Hooray for the Red, White & Blue- The Importance of First to Use

In trademark law, the first user of a trademark is called the “senior user,” and has priority over any later user, called the “junior user.” This rule means that filing a trademark application, if you are the junior user, will not get your mark priority over the senior user.

In 2006, Tassel Ridge Winery, LLC of Iowa named their concord grape wine RED, WHITE & BLUE. They did so apparently as a part of a series of patriotic names including STAR SPANGLED WHITE, AMERICAN MERLOT, AMERICAN CHARDONNAY AND ROCKET GLARE ROSE. Tassel Ridge applied for a COLA, which was granted on July 5, 2006. Shortly thereafter Tassel Ridge started selling its RED, WHITE 7 BLUE wine. On October 17,2007, Tassel Ridge filed a federal trademark application on this name for use on wine, and registration was later granted.

Apparently unknown to Tassel Ridge, WoodMill Winery Inc. of North Carolina had the idea to sell a wine which is a blend of red and white grapes and blueberries. WoodMill decided to call the wine RED, WHITE AND BLUE. Because this wine was nonstandard, WoodMill had to obtain government approval of the formulation and process of production. WoodMill did so. It submitted application on April 7, 2006, and it obtained approval in ten days. However, WoodMill did not submit its application for COLA until August 28.2006.

In 2011, Tassel Ridge became award that WoodMill was selling a wine with the same name, and sent WoodMill a cease and desist letter. There was also a call to WoodMill and another letter to no avail. In may 2011, Tassel Ridge filed suit for trademark infringement against WoodMill.

After around two years of litigation, Tassel Ridge asked the court to grant summary judgement (judgement without the need for a trail) against WoodMill, given that the marks were the same and that Tassel Ridge used first. In response to Tassel Ridge’s motion for summary judgment, WoodMill claimed it had first sold its wine on July 3, 2006, before Tassel Ridge’s first sale in July 2006. The Court found that even if WoodMill had sales of its wine before Tassel Ridge had any sales, WoodMill’s early sales were before WoodMill had a COLA. The Court stated the rule that the senior user has priority, but that use must be lawful. Sales of wine prior to receipt of the COLA were not lawful.

WoodMill also claimed it used the mark first because it filed its April 2006 application for approval of its formulation and production process, and because it used the name RED, WHITE & BLUE on its web site. However, “use” in a trademark sense comes from actual sales of wine, not just advertising and not from submission of an application to make the wine.

Accordingly, Tassel Ridge was the senior user. The Court, however, denied the motion for summary judgment because a trial was needed to determine if there was infringement. WoodMill claimed its use of the mark RED, WHITE & BLUE was descriptive of its ingredients, and as such it was not a trademark use. This issue never got resolved, as the parties settled shortly thereafter. It is likely that WoodMill realized this defense was relatively weak.

It appears that WoodMill may very well have been the first to conceive of the mark RED, WHITE & BLUE, and the first to advertise it. WoodMill’s mistake was advertising the mark long before it was entitled to sell the wine. To protect its trademark rights, WoodMill should have filed an intent-to-use trademark application before advertising its mark. Had WoodMill done so in April of 2006, before Tassel Ridge started selling its wine, WoodMill would have preserved its rights. However, once Tassel Ridge started using (by selling wine with the mark on it), an intent-to-use trademark application by WoodMill would have been too late to change anything. In this situation, early filing of a trademark application would likely have avoided six digit expenses in trademark litigation.

This article was written by David L. Hoffman, Esq. and was originally published in the May/June 2014 issue of The Grapevine Magazine. The full article can be found at the following link: http://www.thegrapevinemagazine.net/view-emag/2014-may .

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