Whiskey Makers Fight it Out Over Crown Trademarks

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Two whiskey makers are proving that there really is a fight in every bottle of whiskey.  Canadian whiskey maker Diageo North America Inc., which owns the brand Crown Royal, is well known for the signature purple drawstring felt bags and smooth taste of one of its flagship products.  Now the iconic liquor maker says that Mexcor, Inc. is attempting to capitalize on its famous brand by confusing consumers.

 

Mexcor, Inc. sells whiskey products featuring the word “crown” and targeted to regional markets in the southeastern U.S., including “South Carolina Crown,” “Texas Crown” and “Florida Crown,” which also come in drawstring felt bags depicting each state flag.  In a complaint filed in the U.S. District Court for the Southern District of Texas back in March, 2013, Diageo North America, Inc. claimed that Mexcor’s packaging contains, “imitative bags [which] violate Diageo’s rights in the Purple Bag mark.”  Diageo also alleges that Mexcor’s bags and names create customer confusion by leading customers to believe that the Mexcor products are, “regional variations or novelty line extensions of Crown Royal.”

 

Mexcor filed a motion for summary judgment,  based upon the doctrineof laches and the contention that Diageo’s claims are barred by the statute of   limitations, among other claims and defenses.  Mexcor claims it has been using its “crown” labeling on packaging for more than five years, in limited geographies.  Diageo fired back with its own motion for summary judgment, responding that it had tolerated limited low-level infringement, based upon the doctrine of progressive encroachment, which it claimed did not preclude its right to sue Mexcor later.  Last month the court rejected both motions for summary judgment, and the case appears to be headed to trial.

 

Navigating geographic scope of use, junior and senior trademark uses, and the question of how much a trademark owner can tolerate ‘de minimis’ trademark infringement is nuanced.  If you have questions about trademark infringement, or have an issue with someone else using your intellectual property, you need an experienced business litigator who understands trademark protection.  James J. “Jim” Thomas II has more than 35 years of experience advising Georgia businesses and handling complex business litigation including intellectual property matters like trademark infringement.  Jim can help you with the analysis, evaluation, and resolution of existing and potential litigation including in intellectual property disputes. Visit www.litigationatlanta.com online, or give Jim a call at 404-869-5248 to set up a free consultation.

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