Here’s a test. Out of the following three
alcoholic beverages, scotch, tequila and malt liquor,
pick the two that are the most similar to one another.
But wait! In the serpentine, tortuous logic of federal
trademark law, it might help to empirically imbibe
before taking the test.
Majestic Distilling Company began marketing a tequila
under the name RED BULL way back in 1984. But, it
wasn’t until a decade later that the company
filed for a registration of its mark. Majestic,
no doubt, performed a search before it filed, so
it wasn’t surprised when the Patent and Trademark
Office rejected its application based upon not one,
but two, existing registrations for RED BULL.
One of those RED BULL registrations was owned by
George Willsher & Co. for scotch, while the
other was owned by Stroh’s Brewery for malt
liquor. The PTO said that there was a likelihood
of confusion between Majestic’s mark and the
other two. Despite this seemingly insurmountable
hurdle, Majestic pressed its case.
Sometime during the decade between Majestic’s
use and the filing of its application, Willsher
stopped marketing its RED BULL scotch. Majestic
petitioned the PTO to cancel the scotch RED BULL
on the basis that Willsher abandoned the mark. The
PTO likes to cancel registrations based on abandonment
as it clears out the deadwood and frees up names
for others to use. Majestic successfully knocked
down the RED BULL scotch. As to RED BULL malt liquor,
well, it wound up giving Majestic a hangover.
The PTO maintained that the two RED BULL marks were
confusingly similar, because, after all, the words
in the marks are exactly the same and the two garishly
red-colored bulls could be brothers.
Which is where the fun started. Majestic said hold
on now, tequila is different from malt liquor. Tequila
is distilled, while malt liquor is brewed. Left
unsaid was malt liquor’s unseemly reputation
earned from its high alcohol content and packaging
in Big Gulp kind of 40 oz. bottles, while tequila
has been trying to upscale its reputation via margaritaville.
Also left unsaid is that after a few drinks, the
logo on the outside of a glass matters much less
than the liquid inside. Showing it had a sense of
humor, the PTO countered with TEQUIZA, that puts
the two together in a tequila-flavored beer.
Majestic couldn’t argue that no beer connoisseur
buys TEQUIZA, so it said customers were very brand
conscious and discriminating. The PTO countered
again, taking the stance that consumers bought the
stuff on impulse, and without careful consideration
or sophistication. Sounds like a snub by a wine
drinker.
Now, Baltimore-based Majestic may have wanted to
simply go down to Washington DC and take the PTO
decision-maker out for drinks and bar hopping. Up
to this point very little real evidence had entered
the case and the parties were trading speculation
and argument. And, survey evidence is, in many trademark
cases, persuasive. Ah, while some consider such
lobbying behavior to be the lubrication of Congress,
it’s strictly prohibited at the bureaucratic
level.
Majestic took out its bullfighting cape and shook
it wildly, arguing that Stroh was able to obtain
a registration for RED BULL malt liquor, in spite
of the RED BULL scotch. Stroh and Willsher had in
fact agreed that their customers wouldn’t
be confused. Not a hard agreement to reach since
the number of people who drink both scotch and malt
liquor must be miniscule, assuming anyone would
ever admit to it.
In other words, Stroh willingly agreed to avoid
using RED BULL on hard liquors in order to obtain
its registration. This left the door open for Majestic
to register RED BULL for tequila. Majestic even
invited Stroh to participate and give its point
of view.
Neither the PTO or an appeals court would charge
Majestic’s cape. After all, it works both
ways, as Majestic used RED BULL subject to the rights
of the scotch maker, Willsher, before Willsher walked
away.
Thus, despite the unusual situation that Majestic
and Stroh have coexisted with RED BULL in the market
for over fifteen years, the PTO refused to give
its official approval. As first user over Stroh,
Majestic will likely keep selling RED BULL tequila,
just without a registration.
The market research must be pretty definitive on
the selling power of RED BULL, because waiting in
the wings of the PTO are other companies attempting
to register RED BULL, one of which is for an energy
drink. In a shot that may be aimed at both Majestic
and Stroh, the maker of the energy drink claims
that its RED BULL is first-aid after a long party
night. Originally Published in the Fort Worth Businss Press |
