The opinion of the court was delivered by: Platt, District Judge.
Plaintiff Banfi Products Corporation commenced this action against
defendant Kendall-Jackson Winery, Ltd. on March 14, 1996, seeking a
declaratory judgment of non-infringement. In the alternative, plaintiff
has asserted claims for: (1) trademark infringement in violation of the
Lanham Act § 32(1), 15 U.S.C. § 1114; (2) unfair
competition/false designation of origin and false advertising, in
violation of section 43(a) of the Lanham Act, 15 U.S.C. § 1125 (a);
and (3) common law trademark infringement.
In response, defendant Kendall-Jackson Winery, Ltd. has asserted
counterclaims for: (1) false designation of origin in violation of
section 43(a) of the Lanham Act, 15 U.S.C. § 1125 (a); (2) unfair
competition in violation of N.Y.Gen.Bus. Law § 368-e; and (3) unfair
business practices in violation of N.Y.Gen.Bus. Law § 349.
Additionally, Kendall-Jackson Winery, Ltd. seeks an order canceling
Banfi's federal trademark registration No. 1,743,450 for COL-DI-SASSO.
This Court conducted a six-day bench trial that concluded on February
with post-trial arguments held on April 30, 1999.*fn1 This Memorandum
and Order constitutes the Court's findings of fact and conclusions of law
pursuant to Rule 52(a) of the Federal Rules of Civil Procedure. For the
following reasons, this Court finds that there is no likelihood of
confusion and accordingly directs the Clerk of the Court to enter a
Judgment of non-infringement.
Plaintiff Banfi Products Corporation ("Banfi") is a New York
corporation whose principal place of business is in the Village of Old
Brookville, Nassau County, New York. (Tr. 31:17.)*fn2 At present, Banfi
is the largest importer of Italian wines in the United States, importing
as much as sixty to seventy percent of all Italian wines coming into this
country. (Tr. 668:16-22.) Banfi also imports wines produced by its
affiliated companies in Montalcino and Strevi, Italy. (Tr. 33:20-25.)
Domestically, Banfi produces a chardonnay wine in Old Brookville, New
York, distributed primarily on Long Island and in Manhattan. (Tr.
Defendant Kendall-Jackson Winery, Ltd. ("Kendall-Jackson") is a
California corporation with its principal place of business in Santa
Rosa, California. (Joint Pre-Trial Order, Schedule M, Stipulated Fact
No. 2.) In 1994, Kendall-Jackson purchased the Robert Pepi Winery,
located in Napa Valley, California. (Joint Pre-Trial Order, Schedule M,
Stipulated Fact No. 6.
Banfi imports and sells COL-DI-SASSO, which is produced by an affiliate
of Banfi in the Tuscan region of Italy. (Tr. 667:22-668:6.) Dr. Ezio
Rivella, Banfi's general manager of Italian operations, conceived of the
name COL-DI-SASSO in Montalcino, Italy in 1989 or 1990. (Tr. 34:4-35:21.)
COL-DI-SASSO is an Italian term meaning "hill of stone." (Joint Pre-Trial
Order, Schedule M, Stipulated Fact No. 9.) It was named for a particular
rock known as "sasso," prevalent in the region of Tuscany. (Tr.
Originally, COL-DI-SASSO was introduced as a Cabernet Sauvignon wine.
(Joint Pre-Trial Order, Schedule M, Stipulated Fact No. 14.) Soon
thereafter, however, Banfi changed COL-DI-SASSO to a 50-50 blend of
Sangiovese and Cabernet. (Tr. 163:1-4.) Banfi began selling this new
blend in early 1993. (Tr. 163:16-22.)
COL-DI-SASSO's trade dress is very distinctive. Its front label
includes an orange-yellow depiction of a landscape, surrounded by a
green-black marbleized background. (Pl.'s Ex. 117.) The name COL-DI-SASSO
is featured prominently on the front label, as are the words "Sangiovese"
and "Cabernet." (Pl.'s Ex.117). The back label includes the following
legends: (1) "Red Table Wine of Tuscany;" (2) "Banfi S.R.L.;" (3) "50%
Sangiovese-50% Cabernet Sauvignon;" (4) "Banfi Vinters;" and (5) "Produce
of Italy." (Pl.'s Ex. 117.)
Additionally, the word "Banfi" appears in black script on the cork used
in bottles of COL-DI-SASSO. (Tr. 441:12-13.)
In 1991, Banfi introduced COL-DI-SASSO to the Italian market, and sold
substantial quantities from that point forward throughout Europe. (Tr.
35:24-36:3.) Banfi sent its first shipment of COL-DI-SASSO, consisting of
two bottles, to the United States in late 1991. (Tr. 38:18-22.) Yet
commercial distribution and sales of COL-DI-SASSO in the U.S. did not
commence until the Spring of 1992. (Tr. 38:23-25.) On or about December
29, 1992, the United States Patent and Trademark Office ("PTO") issued
Banfi federal trademark registration No. 1,743,450 for COL-DI-SASSO.
(Pl.'s Ex. 53.)
By late 1993, Banfi began to experience a sharp increase in U.S. sales
of COL-DI-SASSO. To date, over 27,000 cases of COL-DI-SASSO have been
sold in the United States. (Pl.'s Ex.115). In 1998, Banfi's total U.S.
sales in dollars of COL-DI-SASSO exceeded $1.3 million. (Pl.'s Ex. 112.)
COL-DI-SASSO's success is attributable, in part, to the fact that Banfi
expends vast sums of money each year on advertising and promotions for
COL-DI-SASSO, to wit, $190,000 in 1998, $160,000 in 1997, $140,000 in
1996, and $113,000 in 1995. (Tr. 45:6-10.) In promoting COL-DI-SASSO,
Banfi uses point-of-sale materials such as displays, brochures, table
tents, which are pieces of cardboard placed on restaurant tabletops
featuring images of a designated wine bottle, and bottle collars placed
over the necks of COL-DI-SASSO bottles. (Tr. 44:19-45:1, 49:9-18.)
Banfi sells COL-DI-SASSO to wine and spirit distributors throughout the
United States, who in turn distribute the wine to restaurants and retail
establishments. (Tr. 43:23-44:10.) Banfi markets COL-DI-SASSO as an
affordable, everyday Italian red wine. (Tr. 52:17-23.) Accordingly, Banfi
encourages its distributors to place the wine in discount liquor stores,
supermarkets, and mid-range Italian restaurants such as the Olive Garden
and Macaroni Grill. (Tr. 51:8-11, 53:15-54:3.) COL-DI-SASSO sells for
between $8 and $10 per bottle in stores (Tr. 39:2-3), and for anywhere
from $16 to $23 per bottle in restaurants. (Tr. 56:5-6.) Restaurants also
feature COL-DI-SASSO by the glass as a promotional tool. (Tr. 56:7-15.)
Since its introduction, COL-DI-SASSO has received generally favorable
reviews from the media. In May 1994, the Houston Chronicle praised
Banfi's 1991 vintage of COL-DI-SASSO, giving the wine "4 stars — a
Cabernet-sauvignon-sangiovese blend, is molto buono, capisce?" (Pl.'s
Ex. 68 at 57.) In 1995, the Providence Journal-Bulletin described the
flavor of Banfi's 1992 vintage of COL-DI-SASSO as "rustic and nicely
Tuscan." (Pl.'s Ex. at 45.) The following year, the Washington Post
opined that the 1994 vintage of COL-DI-SASSO is a "versatile, affordable,
everyday wine that will complement burgers, poultry, and . . . red meat"
with its "bright, forward, quaffable style." (Pl.'s Ex. 37.) Finally, in
1997, the Port St. Lucie News recognized the 1995 COL-DI-SASSO as its
pick of the week, describing the wine as "dark in color and import, smooth
and spicy, full-bodied and fairly silky and deeply imbued with peppery
raspberry and blackberry flavors." (Pl.'s Ex. 58.)
C. ROBERT PEPI COLLINE DI SASSI
The other wine at issue in this case is ROBERT PEPI COLLINE DI SASSI,
produced by the Robert Pepi Winery in Napa Valley, California. In July
1994, defendant Kendall-Jackson Winery ("Kendall-Jackson") purchased the
Pepi winery and has continued to produce COLLINE DI SASSI ever since. In
late 1989 or early 1990, Robert A. Pepi and his son Robert L. Pepi,
founders of the Pepi winery, arrived at the name ROBERT PEPI COLLINE DI
SASSI while eating dinner together. (Tr. 243:20-245:10.)
Directly translated, ROBERT PEPI COLLINE DI SASSI means "Robert Pepi
little hills of stone." (Tr. 261:4-6.) The "Colline" element of ROBERT
PEPI COLLINE DI SASSI is a three-syllable word pronounced "Cal-ee-ne."
(Tr. 260:17-261:3, 302:8-11, 358:10-12.) Although ROBERT PEPI COLLINE DI
SASSI is labeled solely as a Sangiovese varietal, it contains a small
amount (typically 15%) of cabernet. (Tr. 370:1-2, 357:5-15.)
Since the introduction of ROBERT PEPI COLLINE DI SASSI, its trade dress
has gone though several changes. Up through the 1993 vintage, the front
label on bottles of ROBERT PEPI COLLINE DI SASSI was long and narrow with
a jagged top edge. (Pl.'s Ex. 114.) The Words "Robert Pepi," "Colline Di
Sassi," and "Napa Valley" all appeared on the front label in gold block
lettering superimposed on a mauve background. (Pl.'s Ex. 114.) Beginning
with the 1994 vintage, the front label again was long and narrow, but was
brown-black in hue with a jagged edge along the right side. (Pl.'s Ex.
19.) The front label still contained the legends "Robert Pepi," "Colline
Di Sassi," and "Napa Valley" in gold block lettering. (Pl.'s Ex. 19.)
The current trade dress of ROBERT PEPI COLLINE DI SASSI consists of a
rectangular wrap-around front label. The label is orange and cream,
bearing the legend "Robert Pepi" in black script in the top left corner.
(Pl.'s Ex. 113.) The words "Colline Di Sassi" and "Napa Valley
Sangiovese" are centered on the front label in black print. (Pl.'s Ex.
113.) The back label reiterates that the wine is produced and bottled in
Napa Valley California. (Pl.'s Ex. 113).
In September 1990, ROBERT PEPI COLLINE DI SASSI labels were approved by
the Bureau of Alcohol, Tobacco and Firearms ("BATF"). (Pl.'s Ex. 1.) of
considerable significance, the label approval application listed "ROBERT
PEPI" as the "brand name" and "COLLINI (sic) DI SASSI" as the so-called
"fanciful name." (Pl.'s Ex. 1.) Thereafter, in October 1990, Pepi began
to distribute the 1988 vintage of ROBERT PEPI COLLINE DI SASSI throughout
the United States. (Tr. 246:2-8.)
Since then, distribution of ROBERT PEPI COLLINE DI SASSI has been
relatively limited. Annual case sales of defendant's wine have ranged
from 133 cases in 1990, to 462 in 1991, 689 in 1992, 301 in 1993, 170 in
1994, 996 in 1995, 903 in 1996, 37 in 1997, and 1345 in 1998. (Pl.'s Ex.
139.) Pepi did not produce a 1994 vintage of ROBERT PEPI COLLINE DI SASSI
due to concerns over quality. (Tr. 286:23-287:4.) Moreover, from 1990
through 1998, advertising ...