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When David Beats Goliath

Posted by: Karla Aspiras on November 14, 2012
Stark Raving

As brandchannel reports, Stark Wines won its preliminary injunction suit against a subsidiary of global wines and spirits group Diageo. Diageo Chateau and Wines was marketing “Stark Raving” wine. Stark Wine is an artisanal company based in California. With Stark Wine's win, Diageo is prevented from marketing, selling and manufacturing Stark Raving wine.

Some might wonder how a strong, famous, global wine and liquor company such as Diageo would lose to a relatively small company such as Stark Wine. Commonly, the standard in preliminary injunction suits is confusion, such as when customers are confused that the junior user's (the second comer) goods are from the senior user or connected with the senior user (the first user or registrant of the mark).

The Diageo and Stark dispute is different. It is actually a reverse confusion case. Reverse confusion cases usually occur when a bigger, widespread manufacturer wishes to introduce a new product in the market and discovers a local, smaller, established manufacturer of similar or related goods. The bigger company decides to proceed anyway.

When consumers encounter the senior user's goods in the market, they get the impression that they are getting the goods of the junior user. In other words, and in this case, reverse confusion happens if Diageo's advertising and promotion swamps or overwhelms Stark Wine's market recognition. Customers are confused into thinking that Stark Wine's goods are those of Diageo.

In reverse confusion cases, the junior user is not free riding on the recognition value of a strong, senior mark; so the Courts focus on the strength of the junior user’s mark, not the senior user’s mark. What the Courts look for is the ability of the junior user to trump the senior user’s mark -- in this case Diageo's ability to trump Stark Wine.

The decision in favor of Stark Wine is limited to Sonoma County, California. Outside of that geographic area, Diageo is free to market Stark Raving as they please. And according to Diageo, “Stark Raving wines will continue to be sold nationally except in Sonoma County. We will comply with the Court's order, and we are confident that we will prevail in the end.”

It is best to be mindful that trademark owners, regardless of size, are equally protected in their investment in a name or brand. Never underestimate the little guy. While trademark law primarily protects consumers from confusion as to source of goods, it also (secondarily) protects the goodwill that companies have built up in their trademarks.

Karla Aspiras is a Trademark Analyst at Interbrand NY.

Category: Trademarks




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