Last week I received an email from Vidiot over at Cocktailians asking my thoughts on a recent email he received from a company claiming he violated a trademark through a name he gave a cocktail.? (Whew!)? You can read his post about the situation here.? We exchanged emails throughout the day discussing the company which sent him the email, his reaction to the email and the current state of booze bloggery.? My friend Jacob also wrote about this issue here.

I found this whole issue very interesting, not only because I’m a booze blogger but also as an attorney.? However, I have very little knowledge of the law relating to intellectual property, trademarks, etc.? An interesting thing about lawyers is that there is always someone a phone call or two away that has a much better understanding of a particular area of law.

In that vein, I contacted my friend Chris Leger to see if he would chime in.? We met for drinks last Friday and he agreed to write an article discussing trademarks and cocktails.? To my knowledge, this is the first article to discuss this issue on a cocktail blog written by a practicing attorney.? I’m grateful to Chris for agreeing to write this and I hope you find it as interesting as I did.

The Gosling’s Dark ‘n’ Stormy Controversy Through an Intellectual Property Lens

by Christopher Leger

Gosling’s Dark ‘n’ Stormy Trademark

The recent New York Times article about Bahamian rum company Gosling’s owning a registered trademark for the drink name Dark ‘n Stormy has ignited a controversy that is making the rounds on many, many cocktail blogs, and serves as a very good opportunity to explain the impact of intellectual property law on issues that are important to the average person.? This controversy must be discussed within the current intellectual property law framework, and specifically the current trademark law.

Given the many forums in which this trademark may be litigated [FN 1], it is a fool’s errand to try and discuss every specific test used in every jurisdiction. Discussing this trademark in the context of the common law [FN 2],? the Lanham Act [FN 3], the Federal Trademark Dilution Act [FN 4], and the Trademark Dilution Revision Act of 2006 [FN 5] will give broad view of what most federal courts will look to in deciding the strength of the mark. Of course, as a general and specific disclaimer, this discussion will have both major and minor factual omissions, and should most definitely not be construed as legal advice and should not be relied on as legal advice.

The History and Purpose of Intellectual Property Law

Intellectual property law is generally considered to encompass patent, copyright, and trademark law. Patent law generally covers inventions, copyright law generally covers artistic works, and trademark law generally covers commercially identifiable names and designs. Many people do not understand the history and purpose of ?intellectual property law, and understanding this history will give the layperson a much better understanding of the issue as a whole.

For most of recorded history, there was no such thing as intellectual property, and people were free to copy the works of others as they saw fit. This included word for word copies, inventions, logos, and any other identifying marks. Keep in mind that this is actually how a totally free, laissez-faire capitalist market operates. It is only by direct government intervention that this wholesale duplication does not exist in the same manner today.

The first major intellectual property laws in the 17^th and 18^th centuries were mainly discussed as monopolies [FN 6], because the laws granted a single entity the right to sell or license a good or brand, and was considered by Thomas Jefferson as dangerous to a free society, to be applied only in a clear need of a broad public interest [FN 7]. The second half of the 20^th century ushered in a much more broad ownership interest in these monopolies, and the terminology has since changed to reflect this new propertization of these monopolies [FN 8].

The issue at hand is about a registered trademark on the drink name “Dark ‘n Stormy,” and should not be confused with patent or copyright issues. The difference between these areas of law begin with why these areas of law exist. Patent and copyright policy is at its heart designed to foster innovation, invention, and creativity by giving inventors and creators a period of exclusivity to allow them time to monetize their creativity and profit from their labors. Trademark policy historically has been a separate and distinct policy goal than patent and copyright. Trademark policy was developed to protect consumers from unknowingly purchasing inferior or fraudulent goods or services, not to directly benefit the trademark holder.

The public needed a way to guarantee that the items that were being sold under a particular label or name were in fact made by the company whose name was on the label. The “likelihood of confusion” of the consumer was paramount in the determination of whether a trademark was being abused. After WWII, trademark policy has changed drastically, with both legislative and case law creating a property ownership and monetary interest in trademark protection that is nearly as universal as patent and trademark. The largest changes have been incorporated through the Lanham Act of 1946, the Federal Trademark Dilution Act of 1996 and the Trademark Dilution Revision Act of 2006.

Common Law, the Lanham Act of 1946, Federal Trademark Dilution Act of 1996 and Trademark Dilution Revision Act of 2006 Issues

Common law dictates that prior use in the market is the controlling determination in who owns a trademark. Determining if Gosling’s actually owns this mark is very much dependent on the use of the mark before November 1988, as that Gosling’s registered their marks with the Patent and Trademark Office on January 11th 1988 [FN9] and again on November 7th, 2007 [FN 10]. Obviously, the readers of this and other cocktail blogs will have much more research material than I do on the prior usage of the name and whether it has been used by others in the market. Because Gosling’s has registered their trademark, the burden does not rest on Gosling’s to prove anything, and instead rests on the defendant who would now have to show proof of prior use to invalidate the mark [FN 5]. If there is a documented history of prior use, it is very unlikely that Gosling’s would prevail in any lawsuit.

The Lanham Act is the legislation under which federal trademark litigation is brought. Sections 32 and 43(a) would allow Gosling’s to recoup monetary and injunctive relief if they can prove that trademark infringement has occurred. To determine if trademark infringement has occurred, it is necessary to look to case law. As most non-lawyers are surprised to learn, there is no uniform method for determining how the law is applied. For discussion purposes, the Second Circuit Court of Appeals has elucidated an eight factor test to determine if infringement has occurred and the extent of that infringement in Polaroid Corp. v. Polaroid Elecs. Corp. [FN 11].

The Federal Trademark Dilution Act of 1996 greatly expanded the area of trademark law into an ownership right, and gives Gosling’s what may be their greatest protection of the “Dark ‘n Stormy” trademark. It completely obliterates the need for consumer confusion and in fact the FTDA defines “dilution” as [FN 4]:

The lessening of the capacity of a famous mark to identify and distinguish goods or services, regardless of the presence or absence of -

(1)?? competition between the owner of the famous mark and other parties, or

(2)?? likelihood of confusion, mistake, or deception.

The U.S. Supreme Court determined that an actual dilution of the trademark had to occur in the Moseley v. V. Secret Catalogue, Inc. case decided in 2003 [FN 12]. The Trademark Dilution Revision Act enacted in 2006 overturned this U.S. Supreme Court case law requiring actual dilution to have occurred and replaced it with a much easier to prove likelihood of dilution standard [FN 5].

These recently enacted area of trademark law may very well have a profound impact on the Gosling’s Dark ‘n Stormy controversy. Many mixologists have put forward the argument that by changing the “‘n” to “and,” “‘n’,” or “&” they would be able to skirt the letter of the Gosling trademark, however the TDRA seems to effectively eliminate any remotely similar names from public use. If Gosling’s is determined to have a valid registered trademark in the name Dark ‘n Stormy, the FTDA and TDRA are very powerful tools to enforce their mark and eliminate any non-licensed use, including similar and not-so-similar sounding names.

Conclusion

This Dark ‘n Stormy controversy is a very good example of who benefits from trademark protection, and how these changes do not seem to comport with the original public interest intent at all. Changing the policy of trademark law from a consumer protection law to a property right may well prove to be damaging to new creativity and further development of new and interesting cocktails.? It is easy to conclude that a threat of a possible lawsuit, regardless of the merits of the case, will cause many mixologists to abandon the name Dark ‘n Stormy, and allow a name that once signified an important Bahamian cultural contribution to become nothing more than a barely used line item in a corporation’s accounting ledger, alongside depreciating buildings, vehicles, and other assets. In general, intellectual property legislation has become much more protectionist of current business models at the expense of future business models, and this use of? intellectual property law to stifle competition shows no sign of abating.

Using another name for variations of this drink may ameliorate the legal issues with regard to the Dark ‘n Stormy, but this is a real threat to individual creativity that adds to the economic diversity of the industry and the country. The propertization of ideas has by many accounts gone too far, and now that serving an Appleton Estate Reserve and ginger beer called a “D&S” can be grounds for a federal lawsuit, it is time for the average person to take the time to understand intellectual property law a bit more.

[FN 1] David J. Kera and Jonathan Hudis with research assistance by Kathleen Cooney-Porter, “Forum Shopping in Trademark Litigation in the United States,” (1998); (http://www.oblon.com/media/index.php?id=77)

[FN 2] J. Thomas McCarthy, “McCarthy on Trademarks and Unfair Competition,” ?16.02[1] (1995)

[FN 3] 15 U.S.C. Chapter 22; ? 1051 – 1141(n)

[FN 4] 15 U.S.C. ? 1125(c)

[FN 5] 15 U.S.C. ? 1125(a)

[FN 6] Edward C. Walterscheid, “Patents and The Jeffersonian Mythology,” 29 J. Marshall L. Rev. 269 (1995); Walterscheid, supra note , 12

[FN 7] Edward C. Walterscheid, “Patents and The Jeffersonian Mythology,” 29 J. Marshall L. Rev. 269 (1995); Walterscheid, supra note , 54

[FN 8] William W. Fisher III, “The Growth of Intellectual Property:A History of the Ownership of Ideas in the United States,” Eigentumskulturen im Vergleich (1999); Fisher, section D (http://cyber.law.harvard.edu/property99/history.html)

[FN9] http://tarr.uspto.gov/servlet/tarr?regser=serial&entry=73705138

[FN 10] http://tarr.uspto.gov/servlet/tarr?regser=serial&entry=77323651

[FN 11] Polaroid Corp. v. Polaroid Elecs. Corp., 287 F.2d 492 (2d Cir.), cert. denied, 368 U.S. 820 (1961)? The factors are as follows: 1) the strength of the plaintiff’s mark, 2) the degree of similarity between the plaintiff’s and the defendant’s marks, 3) the proximity of the products, 4) the likelihood that the plaintiff will “bridge the gap” between the two products, 5) actual confusion between the two marks, 6) the defendant’s good faith in adopting its mark, 7) the quality of the defendant’s product(s), and 8 ) the sophistication of buyers of the plaintiff’s and defendant’s goods or services.

[FN 12] Moseley v. V. Secret Catalogue, Inc., 537 U.S. 418 (2003)

The author is an attorney desperately trying to make it in the rough and tumble legal arena known as Washington D.C. He aspires to bring intellectual property law back in line with the public good through educational papers, blogging, and in person ranting and raving. See more at www.christopherleger.com

and www.twitter.com/chrisleger1.

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