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.