Maker's Mark Distillery, Inc. v. Diageo North America, Inc.
679 F.3d 410, 2012 WL 1605755 (2012)
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Rule of Law:
A distinctive and strong trade dress, such as a red dripping wax seal, is protectable under trademark law if its exclusive use does not hinder legitimate competition and its unauthorized use creates a likelihood of consumer confusion, even if the goods are not directly competitive.
Facts:
- Bill Samuels, Sr. formulated the recipe for Maker’s Mark bourbon in 1953.
- Margie Samuels, his wife, conceived of the red dripping wax seal design for Maker’s Mark bottles.
- Maker’s Mark has bottled bourbon for commercial sale under its name and has used the red dripping wax seal on its bourbon bottles since 1958.
- In 1985, Maker’s Mark registered a trademark for the dripping-wax-seal element of its trade dress, described as a “wax-like coating covering the cap of the bottle and trickling down the neck of the bottle in a freeform irregular pattern,” intending to enforce it specifically for the red color.
- Jose Cuervo began producing a premium tequila, “Reserva de la Familia,” in 1995, initially with a straight-edged wax seal on its bottles.
- By 2001, Cuervo started selling its Reserva de la Familia tequila in the United States in bottles with a red dripping wax seal reminiscent of the Maker’s Mark design.
- Sometime after 2003, Cuervo discontinued use of the red dripping wax seal on its Reserva de la Familia bottles and reverted to a red straight-edged wax seal.
Procedural Posture:
- In 2003, Maker’s Mark Distillery, Inc. instituted a lawsuit in the United States District Court for the Western District of Kentucky against Casa Cuervo S.A. de C.V., Jose Cuervo International, Inc., Tequila Cuervo La Rojeña S.A. de C.V., and Diageo North America, Inc. (collectively, Cuervo) claiming state and federal trademark infringement and federal trademark dilution.
- Cuervo counterclaimed for cancellation of the Maker’s Mark trademark.
- After a six-day bench trial, the district court (trial court) found that Maker’s Mark’s red dripping wax seal was a valid trademark and that Cuervo had infringed that trademark.
- Based on its findings, the district court enjoined Cuervo permanently from using red dripping wax on the cap of a bottle in the sale, offering for sale, distribution, or advertising of Cuervo tequila products in the United States.
- The district court found that Cuervo had not diluted the mark and denied Maker’s Mark’s claim for damages.
- The district court also denied Cuervo’s counterclaim for cancellation of the mark.
- In a separate opinion, the district court awarded Maker’s Mark some of its costs.
- Cuervo appealed the district court’s determination that the red dripping wax seal was not aesthetically functional, some of the district court’s factual findings, its balancing of those findings in determining Cuervo had infringed, and its award of some of Maker’s Mark’s costs, to the United States Court of Appeals for the Sixth Circuit. Cuervo is the Appellant, and Maker’s Mark Distillery, Inc. is the Appellee.
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Issue:
Does the red dripping wax seal on Maker’s Mark bourbon bottles constitute a valid and enforceable trade dress that is infringed by Jose Cuervo’s similar use of a red dripping wax seal on its Reserva de la Familia tequila bottles, warranting injunctive relief?
Opinions:
Majority - Boyce F. Martin, Jr.
Yes, the red dripping wax seal on Maker’s Mark bourbon bottles is a valid and enforceable trade dress that is infringed by Jose Cuervo’s use of a similar seal on its tequila bottles, justifying injunctive relief. The Sixth Circuit affirmed the district court's conclusion that the red dripping wax seal was not aesthetically functional, holding that under either the 'comparable alternatives' test or the 'effective competition' test, Cuervo failed to show that granting trade dress protection would hinder legitimate competition, as there are 'more than one way to seal a bottle with wax to make it look appealing.' The court then reviewed the district court’s factual findings regarding the eight Frisch factors for likelihood of consumer confusion, affirming the findings as not clearly erroneous for the disputed factors: strength, similarity, and actual confusion. The court emphasized that Maker’s Mark’s red dripping wax seal is an 'extremely strong mark' due to its unique design and intensive marketing. While Cuervo’s products bore a house mark, the court noted this was less significant in an 'association case' where consumers might infer a connection between brands even with distinct labels. The lack of actual confusion evidence was given little weight given the limited time and quantity of Cuervo’s infringing sales. Balancing all Frisch factors de novo, the court concluded that the 'extreme' strength of the Maker’s Mark mark, coupled with the similarity of the seals, outweighed the factors favoring Cuervo (such as a high degree of purchaser care and lack of intent to infringe), compelling a finding of infringement. Finally, the court affirmed the award of costs to Maker’s Mark, determining that securing a permanent injunction constituted obtaining 'at least some relief on the merits' and a 'judicially sanctioned change in the legal relationship of the parties,' thus establishing Maker’s Mark as a 'prevailing party' under Federal Rule of Civil Procedure 54(d).
Analysis:
This case significantly reinforces the protection afforded to distinctive trade dress under federal trademark law, particularly for unique visual elements like a bottle seal. It demonstrates that the aesthetic functionality defense is a high bar, requiring proof that exclusive use of a feature would genuinely impede legitimate competition rather than merely requiring competitors to be creative. The opinion also provides a detailed application of the Frisch factors, underscoring that the strength and similarity of marks can be pivotal in establishing a likelihood of confusion, even for products in different categories sold to sophisticated consumers. The ruling further clarifies that injunctive relief, even without monetary damages, is sufficient for a party to be considered 'prevailing' and recover costs.
