Courts and TTAB Trending Towards Finding Alcoholic And Non-Alcoholic Beverages Related

A recent court case in the Eastern District of California, E. & J. Gallo Winery v. Grenade Beverage LLC, No. 1:13-cv-00770 (E.D. Cal. Aug. 15, 2014), seems to underscore a trend of court decisions and TTAB findings where alcoholic and non-alcoholic beverages are considered related for purposes of a likelihood of confusion analysis. In this recent case, the court held that GALLO (for wines) and EL GALLO (for energy drinks) were similar trademarks and that the products were related. There was not much evidence produced by the parties that showed use of the products in the marketplace. Therefore, the Court relied on the similar spellings of the terms “Gallo” and “El Gallo” and inferred that based on the spellings of the terms, purchasers would likely pronounce the marks in the same way.

Regarding the analysis of the relatedness of the goods, the questions usually focus on the following: (1) are the products complementary; (2) are the products sold to the same class of consumers; and (3) are the products similar in use and function. A close proximity of the goods is not necessarily required. Here both products are in the beverage industry. Thus, they have similar use and function. Given that both products are beverages, there is a reasonable inference that they utilize similar marketing channels. Through deposition testimony, Gallo Wines contended that it would market its wine in convenience stores, supermarkets, liquor stores, restaurants, and bars. One of the Plaintiff’s witnesses attested to the fact that energy drinks and wines are sold in the same aisle of the grocery store. Therefore, the court concluded that the marketing channels of the two products overlapped to a certain degree.

The degree of care factor favors Plaintiff here. The rationale is that Plaintiff’s wines cost somewhere between $5.99-$9.99 a bottle. It has been held that consumers are likely to exercise less care when the goods are relatively inexpensive and that confusion is more likely when less care is employed. Several other factors also favored the Plaintiff. After reviewing all the evidence, the Court granted Plaintiff’s motion for summary judgment on all of its claims. It issued a permanent injunction against the use of EL GALLO for energy drinks.

This case is in line with TTAB findings. See our previous blog post entitled, TTAB Finds Water And Wine Related Goods Under Likelihood of Confusion [citable as precedent], where the Board sustained an opposition and refused to register the mark GOTT LIGHT for water finding it would cause a likelihood of confusion with the registrations GOTT and JOEL GOTT for wine. In Joel Gott Wines, LLC v. Rehoboth Von Gott, Inc. (Opposition No. 91197659 (June 26, 2013), the opposer relied on third party registrations that showed that water and wine products emanated from a single source.

In another TTAB case, again the Board finds a likelihood of confusion with an alcoholic beverage and a non-alcoholic beverage, see In re Pigs Eye Brewing Company LLC, Serial No. 78711050 (February 14, 2008). Here, the Applicant was seeking to register the mark PIT BULL (standard characters) for malt liquor. The Examining Attorney refused the application under 2(d) of the Trademark Act, 15 U.S.C. §1052(d), because he concluded that the Applicant’s mark would cause a likelihood of confusion with the registered mark PIT BULL ENERGY DRINK (for non-alcoholic energy drinks). The Board affirmed the refusal.

Some of the evidence relied on included Internet articles showing an overlap in the channels of trade between energy drinks and alcoholic drinks. For example, Anheuser-Bush known for distributing alcoholic drinks, also distributes energy drinks produced by their company and other companies such as Hansen Natural Corporation (seller of Monster Energy drinks). It was shown that other companies (such as Seagram’s) also distribute both alcoholic beverages and non-alcoholic drinks. In addition, evidence was produced to demonstrate that the products themselves are marketed as a combined drink.

Further evidence was introduced to demonstrate that the packaging and labels of the two products often resemble each other. Lastly, it was shown that there is a growing trend in retail outlets, placing the products (energy drinks and alcoholic beverages) near each other in the same sections of the store or in the same aisle. Of course, if there is any doubt regarding a likelihood of confusion,  it is resolved in favor of the registrant. In light of these recent findings, trademark counsel with clients in the beverage industry, should carefully examine clearance reports. Trademarks of both alcoholic and non-alcoholic products need to be evaluated for purposes of a likelihood of confusion analysis. Please feel free to contact our office, if you are in need  of trademark counsel.