Beam Global's Old Crow bourbon brand has been a party in two trademark lawsuits recently - one where it was the plaintiff in a complaint involving Jose Cuervo and another where it was the defendant in a suit lodged by Rare Breed Distilling (Wild Turkey). Here's the rundown:
CUERVO STRETCHING THE LIMITS OF '97 AGREEMENT, SAYS BEAM
This week a New York state appeals court agreed with a lower court that ruled Jose Cuervo breached an agreement with Jim Beam Brands that restricted Cuervo's use of Beam's crow trademark, Law360.com is reporting. You can view the short order here.
Here's the story. Back in 1993 Jim Beam "began objecting to Cuervo's use of a crow design and the word 'crow' in advertising" for Jose Cuervo Tradicional on behalf of Beam's Old Crow bourbon brand. Then in 1997 the two companies struck a deal that allows Cuervo to use its bird design on Tradicional's neck and back labels, as well as on advertising and promotional materials that feature a picture of the bottle. In return, Beam agreed not to use its crow marks on any tequila products.
Fast forward several years when Jim Beam alleged "that Cuervo began using the bird design more broadly" from 2002-2009, which Cuervo admitted. It had begun using the design on other parts of the Tradicional bottle, "as well as in marketing its entire line of Cuervo products on websites, gift boxes, shipping boxes and in a 2007 ad campaign." Cuervo argued that if it did indeed breach the agreement, "the violation is only a minor one" and did not result in damages for Old Crow.
However, Judge Richard B. Lowe III disagreed and said: "'Even a minor breach allows the innocent party some measure of damages to put it in the same position that it would have been in if no breach had occurred.'"
According to the article, damages will be determined at trial. Beam reportedly wants an injunction, "as well as several million dollars in damages."
WILD TURKEY AND JIM BEAM EMBROILED IN SUIT OVER "GIVE 'EM THE BIRD"
But as we mentioned, that isn't the only lawsuit involving Old Crow. Wild Turkey's parent company Rare Breed Distilling filed a separate lawsuit in May in a US District Court in Kentucky against Jim Beam Brands over the term "Give 'Em The Bird," which the company says they began using in a national print advertising campaign in 2006. Since then the US Patent and Trademark Office has approved Beam's application for the phrase, but Wild Turkey is using it in a national advertising campaign.
In Rare Breed Distilling, LLC v. Jim Beam Brands Co, the complaint states: "Four (4) years after Plaintiff had begun use of the Give Them ['Em] The Bird mark, Jim Beam embarked on a campaign to unfairly entice consumers to purchase its Old Crow bourbon whiskey by using the identical mark in connection with its Old Crow bourbon whiskey."
As early as 1977 the plaintiff used the mark "The Bird" to identify Wild Turkey and trademarked the phrase "The Bird is the Word" in 1979. They claim that phrase evolved to "Give Them The Bird" in 2006, and eventually "Give 'Em The Bird" in 2009, which is featured "prominently" on product labeling and marketing materials, says the lawsuit.
The suit alleges that Jim Beam began using "Give 'Em The Bird" in 2010 and filed a trademark application in March 2010, which was still pending when Rare Breed filed the suit.
Wild Turkey contacted Beam in October 2010 to "request that Jim Beam cease use of the Give 'Em The Bird mark." But Beam "refused to acknowledge Plaintiff's prior rights.and has continued to use the mark on its website.and point of sale advertising materials for its Old Crow bourbon whiskey.and to prosecute its application to register the mark," said the lawsuit.
They are asking the court to enjoin Jim Beam from using the mark
BEAM RESPONDS, TURNS THE TABLES. Jim Beam fired back on June 13 by filing a response, counterclaim and preliminary injunction to enjoin Rare Breed from using Beam's now trademarked phrase.
The counterclaim says that in March 2010 Beam filed an application to trademark the phrase, "Give 'Em The Bird," which was granted in June 2011. Jim Beam acknowledges that it received a letter in October 2010 from Rare Breed that "alleged without specificity that it had previously used the slogan 'Give 'Em The Bird' in certain sporadic, limited contexts but not in a manner that had caused or had been calculated to cause consumers to associate the mark.with any of Rare Breed's products." Beam said it responded to the letter stating that it "had valid rights in its trademark.and would not withdraw its then-pending Application." It claims it did not hear back from Rare Breed until the above lawsuit was filed in May.
Then in June, around the same time Beam's trademark application was granted, they "learned that Rare Breed, without receiving any authorization from Jim Beam, had launched a new world-wide advertising campaign" for Wild Turkey on its website and Facebook page "that uses Beam's registered mark." Furthermore, "in Rare Breed's commercial advertisement, the words 'Give 'em the Bird' appear visually beside a bottle labeled 'Wild Turkey,' and a male voice is heard to say, 'Wild Turkey. Straight Kentucky bourbon. Nothing else comes close. Give 'em the bird.'"
In a memorandum in support of its preliminary injunction, Beam claims Rare Breed "does not have any common law trademark rights in Beam's" trademarked phrase. Why? Citing McDonald's Corp. v Burger King Corp, the memorandum states: "To establish common law trademark rights, a party must prove that its prior uses of the market were 'deliberate and continuous, not sporadic, casual or transitory' and that the use was 'sufficiently public to identify or distinguish the marked goods in an appropriate segment of the public mind [such that] [t]he activities must have substantial impact on the purchasing public.'"
However, Beam alleges Rare Breed "only vaguely identified two sporadic instances in which the phrases 'Give Them The Bird' and 'Give 'Em The Bird' were used as advertising slogans." Furthermore, they claim Rare Breed's alleged prior uses do not demonstrate "continuous commercial utilization" of the mark as is required to establish common law trademark rights, the documents claim.
Beam claims Rare Breed "is liable for infringement of Beam's registered mark" and is asking for injunctive relief. It is also seeking an "award of three times the profits realized by Rare Breed from its infringement as well as its unfair competition with Beam."
According to court documents, both parties are scheduled to hold a telephone conference on the pending motion for preliminary injunction today (June 17). They had until yesterday (June 16) to notify the court that the matter has been resolved if indeed that was the case.
DIAGEO CONSOLIDATES AND SOUTHERN EXPANDS
You'll recall Diageo announced this morning it has appointed Southern Wine & Spirits as its new national broker in all 18 control states, including the 5 control states for wine.
But we're looking at a double whammy because not only is Diageo consolidating its distributor network, but Southern is expanding. Note that Southern does not currently have operations in Michigan or Iowa, but you can go ahead and add those two markets to the list of states Southern has entered in the past year - Indiana, Minnesota and Maryland/Washington DC - through a joint venture or by setting up a warehouse. Southern states in the press release: "Southern also holds operating licenses and permits in Nebraska and Texas, and will be entering the states of Iowa and Michigan as part of the national Diageo brokerage agreement."
This news is also interesting because there will be "enhancements" to the teams representing Diageo's brands. Yesterday we referenced a note from Redburn's Chris Pitcher that predicted Diageo would appoint more dedicated sales teams within its distributor network, much like it has already done with Glazer's. And now here we are. Other suppliers are moving towards this model as well.
IMPLICATIONS FOR THE INDUSTRY. So not only are wholesalers consolidating, but more suppliers are shrinking their distributor network. We saw it with Diageo in the past, along with Pernod-Ricard, Constellation and most recently Treasury Wine Estates and Beam Global/Bacardi. And it's not just the big boys - smaller suppliers are getting into the mix as well. For example, Chopin Imports struck a national agreement with Southern, WJ Deutsch signed with Glazer's in a number of states, and Foley Family Wines announced it would work exclusively with Young's in markets where it operates. So this is an interesting time as we see suppliers and wholesalers staking their claim.
BACARDI IMPLEMENTS VOLUNTARY RECALL OF MARTINI ASI. Bacardi USA announced it has issued a voluntary recall of Martini Asti Sparkling Wine 1.5L products after receiving reports that some of the products "have burst while located either in their case or on retail shelves.. To date, there have been no reports of consumer injuries."
THE WINE INSTITUTE has named David Kent, ceo of The Wine Group, as chairman for the 2011-2012 fiscal year. Other leadership roles include: Kathleen Heitz Myers of St. Helena's Heitz Wine Cellars, first vice chairman; Chris Fehrnstrom of Constellation Wines U.S., second vice chairman; Carolyn Wente of Livermore's Wente Family Estates, treasurer; Greg Coleman of Modesto's E. & J. Gallo Winery, secretary.
SVEDKA VODKA announced that for the second time in 3 years the brand is taking home another Effie Award, this time for "Sustained Success over a 5 year period."
VISION WINE & SPIRITS has been named the exclusive importer of DOCG Prosecco producer Bellenda.
Until Monday, Megan
"The conventional view serves to protect us from the painful job of thinking."
John Kenneth Galbraith
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