Wine and Spirits Are not Always Confusingly Similar

Brand litigation can be extreme in the consumer products space and even more so for alcoholic beverages (legal cannabis brand owners take note and start stockpiling your war chest).  It’s not uncommon for litigation to arise whenever an alcoholic beverage brand owner believes that another alcoholic beverage brand infringes.  Such was the case for Sazerac Company, the maker of the high quality bourbon BUFFALO TRACE.  Sazerac became concerned that Fetzer Vineyards’ use of a buffalo design and the word “bourbon” on a wine label would cause consumer confusion.

In its complaint Sazerac alleged that:

Fetzer Buffalo Design and Trade Dress are confusingly similar to Sazerac’s BUFFALO Marks and BUFFALO TRACE Trade Dress.  Each of the 1000 Stories’ bottles prominently features the Fetzer Buffalo Design, which is a sketched rendering of a standing, left-facing, fur-covered buffalo, similar to the Buffalo Logo and Buffalo Outline displayed on Sazerac’s BUFFALO TRACE product packaging.  In addition to this confusingly similar representation of a buffalo, the bottle text prominently reads “AGED IN BOURBON BARRELS,” and the website marketing specifically references the wine’s aging process in bourbon barrels from “famed distilleries,” tacitly suggesting an association with such distilleries.  It is readily apparent that Defendant chose the illustration and particular artistic stylization of a Buffalo to create a false association with Sazerac’s BUFFALO TRACE brand.

Sazerac alleged in its complaint that theirs and Fetzer’s wine would be sold in the same commercial channels – “Sazerac’s BUFFALO TRACE product and Defendant’s 1000 Stories product are competing, or will compete, in identical retail outlets – for example, wine and liquor stores, bars, restaurants, and online retail sites” – and be marketed to the same group of consumers – “Defendant, like Sazerac, markets its 1000 Stories product to adult consumers and adult purchasers of alcoholic beverage products.”

Sazerac’s claim of likelihood of confusion falls in line with the trend of the Trademark Trial and Appeals Board to find beer, wine and spirits related goods for the purposes of determining likelihood of confusion.  The TTAB has found support for this position based on third-party evidence showing manufacturers produce various types of alcoholic beverages under a single mark.  In re Uinta Brewing Company, the TTAB found persuasive eleven websites that showed breweries also selling wine; In re Sugarlands Distilling Company, LLC, the TTAB cited five examples of wineries also engaged in distillation and the sale of spirits; In re Sonoma Estate Vintners, LLC, the TTAB found persuasive fifteen registrations showing that various entities registered a single mark for wine and beer.  The TTAB also finds that alcoholic beverages are sold in the same channels of trade, such as liquor stores and restaurants, which means  that consumers will encounter multiple types of alcoholic beverages in the same stores.  The TTAB also commonly finds that consumers purchase alcohol without exercising great care.

Most often cases such as these settle.  This case, however, went all the way to a bench trial after which the judge rendered an opinion which began with the statement “In the final analysis, this case was not close.”

First the court found that Sazerac failed to establish a claim of trademark infringement.  The court noted that Sazerac relied on the “colorable imitation” theory of trademark infringement, but failed to present any evidence that Sazerac’s buffalo logo trademark creates the same commercial impression as Fetzer’s buffalo.  The court noted that Sazerac consistently argued that it was the combination of Fetzer’s buffalo and its reference to “bourbon” in “BOURBON BARREL AGED” that confused consumers as to the source of Fetzer’s wine.  This, the court noted, is a trade dress claim.

Trade dress involves the total image of a product and may include features such as size, shape, color, color combinations, texture, or graphics.  Trade dress protection is broader in scope than trademark protection, both because it protects aspects of packaging and product design that cannot be registered for trademark protection and because evaluation of trade dress infringement claims requires the court to focus on the plaintiff’s entire selling image, rather than the narrower single facet of trademark.  To establish a trade dress infringement claim, a plaintiff
must prove: “(1) the trade dress is inherently distinctive or has acquired distinctiveness through
secondary meaning; (2) there is a likelihood that the public will be confused by the infringing
use; and (3) the trade dress is nonfunctional.”

In reviewing these elements, the court found that Sazerac failed to establish that its trade dress is distinctive or that it had acquired secondary meaning.  Distinctive trade dress occurs when the trade dress is of such an unusual design that it automatically distinguishes itself from its competitors.  In finding Sazerac’s trade dress not distinctive, it found persuasive the “extensive evidence of other alcoholic beverages…that include buffalo image[s]” and that the Buffalo Trace brand has low brand recognition since it comprises only .5% of the whisky market.

Further, the court said that Sazerac failed to present evidence of direct consumer testimony or survey findings showing that its claimed trade dress had acquired secondary meaning.  While Sazerac relied on evidence showing significant marketing expenditures, the court said that Sazerac failed to demonstrate how its marketing efforts effectively created secondary meaning.

The court made quick work of analyzing the similarity of the trade dress.   While both use realistic sketched renderings of a buffalo and use the term “bourbon”, the court found that all of the other elements are different.  In the end, the court found that Sazerac failed to present any evidence that the overall appearance of Fetzer’s wine is so similar to its Buffalo Trace trade dress that it is likely to confuse consumers.

In addressing the trade channels, the court acknowledged that both bourbon and wine participate in the same general alcoholic beverage industry and are advertised and sold in overlapping channels.  However, the court found that wine and bourbon are “very distinct products” with “different alcohol contents and social uses” and they “occupy different sections of the stores where they are offered for sale.”  The court found that “the proximity or relatedness of these alcoholic beverage products may weigh slightly in Sazerac’s favor, but not significantly so.”

Lastly, the court noted that purchasers of premium alcoholic beverages tend to exercise a high degree of sophistication and care when making their purchasing decisions and cited to the 2005 Second Circuit case of Star Indus., Inc. v. Bacardi & Co. for the authority that “Unhurried consumers in the relaxed environment of the liquor store, making decisions about $12 to $24 purchases, may be expected to exhibit sufficient sophistication to distinguish between Star’s and Bacardi’s products, which are differently labeled.”  Given a $14 price point for Fetzer’s wine, the court found that “[p]urchasers of a premium red zinfandel, therefore, are expected to exercise a high degree of care and are not likely to make mistakes as to a product’s sponsorship or affiliation.

While the court’s finding of no infringement was “not close”, it will be interesting to see what effect, if any, the court’s reasoning may have on the USPTO or TTAB in refusals to register a brand for wine based on likelihood of confusion with a brand for spirits (or visa versa).  The court’s opinion guts two significant factors upon which the USPTO and TTAB have based refusals to register.