Use of Square Bottle Sparks Trade Dress Lawsuit With Jack Daniel's

Fox News is reporting on a newly-filed trademark lawsuit pending between Jack Daniel's Properties, Inc., a subsidiary of Brown-Forman, the makers of Jack Daniel's whiskey and Defendants J&M Concepts, and Popcorn Sutton Distilling, LLC, a small distiller.

Photo Courtesy of Ann Richardson

Sutton's whiskey is packaged in a very similar square bottle, with angular proportions and dimensions that are clearly reminiscent of the classic Jack Daniels' whiskey bottle.

Sutton's alcoholic beverage is named after a famous moonshiner Marvin "Popcorn" Sutton.  Sutton, known for his long gray beard and overalls, committed suicide by carbon monoxide poisoning in 2009 rather than go to prison for violating alcohol manufacturing laws.  According to Wikipedia, Sutton received his "Popcorn" nickname after damaging a bar's faulty popcorn vending machine with a pool cue in the 1960's.

Jack Daniel's, produced in Lynchburg, Tennessee, filed the suit in federal district court in Nashville, alleging that the Defendants' use of a square bottle is likely to cause confusion among consumers.

The Complaint further alleges that the Jack Daniel's square bottle has been "a consistent commercial impression" for decades. That packaging is part of "one of the oldest, longest-selling and most iconic consumer products" in U.S. history, the Complaint alleges.

Jack Daniel's specifically describes its claimed "Trade Dress" as a "combination of a square-shaped bottle with angled shoulders that house a raised signature on four sides, and beveled corners, and labeling with a white on black color scheme and filigree designs."

While Jack Daniel's does not own a federally registered trademark on the square bottle shape standing alone, it does own a trademark for the labeling elements of its claimed "Trade Dress."  

The Defendants' website which had been advertising the accused whiskey appears to have been shut down, possibly in response to the filing of the lawsuit.

Trade dress lawsuits involving alcohol bottle shapes are rare, but not unheard of. For example, in 2012, the Ninth Circuit Court of Appeals reversed the lower court's dismissal of a case involving a skull-shaped vodka bottle.  In that case, the Court noted that the shape of a skull for a bottle was purely ornamental, served no functional purpose whatsoever and may have garnered sufficient secondary meaning among the consuming public to be identified with its producer.  Further, the Appeals Court noted the availability of many alternative designs to competitors.

Delay in Resolving ABSOLUT Trademark Dispute Raises Thorny Issues

The Everett, Washington hair salon's name/logo

Self-help guru Napoleon Hill once wrote that "procrastination is the bad habit of putting off until the day after tomorrow what should have been done the day before yesterday."  A number of parties involved in a trademark dispute in the state of Washington may agree with that statement more than they would care to.

According to recent reports, when Jesse Skittrall purchased the small Absolut Hair and Makeup salon in Everett, Washington in 2009, he was informed by Gayle Pratt, the former owner of the salon, that Vodka giant Absolut had sent a formal cease and desist letter in 2005, but didn't follow up on its demand that the salon change its name.

Consequently, Pratt evidently concluded that the matter was not being pursued by the vodka maker, and the hair salon management changed hands.

However, at the end of July 2013, the vodka maker finally followed up, and reportedly gave Skittrall until January 1, 2014 -- 6 months -- to completely change the salon's name, or else face a federal lawsuit for trademark infringement.

Skittrall has appealed to the community to raise money, and appeared on local radio stations, complaining that the vodka company had "come out of nowhere."

On GoFundMe.com, Skittrall apparently seeks as much as $20,000 to fund the name change, but as of today, has raised only $125.  It is not clear why it would cost $20,000 for the business to change its name, but the salon would obviously need new signage, a new website and new business cards.

The Vodka Maker's Trademark

On the crowd funding site, Skittrall claims that "I bought the business with this name and existing signage and was not aware of any trademark issues."

But the former owner disputes Skittrall's characterization, saying that she fully informed him of the unresolved trademark dispute back in 2009.

But what of the vodka maker's apparent delay in following up?

Precedent from the Ninth Circuit Court of Appeals, which governs Washington, lays out a clear duty for a trademark owner to act diligently once it has sent a cease and desist letter that has become unresolved.

Otherwise, the trademark owner might face the possibility that its delay in protecting its rights may rise to the level of being "estopped by laches."  The doctrine is sometimes just referred to as "laches," which comes from the French for "laziness."

The Latin phrase "Vigilantibus non dormientibus æquitas subvenit (Equity aids the vigilant, not the sleeping ones (that is, those who sleep on their rights))" is often quoted to help explain the doctrine.

In other words, the vodka maker's delay in pursuing the 2005 matter against the hair salon could have led the former and new owners to reasonably infer that the alcohol beverage company had lost interest in protecting its rights in this instance.

To the extent that the salon owners relied upon that delay to their detriment and suffered prejudice, courts may hold that delay against the trademark owner, not the salon.

The Ninth Circuit Court of Appeals had said in Brookfield Communications v. West Coast Entertainment in 1999:

"Although we have applied laches to bar trademark infringement claims, we have done so only where the trademark holder knowingly allowed the infringing mark to be used without objection for a lengthy period of time. See E–Systems, Inc. v. Monitek, Inc., 720 F.2d 604, 607 (9th Cir.1983). In E–Systems, for example, we estopped a claimant who did not file suit until after the allegedly infringing mark had been used for eight years where the claimant had known of the infringing use for at least six years. See id.; see also Carter–Wallace, Inc. v. Procter & Gamble Co.,434 F.2d 794, 803 (9th Cir.1970). We specifically cautioned, however, that “had defendant's encroachment been minimal, or its growth slow and steady, there would be no laches.” E–Systems, 720 F.2d at 607; accord Carter–Wallace, 434 F.2d at 803 n. 4."

In this case, the delay would appear to be from 2005 to 2013:  approximately eight years.  There is no clear evidence of progressive encroachment, as the local hair salon appears to be largely the same as it was in 2005, despite having new management.

Furthermore, Washington's statute of limitations may also apply here, which enforces a three year statute of limitations to trade name disputes.

Consequently, the vodka maker may face a problem if the hair salon simply refuses to change its name, and invokes these doctrines in its defense. 

The lingering problem for the salon, of course, is that estoppel by laches is a defense that can only be asserted in a lengthy court proceeding, after factual discovery has been exchanged.  And invoking such equitable defenses obviously costs time and money, and litigation comes with no guarantees.

In conclusion, had all the parties more clearly resolved their original dispute back in 2005, more costly headaches for all involved might have been avoided.

Microbreweries Increasingly Battle Over Beer Names as Trademarks

After a long lull following the Prohibition era during which mega-breweries dominated the American beer market for decades, local microbreweries have steadily grown in popularity recently, with thousands of newly operating breweries joining the ranks each year.

However, such microbreweries still only satisfy a modest portion of the American appetite for beer.  Consequently, thousands of struggling microbrewers are trying to capture this highly competitive segment of the aggregate marketplace.

The increasing pressure on this marketplace has made brand differentiation a key concern.  Some commentators have called this conundrum "standing out in a sea of beer."

Consequently, publicized legal conflicts over brands in the microbrewery marketplace have recently arisen.

 

For example, in April 2013, a Grand Rapids, Michigan-based brewery called Brewery Vivant sent a legal cease and desist letter to Tired Hands Brewing Company of Ardmore, Pennsylvania, demanding that the small brewery cease using the name "FARMHANDS" for one of its Belgian ales.

"FARMHAND" is an as-yet unregistered trademark claimed by Brewery Vivant for a French farmhouse-style ale that is very popular in Michigan.  Brewery Vivant owners claims to have experienced an instance of actual confusion at a trade show, leading to the need for legal threats.

The FARMHAND brand has been used by a British Columbia-based microbrewer called Driftwood Brewery, leading to the possibility of international trademark issues down the line.

But the conflict over FARMHAND is not an isolated incident.

In June 2013, West Sixth Brewing of Kentucky and Magic Hat Brewing of Vermont settled a trademark-related dispute that quickly got ugly when it was described as "frivolous," and which escalated to a full-blown federal lawsuit until it was settled by the parties after mediation.

Similarly, Sierra Nevada Brewing Company had a trademark dispute over the "NARWHAL" trademark when it launched "Narwhal Imperial Stout," a move that the Narwhal Brewery apparently opposed.

And when Mother Earth Brewing Co., a craft beer maker in Vista, California, discovered another company in North Carolina with virtually the same name, Mother Earth Brewing Co., LLC, it was forced into filing trademark litigation in the Trademark Office.

Those with long ties to the microbrewery industry lament the need for ongoing legal conflicts over trademarks, citing comparisons to the less collegial tech industry.

According to one attorney who specializes in the alcohol and brewery industries, the craft beer industry "has become swollen," leading to a need for market participants to be more proactive with a coherent and aggressive branding and trademark strategy.

Tommy Gun Maker Sues Al Capone For Boozy Trademark Infringement

Saeilo Enterprises, Inc., current manufacturer of the old school Thompson submachine gun (left), often referred to as a “Tommy gun,” recently filed a lawsuit claiming trademark infringement against Chicago-based liquor company, Alphonse Capone Enterprises, Inc.  Capone Enterprises has no clear legal connection to the Chicago gangster of the 1920's, but is clearly attempting to profit from an association with the notorious Public Enemy Number One.

At issue is the fact that Capone Industries has been selling a new brand of vodka under the Tommy Guns name in a bottle that is intentionally shaped like a Tommy gun. 

Saeilo owns a federally registered trademark for TOMMY GUN in connection with actual firearms, and the trademark has been used constantly since 1920 in connection therewith (including use by the Chicago gangster, not the Chicago liquor company).

The gun maker is also the owner of a separate TOMMY GUN trademark that covers clothing. Saelio does not apparently own any federal trademark on the name for alcoholic beverages.


In contrast, Al Capone Enterprises owns a current federally registered trademark for TOMMY GUN for beer, wines and spirits.

The complaint, which was filed in federal court in Chicago in March 2013, alleges that Al Capone Industries does not have authorization to use the Tommy Gun trademarks on alcoholic beverages that carry a reproduction of the Tommy Gun name and distinctive shape. 

Additionally, Saeilo claims that Capone’s conduct not only violates federal trademark laws, but also Illinois state law and common law. Saeilo further brought claims under Illinois’ Trademark Registration and Protection Act, as well as the Illinois Deceptive Trade Practices Act.

As owner of the trade dress rights in the design of the Thompson submachine gun or “Tommy Gun,” Saeilo claimed that Capone’s unlawful use of the Tommy Gun trade dress was likely to cause “confusion or mistake and/or is likely to deceive consumers as to the affiliation, connection of association of [Capone] with Saeilo,” and of course, Saeilo seeks a permanent injunction and damages.

An interesting legal question arises as to whether and when phrases used to describe firearms can be legally trademarked by the gunmaker, or even by others, in connection with alcoholic beverages.

For example, the trademark of Colt Buntline Special .45 is owned by Colt's Patent Firearms Manufacturer. But Colt 45 in connection with clothing is owned by Pabst Brewing Company. It is unclear why Pabst does not own a federally registered trademark for Colt 45 in connection with its malt liquor beverages.