E. & J. GALLO WINERY v. Consorzio Del Gallo Nero
782 F. Supp. 457, 1992 Daily Journal DAR 1224, 20 U.S.P.Q. 2d (BNA) 1579 (1991)
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Rule of Law:
The use of a mark that incorporates the dominant element of an exceptionally strong, federally registered trademark for the same class of goods creates a likelihood of confusion and constitutes trademark infringement, especially when the goods are marketed through similar channels to unsophisticated consumers.
Facts:
- Since 1933, E. & J. Gallo Winery ('Gallo') has produced and sold wine in the United States under the 'Gallo' trademark, spending approximately $500 million on advertising and selling over 2 billion bottles.
- Consorzio del Gallo Nero ('Gallo Nero') is an Italian trade association formed in 1987 to promote Chianti Classico wine produced by its members.
- Gallo Nero's predecessor organization, CVCC, had historically used a symbol of a black rooster, or 'gallo nero', on its wines.
- In late 1986, CVCC published an advertisement in the Wine Spectator using the words 'Gallo Nero' to promote Chianti Classico wine.
- In early 1987, Gallo sent a cease-and-desist letter to CVCC, which subsequently stopped its U.S. marketing campaign.
- In 1989, Gallo Nero launched a new U.S. marketing campaign that again utilized the words 'Gallo Nero' in its promotions.
- While Gallo Nero produced neck seals with its name, they were never used on any wine distributed in the United States prior to the lawsuit.
Procedural Posture:
- E. & J. Gallo Winery sued Consorzio del Gallo Nero in federal district court for trademark infringement and dilution.
- Gallo Nero filed a counterclaim seeking a judicial declaration that its use of 'Gallo Nero' was not infringing or dilutive.
- The parties engaged in settlement discussions, which were unsuccessful.
- Gallo Nero voluntarily discontinued all use of the term 'Gallo' in the United States pending a court order.
- Both parties filed cross-motions for summary judgment in the U.S. District Court.
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Issue:
Does an Italian wine trade association's use of the name 'Gallo Nero' to promote its members' wines in the United States create a likelihood of confusion with the established 'Gallo' trademark, thereby constituting trademark infringement?
Opinions:
Majority - Jensen, District Judge
Yes, the use of 'Gallo Nero' constitutes trademark infringement. The court found a likelihood of consumer confusion by applying the Ninth Circuit's seven-factor test. The court determined that: (1) Gallo's mark is exceptionally strong and has acquired secondary meaning; (2) the marks are substantially similar because 'Gallo' is the dominant, 'stand-out' term in 'Consorzio del Gallo Nero,' especially to non-Italian speakers; (3) the goods (wine) are identical for trademark purposes; (4) both parties use similar marketing channels, such as retail stores and magazines; (5) the average wine purchaser is an unsophisticated, 'impulse' buyer, increasing the likelihood of confusion; (6) survey evidence, while not showing widespread actual confusion, indicated some likelihood of confusion; and (7) Gallo Nero was aware of Gallo's mark and the potential for infringement before launching its U.S. campaign. Balancing these factors overwhelmingly demonstrated a likelihood of confusion as a matter of law.
Analysis:
This case solidifies the principle that an exceptionally strong trademark receives the 'widest ambit of protection.' The decision emphasizes that adding descriptive or foreign words around a famous mark is insufficient to avoid infringement when the famous mark remains the dominant element. It also provides a clear application of the multifactor 'likelihood of confusion' test, highlighting that no single factor is dispositive but that the strength of the senior mark and similarity of the goods are heavily weighted. The ruling serves as a strong deterrent to junior users attempting to trade on the goodwill of a well-established brand, even if their name has a legitimate historical origin in another country.
