, which is a brand of PepsiCo Inc, was represented by teams from the Dallas office of Baker Botts and Sherman-based Siebman Burg Phillips & Smith.

Attorneys from Missouri's Armstrong Teasdale and Ward & Smith of Longview, Texas, represented Medallion.

Frito-Lay is disappointed by the jury's verdict, spokesman Chris Kuechenmeister said in a statement. He also noted that "Frito-Lay's trade dress and patent rights remain valid" and the company is evaluating its options for post-trial motions and appeal.

Medallion is a subsidiary of Ralcorp Holdings, Inc, which was acquired in January by ConAgra.

Company spokeswoman Teresa Paulsen said in a statement that ConAgra is pleased with the jury's decision and will continue to make "distinctive, high-quality food such as this chip."

The litigation began in February, and Frito-Lay's complaint features color photographs side by side of the two companies' chips, both with scalloped edges.

Frito-Lay has a 2003 patent on the process used to make the bowl-shaped tortilla chips that it claimed that Medallion's chips infringed.

It also claimed that Medallion infringed both its trade dress rights to the Scoops design, which Frito-Lay registered with the U.S. Patent and Trademark Office, as well as its unregistered trade dress on the chip packaging.

Each company's package is blue, features a black name on a geometric background and has a see-through panel making it look as though the chips are being dipped in salsa.

To succeed on a trade dress claim, a plaintiff must show that its trade dress is distinctive and non-functional and that a defendant's product would confuse customers as to the source of the product.

Intellectual property disputes over the design of food are rare. Such disagreements typically would crop up when the shape of a food product is consistent enough and widespread enough that customers would associate it with a certain source, said Christopher Carani of McAndrews Held & Malloy.

In this case, however, the jury apparently did not believe such consumer confusion exists, finding that Medallion did not dilute or infringe Frito-Lay's trade dress rights. The jury also said Medallion did not infringe Frito-Lay's patent on the process for making the chips and ruled against Frito-Lay on its trade secrets claims.

The case is Frito-Lay North America, Inc v. Medallion Foods, Inc, U.S. District Court for the Eastern District of Texas, No. 12-00074.

For Frito-Lay: Timothy Durst of Baker Botts.

For Medallion: David Harlan of Armstrong Teasdale.

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