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Penfolds: The Unfolding of China’s New Trademark Law

Penfolds Wine Law Trademark China Brand Squatting Penfolds: The Unfolding of Chinas New Trademark Law

A new case that may show the effects of China’s recently updated trademark law made headlines this last week. Treasury Wine Estates reported that the company did not register the Chinese name for Penfolds and is currently engaging in a legal battle with Li Daozhi, an allegedly notorious trademark squatter. See Brand Wars: Battling China’s Trademark ‘Squatters’. (Li Daozhi is the individual responsible for registering a number of Castel Frères brands in China, as well as offering to sell the rights to these marks at exorbitant prices, as discussed previously at French Wine Company Castel Frères to Pursue Trademark Battle Against Panati in China’s Supreme Court.) Based on an investigation conducted by The Australian Financial Review, Li Daochi registered at least three variations of the Penfolds name. (Penfolds has done particularly well in China in the past, see, e.g.Chinese Appetite for Penfolds Driving Sales of Australian Fine Wine, but recently claimed a downturn in sales due to “government austerity measures.” See Penfolds Owner Fighting Trademark Battle in China.) While Treasury won the first legal battle against Li Daozhi, Li is appealing the ruling decided in favor of Treasury.

Castel is also appealing a case against Panati Wine Co., Ltd. (owned by Li Daozhi) to China’s Supreme Court, which was previously decided in favor of Panati. See French Wine Company Castel Frères to Pursue Trademark Battle Against Panati in China’s Supreme Court. In a separate case from June 2014, a Chinese company announced it would appeal a lower court’s decision after a favorable ruling for Roussillon winemakers against said Chinese company that sought to register the Chinese translation of Roussillon as a brand name. See The New Chinese Trademark Law In Effect: The Wine Version.

The outcomes of the aforementioned suits will set a tone for how China’s new trademark law is not only interpreted but also for how seriously the new law will be enforced. There are immeasurable reasons—not exclusive to wine or wine trade—why China should enforce its new law and offset or curtail brand squatters or individuals who register a mark in bad faith. The current environment in China with respect to registering a trademark is hostile and expensive for many companies despite the popularity of their products or success of sales. But an answer seems far off, as litigation often takes many months, if not years, to complete.

Until then, companies looking to pursue business in China can search China’s trademark database to see if their brand names have been registered. If the marks are not registered and a company even so much as anticipates doing business abroad, it is certainly advisable to register a mark as early as possible. If the company is victim to trademark squatting, prior matters involving Castel, Château Listran, Barrière Frères, and Château Ausone indicate few options: pay off the trademark squatter (usually at high cost), change the brand name (which can certainly be a high cost), pursue litigation (also at high cost, as well as the risk of an unfavorable judgment), or leave the market entirely. See, e.g., No Wine-ing: The Story of Wine Companies and Trademark in China. Perhaps some of these options will change in time to provide more supportive options to true brand owners.

Image property of Treasury Wine Estates.

DISCLAIMER: This blog post is not intended as legal advice, and no attorney-client relationship results. Please consult your own attorney for legal advice.

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 On Reserve Named a Finalist in 2014 Wine Blog Awards Best Overall Wine Blog CategoryIt is quite an honor to share that On Reserve was named one of five finalists in the 2014 Wine Blog Awards category for Best Overall Wine BlogSee 2014 Wine Blog Awards Finalists Are…. I am humbled to be named among many very respected wine bloggers and writers, especially within the “Best Overall Wine Blog” category.

Blogging about wine law the last four years has been an incredible journey, and one I truly feel is only the beginning. I have said this before, but when I started On Reserve four years ago, I never imagined or anticipated the continued interaction I have thanks to this blog. The blog has certainly grown and changed over time, and I believe this is only proof that a lot is in store for On Reserve and the wine law community at large.

If you enjoy reading On Reserve, please consider voting for us as this year’s best overall wine blog here. I’ll be sure to pop open some bubbly very soon to celebrate such a true honor.

Thank you again to all for your continued support, communication, and readership, and congratulations to all finalists in this year’s competition!

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Last year, California-based Duckhorn Wine Co. filed a complaint against Long Island-based Duck Walk Vineyards alleging consumer confusion and breach of settlement agreement that resolved a prior trademark infringement action between the two parties. See Duckhorn Wine Co. Files a Complaint Against Duck Walk Vineyards Alleging Consumer Confusion on Wine Labelssee also Duckhorn Asks N.Y. Winery to Modify Labels and Sales. One of Duckhorn’s lawyers stated that Duck Walk Vineyards did not follow a 2003 settlement agreement in which Duck Walk agreed to several constraints—including placing the vineyard’s place of origin on the front label of Duck Walk wines containing duck images, as well as restrictions to production volume and geographic distribution of Duck Walk wines with duck images—the alleged breach of which was the foundation of Duckhorn’s complaint.

This past week, the United States District Court of Eastern District of New York denied Duck Walk’s motion to dismiss. See Duckhorn Wine Co. vs. Duck Walk Vineyards, Inc., 13-CV-1642. Duck Walk had moved to dismiss the original compliant for failure to state a claim upon which relief can be granted pursuant to Federal Rule of Civil Procedure 12(b)(6). In its complaint, Duckhorn alleged that Duck Walk had breached the settlement agreement between the two parties by:

  1. Failing to include the geographic location or place of origin (referred to as “Prefatory Language” in the Agreement) on the true front labels of Duck Walk’s cabernet sauvignon, merlot, and brut sparkling wines;
  2. Using duck images on its labels that were not approved or similar to those approved for use by the parties’ Settlement Agreement (i.e., use of two blue ducks in a silhouette is not similar to any of the approved images by Duckhorn, which generally contain about nine white ducks); and
  3. Selling Duck Walk wines in excess of agreed upon production and distribution limitations (i.e., selling more than 50% of Duck Walk’s annual Gross Production outside of New York, New Jersey, and Connecticut of wines containing the word “Duck” and/or the image or picture of ducks with the exception of Duck Walk’s corporate name, Duck Walk Vineyards, Inc.).

(One of the labels which Duckhorn opposed features blue duck silhouettes and is pictured at below. Duckhorn alleged that the label pictured on the left-hand side is the actual front label of the wine—not the label containing the Government Warning Statement, vintage year, origin, and producer’s name and address—and, as such, the actual front label fails to contain the requisite Prefatory Language of the Settlement Agreement. Duck Walk, however, argued that the front label is the label pictured on the right-hand side, the very same label that TTB recognizes as the wine’s “front” label under requirements outlined in 27 CFR Part 4.)

 It its motion to dismiss, Duck Walk argued:

  1. The Certificate of Label Approvals (“COLAs”), including that for its cabernet sauvignon, brut, and merlot, demonstrate that Duck Walk did comply with the Prefatory Language;
  2. The blue duck silhouette image does not violate the Settlement Agreement because the Agreement does not specifically restrict the color or amount of ducks; Duck Walk simply reduced the number of ducks and made them blue in color; and the duck is the same or similar type to those ducks approved in the Settlement Agreement; and
  3. Duck Walk has not sold more than 50% of its annual Gross Production outside of New York, New Jersey, and Connecticut.

Duck Walk Vineyards Label Approval Merlot District Court Denies Duck Walks Motion to Dismiss Against Duckhorn

 

In its motion to dismiss, Duck Walk interestingly argued that the Settlement Agreement made Duck Walk’s compliance “expressly contingent upon approval of the BATF [TTB].” Id. at 9 (quoting Duck Walk’s motion). Meaning, if the TTB approved of a label as the “front” label, such label would be considered the “front” label of the wine in the context of the Settlement Agreement. The vineyard furthered its argument for compliance by stating that TTB considered the front label of the wine at issue to be the label containing the “alcohol percentage, government warnings, and product bar code.” Id. The District Court found Duck Walk’s first argument to be “patently meritless.” Id. at 10. In interpreting the parties’ Settlement Agreement, the Court found that Duck Walk could not merely comply with the Agreement’s requirement by obtaining label approval from TTB. Further, the Court noted that if it accepted Duck Walk’s argument, then a “front” label with the Prefatory Language could be placed anywhere on the wine bottle as long as such was approved by TTB (i.e., on the neck, strip, etc.)—and this could not possibly be what the parties intended.

The Court also rejected Duck Walk’s argument about the blue silhouette ducks and stated the vineyard’s argument was “absurd” and the words of the Settlement Agreement “permits Duck Walk to use only one of the approved images . . .  or ‘such similar pictures or depictions.’” Id. at 13 (quoting the Settlement Agreement). After analyzing Duck Walk’s blue duck silhouette in comparison to one of the labels annexed in the Settlement Agreement, the Court concluded that “the only thing similar about these images is that they contain ducks.” Id. at 14. (See example label below indicating one of the styles of ducks approved in the Settlement Agreement.)

Duck Walk Vineyards Windmill Red Label District Court Denies Duck Walks Motion to Dismiss Against Duckhorn

With respect to the production and distribution restriction claim, Duck Walk provided a declaration from its CEO, which introduced allegations and documents outside of the Complaints. However, the Court noted that, pursuant to FRCP 12(b)(6), a court’s review is limited to the facts asserted within the “‘four corners of the complaint, documents attached to the complaint as exhibits, and any documents incorporated in the complaint by reference’” and thus could not consider such facts without converting the motion to dismiss into a motion for summary judgment (which the Court deemed inappropriate given the factual dispute and the absence of discovery or evidentiary hearing). Id. at 15 (quoting McCarthy v. Dun & Bradstreet Corp., 482 F.3d 184, 191 (2d Cir. 2007)).

Images property of the Alcohol Tobacco Tax and Trade Bureau.

DISCLAIMER: This blog post is not intended as legal advice, and no attorney-client relationship results. Please consult your own attorney for legal advice.

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CLE International Wine Beer Spirits Law Conference Washington DC September 2014 Upcoming Wine, Beer, and Spirits Law Conference Hosted by CLE International

CLE International is hosting the 19th Annual National Conference on Wine, Beer, and Spirits Law this September in Washington, D.C. The conference will be Thursday, September 18th through Friday, September 19th at the Mayflower Renaissance Hotel in Washington, D.C. Additionally, attendees can earn up to 12 MCLE credits including one hour of ethics credit. More information, including the registration page, is available on CLE International’s website. See CLE International (CLE): Wine, Beer, and Spirits Law, Washington, D.C., September 18–19, 2014

The conference will include speakers from the following:

  • Alcohol and Tobacco Tax and Trade Bureau
  • Pillsbury Winthrop Shaw Pittman
  • McDermott Will & Emery
  • Diageo North America
  • Virginia Department of Alcoholic Beverage Control
  • New Belgium Brewing Company
  • Wine Institute
  • Federal Trade Commission
  • Hangley Aronchick Segal Pudlin & Schiller
  • And more to come!

Additional information on the conference will be posted on CLE International’s website in the upcoming weeks.

Update on July 20, 2014

CLE International has provided the following additional information regarding September’s conference:

CLE International Wine Beer Spirits Law Conference September 2014 Upcoming Wine, Beer, and Spirits Law Conference Hosted by CLE International

CLE International Wine Beer Spirits Law Conference September 2014 Page 2 Upcoming Wine, Beer, and Spirits Law Conference Hosted by CLE International

 

Photos provided courtesy of CLE International.

DISCLAIMER: This blog post is not intended as legal advice, and no attorney-client relationship results. Please consult your own attorney for legal advice.

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There’s been a lot of news over the last few months with respect to China and wine trademarks, especially with respect to French winemakers. See, e.g.Is China Making a Step Forward in Wine Trademark Law? and French Wine Company Castel Frères to Pursue Trademark Battle Against Panati in China’s Supreme Court. On May 1, China’s new trademark law went into effect. The new law presents a number of significant changes, some of which are highlighted below:

  1. Aims to deter trademark hijacking (or squatting) by imposing an obligation to uphold the principle of good faith on new mark filings and similar for trademark agencies, and recognition of bad faith extended further;
  2. Attempts to deter infringement by, i.e., raising the compensation ceiling for trademark infringement to about $500,000 (U.S.), or roughly six times the previous limit;
  3. Greatly increases the allowable types of marks to be registered (inclusive of sound marks); and
  4. Overall increased improvement of administrative filing details such as introducing timelines for processing reviews and oppositions.

For more details on China’s new trademark law, see Trademark Law of the People’s Republic of China (2013, Comparison Version) and, for insight with respect to the wine industry, Section 4 of No Wine-ing: The Story of Wine Companies and Trademark in China.

This last week, a group of French wine authorities received a significant victory at a Beijing court with respect to trademark registration. A Chinese company sought to register the Chinese translation of Roussillon as a brand name as well as the Latin version of Roussillon and Banyuls, but its wines did not contain grapes from the Southern French wine region. See Roussillon Winemakers Win Trademark Case in China. The Tribunal of Commerce and Industry annulled the request to register on the grounds that registering Roussillon as a brand name had the potential to cause consumer confusion.

Is this the work of China’s new trademark law? Perhaps. At this point, and until we start to see more cases with similar results, it is hard to say. The new Trademark Law does clarify the terms of likelihood of confusion, and verifies that there must be a likelihood of confusion when similar marks are used on goods that are either the same or similar. Perhaps it is a strong enough outcome right now that the Court ruled against what might otherwise promote consumer confusion in the wine market. Still, it will be easier to conclude in favor of the new law should this case have the same (or similar) result on appeal. (As of now, the Chinese company is reportedly appealing the ruling of the Tribunal of Commerce and Industry. See id.) There have been both favorable and unfavorable results with respect to trademark registrations in China (before the new law went into effect), and one positive result may be too early to conclude the effectiveness of the amendments.

DISCLAIMER: This blog post is not intended as legal advice, and no attorney-client relationship results. Please consult your own attorney for legal advice.

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Uproot Wines Rose Wine Label The Minimalistic Wine Label Approach: Are We Heading Toward Textless Labels?There’s been some chatter recently about Uproot Wines and its newly introduced color-coded labels that represent the wine’s flavor palette. See, e.g., Millennials Targeted with Color-Coded Labels. The colored boxes on the true front label of the wine feature what Uproot Wines declares is a flavor palette, or a profile of what the wine in the bottle tastes like. The size of the boxes indicates how dominant a certain note is. For example, its 2011 Cabernet Sauvignon features a label with colored boxes in shades of raspberry, mustard yellow, burgundy, grape, and brown. The Cab’s flavor profile is said to correspond with these colors and consist of notes of raspberry, Cuban cigar, cherry, blackberry, and dark chocolate (with raspberry and blackberry appearing as the largest colored boxes and, hence, the most predominant notes). While the labels are unique, I’ll leave it to the marketers of the world to talk about the branding and design elements. Instead, I want to look at the labels from a legal perspective under 27 CFR Part 4, the relevant section of the Code of Federal Regulations on wine labeling and advertising. See generally 27 CFR Part 4 (outlining provisions of wine labeling and advertising regulations).

Generally speaking, like other wine labels within the labeling jurisdiction of the TTB, Uproot’s labels were pre-approved by the federal government. Such is evidenced by its Rosé Wine label approval here and its Grenache Blanc label approval here. Additionally, the true back labels of the wines produced by Uproot contain mandatory statements, such as the Alcohol by Volume statement, Net Contents Statement, and the Health Warning Statement. The true back label is a good example of the bare bones of a wine label, i.e., the back label contains only mandatory information that is required by federal law (with the exception of the website and social media addresses, which are considered to be voluntary information). I quite like the label design of these wines, and it left me wondering the following: are we heading toward a trend of textless wine labels? Or will demand for truth in labeling reign?

Uproot Wines Rose Wine True Back Label The Minimalistic Wine Label Approach: Are We Heading Toward Textless Labels?

Uproot Wines’ True Back Label of its Rose Wine

From a regulatory perspective, surely a textless label would make labeling specialists’ jobs easier and cut down the average processing time of a label (if not eliminate the processing time altogether). However, given that there are some requirements that must appear on a label, it is unlikely such requirements would disappear, especially after one considers the history and posture of these mandatory statements. If we were to ever come to a point where mandatory information was not required to be placed directly on a label, but could instead be viewed through a scannable Quick Response code (“QR code”), it is likely there would still be a level of government regulation with the type of information that could be presented (as well as the type that must be presented) by the scannable code. I can almost imagine a similar online submission process to COLAs Online, entailing the enduser to submit the information that appears through the scannable barcode to the government for prior approval.

From a marketing perspective, however, there are some features that producers may always want to keep on a wine’s label, such as a vintage year or an appellation of origin, so it is possible this aforesaid textless label may never appear discounting any regulatory reasonings. For some wines, the appellation may be the strongest branding for a wine produced and whose grapes are grown in a notable region whereas, for other wines, the brand name will always take precedence. These may be textual elements that, for marketing and other brand awareness purposes, may never leave a wine’s label. For Uproot, I think there is something to be said about placing a purely pictorial or graphic reference on the true front of its wine bottle as the focal point of the consumer, especially without referencing its brand name or producer (at least, not on the true front label). Its labels altogether are far off from a “textless” wine label, however its approach to minimalism is entirely respectable.

The age old story is, however, the law is persistently slow to catch up to innovation. Albeit, it is enjoyable to think about the possibilities that wine labels could take on. It should be noted, however, that it is TTB’s position that relevant sections of 27 CFR and the advertising provisions of the Federal Alcohol Administration Act (“FAA”) do apply to advertisements in social media, inclusive of QR codes and other 2D mobile barcodes that link to content that is a “written or verbal statement, illustration, or depiction that is in, or calculated to induce sales in interstate or foreign commerce.” See Use of Social Media in the Advertising of Alcohol Beverages.

Photographs property of Uproot Wines.

DISCLAIMER: This blog post is not intended as legal advice, and no attorney-client relationship results. Please consult your own attorney for legal advice.

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Alcohol Facts Wine Bottle 750ML 14 Alcohol by Volume TTB Updates Information on Optional Alcohol Facts StatementsLast week, TTB updated its FAQ section on optional Alcohol Facts statements to include more information on Alcohol Facts statements (or alcohol facts panels). The updated information includes TTB’s insights on whether per-serving and per-container alcohol content information can be placed on labels and in advertisements which do not contain nutrient content information for the beverage. In its updated FAQ section, the agency stated that the use of per-serving alcohol content information on labels or in advertisements (without providing nutrient content information) is permissible provided such is truthful and accurate as per Serving Facts statement under TTB Ruling 2013-2. In its updated FAQ section, TTB noted that such information should be included under a heading titled “Alcohol Facts” (as opposed to “Serving Facts”) and must include the serving size, the number of servings per container, and the percentage of alcohol by volume statement along with a numerical statement indicating the amount of fluid ounces of pure ethyl alcohol per serving. See TTB: FAQs: Alcohol Facts Statements: AF1. The updated information on TTB’s Alcohol Facts statements FAQs includes information on the type of serving size to use if Alcohol Facts statements are included on labeling or in advertisements, how to calculate the number of servings per container and the fluid ounces of alcohol per serving, and whether a new application for a label approval must be submitted upon using an Alcohol Facts statement, among other related information. (Generally speaking, should a beverage alcohol label Alcohol Facts statement be formatted as depicted in TTB’s FAQ section AF9, a new COLA will not be required for beverage labels adding an Alcohol Facts statement; however, the agency notes that should the alcohol facts statement be formatted or positioned in a way other than those outlined by TTB, such will require a new COLA and will be approved on a case-by-case basis. See id.)

Last year, TTB issued a ruling titled “Voluntary Nutrient Content Statements in the Labeling and Advertising of Wines, Distilled Spirits, and Malt Beverages” as an interim policy on the use of Serving Facts statements with respect to the labeling and advertising of alcohol beverages. See Voluntary Nutrient Content Statements in the Labeling and Advertising of Wines, Distilled Spirits, and Malt Beverages. While this ruling spoke mostly to serving facts/nutrient content (i.e., calories, carbohydrates, fats, and protein) with respect to beverage alcohol products, the agency did remark that “[t]ruthful, verifiable numerical statements of alcohol content may be included in Serving Facts statements as an option.” Id. The interim policy is pending the completion of a final rule, in which TTB “propose[s] to issue regulations requiring Serving Facts statements on alcohol beverage labels.” Id. (According to TTB’s 2007 proposed rule entitled, “Labeling and Advertising of Wines, Distilled Spirits and Malt Beverages,” such would include information on the number of calories as well as the number of grams of carbohydrates, protein, and fat; alcohol content and the percentage of alcohol by volume would also be permitted in the Serving Facts statement. The agency received a significant amount of comments in response to the proposed rule, which can be viewed on the Regulations.gov website. See Labeling and Advertising of Wines, Distilled Spirits and Malt Beverages (Serving Facts Labeling.) While the ruling discussed including alcohol by volume statements (as well as fluid ounces of alcohol per serving) in the context of Serving Facts, the ruling did not address the ability to create an Alcohol Facts statement (as TTB’s FAQ section now acknowledges).

The flexibility to (voluntarily) include an Alcohol Facts statement is great for the industry, especially for those products with previously approved COLAs. TTB’s new FAQs are generally straightforward for those who wish to add the voluntary Alcohol Facts statement without nutrient content information. Further to the point, the addition of such a statement can usually be done without the need for a new COLA, which helps both industry  as well as TTB with saving time and curbing additional costs. Instituting a mandatory Serving Facts statement requirement, however, has proven quite contentious among industry members (as demonstrated by many of the comments to the proposed rule). It is true that mandating such will require industry members to redesign labels as well as analyze the contents of their products, both of which are timely and costly, however perhaps such initiative is yet another acknowledgement that the consumer demand for truth in labeling is dramatically increasing. Several weeks ago, I discussed FDA’s proposed redesign of its nutrition facts panel and the impact on the alcohol beverage industry. See Is TTB Next? FDA’s New Proposed Nutrition Label and its Effects on Alcohol Beverages. While it is not likely that the agency is close to establishing an FDA-styled nutrition facts panel, it is conceivable that the Alcohol Facts statement and the Servings Facts statement are both a step in this direction, i.e., a step in the direction of full(er) disclosure.

Photograph property of the Alcohol Tobacco Tax and Trade Bureau.

DISCLAIMER: This blog post is not intended as legal advice, and no attorney-client relationship results. Please consult your own attorney for legal advice.

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A Trademark Double Entendre: N2 Versus Into Wines

Here’s an interesting scenario. Can a trademark applicant’s mark ever have multiple meanings? And can such dual-meaning mark be issued a trademark even if one of its meanings is deemed merely descriptive? In a recent appeal to the United States Patent and Trademark Office’s Trademark Trial and Appeal Board, administrative trademark judges said yes (and yes).

Recently, a company named N2Wines LLC filed a trademark application with the U.S. PTO to register the mark “N2WINES” for “wines sold in kegs” under Class 33, but the U.S. PTO refused registration pursuant to Section 2(e)(1) of the United States Trademark Act (15 U.S.C. §1052(e)(1)) on the grounds that the name N2WINES was merely descriptive. See In re N2Wines LLC, Serial No. 85680969 (April 5, 2014) [not precedential]. The applicant requested reconsideration, which was refused, and subsequently appealed.

A name is considered merely descriptive of goods or services if the term conveys the “immediate idea of an ingredient, quality, characteristic, feature, function, purpose or use of the goods or services.” Id. citing DuoProSS Meditech Corp. v. Inviro Medical Devices Ltd., 695 F.3d 1247, 103 USPQ2d 1753, 1755 (Fed. Cir. 2012). However, it is important to note that a name is not merely descriptive in its abstract form—it must be considered in relation to the goods or services for which a registration is sought, as well as the context in which the name is being used in relation to the goods or services and the potential connotation or implication the term would have to an average purchaser of the good or service due to the manner of its use. If the term has meanings in other contexts, such is not necessarily deemed as controlling.

“Wine” in “N2WINES” was quickly recognized as a generic term, thus the Board reasoned it must determine whether “N2″ was descriptive of the applicant’s goods (N2, or more properly N2, is the symbol for nitrogen gas). The examining attorney submitted evidence, including that from the applicant’s website as well as other advertisements and internet articles, to support that nitrogen is an inert gas used in wine tapping systems. Based on the evidence submitted by the examining attorney, the Board determined that nitrogen does have some significance with respect to wine sold in kegs because nitrogen may be used to tap or preserve the wine.  However, the Board highlighted that applicant’s mark did not include the word “Nitrogen” and instead considered the possibility that, while N2 is the symbol for nitrogen gas, the symbol takes on a different meaning and would be perceived by potential consumers in a way that is not merely descriptive of the goods. As such, the Board determined that there was sufficient support to find that when “N2″ was used in the mark “N2WINES,” there was a double entendre meaning, “Into Wines.” See id. at 5, citing Appeal Brief, p. 10, 12 TTABVue, 11. (Applicant submitted a significant number of examples of both domain names and registered marks in which “N2″ is construed as “Into.”)

In its opinion, the Board clarified the meaning of double entendre with respect to marks as per the following:

‘A ‘double entendre’ is a word or expression capable of more than one  interpretation. For trademark purposes, a ‘double entendre’ is an expression that has a double connotation or significance as applied to the goods or services. The mark that comprises the ‘double entendre’ will not be refused registration as merely descriptive if one of its meanings is not merely descriptive in relation to the goods or services.’ Id. citing TMEP § 1213.05(c) (Oct. 2013).

N2 Wine Label Approval A Trademark Double Entendre: N2 Versus Into Wines

The Board also recognized that, in the past, several other marks had been registrable as double entendres, including SUGAR AND SPICE (for bakery products), SHEER ELEGANCE (for pantyhose), SHEER PERFECTION (for makeup for legs), FAST’N EASY (for pre-cooked meats), and HAY DOLLY (for self-loading trailers for hauling bales). Id. at 5–6. Further to the point, the Board noted that “into,” which it defined as “involved with or interested in,” allows “N2WINES” to be a double entendre meaning “into wines.” Id. at 7. “The unitary phrase ‘into wines’ implies that consumers of applicant’s goods are interested in wine. It does not immediately convey an idea of any ingredient, quality, characteristic, feature, function, purpose or use of the goods, and thus is not merely descriptive of applicant’s goods.” Id. The Board thus reversed the refusal.


Nitrogen Periodic Table of Elements A Trademark Double Entendre: N2 Versus Into Wines

The interesting aspect about the label for N2WINES is the N2 symbol on N2WINES’ label resembles the Nitrogen element’s format on the Periodic Table of Elements. When I originally read the Board’s opinion, I did not review the label, as such was not included in the opinion (the mark was filed as “Standard Character Mark” and thus did not include the design or artwork featured in the label). See photo at right as a sample of Nitrogen the element in its Periodic Table of Elements format (i.e., not the inert gas). Had applicant filed the mark along with the design, perhaps it is possible the outcome may have been different—although still room for a double entendre argument, especially considering the applicant’s ability to identify and reference the breadth of the use of “N2″ as a substitute for the more formal “Into.”

Photos property of Alcohol and Tobacco Tax and Trade Bureau and Boston University Chemistry.

DISCLAIMER: This blog post is not intended as legal advice, and no attorney-client relationship results. Please consult your own attorney for legal advice.

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TTB Suspends Ruling on Bottling Taxpaid Wine in Growlers

Several weeks after TTB announced its third ruling of Year 2014, the Bottling Taxpaid Wine in Growlers or Similar Containers for Consumption Off of the Premises, TTB issued a subsequent announcement declaring the suspension of the ruling. (The original ruling held that filling growlers and similar containers for consumption off of the premises is classified as a bottling activity, subject to the taxpaid wine bottling house provisions of the Internal Revenue Code of 1986; this required businesses that fill growlers to apply as a taxpaid wine bottling house, as well as label their growlers, maintain certain records, and comply with additional regulations.) On Friday, April 25, 2014, the agency determined that it would be more appropriate to engaged in rulemaking with respect to growlers so TTB can “modernize [its] regulations to specifically address the filling of growlers with taxpaid wine.” See TTB Suspends Ruling 2014-3 Pending Rulemaking. TTB believes that, by pursuing the rulemaking process, the agency will be able to evaluate what types of regulations are not unduly burdensome to alcohol beverage businesses while still protecting the government’s revenue. Id. You can read more about the original ruling from March 2014 here.

TTB cites the concern of industry members for its reason for suspending its ruling on bottling taxpaid wine in growlers. In particular, industry explained the ruling is unduly burdensome for industry members, especially for members in states where state and local laws permit the bottling of growlers without additional requirements (i.e., application for a taxpaid wine bottling house, labeling, etc.). See TTB Suspends Ruling 2014-3 Pending Rulemaking. In its suspension, TTB responded that its existing regulations were intended to monitor “traditional” taxpaid wine bottling activities, as opposed to the filling of wine growlers. As such, the agency will engage in the rulemaking process to formalize a rule that is more flexible and appropriate for the industry with respect to wine growlers. 

Rulemaking is the process agencies use to promulgate regulations. Generally, a proposed rule will be published in the Federal Register, and will invite comments from the public so the agency can evaluate the thoughts and concerns of interested parties as well as additional data. After a specified period of time, the agency will review the submitted comments and respond to each. Subsequently, the agency may modify the proposed rule, taking the public comments into account, and will publish a finalized rule in the Federal Register. This is a fairly common process, and one from which TTB hopes to receive adequate insight from interested parties like consumers, industry members, and State regulatory agencies. 

DISCLAIMER: This blog post is not intended as legal advice, and no attorney-client relationship results. Please consult your own attorney for legal advice.

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Lindsey Zahn Attorney Cornell Law School Alcohol Beverage Law Author of On Reserve to Speak About Beverage Law at Cornell Law School

It is quite an honor to share that I have been invited to speak at Cornell Law School on behalf of The Society of Wine and Jurisprudence and The Cornell Sports and Entertainment Law Society. The topic is “Pursuing a Career in Beverage Law,” and will include discussions about following a law career in a niche practice area as well as a survey of the different facets of alcohol beverage law. The event will take place next week on Tuesday, April 15, 2014 at 11:15 AM to 12:15 PM in the Saperston Student Lounge of Cornell Law School. While the talk will have a focus on alcohol beverage law, this session may be of interest to any student or young attorney passionate about working in a unique area of law.

Next week will be my first time back in Ithaca since my undergraduate days and, as such, I am very excited. For me, Cornell is the birthplace of both my interest in wine and the law, as well as the point of initial introduction to wine law. For those reasons (and many others), Ithaca is an extremely special place to me.

The Societies and I are working on a list of questions that may guide the discussion about beverage law and/or pursuing a niche practice. We welcome and appreciate all comments, especially those from industry members, practicing attorneys, and current students, in the formation of what we hope will be a very valuable conversation. Please feel free to add any suggestions for topics or discussions. Thank you kindly, well in advance.

DISCLAIMER: This blog post is not intended as legal advice, and no attorney-client relationship results. Please consult your own attorney for legal advice.

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