Defending 'Butter' wines: Napa's JaM Cellars goes back to court to defend trademarked brand

JEFF QUACKENBUSH
BUSINESS JOURNAL STAFF REPORTER

8 factors for determining consumer confusion

The U.S. District Court Ninth Circuit's 1979 ruling in the

AMF Inc. v. Sleekcraft Boats case created eight factors, known as the Sleekcraft test, that courts in the district consider on the consumer-confusion question of trademark infringement.

1. Strength or weakness of the plaintiff's mark. The more the consuming public recognizes the plaintiff's trademark as an indication of origin of the plaintiff's goods, the more likely it is that consumers would be confused about the source of the defendant's goods if the defendant uses a similar mark.

2. Defendant's use of the mark. If the defendant and plaintiff use their trademarks on the same, related, or complementary kinds of goods there may be a greater likelihood of confusion about the source of the goods than otherwise.

3. Similarity of plaintiff's and defendant's marks. If the overall impression created by the plaintiff's trademark in the marketplace is similar to that created by the defendant's trademark in appearance, sound or meaning, there is a greater chance that consumers are likely to be confused by defendant's use of a mark or of likelihood of confusion.

4. Actual confusion. If use by the defendant of the plaintiff's trademark has led to instances of actual confusion, this strongly suggests a likelihood of confusion. However actual confusion is not required for a finding of likelihood of confusion. Even if actual confusion did not occur, the defendant's use of the trademark may still be likely to cause confusion.

5. Defendant's intent. Knowing use by defendant of the plaintiff's trademark to identify similar goods may strongly show an intent to derive benefit from the reputation of the plaintiff's mark, suggesting an intent to cause a likelihood of confusion. On the other hand, even in the absence of proof that the defendant acted knowingly, the use of plaintiff's trademark to identify similar goods may indicate a likelihood of confusion.

6. Marketing/advertising channels. If the plaintiff's and defendant's goods or services are likely to be sold in the same or similar stores or outlets, or advertised in similar media, this may increase the likelihood of confusion.

7. Consumer's degree of care. The more sophisticated the potential buyers of the goods or the more costly the goods, the more careful and discriminating the reasonably prudent purchaser exercising ordinary caution may be.

8. Product line expansion. When the parties' products differ, you may consider how likely the plaintiff is to begin selling the products for which the defendant is using the plaintiff's trademark.

Source: U.S. District Court Ninth Circuit

Napa-based JaM Cellars Inc. is suing Livermore-based The Wine Group LLC, one of the largest vintners and maker of the Franzia brand of value wines, alleging trademark infringement.

JaM Cellars alleges in a federal complaint filed April 1 that The Wine Group's newly launched Franzia Bold & Jammy cabernet sauvignon box wine “is likely to cause consumer confusion, deception or mistake” as to the source of the wine, as the Napa vintner had registered “Jam” and “Jam Cellars” with the U.S Patent and Trademark Office in 2010.

This action follows an ongoing trademark-infringement suit JaM Cellars filed against The Wine Group a year ago, claiming the Franzia Rich & Buttery chardonnay box wine is confusing consumers when in the marketplace with JaM Cellar's Butter chardonnay. The Napa company registered the “Butter” mark also in 2010.

JaM Cellars' attorneys wrote that they learned about the forthcoming Bold & Jammy label during litigation of Rich & Buttery. The Napa wine company also had sued The Wine Group in 2017 for trademark infringement over a “Butterkissed” chardonnay label produced for the Cupcake Vineyards brand, and they learned of the Rich & Buttery label during that action.

That matter was resolved in July 2018 “to the mutual satisfaction” of both wine producers, and Butterkissed was moved to secondary Cupcake label, according to court documents.

The Wine Group in a statement challenged JaM Cellars' ability to use those words in a trademark and called the allegation of infringement “offensive.”

“The terms ‘buttery' and ‘jammy' are among the most common descriptors that exist for wine,” wrote John Sutton, chief financial officer of The Wine Group. “The complainant made the choice to use those terms in their brands and should have to live with other wineries using those familiar phrases to describe their products.”

Attorneys for JaM Cellars couldn't be reached for comment. JaM Cellars is seeking court costs and unspecified damages in the two most recent cases with The Wine Group.

Over 1.6 million bottles (more than 133,000 12-bottle cases) of JaM cab have been sold since it debuted in 2009, totaling $15.9 million at wholesale, according to the latest filing.

JaM's Butter is said to be the second-best-selling chardonnay in the U.S. for its price tier ($15-$25 a bottle or $20 for four-pack of aluminum cans), with $150 million at wholesale since it was released in 2010, with over $50 million just last year ($90 million at retail), per the lawsuit filed last year.

The company said it has spent $35 million in advertising and marketing all the wines, according to the court documents.

The Wine Group in the statement said the Franzia brand sells the equivalent of 24 million cases annually.

JaM Cellars has been vigorous in trademark actions over Butter and JaM since they were registered, according to court records. The first lawsuit was against Cult of 8 (Alcohol by Volume) in 2013 for the Bread & Butter label, and it settled in early 2015. Other lawsuits included 2017 actions against Plata Wine Partners (Buttercream), Rubin Wines (Buttery Babs and Buttery Barb), Vintage Wine Estates (Butterknife Wines) and O'Neill Beverages (Butterball), now part of Vintage.

The Wine Group vowed to fight on in court this time.

“The complainant has been suing others in the industry over this same issue for years, including those who may not have the resources to fight back as we can,” Sutton wrote. “We will stand up for all of us in the industry who are merely trying to describe our wines using common wine descriptors.”

JaM Cellars' lawsuits are amid 30 protests it has made since 2013 to the Trademark Trial and Appeal Board since 2013 against filings, according to the Patent and Trademark Office.

After a filing is published publicly, mark holders can submit letters of protest to the trademark office attorney reviewing the filing, according to David Sharisi, principal attorney of LA Tech & Media law in Los Angeles. If the mark is approved, there's a 30-day window to appeal that approval to the board before a mark is registered.

“A lot of litigation happens during that time,” Sharisi said. “A lot of this is public information, so you can find out when it is published then file before that window with cease and desist letters.”

Legal industry figures note that 2% to 3% of trademark applications are contested during the application window.

Jeff Quackenbush covers wine, construction and real estate. Contact him at jquackenbush@busjrnl.com or 707-521-4256.

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This story was updated April 30 with a statement from The Wine Group about the case.

8 factors for determining consumer confusion

The U.S. District Court Ninth Circuit's 1979 ruling in the

AMF Inc. v. Sleekcraft Boats case created eight factors, known as the Sleekcraft test, that courts in the district consider on the consumer-confusion question of trademark infringement.

1. Strength or weakness of the plaintiff's mark. The more the consuming public recognizes the plaintiff's trademark as an indication of origin of the plaintiff's goods, the more likely it is that consumers would be confused about the source of the defendant's goods if the defendant uses a similar mark.

2. Defendant's use of the mark. If the defendant and plaintiff use their trademarks on the same, related, or complementary kinds of goods there may be a greater likelihood of confusion about the source of the goods than otherwise.

3. Similarity of plaintiff's and defendant's marks. If the overall impression created by the plaintiff's trademark in the marketplace is similar to that created by the defendant's trademark in appearance, sound or meaning, there is a greater chance that consumers are likely to be confused by defendant's use of a mark or of likelihood of confusion.

4. Actual confusion. If use by the defendant of the plaintiff's trademark has led to instances of actual confusion, this strongly suggests a likelihood of confusion. However actual confusion is not required for a finding of likelihood of confusion. Even if actual confusion did not occur, the defendant's use of the trademark may still be likely to cause confusion.

5. Defendant's intent. Knowing use by defendant of the plaintiff's trademark to identify similar goods may strongly show an intent to derive benefit from the reputation of the plaintiff's mark, suggesting an intent to cause a likelihood of confusion. On the other hand, even in the absence of proof that the defendant acted knowingly, the use of plaintiff's trademark to identify similar goods may indicate a likelihood of confusion.

6. Marketing/advertising channels. If the plaintiff's and defendant's goods or services are likely to be sold in the same or similar stores or outlets, or advertised in similar media, this may increase the likelihood of confusion.

7. Consumer's degree of care. The more sophisticated the potential buyers of the goods or the more costly the goods, the more careful and discriminating the reasonably prudent purchaser exercising ordinary caution may be.

8. Product line expansion. When the parties' products differ, you may consider how likely the plaintiff is to begin selling the products for which the defendant is using the plaintiff's trademark.

Source: U.S. District Court Ninth Circuit

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