Godiva, Dogiva and Cativa

Realizing that many people treat their dogs and cats like children, Cynthia Grey, 34, a Hollywood entrepreneur, came up with what she considers a perfect present for the pampered pet. She packaged ordinary dog and cat biscuits in sampler boxes covered with silver foil to resemble assortments of exquisite chocolates. The names for the products: Dogiva and Cativa. Grey sent samples last spring to such departent-store chains as Lord & Taylor and Saks Fifth Avenue, which quickly decided that the bonbon biscuits would make excellent Christmas gifts at about $10 a box. Grey, a former Playboy bunny and wife of a Los Angeles lawyer, put up her Mercedes-Benz 4505L as collateral for a $25,000 bank loan to build her fledgling business. Since starting full-scale production early last fall, she has shipped 25,000 boxes.

Campbell Soup, which manufactures Godiva chocolates, was not amused. In a letter to Grey, the company charged that she was "passing off inauthentic and offensive merchandise" that looked like candy for humans and "may constitute a danger to public health." Campbell demanded that she supply a list of her customers, "destroy all the packaging" and "pay over to us the profits." Grey, who says that Campbell is "barking up the wrong tree," sued the company in a Los Angeles federal court for interfering with her enterprise. Campbell countersued, and Grey filed an additional complaint with a California state judge. The courts are scheduled to take up the case of the canine candy this month.

In the meantime, Grey is looking ahead. She will offer Valentine's Day pet treats in heart-shaped boxes adorned with red ribbons. For the spring, she plans to dye her products with pastel colors to produce Easter baskets of biscuit-eggs.