Never the Dark Horse, Gallo Goes on Trademark Attack

On February 25, 2014, E. & J. Gallo filed a trademark suit in the Southern District of New York against Dark Horse Distillery, LLC. of Lenexa, Kansas, and T. Edward wines, Ltd., its New York distributor, claiming infringement by false designation of origin, unfair competition and trademark dilution of its registered mark DARK HORSE for which Gallo claims first use (through its predecessor in interest) in connection with wine as of 2004, as well as sales of spirits (specifically, vodka) under the same mark since 2011 (E. & J. Gallo Winery v. Dark Horse Distillery, LLC. And T. Edwards Wines, Ltd., Case No. 14-CV-1231).

The Complaint (available here) alleges that when Gallo learned of the defendant distillery’s plans to introduce its whiskey under the name DARK HORSE in 2011, it repeatedly warned the distillery that its conduct would confuse consumers, and alleges that Dark Horse Distillery has since actually admitted that consumers are actually confused by its sale of DARK HORSE Distillery Reunion Rye Whiskey and its Reserve Bourbon Whiskey under the DARK HORSE brand. If proven true, this alleged “actual confusion” could be the best evidence in favor of Gallo in the analysis of the likelihood of confusion to determine whether there is infringement of Gallo’s marks.

The Complaint also alleges that, upon learning of Gallo’s asserted rights to the mark DARK HORSE, the defendant “in defiance of Gallo’s senior rights” filed no less than six (6) trademark applications for registration of marks containing the words DARK HORSE in connection with distilled spirits, including bourbon and rye whiskey.

Wine and distilled spirits have been found to be “related goods” for purposes of analyzing the likelihood of confusion in other cases. However, any distinction here would not seem to matter all that much because Gallo allegedly sells both wine and spirits under the mark DARK HORSE. The Complaint also alleges that the defendant distillery in fact sells its spirits through a wine distributor and “encourage[es] consumers to mix its spirits with wine” (Do folks really mix the two? I am fascinated and need to meet these people. –ed.)

Gallo’s counsel also appears to employ some level of comedic license, as the Complaint defines the relevant consumers as “purchasers of value-priced alcoholic beverages” who “cannot easily distinguish between the two DARK HORSE brands that appear to be the same” and that the defendant distillery “appears eager to take advantage of them.” Kidding aside, there may be some risk that, if found liable, defendants will be found to have infringed willfully – subsequent to and in disregard of actual notice by Gallo of its registered rights. In exceptional cases, treble damages and sometimes a prevailing party’s attorneys’ fees can be awarded in instances of willful infringement.

At the moment, the field conditions seem to favor Gallo, who appears as front-runner, favored to win. However, we will just have to wait and see if defendants can stay true to the moniker and somehow pull out an unexpected victory.