Kentucky remains special as Sixth Circuit affirms bourbon’s dominant appeal.

Just as “all bourbon is whiskey, but not all whiskey is bourbon,” it is equally true that all trade dress constitutes trademarks but not all trademarks are trade dress. The U.S. Court of Appeals for Sixth Circuit made a series of fine distinctions recently in upholding an injunction against Jose Cuervo tequila from adopting a confusingly similar form of trade dress. The Sixth Circuit has found that the red wax seal on the Maker’s Mark bourbon whiskey is protected trade dress. The opinion by Judge Boyce Martin Jr. celebrated the uniqueness of bourbon and by extension easily afforded trade dress protection to a leading manufacturing.

Maker’s Mark had been using the red dripping wax seal since at least 1958 and had federally registered the trade dress. In 1995, Jose Cuervo began producint a premium tequila, “Reserva de la Familia.” In 2001 Cuervo modified the seal on the premium tequila to include the red dripping style of seal.

Two years later Maker’s Mark brought a lawsuit to stop the competition, suing 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. During the litigation, Cuervo reverted to its original red straight-edged wax seal but continued to seek cancellation of the Maker’s Mark trademark.

The litigation first established that the Maker’s Mark wax seal was not functional. It does not, in fact, seal the bottle. Other bourbon distilleries such as Buffalo Trace still use wax as a functional sealant, but the red dripping seal has no function. Secondly, the litigation established that for the market of distilled spirits, the red dripping seal served to distinguish Marker’s Mark from other brands.

The district court found and the Court of Appeals affirmed “that the Maker’s Mark red dripping wax seal is an extremely strong mark due to its unique design and the company’s singular marketing efforts.”

The Wall Street Journal enjoyed the flavor of the opinion.

Judge Martin’s opinion includes some interesting points:

Justice Hugo Black once wrote, “I was brought up to believe that Scotch whisky would need a tax preference to survive in competition with Kentucky bourbon.” While there may be some truth to Justice Black’s statement that paints Kentucky bourbon as such an economic force that its competitors need government protection or preference to compete with it, it does not mean a Kentucky bourbon distiller may not also avail itself of our laws to protect its assets. This brings us to the question before us today: whether the bourbon producer Maker’s Mark Distillery, Inc.’s registered trademark consisting of its signature trade dress element—a red dripping wax seal—is due protection, in the form of an injunction, from a similar trade dress element on Casa Cuervo, S.A. de C.V.’s Reserva de la Familiatequila bottles.  We hold that it is.  The judgments of the district court in this trademark infringement case are AFFIRMED.

The name “bourbon” at that time meant whiskey made from mostly corn in Kentucky or points west. But it was likely not until “sometime between 1823 and . . . 1845” that Dr. James Crow “perfect[ed] the sour-mash method of whiskey-making”—the dominant process in use today that, when coupled with aging in charred new oak barrels, produces modern bourbon’s familiar caramel color and distinctive taste.

Congress in 1964 designated bourbon as a “distinctive product[] of the United States,” 27 C.F.R. § 5.22(l)(1), and prescribed restrictions on which distilled spirits may bear the label “bourbon.” Federal regulations require that bourbon whiskey to, among other things, be aged in charred new oak barrels, contain certain proportions of mash ingredients, and be barreled and bottled at certain proofs. § 5.22(b). Importantly, whiskey made for consumption within the United States cannot be called bourbon unless it is made in the United States. § 5.22(l)(1).

The Court notes that ninety-five percent of bourbon is made in Kentucky. While the Court provides a footnote regarding the other five percent, as a member of a Kentucky law school, I’ll refrain from reproducing that here.

Since the injunction does not prohibit Cuervo from using a red wax seal located on the same areas of the neck of its bottle. The injunction applies merely to the red wax seal that includes the stylized drips of the Maker’s Mark trademark. For companies hoping to imbue support from the decision, trade dress remains a useful, but extremely limited, marketing strategy.

The decision was consistent with recent Supreme Court decisions such as Walmart Stores, Inc. v. Samara Bros., Inc. in which the Court upheld but restricted the role of trade dress under trademark law. Earlier decisions by the Court in Qualitex and Two Pesos, Inc. v. Taco Cabana, Inc. had been much more expansive, so the narrowing has been a better balance between competitors which better serves the public.

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