Leelanau Wine Cellars, Ltd. v. Black & Red, Inc.
84 U.S.P.Q. 2d (BNA) 1225, 2007 U.S. App. LEXIS 22409, 502 F.3d 504 (2007)
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Rule of Law:
Under the Lanham Act, the use of a geographically descriptive term in a competitor's trademark does not constitute infringement unless, after applying an eight-factor balancing test, the junior user's mark as a whole is found to create a likelihood of confusion among consumers.
Facts:
- The Leelanau Peninsula in Michigan was designated as an Approved American Viticultural Area (AVA) in 1981, a recognized grape-growing region.
- Leelanau Wine Cellars, Ltd. (LWC) began operating its winery on the peninsula in 1977.
- In 1990, Roberta Kurtz and Joanne Smart formed Black & Red, Inc. (B&R), initially growing fruit and selling grapes to other wineries, including LWC.
- In 1997, LWC successfully registered the trademark 'Leelanau Cellars' on the Principal Register of the U.S. Patent and Trademark Office (USPTO).
- In 1999, B&R began producing its own wine.
- In 2000, B&R changed its business name to 'Chateau de Leelanau Vineyard and Winery' and began selling wine in 2001.
- In October 2000, LWC's owner sent a letter to B&R, asserting that their use of 'Leelanau' infringed upon LWC's exclusive rights to the name.
- After consulting with attorneys, B&R continued using the name, receiving a state trademark in 2000 and a federal trademark registration from the USPTO in 2003.
Procedural Posture:
- Plaintiff Leelanau Wine Cellars, Ltd. (LWC) filed suit against defendants Black & Red, Inc. (B&R) and Roberta Kurtz in the U.S. District Court for the Western District of Michigan for trademark infringement.
- The district court first granted partial summary judgment for LWC and enjoined B&R from using the name 'Leelanau'.
- After a bench trial on a separate issue, the district court reconsidered its prior ruling, found no likelihood of confusion, and entered judgment in favor of B&R.
- LWC appealed to the Sixth Circuit Court of Appeals (LWC as appellant, B&R as appellee).
- The Sixth Circuit affirmed in part but remanded the case, instructing the district court to allow LWC to conduct a consumer survey.
- On remand, the district court held a new bench trial, considered the survey evidence but afforded it little weight, and again found no likelihood of confusion, entering a final judgment for B&R.
- LWC filed the present appeal with the Sixth Circuit Court of Appeals.
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Issue:
Does a winery's use of the trademark 'Chateau de Leelanau Vineyard and Winery' create a likelihood of confusion with the senior registered mark 'Leelanau Cellars,' thereby constituting trademark infringement, when both marks share a geographically descriptive term?
Opinions:
Majority - Gibbons, Circuit Judge
No, B&R's use of its trademark does not create a likelihood of confusion with LWC's mark. To determine trademark infringement, the court applied the Sixth Circuit's eight-factor test for likelihood of confusion and found that the factors weighed in favor of B&R. The court reasoned that: (1) LWC's mark is weak because 'Leelanau' is a geographically descriptive term for a federally recognized wine region; (2) while the goods are related, the marks are not similar when viewed in their entirety, as required by the 'anti-dissection rule'; (3) LWC's evidence of actual confusion, including a methodologically flawed consumer survey and minimal anecdotal accounts, was unpersuasive; (4) the parties use significantly different marketing channels, with B&R selling primarily from its tasting room and LWC selling primarily through large retailers; and (5) there was no evidence of bad faith or intent to copy on the part of B&R. Therefore, LWC failed to demonstrate that consumers were likely to be confused as to the source of the wines.
Analysis:
This decision underscores the difficulty of protecting trademarks that are primarily geographically descriptive. It clarifies that owning a registration for such a mark does not grant a monopoly over the geographic term itself, particularly when the region is well-known for producing certain goods. The court's analysis reinforces the principle that marks must be compared in their entireties, not by dissecting them into their component parts. The ruling also serves as a strong precedent for the critical evaluation of consumer survey evidence in trademark litigation, emphasizing that methodologically flawed surveys will be given little to no weight.
