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NATIONAL DISTILLERS PRODUCTS v. REFRESHMENT BRANDS

April 15, 2002

NATIONAL DISTILLERS PRODUCTS CO., LLC, PLAINTIFF,
V.
REFRESHMENT BRANDS, INC., WINE MERCHANTS/BUFF, WINE MERCHANTS OF A SYRACUSE, LTD., AND WINE MERCHANTS OF SCHENECTADY, LTD. DEFENDANT.



The opinion of the court was delivered by: Buchwald, District Judge.

    OPINION AND ORDER

National Distillers Products Co., LLC ("National") brought this trademark action against Refreshment Brands, Inc. ("RBI") and several other defendants. The parties consented to a bench trial which was held on February 5-8, 2002.*fn1 The following Opinion constitutes our findings of fact and conclusions of law. As discussed below, we find for the defendants on all counts.

BACKGROUND

A. Parties

National was founded in 1996 by three partners in order to market and sell an 80-proof potato vodka. They named the vodka "Teton Glacier" and registered TETON GLACIER with the United States Patent and Trademark office.*fn2 National does not own a distillery, but rather contracts with one located in Rigby, Idaho.*fn3 From the beginning, National wanted to market Teton Glacier as an "ultrapremium" vodka, in competition with brands such as Grey Goose and Belvedere. Accordingly, National instructed retailers to price Teton Glacier at the high levels commanded by ultra-premium vodkas and specifically refrained from offering price discounts. In addition, National sought to make Teton Glacier known to the most affluent members of society by sponsoring events such as polo matches, the Junior League Winter Ball, and sailing regattas, and by becoming the exclusive vodka offered at Royal Caribbean Cruise Lines's caviar bars.

Nevertheless Teton Glacier has not been a successful product. One of National's partners, John Salisbury, testified that he hoped to sell 40,000-100,000 cases per year in order to make the Teton Glacier brand attractive enough to be purchased by a larger alcoholic beverage company. In its best year, however, Teton Glacier sold fewer than 8,000 cases, and has sold fewer than 30,000 cases in toto since its introduction. By way of comparison, Absolut vodka sells 4,000,000 cases per year, and Belvedere vodka sells 200,000 cases per year. Even Relska, the thirtieth-ranked domestic vodka, sold approximately 162,000 cases in 2000, and Three Olives vodka, a relatively obscure British vodka first introduced in 2000, sold 25,000 cases that year.

RBI, on the other hand, was founded by two partners in 1999 with the intent to market and sell a "vodka cooler" that they named "Glacier Bay."*fn4 A "cooler" is a broad term that encompasses many types of alcoholic beverages that combine small amounts of alcohol, such as wine, malt liquor, or spirits, with some type of "mixer," such as fruit juice or carbonated water. The result is a sweet tasting beverage with the approximate alcohol content of a beer. Well-known cooler brands include Bartles & Jaymes and Smirnoff Ice. Coolers are most popular with women and ethnic minorities in urban ares. RBI has had significant success with their Glacier Bay product, selling 550,000 cases in 2001.

B. Facts

On May 6, 1997, the United States Patent and Trademark Office granted National a registration for their trademark TETON GLACIER: AMERICAN HANDCRAFTED VODKA and design. See Pl.'s Ex. 1. "Teton" is set out in script above a black box in which "Glacier" is written in white interlined Roman font lettering. Above these words are a sketch of two mountains with a "sun" rising between them, and the words "Hand Crafted American Vodka" in an arc above the mountains. National has made efforts to protect its trademark. They have, for example, written numerous "cease and desist" letters to entities who had plans to use the words "glacier" and "vodka" together for products other than Teton Glacier.*fn5 Many, but not all,*fn6 letter recipients did, in fact, abandon their plans upon learning of National's Opposition.

In 1999, RBI placed a "teaser" advertisement in a trade magazine announcing its soon to be released Glacier Bay product. Upon becoming aware of this advertisement, National telephoned RBI and then sent a cease and desist letter on September 30, 1999. RBI consulted their attorney, Gregory Meath, for advice. Mr. Meath advised RBI that their use of the GLACIER BAY trademark in connection with their cooler product would not infringe National's rights in TETON GLACIER. Accordingly, RBI went ahead and launched their product in October of 1999. More than a year later, on November 2, 2000, National filed a complaint in this Court against RBI.

C. Claims

Although National's First Amended Complaint included twelve Counts, three of them were withdrawn either before or during trial.*fn7 The remaining Counts allege three distinct types of claims.

First, National claims that RBI has infringed their registered trademark, TETON GLACIER, as well as their "family" of unregistered trademarks, namely, GLACIER and GLACIERVODKA.COM, by marketing and selling their products under the registered trademarks GLACIER BAY VODKA REFRESHMENT and GLACIER BAY NIGHTS. National also claims that the trade dress used by RBI in connection with Glacier Bay infringes the unregistered trade dress used for Teton Glacier. These claims are brought under sections 2(d), 32(1), and 43(a)(1)(A) of the Lanham Act, as well as the common law.

Second, National asserts claims under New York law and the Lanham Act that RBI's production, marketing, and sale of their Glacier Bay product dilutes the value of the Teton Glacier family of marks. Finally, National claims that RBI has violated New York's unfair competition and false advertising statutes. For the reasons that follow, we find for the defendants on all counts.

DISCUSSION

A. Trademark Infringement

To prove its trademark infringement claims (Counts 1-3 and 5-7), National had to prove that it was probable that "an appreciable number of ordinarily prudent purchasers are likely to be misled, or indeed simply confused, as to the source of the goods in question." W.W.W. Pharm. Co., Inc. v. Gilette Co., 984 F.2d 567, 571 (2d Cir. 1993). Specifically, National had to show a likelihood that consumers would mistakenly believe that the Glacier Bay vodka cooler product emanated from the producers of Teton Glacier. In analyzing this question, we ...


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