Trademark research company CompuMark and Clarivate Analytics released a 2017 report “The Trademark Ecosystem Through the Lens of the C-Suite,” which surveyed 440 C-level executives in the US and EU. The report notes that the number of trademark applications has more than doubled between 2008 and 2015. The report found that while more companies are filing for new trademarks (61% of the respondents launched new trademarks in the last 12 months), few were actively enforcing their marks against third party infringement (20% actively watch more than three quarters of their trademarks, while half only watch 26-75% of their marks). The report also found that 34% of the respondents had to change one of their brand names as a result of infringement. The respondents cited that the biggest costs of trademark infringement was loss in revenue, followed by damage to brand reputation, customer confusion and reduced customer loyalty and trust.
On June 19, 2017, the U.S. Supreme Court ruled in Matal v. Tam (Case No. 15-1293) that the Trademark Act’s prohibition on registration of “disparaging” marks was unconstitutional. The USPTO had refused to register an application for THE SLANTS filed by the Portland-based band on grounds that it was disparaging to Asians under the “Disparagement Clause” of the Trademark Act (Section 2(a)). The Disparagement Clause bars registration of trademarks which may disparage persons, institutions, beliefs or national symbols or “bring them into contempt or disrepute.” The Asian-American band members argued that they intended the mark “reclaim” the offensive phrase and “drain” it of derogatory meaning. The band appealed the refusal to the Federal Circuit, which held that the Disparagement Clause unconstitutionally restricts free speech and this decision was affirmed. The Supreme Court reasoned that the Disparagement Clause amounted to impermissible viewpoint discrimination – where the government restricts speech solely because it was disagreeable. This decision does not address the Trademark Act’s ban on registering “immoral, deceptive or scandalous matter,” although this matter is being addressed in an appeal before the Federal Circuit (In Re Brunetti), which addresses the USPTO’s refusal to register FUCT for apparel, including children’s apparel. This case will also be informative for the REDSKINS’ owners whose trademarks were cancelled in 2014 under the Disparagement Clause as disparaging to Native Americans. There are numerous alcoholic beverage brand names that were refused based on the Disparagement Clause, including BULLSHIT and KHORAN and would now be considered registrable.
On May 1, 2017, the Eagles filed a lawsuit (Eagles Ltd v Hotel California Baja LLC et al, filed in the Central District of California, Case No. 17-03276) against a hotel in Todos Santos, Mexico for trademark infringement based on its use of HOTEL CALIFORNIA. The Eagles claim that the owners of the 11-room Hotel California infringe their trademark through selling HOTEL CALIFORNIA-branded merchandise and encouraging customers to believe the hotel is falsely associated with the band to further its sales. Interestingly, the song was released in 1976 and Hotel California opened in 1950, although the hotel underwent several name changes since then. The Eagles also opposed the hotel’s application to register the trademark HOTEL CALIFORNIA for a host of goods, including eyewear, jewelry, bags, and clothing, based on the Eagles’ “common law” (unregistered) rights to the HOTEL CALIFORNIA trademark.
In a non-precedential opinion issued on January 4, 2017, the Trademark Trial and Appeal Board (TTAB) cancelled two US trademark registrations for PORTON for “distilled spirits; brandy; pisco” on grounds that they were confusingly similar to PATRON for “tequila.” PORTON is the brand name for a Peruvian brandy, pisco, sold by Pisco Porton and PATRON is the brand for a Mexican tequila sold by Patron Spirits Int’l. The TTAB concluded that there was a likelihood of confusion between the marks based on the similarity of marks, the relatedness of goods, the channels of trade, the classes of customers and the conditions under which the products are sold. The TTAB held that since the products were deemed “legally identical,” the degree of similarity between the marks necessary to find confusion was reduced. While any Spanish speaker would distinguish these marks based on meaning alone (“porton” means door or gate and “patron” means guest or customer), it is clear that the TTAB will not put as much weight on differences in connotation when the marks are non-English words.
Wines & Vines reports on January 25, 2017 in its "Good Times Roll for U.S. Wine Industry" article that U.S. wine consumption and production are on the rise. Specifically, the article notes that "Table wine consumption in the United States grew by 1.8% in volume and 4.4% in dollars at the stores" and that "553,000 U.S. on- and off-premise locations now sell wine, which is 120,000 more locations than 10 years ago." The article also notes the rise of higher-priced wine, since "the average price of a 750ml bottle of wine is passing the $10 mark for the first time."
On November 28, 2016, Sutter Home sued Shmaltz Brewing for infringing its Menage a Trois trademark for selling 12-packs of beer under the MANNAge a Trois trade name. Here is the complaint and Shmaltz' website showing its use for a "3-way variety 12-pack" of its Hop Momma, Hop Manna and Hop Mania IPAs. The lawsuit was dismissed on January 11, 2017 and the 12-pack remains sold, for now.
Andres O'Hara-Plotnik's "Wine Label Design is More Important than You Think" article in Eater on October 12, 2016 is a great overview of studies and buyer perspectives (both consumer and retailer) of selecting bottles based on their label design. While some believe labels are just "gimmicks," reports and this author's interviews do show that wine buyers and consumers, especially millenials, are apt to buy (or not) a wine based on its label.
This 2016 Direct-to-Consumer Wine Shipping Report by ShipCompliant and Wines & Vines offers some interesting facts on the state of the wine industry as it relates to shipping and DTC sales. Of note is the break-down of large, medium and small wineries: 61 large wineries (500k+ case production), 256 medium wineries (50k-499k cases), 1538 small wineries (5k-49k cases) and over 6,000 wineries producing less than 5k cases. That's a lot of brand names ... see page 4.
On August 31, 2016, Lauren Eads of the Drinks Business covers the recent lawsuit filed by Coppola against Copa di Vino for trademark infringement and unfair competition based on its use of COPA on the Winemaker's Cut wine, which it alleges infringes its Director's Cut trademark for wine (among others) and distinctive trade dress. Coppola seeks damages and injunctive relief. You can read the complaint and check out the labels side-by-side here. We will monitor this for updates so stay tuned...
Eric Mortenson of the Capital Press reports on September 1, 2016 that the number of association cider makers in the Northwest has increased ten-fold in the last 6 years. Other noteworthy trends include the fact that cider represents 1.7% of alcohol sales in the US and Portlanders drink the most cider per capita
The Wine Institute and California Association of Winegrape Growers commissioned a report on the economic impact of California wine (summarized here on August 4, 2016), noting that the California wine industry contributes over $57 billion to the California economy and $114 billion to the US economy. A few other fascinating stats: the California wine industry employs over 786,000 Americans (325,000 in California), pays $15 billion in taxes ($7 billion in California) and has grown 19% in the past seven years.
The Wine Institute reports on July 8, 2016 here that California sold a record high of 276 million cases of wine in 2015 and reminds us that the US has been the world's largest wine market since 2010. Some other interesting facts: DTC shipping will now be legal in 44 states and the number of U.S. supermarkets now selling wine is about 30,000 (1,700 more stores than the year prior). As for the State of California, California wine makes up 60% of the US wine market, and 90% of wine exports. Here is a list of the top 5 consumers of US wine exports: EU ($622 million ), Canada ($461 million), Hong Kong ($97 million), Japan ($96 million) and China ($56 million).
Wines & Vines and ShipCompliant released the 2016 Direct-to-Consumer Wine Shipping Report, available on ShipCompliant's website and well-summarized here by Jim Gordon for Wines & Vines on January 25, 2016. Notably, Direct to Consumer sales in the US reached $2 billion in just ten years after the Supreme Court paved the way for direct-to-consumer wine shipments -- that is 8% higher in value and volume (which exceeds the 2.2% growth in the wine retail marketplace) and the average price per bottle of wine shipped is $38.
Silicon Valley Bank released its annual State of the Wine Industry Report estimating that fine wine sales will grow between 9 and 13% in 2016 (slightly less than 2015) and that "Gen X" consumers will surpass baby boomers in 2021 to become the largest fine wine consumer in the US.
ICANN has released the new generic Top Level Domains (gTLDs) .WINE and .VIN, which will launch on November 17, 2015 on a limited basis only to owners of federally registered trademarks. Whether these new gTLDs will gain traction with consumers and have marketplace value down the road or just be trees falling in the forest remains to be seen.
Regardless, and as history has proven, unsavory entrepreneurs will look at this as an opportunity to make domain-brand grabs and later seek to sell them for a profit to rightful owners. To assist registered trademark owners avoid cybersquatting and domain conflicts, ICANN is providing a two month period (the "Sunrise Period") to purchase domains BEFORE opening the new gTLDs to the general public. This means that a trademark holder can purchase its [trademark].wine or [trademark].vin domain from November 17, 2015 until January 16, 2016 BEFORE it becomes available to the public. To take advantage of the Sunrise Period, you first need to "register" your marks with the Trademark Clearinghouse (TMCH). Once registered with TMCH, you can purchase domains that mirror your trademark registration (with minor variants).
If you would like to pursue .vin and .wine domains for your registered wine trademarks during the Sunrise Period, please contact us for more information.
If you have wine brands that are not registered trademarks, while you may not pursue them during the Sunrise Period, you may do so afterwards using standard domain services (such as GoDaddy). If the domain has already been taken and you have legitimate prior trademark rights in the mark, you may challenge the domain registration. If you find yourself in such a situation, we can assist you in resolving the conflict.
Please contact us if you have any questions or want to pursue domains for any of your registered wine marks during the Sunrise Period.
In summarizing a proposed Congressional bill to amend the Internal Revenue Code as it related to the taxation of alcoholic beverages, Market Watch's June 26, 2015 article provides an interesting insight into the craft beer market and its key players, noting that the "number of breweries in the US has grown steadily from 1,447 in 2005 to more than 3,400 today" and that craft beer has "grabbed an 11% share of the beer market by volume and a more than 19% share of that same market in dollars." That's a "nearly $20 billion industry that's grown by double-digit percentage points for the past decade."
As a reminder to our clients, all communications regardning their trademark applications should come from the United States Patent & Trademark Office in Alexandria, Virginia or @uspto.gov. As INTA reports on November 1, 2015, one scammer gets indicted for mail fraud and aggravated identity theft for his use of deceptive practices in soliciting payments from trademark owners.
The Drinks October 29, 2015 article covers a report by the International Organisation of Vine and Wine that concludes that global wine production have increased by 2% in 2015 with Italy as the world’s biggest producer. Other trends include Chile's new production record of 12.9 million hectolitres, up 22.6% from 2014, and a 20% increase in rose consumption since 2002.
Wine Spectator article on October 8, 2015 notes that "the main counterfeiters are importers, distributors and subdistributors" and that counterfeit wines are "generally a very high quality, which makes it very difficult to tell the real from the fake." The report also notes the rise of "brand squatting--acquiring the Chinese rights to a foreign wine's name" an all-to-familiar occurrence for some of our clients. A recent attempt to trademark all of the Greek grape variety names showcases that "no brand or region or grape is safe." Hopefully, recent changes to Chinese trademark law will help minimize brand squatting in China.
Great article by Fish & Richardson PC for the IP Section of the California State Bar on September 18, 2015 addressing situations where it behooves brand owners to not only seek trademark registration but also copyright registration. The most notable advantages to seeking copyright protection of a design mark include a less stringent test to find infringement (likelihood of confusion v. substantial similarity), statutory damages awards and attorneys' fees, as well as heightened protection against grey-market goods and protection abroad.