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Main Tito’s Case Dismissed

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The main Tito’s Handmade Vodka case has been dismissed, after 19 months of heated litigation. Details are not available so far.

The main case was Hofmann v. Fifth Dimension, Inc. (first filed in state court in September of 2014 then removed to federal court in San Diego a month later). A second and similar case, Cabrera v. Fifth Generation, Inc., also got dismissed on the same day.

On April 22, 2016, both sides in both cases filed joint motions to dismiss. On May 3, Judge Miller of the U.S. District Court for the Southern District of California issued an order in each case, granting the parties’ joint motions.

At one point there were at least eight class action lawsuits against Tito’s Vodka, scattered around the U.S., challenging the very prominent references to “Handmade,” on the product’s labeling and advertising. There are no signs of any label changes, and Google says this has not been in the press to date.

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TTB Got Fast!

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Just when it seemed like TTB labels and formulas would be slow, and get slower every year — all of a sudden things look pretty fast. The above table shows that normal formulas take two weeks or less. It’s been a really long time since the processing times have been less than a month. This is a huge benefit for producers everywhere. Over on the label side, things are also getting better. This scary looking table shows that beer, wine and spirits labels were flirting with 40 and more days of processing time, toward late 2014, until the trends started to improve (things got particularly ugly here).

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As of today, TTB says the processing time for labels is right around 21 days.

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I reached out to TTB to see why things seem so much better. TTB said:

Although workloads have continued to increase since FY 2015, we have recently been able to improve our processing times in part through cross-training and because new staff hired last year are reaching full proficiency.  However, the improvements you are seeing right now are also due in large part to increased use of overtime and the temporary reassignment of staff from other mission areas, which are short term fixes until we are able to fully implement the long term solutions (such as additional personnel and IT improvements) made possible by the additional funding we received for FY 2016.

There are already millions of labels approved in the past 20 years or so, and this should be great news for everyone who wants just a few more choices.

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Trademarks All Over the Atlas

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A few months ago, big law firm Foley Hoag compiled a marvelous list of trademark scuffles, within the alcohol beverage category, during the past year. We already knew there were scores of tussles, and the list was growing ever longer, but we never quite realized how fast the casualties are stacking up. The article shows at least 50 such disputes.

Of all those, the Atlas dispute is the one that caught my eye. Because it’s local, must be crushing news for whoever lost, recent, and I had not heard about it but for the Foley article. Foley explained:

The Atlas Brewing Company of Chicago opposed Atlas Brew Works’ application to register ATLAS for beer. The Opposer alleged that “Atlas” was primarily descriptive of a geographic area within Washington D.C., which is where the Applicant is located (“Atlas” is apparently an unofficial nickname of the H Street District). The TTAB rejected this argument, finding that consumers were unlikely to make the connection. The TTAB agreed with the Opposer that there was a likelihood of confusion between the marks, but it found that the Applicant was the senior user (the TTAB did not accept the launch dates of the Opposer’s Twitter and Facebook accounts as establishing priority). The petition was dismissed. Atlas Brewing Company, LLC v. Atlas Brew Works LLC.

Upon reading the opinion, my main takeaway is that the Washington, D.C. brewer tried earnestly and in good faith to find a good brand name, but still had to contend with this expensive dispute. First, they tried VOLSTEAD but House Spirits Distillery shut that down. The Atlas tale and the Foley article further underscore the need to do no less than look around, Google it, conduct a thorough trademark search, engage a specialized lawyer, check TESS, check TTB’s Public COLA Registry, and check LabelVision, when selecting a brand name in a crowded sector. There is not much sign that either party did a particularly good job of scoping out the things that ought to be scoped out, before putting so much sweat and money into a brand, especially since it is getting so clear that disputes are common. In any event, because the Chicago brewer’s opposition was dismissed by the TTAB, it looks like the Washington brewer can shrug this off and move forward with ATLAS as their brand name.

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Don’t Be Fooled by Trademark Spam!

About five to ten times per year, we get a call from a client asking why the USPTO sent them an invoice for hundreds of dollars for their trademark applications. After a few minutes, it becomes clear what they are talking about—trademark spam.

Trademark spam? Trademark spam is an unavoidable and unfortunate result of the information an applicant provides the USPTO in an application, which is publically available. This includes, among other information, the name, address, and email of the party applying for the mark. As a result, spammers have all of the information they need to send fake trademark solicitations that appear to be legitimate. The USPTO is fully aware of trademark spam, but despite its efforts, applicants and registrants continue to be victimized by spammers.

What does trademark spam look like? Trademark spam generally comes in the form of official-looking correspondence—letters or email—that either “requires” the recipient to pay certain fees, or strongly “recommends” that the recipient use a particular company to facilitate the trademark registration process. In the first instance, some fees are completely fabricated, while other fees purport to be real fees, but are grossly inflated by the spammer. Here is a list of the actual USPTO trademark fees and their correct amounts. In the second instance, spammers offer their services to facilitate the registration process, something only licensed attorneys are allowed to do. To give you a better idea of what trademark spam looks like, here are a couple examples of trademark spam, one from the “U.S. Trademark Compliance Office” and another from the “Patent & Trademark Office.” While these may appear to be official USPTO documents, both are actually spam.

How can I distinguish trademark spam from legitimate, USPTO correspondence? Here is a quick, easy, and effective way, recommended by the USPTO, to tell trademark spam from legitimate correspondence: If the correspondence is from (1) the “United States Patent and Trademark Office” in Alexandria, VA; or (2) If by e-mail, specifically from the domain “@uspto.gov,” then it is official, USPTO correspondence. Also, if you hired an attorney to file your application, all legitimate mail should go to them. Remember, if you ever have any doubt as to the legitimacy of any correspondence you receive regarding your trademark application or registration, you should check with the USPTO, or an experienced trademark attorney.

What should I do if I get spammed? If you receive any communications that you believe may be spam, or believe you have been misled by trademark spam in the past, the USPTO encourages you to email a copy of the correspondence and the envelope it came in to tmfeedback@uspto.gov, so that it may assess whether to add the sender to the trademark spam list. While the USPTO will not reimburse you for any money you paid to a spammer, notifying the USPTO may help prevent others from being misled in the future.

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Tito’s Scorecard

scoreI don’t mean to keep harping on the Tito’s Vodka cases — but there sure are a lot of them — and they are important. Because there are so many, it is not easy to keep track of how it’s going, hence this handy Scorecard. Most of the cases are slowly grinding along, with no clear winner or loser (as shown with the ⇔ symbol). At one extreme, the Aliano case went especially well for Tito (⇑). At the other extreme is the Hofmann case (⇓). In late November Judge Miller allowed Hofmann, the first-filed case, to go forward, past the defendant’s motion for summary judgment. It got even worse, five days later, when the court gave the plaintiffs permission to go into the plant and see exactly how Tito’s Vodka is made, despite the company’s strong objections.


 

Plaintiff (State)Status (Filed Date)Notes
Aliano (IL)Closed. Dismissed 9/24/2015. (11/7/2014)⇑⇑ Big win for Tito.
Cabrera (CA)Open. On 11/20/2015 Judge Miller denied Tito's motion for summary judgment. (12/22/2014)⇓ This case is not going well for the defendant.
ConsolidationClosed. The Hofmann lawyers withdrew their motion to consolidate the cases listed on this table on 5/15/2015. (4/6/2015)
Emanuello (MA)Open. (4/3/2015)
Grayson (NV)Open. (1/26/2015)
Hofmann (CA)Open. On 11/20/2015 Judge Miller denied Tito's motion for summary judgment , and on 11/25/2015 the court ok'd a site visit. (9/15/2014)⇓⇓ This case is not going well for the defendant.
McBrearty (NJ)Open. (10/24/2014)
Pye (FL)Open. On 9/23/2015 the federal court dismissed the statutory deception-type claims but let stand the warranty-type claims. (9/25/2014)
Singleton (NY)Open. (4/7/2015)
Terlesky (OH)Open. 11/17/2015 the court dismissed the statutory deception-type claims but let stand the warranty-type claims. (6/4/2015)
Wilson (AL)Closed. Dismissed 9/30/2015. (8/4/2015)⇑ Win for Tito.

 

We reached out to Tito and his lead lawyer to make sure we are not missing anything important, and to ask a few questions, as follows. From early on, Tito said he knew it was going to be a long haul.

How’s it going? Business has continued to be good. The lawsuits have been a distraction. But our consumer base is growing, and they have been extremely loyal. They appreciate Tito’s Handmade Vodka for what it is:  a premium quality vodka at a price they can afford. That’s what we set out to make, and the fact that our fans appreciate it makes it all worthwhile.

Do you still think you are going to win? Yes, we do believe we will win. So far, the cases that have been decided on the merits have gone our way. The others are still in the early stages.

Anything you want to say and can say that has not already been in the media? As the courts get more into the issues, they are starting to understand that the regulatory process we have to go through to get label approval means something. And when the federal government issues an approval for our labels, it means they have found them to be in compliance and not misleading to consumers. Everyone in the industry should be able to rely on their approved labels to do business.

Why not just settle or compromise? Settling cases like these simply invites more people to bring more cases. Some principles are worth fighting for.

Biggest surprises about our legal system, so far? Things move slowly in the court system. And in the early stages, people can make a lot of baseless accusations and get the benefit of the doubt for a long time, with no real skin in the game and no downside when those accusations are disproven.

How if at all have the cases affected sales? I haven’t had anyone tell me they won’t buy the product because we’ve been sued. To the contrary, I’ve had people tell me that this means I’ve arrived. All I know is we keep doing the same thing we’ve been doing for years; we just do more of it.

What else? On the Florida case … continued here.

With so many cases pending, and so much at stake, it won’t be long until this scorecard needs a major update.

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