Chateau Grand Traverse Sues Grand Traverse Distillery Alleging Trademark Infringement

Michigan trademark infringement alert:

The Traverse City Business News is reporting that Chateau Grand Traverse, a Michigan winery, has filed a federal lawsuit against vodka producer Grand Traverse Distillery alleging trademark infringement over the distillery's use of the "Grand Traverse" name.  The dispute arises from the winery's opposition to the Distillery's Trademark filing with the United States Patent and Trademark Office (USPTO) for registration of the mark "Grand Traverse Distillery" on the principal registrar. 

The winery claims trademark rights in the name since it has used the mark "Chateau Grand Traverse" since 1977 and had recently filed and was granted trademark registration in late 2007. Grand Traverse Distillery filed for its trademark protection July 2005.  However, trademark rights date back to the date of first use in commerce. 

This is an interesting lawsuit in that both companies deal in the manufacture and sale of alcohol beverages which Chateau Grand Traverse says has led to confusion among customers.

Read the full article below…

Traverse City Winery Sues Local Vodka Maker, Traverse City Business News, June 2008

Chateau Grand Traverse on Tuesday filed a federal lawsuit to stop vodka producer Grand Traverse Distillery from using its name, which the winery says infringes on its trademarked name, is unfair competition and constitutes deceptive trade practice.

The action follows the winery’s late December 2007 opposition to Grand Traverse Distillery’s application for a trademark of its name, filed with the U.S. Patent and Trademark office. Chateau Grand Traverse attorney John Waters said that suit will only determine whether or not Grand Traverse Distillery, which markets True North Vodka, is entitled to register the trademark. The federal suit, which seeks a jury trial, enables the winery to try and stop the distillery from using the name in the meantime.

“We can’t get injunctive relief preventing them from using it in the trademark office, nor can we collect damages,” Waters said. “We will be seeking damages and attorney’s fees.”

Kent Rabish, owner of Grand Traverse Distillery, says his company won’t back down.
“We’re keeping our name. We’re going forward,” he said.

In its trademark and federal court filings, the Old Mission winery says it has used the name “Chateau Grand Traverse” since 1977 and the stylized, all-capital letters name since 1992. It formally registered the trademarks in January and February 2007, and was granted the registration later that year. Grand Traverse Distillery filed for trademark protection of its name in July 2005. Trademark rights, however, date to the first use of a mark, Waters said.

“Registration doesn’t change the basic priority. Priority is based on use,” he said.

After 30 years of use, Chateau Grand Traverse claims Grand Traverse Distillery, which acquired its license in June 2006 and began production in January 2007, is taking advantage of the winery’s reputation for quality.

“There have, upon information and belief, already been instances of actual confusion, including confusion among sophisticated customers,” according to the winery. Waters said he could not provide examples, however.

Rabish said he is flabbergasted by the suits. Searches prior to the company’s name choice turned up no red flags, he said, adding that the phone book is filled with businesses that use Grand Traverse in the name.

“No one had a trademark on Grand Traverse Distillery,” he said. “You can’t trademark a geographic region. This is the same thing that happened in Leelanau County.”

A long-running legal battle over the use of the word “Leelanau” on wine labels just ended last year. In that case, Leelanau Wine Cellars in 2001 sued Chateau de Leelanau alleging a trademark violation by the latter’s use of the word “Leelanau” on its labels. After initially ruling in favor of Leelanau Wine Cellars — a decision which forced Chateau de Leelanau to temporarily modify its labels — the district court reversed itself. Leelanau Wine Cellars appealed to the U.S. Court of Appeals and lost last September.

Waters, however, believes that a key difference in that decision was the fact that Chateau de Leelanau sold its wines mostly through its tasting rooms. Likelihood of customer confusion about the source of products is integral to trademark claims.

“There’s not much of a likelihood of confusion when you have your products sold at the winery,” Waters said. But in this case, both Chateau Grand Traverse and Grand Traverse Distillery rely heavily on retail distribution and make similar products. Chateau Grand Traverse’s dozens of products include wine fortified with distilled spirits and several cherry wines. Grand Traverse Distillery makes a cherry-flavored vodka and its signature True North vodka.

“When you have two companies that are selling alcoholic beverages, people are likely to think there’s some connection between the two companies,” Waters said.

The lawsuit also claims that before starting his business, Rabish contacted Chateau Grand Traverse CEO Ed O’Keefe Jr. to ask if he had any objections to the Grand Traverse Distillery name, and was told “unequivocally” that O’Keefe did indeed object.

Rabish, however, recalls the meeting as being about renting space at Chateau Grand Traverse.
“I didn’t call Grand Traverse Pie Company and ask them could I use the name. I didn’t call Grand Traverse Auto, and I certainly didn’t call Chateau Grand Traverse,” he said.

Rabish says Grand Traverse Distillery won’t back down, especially after the strong reputation and brand it’s already building. After just a year on the market, its sales are ahead of expectations, and distribution will start in Chicago this month, a market three times the size.

Waters estimated a trial would not be held for two years.