Trademark trouble in the wine industry. SUTTER v. TRI-VIN

A trademark is something that a producer of a product uses to distinguish their products from products produced by a competitor. The public policy reason for trademark law is to protect consumers from products of inferior quality. Because consumers will frequently make purchasing decisions based on the outward appearance of a product, a trademark has a significant influence on a consumer’s decision to purchase a product. At the time of purchase a consumer typically does not have the ability to fully evaluate a product for quality, therefore a decision to purchase will be based mainly on the trademark the product bears. Unscrupulous businesses will attempt to exploit this consumer behavior by branding their products with trademarks associated with high quality. The consumer will not discover that the mismarked product is a counterfeit until some time after the sale has been made.

In the United States trademark law gives the owner of the trademark the exclusive right to brand goods with their trademark. If someone other than the owner of a trademark brands products with a trademark, that can be considered trademark infringement. Trademark infringement is the unauthorized use of a trademark on or in connection with products in a manner that is likely to cause confusion, deception, or mistake about the source of products. A trademark owner can combat trademark infringement by filing a lawsuit against the alleged infringer. The trademark owner can request an injunction to stop the infringing activity and request monetary damages for trademark infringement which has occurred.

While the trademark on the product is important, the trademarks that appear in advertisements for a product are also relevant in a trademark dispute. Even if the products offered for sale do not bear the trademark, if the advertisements for the products prominently display a trademark that belongs to a competitor, that can constitute trademark infringement.

SUTER HOME WINERY, INC. V. TRI-VIN IMPORTS, INC., 19-cv-06302 (N.D.CA 2019) is a case which involves advertising that uses trademarks without authorization. The plaintiff in this case is a major producer of wines in the United States. The plaintiff is the owner of incontestable U.S. Trademark Registration No. 4,200,838 for NAPA CELLARS for wines derived from grapes grown in Napa County, California. The defendant in this case is a competing wine producer that sells its products using the trademark CLOS DE NAPA CELLARS.

In October 2019 the employees of the plaintiff were contacted by wine retailers for pricing information on CLOS DE NAPA wines. Included in the request was an advertisement which featured a wine bottle from the defendant next to the plaintiff’s NAPA CELLARS trademark. The wine retailers were given the advertisement by a representative of a distributor for the defendant. The defendant’s website also had the advertisement displayed. A copy of the advertisement is reproduced above. The plaintiff quickly filed a lawsuit against the defendant for trademark infringement.

In its complaint the Plaintiff alleges that the Defendants’ actions constitute use in commerce of a reproduction, counterfeit, copy or colorable imitation of Plaintiff’s registered mark in connection with the sale, offering for sale, distribution or advertising of goods or services on or in connection with which such use is likely to cause consumer confusion, deception or mistake as to source, sponsorship or approval of the Defendants’ aforesaid goods or services in violation of 15 U.S.C. §1114.

Even though the case has just been filed, it is difficult to see how the defendant will justify the use of the plaintiff’s trademark. The advertisement could be a mistake by an employee who was ignorant of trademark laws, however that will not excuse the use of the plaintiff’s trademark. We will have to wait and see what the defendant states in its answer.

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