Wineries get new tools for protecting trademarks, but disputes continue
While the business of protecting intellectual property recently got some shiny new tools, many of the challenges behind disputes between vintners about trademarks remain the same.
The Trademark Modernization Act of 2020 called for the U.S. Patent & Trademark Office to develop ways to streamline the dispute process and clean up fraudulent and unused marks. Those rules took effect in December.
A key update was the allowance of third parties, including the PTO director, to undertake cancellation of marks not in use through expungement and re-examination proceedings. Those are key because “it is more difficult for legitimate businesses to clear and register their own marks,” the final rule said.
Warren Dranit, an intellectual property attorney with Santa Rosa-based Spaulding McCullough & Tansil, explained the difficulty created by such unused trademarks.
“If a winery wants to introduce a new brand or mark, but one is out there standing in the way, you can’t go forward,” Dranit said.
The new process involves a $400 filing fee and a verified statement about “reasonable investigation of nonuse.” The PTO then is to pick up the effort, evaluating whether records warrant further inquiry. From that point, the one that registered the mark would have to provide evidence that it actually was in use to maintain that registration.
An improvement that came with the signing of the Trademark Modernization Act was the presumption of “irreparable harm” when there was a court finding of infringement, Dranit said. Before that, if a mark enforcement action was headed toward litigation, a goal was to get a preliminary injunction as quickly as possible.
Another new TMA rule that kicked in around the end of last year was a halving of the time applicants or registrants have to respond to agency action, reducing it to three months from six.
Fruit of the vineyard case
A wine trademark case that met a startling resolution recently after years in court was the battle over use of the name for a prized Napa Valley vineyard on labels. The Vineyard House in 2019 sued New York-based Constellation Brands, owner of Robert Mondavi Winery, over the use of the To Kalon Vineyard name.
Among its allegations, The Vineyard House claimed Constellation was putting the vineyard name on wine that may not contain fruit that really came from that property. Constellation countersued, claiming infringement of a name that had been used by Mondavi for three decades, well before it was acquired by Constellation in 2001.
A federal judge in California agreed with Constellation last year, granting a permanent injunction against The Vineyard House from using the name and awarding Constellation $2.3 million in attorney’s fees, out of the nearly $4.5 million it claimed. In her order, U.S. District Judge Yvonne Gonzalez Rogers wrote that it was a case that never should have been filed, no less make it to trial, Reuters reported.
While that outlay for legal costs was extraordinary, IP litigation can run into hundreds of thousands of dollars for even small North Coast vintners, Dranit said. But proactive searches for conflicting marks can be $40,000 to $70,000, and annual monitoring for registrations and filings of marks typically is much less, he said.
Cream of the dispute
In another clash over use of well-known industry names, Santa Rosa-based Jackson Family Wines, one of the globe’s biggest wine producers, a year ago sued Central Valley-based E. & J. Gallo Winery over the latter’s newly introduced Cask & Cream wine, claiming that it was similar to Jackson’s La Crema brand and winery, The Press Democrat reported at the time.
Jackson had previously clashed over the name with Gallo, the world’s largest vintner and owner of multiple North Coast brands and thousands of acres of regional vineyards. In 2013, Jackson objected to Gallo’s application to trademark “Cask & Cream,” the name of cream liqueurs it had been producing since 1996. In 2019, Jackson opposed Gallo’s registration of a mark for Cask & Cream wines.
In late January of this year, Jackson and Gallo reached a settlement with prejudice, according to court records.
Dranit, who wasn’t involved in the case, said the proliferation of wine brands, in particular beverage alcohol labels, generally can complicate IP cases.
“Part of what confounds winery and other beverage producers is that it is such a crowded field,” Dranit said. “And the vagarity is how wine brands relate to other brands in beer and other alcoholic beverages. How close do they have to be for infringement?”
Some legal analysis lumps all alcoholic drinks together, so if the marks get close there will be accusations of infringement, he said.