California Court Issues Trademark Injunction Against Fresno’s Black Ops Brewery
New York based Brooklyn Brewery brought an action to enjoin the Fresno County Black Ops Brewery from any continued use of “Black Ops” on or related to beer products. The Court granted the injunction January 6, 2016. Brooklyn Brewery produces a single bottle Russian Stout (with a champagne cork) under the name “Brooklyn Black Ops,” which was issued as a federal trademark registration in 2009, and the brewery has since successfully sold tens of thousands of cases of the beer in 27 states in the past 8 years. Brooklyn Brewery is currently in negotiation to expand distribution to California. Case No. 1:15-cv-01656-JAM-EPG (E.D. Cal.) Click here for opinion.
Black Ops Brewery, Inc. in Fresno County, CA produces blondes and IPAs with specific identifying names, including “the Blonde Bomber” and “Shrapnel.” Each 22 ounce single bottle retails for less than $7.00, compared to Brooklyn Black Ops’ 22 ounce single bottle retail price of $29.99. In March 2015 Black Ops Brewery applied to the Patent and Trademark Office, and was subsequently denied, federal registration for “Black Ops Brewing” for beer and taproom services. Nonetheless, Black Ops Brewery continued its use of the name.
Brooklyn Brewery notified Black Ops Brewery of its infringement and demanded immediate cessation of use of the name; not only was Brooklyn Brewery issued federal registration for the mark, but Brooklyn Brewery’s Black Ops mark is also an incontestable mark because it has been in continuous use for 5 years since trademark issue. Brooklyn Brewery argued that continued infringing use of the name was in bad faith. Black Ops Brewery claimed it had adopted the name in good faith in memory of friends and family in military service and continued use of the term despite being on notice of Brooklyn Brewery’s alleged superior rights in the mark.
The Court found that Black Ops was a strong arbitrary mark (i.e., does not describe the product’s characteristics), and that despite some differences in beer quality, packaging and pricing of the goods, the two breweries had an identical product. These factors weighed heavily in favor of the Court’s finding that there existed a high likelihood of confusion by consumers between the two brands.
The Court determined that the two breweries shared similar marketing channels. While Black Ops Brewery does not have the same marketing teams or distributors as Brooklyn Brewery, Black Ops Brewery did use the same social media channels to promote itself as Brooklyn Brewery. The Court further found that Brooklyn Brewery would likely expand sales to Fresno County where consumer confusion would increase if both brands were available at the same location. As the Court noted, the purchasing environment of alcoholic beverages like beer is often “chaotic and impulsive,” such as when purchased at bars, thus further increasing the likelihood of confusion of the consumer when purchasing a “Black Ops” beer.
Finally, the Court held that Brooklyn Brewery would face irreparable harm if the injunction were not granted. Brooklyn Brewery has spent years of effort and financial investment to establish the goodwill of its brand. Brooklyn Brewery was concerned that if consumers drank a Black Ops Brewery beer they would be unlikely to ever purchase a Brooklyn Black Ops Beer “thinking it is connected with the “Black Ops” beer that they did not enjoy.” The Court agreed with this likelihood of consumer confusion and harm to Brooklyn Brewery, and concluded that the injunction would be effective immediately to enjoin and restrain Black Ops Brewing Inc. from using the marks “Black Ops” or “Black Ops Brewing” or any other infringing or unfairly competing mark with Brooklyn Black Ops.
This case is especially interesting because the Court issued the preliminary injunctive relief even though Brooklyn Brewery is not yet selling its Brooklyn Black Ops beer in California. Thus, the immediacy of the harm to Brooklyn Brewery could be questionable. However, the fact that Black Ops Brewery was on notice of Brooklyn Brewery’s rights and disregarded them no doubt had equitable impact on the Court’s decision.
Clock is Ticking for Trademark Owners for .wine Generic Top-Level Domain
As we’ve previously reported, the Internet Corporation for Assigned Names and Numbers (ICANN) has been selling hundreds of generic top-level domains (gTLDs) to domain name registries for $185,000 each. These registries then authorize domain name registrars to sell domain names to the public under the gTLDs that the registries have purchased. The registry called Donuts has purchased many of these gTLDs, including two of particular interest to members of the wine industry — <.wine> and <.vin>. The <.wine> and <.vin> gTLDs have been in limbo since they were awarded to Donuts due to issues raised by the EU and several regional wine associations concerning the protection of appellations of origin within the <.wine> and <.vin> gTLDs. However, those issues have since been resolved and the <.wine> and <.vin> gTLDs are now moving forward.
This means that trademark owners that wish to secure domain names encompassing their trademarks under the <.wine> and <.vin> gTLDs must now do so within the sunrise periods that have been established by Donuts for the <.wine> and <.vin> gTLDs. If they fail to secure their domain names within the sunrise periods, those domain names under the <.wine> and <.vin> gTLDs can then be purchased by members of the general public and the only recourse available to the trademark owners will be through costly dispute resolution procedures.
The Sunrise periods for the <.wine> and <.vin> gTLDs open on November 17, 2015 and close on January 16, 2016. In order for a trademark owner to obtain its trademarks within domain names for the <.wine> and <.vin> gTLDs, the trademark owner must first register its trademarks with the Trademark Clearinghouse. We have previously blogged about the process for registering a trademark in the Trademark Clearinghouse here. Once a trademark owner has obtained registration in the Trademark Clearinghouse, it may then pay to register its trademarks as domain names under the <.wine> and/or <.vin> gTLDs with recognized domain name registrars during the November 17, 2015 – January 16, 2016 sunrise periods.
So, for all of you wineries wishing to take part in the new <.wine> and <.vin> gTLDs, now is the time to make sure that your trademarks are registered with the Trademark Clearinghouse. For additional information or any other questions contact Scott Gerien at his email.
THIS BUD IS NOT FOR YOU
In a recent precedential case before the Trademark Trial and Appeal Board, the fame of the trademark BUD for beer owned by Anheuser-Busch, LLC (Anheuser) played a dominant role in the Board’s finding a likelihood of confusion between BUD for beer and WINEBUD for wine (and other alcoholic beverages). The Board found that Anheuser’s evidence clearly established the fame of their BUD and BUDWEISER marks. Anheuser has used its BUDWEISER mark since 1876 and its beer has been known as BUD since about 1895. Moreover, Anheuser is a heavy user of advertisement and has been a major sponsor of well known sporting events and is the recipient of scores of unsolicited publicity. In fact, BUD LIGHT is the best-selling beer in America.
In contrast, the mark WINEBUD had not been in use in the United States. The Applicant for the mark WINEBUD argued that WINEBUD is a “fanciful compound noun formed from the nouns WINE and BUD, an analogy to horticultural words such as ‘rosebud.'” It contended that wine drinkers would perceive the latter half of its mark as connoting the bud of a vine, not as a reference to BUDWEISER the beer or the BUD family of marks. In addition, Applicant argued that WINEBUD is essentially a play on the word “vinebud,” a word known in the wine industry.
The Board concluded that consumer would likely see the WINE component of the WINEBUD mark as the generic name for the beverage, and BUD, due to the fame of Anheuser’s marks, as the source-identifying portion of the mark. Accordingly, the Board found the dominant portion of the mark WINEBUD to be BUD, and that WINEBUD and BUD marks are “highly similar.” Moreover, the Board found the goods of beer and other alcoholic beverages, including wine, to be related. In the end, Anheuser’s famous BUD mark was the “heavy thumb” that tipped the scales in Anheuser’s favor.
For a complete review of the case see Anheuser-Busch, LLC v. Innvopak Systems Pty Ltd., Opposition No. 91194148 (August 17, 2015) [precedential].
<.wine> gTLD on the Horizon; Protect your Brand Name
In 2013, the Internet Corporation for Assigned Names and Numbers (“ICANN”), the non-profit organization responsible for managing the Internet’s domain identifiers, began rolling out new generic top-level domains (“gTLDs”). The most popular gTLD is <.com>. Specific domain names are registered under a specific gTLD, e.g., <gallo.com>.
However, ICANN believed that in time the <.com> gTLD would begin running out of domain name options, and that the Internet could be better organized if gTLDs were created around subject matter, such as <.plumber>, <.church>, <.porn> and <.wine>. Therefore, ICANN decided to introduce these new gTLDs by selling them to third-party domain name registrars to register and operate for $185,000 each. ICANN received applications for over 1,900 new gTLDs and many of them have gone into active status.
Many have questioned the need or practicality of these new gTLDs believing ICANN’s real motivation being to raise money. Indeed, Esther Dyson, the founding chairperson of ICANN, wrote that the gTLD expansion “will create jobs [for lawyers, marketers and others] but little extra value.” Many believe that these new gTLDs will add no more value than did the introduction of gTLDs like <.aero> or country code TLDs such as <.tv> (Tuvalu, in case you wondering). In fact, many feel that this is simply another opportunity for domain name registrars and unscrupulous domain name pirates to make money at the expense of trademark owners.
Since domain name high jacking has been fairly prevalent with the <.com> gTLD, it was determined that some preventative measures should be available for trademark owners to obtain their trademarks as domain names within these new gTLDs before the gTLDs are introduced. Enter the Trademark Clearinghouse (“TMCH”).
The TMCH is a place where trademark owners can “register” their trademark rights in order to obtain their trademarks in domain names for gTLDs before the public has a chance to do so. How does it work? A trademark owner goes to the web site for the TMCH located here. The trademark owner then fills out an application, provides evidence of a trademark registration in a country of the world, along with evidence of use of the mark, and then pays a fee of $150 per trademark per year of registration.
Assuming the trademark owner provides all the correct information, the trademark owner is then provided with a special authentication key that it can then use to “buy” a domain name identical to its trademark before the general public during a special Sunrise period when new gTLDs are introduced. As recently evidenced with the registrar for the new gTLD for <.sucks>, which charged a Sunrise registration fee of $2,499, this can be viewed merely as an attempt to extort trademark owners. However, other gTLDs have offered Sunrise period registration fees for as low as $20.
So why does this matter to wineries? There are two gTLDs that have been applied for specific to the wine industry — <.wine> and <.vin>. Both of these gTLDs have been awarded to the largest, most organized and most financially-backed registrar of new gTLDs, Donuts. The <.wine> and <.vin> gTLDs have been held up in procedural wrangling with the EU because wine appellations of origin could not be protected in the TMCH and there were fears that domain names such as <champagne.wine> or <bordeaux.vin> would be swiped up by parties for individual benefit or misuse. However, we have it on good authority that these disputes have been worked out and that we can expect the opening of the <.wine> and <.vin> Sunrise periods possibly as early as fall of 2015.
Therefore, all brand owners that are interested in securing the <.wine> and/or the <.vin> domain names for their brands during the Sunrise period should move with diligence in registering their trademarks in the TMCH so that they are ready with their authentication keys once the Sunrise periods open. Again, is this necessary? That depends on whether you think that <.wine> and/or <.vin> will catch on with consumers for locating web sites for wine brands. The gTLDs could go the same way as <.aero> and die on the vine. However, the risk is if the gTLDs do catch on, then brand owners could be left fighting or paying domain name pirates to get back their <trademark.wine> domain names, which will cost thousands of dollars more than registering in the Sunrise period. So, the question of whether to register your brand in the Sunrise period is a business decision based on a gamble as to whether you think <.wine> and/or <.vin> will succeed or fail.
For those wineries not wanting to deal with the TMCH registration process, contact your trademark counsel for assistance. This will certainly add to your costs, but it will relieve you of the burden of maneuvering through the TMCH registration process. DP&F is offering this service on a flat fee basis in partnership with Corsearch, an authorized TMCH agent. For more information please contact Scott Gerien via email.