Heaven Hill Distilleries, Inc. v. Log Still Distilling, LLC
| Decision Date | 16 December 2021 |
| Docket Number | 3:21-cv-190-BJB-CHL |
| Parties | HEAVEN HILL DISTILLERIES, INC., Plaintiff v. LOG STILL DISTILLING, LLC, Defendant |
| Court | U.S. District Court — Western District of Kentucky |
Christopher W. Brooker, Julie L. Watts, Matthew A. Williams, Sean G. Williamson, Wyatt, Tarrant & Combs, LLP, Louisville, KY, for Plaintiff.
Cory J. Skolnick, Frost Brown Todd LLC, Louisville, KY, Lindsay Mitchell Henner, Troutman Pepper Hamilton Sanders LLP, Atlanta, GA, Robert A. Angle, Troutman Pepper Hamilton Sanders LLP, Richmond, VA, Shaleen J. Patel, Troutman Pepper Hamilton Sanders LLP, Boston, MA, for Defendant.
"Storytelling is everything."
– Log Still marketing team
During the 19th century, pioneering Kentucky distillers like Jacob Beam, Elijah Craig, E.H. Taylor, Jr., and Robert Samuels transformed frontier whiskey into what we now know as bourbon, "the only spirit distinctive to the United States." S. Res. No. 110-294, 153 CONG. REC. S10822 (2007). Their legacies include iconic bourbons branded with their names even today.
Among their ranks is Joseph Washington "J.W." Dant, who in 1836—at age 16—began distilling bourbon in an unusual way: he poured it through a hollowed poplar log. From those humble roots, he and his many children started their own successful brand bearing his name. It still exists. But today J.W. Dant bourbon is distilled and sold rather more conventionally by Heaven Hill, another family-owned distillery that acquired the brand decades after the Dant family sold it.
Seventy-five years after that sale, J.W.’s great-great-great-grandson John Wallace "Wally" Dant III and some of his cousins set out to "restore" their family's place in Kentucky bourbon history by building a new distillery, line of spirits, and tourist destination. "Log Still Distilling," founded in 2018 and named after J.W.’s original method of distilling, produces its Monk's Road bourbon and gin at the "Dant Crossing" campus in Nelson County—the site of a shuttered distillery where previous generations of Dants lived and worked.
If the new venture had stopped there, it might not have spent its early years before the Patent and Trademark Office and U.S. District Court. But Log Still decided to "subtly [tie] the new distillery to the J.W. Dant name." Plaintiff's Exhibit (PX) 25 at 3. Its website describes a "heritage" and "Dant Legacy" revived by Log Still "one barrel at a time." PX 16 at 1. "Our story," the website asserts, "begins with our forefather Joseph Washington Dant," who "gave birth to the Dant family's place in bourbon lore with a legacy all our own." Id. Now the "rebirth of the J.W. Dant legacy" is marked by "the latest generation of Dant distillers." PX 27 at 11. "[W]e're the Dant family," social media proclaimed, "and we're back in the bourbon business." PX 34 at 15.
This is not strictly accurate: the J.W. Dant brand of bourbon and spirits never left. The Dant Distillery Company, founded in 1870, sold the J.W. Dant brand, trademarks, and goodwill in 1943. Heaven Hill acquired them in 1993. Now Log Still is utilizing the J.W. Dant name in a manner that has confused consumers regarding the relationship between the two brands—and is likely to cause more confusion in the future. By trading on the goodwill associated with the story of Joseph Washington Dant and his 19th century log, today's Dants and their 21st-century Log Still threaten Heaven Hill with irreparable harm to the control of its brand and trademarks.
Log Still Distilling offers attractive products wrapped in a compelling story. But that story is associated with Heaven Hill's bourbon, not Log Still's—and Log Still knew this when it set out to "subtly" tie the two together. PX 25 at 3. Federal trademark law bars Log Still from using these trademarks and goodwill to sell spirits that compete with the J.W. Dant brand sold off long ago by an earlier generation. The new generation may distill its own bourbon and promote its own brand, but not by executing a marketing strategy that leverages the old brand. That would infringe Heaven Hill's marks. And the record at this early stage contains more than enough evidence to conclude Heaven Hill will likely prevail on the merits of its infringement claim and suffer irreparable harm in the meantime, entitling it to a preliminary injunction.
1. The Dant Distillery Company. Joseph Washington Dant began distilling whiskey in 1836 by "running it on a log." According to the family legend, he ran a copper
pipe through a hollow log, filled the pipe with fermented mash, and passed steam through the pipe. Hearing Testimony of Wally Dant, Tr. Vol. I (DN 60) at 262; Hearing Testimony of Bernie Lubbers, Tr. Vol. I at 191. In 1870, J.W. Dant built a distillery called The Dant Distillery Company, Inc., which produced J.W. Dant-branded whiskey. Id. J.W. Dant fathered seven sons, all of whom worked in the distilling industry. Dant, Tr. Vol. II (DN 62) at 106–7; Defense Exhibit (DX) 26 at 1.
In 1902 J.W. Dant passed away, leaving a will asking that "no whiskey subsequently made be branded with my name." John P. Dant Distillery Co. v. Schenley Distillers, Inc. , 189 F. Supp. 821, 824 (W.D. Ky. 1960), aff'd , 297 F.2d 935 (6th Cir. 1962). Perhaps the patriarch anticipated some of his family's subsequent legal squabbles.2
Rather than stop production, however, J.W.’s son George W. Dant became president of The Dant Distillery and continued to produce J.W. Dant bourbon. Id. After Prohibition, the distillery obtained two different J.W. Dant trademarks:
Id. ; see U.S. Reg. No. 320,981 (issued January 15, 1935); U.S. Reg. No. 376,057 (issued March 12, 1940).
The brand and its trademarks changed hands several times in the mid-20th century, a period when most of the Dants left the distilling industry. Hearing Testimony of Max Shapira, Tr. Vol. I at 65–66, 139–40; Dant, Tr. I at 263–64, 276; PX 24. After George W. Dant died in 1943, United Distillers of America purchased the Dant Distillery and all its assets. John P. Dant Distillery , 189 F. Supp. at 824. Schenley Distillers bought the Dant Distillery in 1953. Id. at 823 ; PX 1 at 1–2. Guinness purchased Schenley in 1987. Shapira, Tr. I at 66. And Heaven Hill bought the J.W. Dant brand and many larger labels in a $30 million 1993 transaction. PX 2; Shapira, Tr. I at 138. The transaction conveyed the two original J.W. Dant trademarks shown above, a mark for the words "J.W. Dant" registered in the 1960s, see U.S. Reg. No. 874,828, and a common-law trademark for "The Dant Distillery Company," which is registered in Kentucky, see PX 2 at 9; PX 52.
2. Heaven Hill. This large family-owned distilling company produces many high-volume brands including Evan Williams, Elijah Craig, and Old Fitzgerald. See Shapira, Tr. I at 54–58. It also continues to produce J.W. Dant, a far smaller label that offers a bourbon, vodka, gin, blended whiskey, and more. Shapira, Tr. I at 65–70; PX 5. Since 2004, J.W. Dant sales and revenues have declined by more than half. PX 5 at 1; Shapira, Tr. I at 84–88, 155–56. But Heaven Hill has revived other historical brands, like Old Fitzgerald, and if conditions allow, contends it could do the same with J.W. Dant. Shapira, Tr. I at 55–58, 122–23.
Bargain-hunters may find J.W. Dant bourbon for $15 to $18 on the bottom shelf of liquor stores in most states. Shapira, Tr. I at 70–71; PX 6 at 11. Heaven Hill doesn't feature J.W. Dant among the 19 bourbons that appear on its website, and spends next to nothing to market the label—less than $12,000 over 16 years for all J.W. Dant liquors, compared to the millions it spends each year to market the rest of its products. PX 5 at 1; Shapira, Tr. I at 67, 159–62, 166; DX 29. More than 65,000 annual visitors to Heaven Hill's current distillery and tourism center in Bardstown might read about J.W. Dant—but only on a small poster in a corner. See Shapira, Tr. I at 77; PX 4 at 2. Heaven Hill's new visitor center—opened in 2021—presents J.W. Dant only somewhat more prominently, alongside other bottled-in-bond labels. PX 4 at 4; Shapira, Tr. I at 78–80. And J.W. Dant appears in some of the distillery's tasting programs. Shapira, Tr. I at 78–81, 150–53. The visitor center sells the bourbon on site, but offers no J.W. Dant merchandise. Id. at 81, 150–53.
Based on this price point, sales volume, and advertising, Log Still contends the once-proud brand has deteriorated on Heaven Hill's watch. Log Still Opposition Brief (DN 37) at 17. According to Log Still's expert, only 2.1% of bourbon consumers recognized the J.W. Dant logo mark—far less than many other brands. DX 59 at 17–19. This study, though hardly bulletproof according to Heaven Hill's rebuttal expert, at least corroborates what Heaven Hill's own sales and marketing numbers tell us: J.W. Dant is a relatively small brand in a hot and crowded bourbon market. Id. Indeed, Dant sales comprise less than 1% of Heaven Hill's sales today, even though other "bottled-in-bond" brands represent a larger (and growing) share of the company's sales. Shapira, Tr. I at 156–57.
Heaven Hill draws a very different conclusion, however: this small brand sells itself. And at an attractive profit margin. Rather than spending on ads, Heaven Hill sells to existing customers without needing to prompt them. Shapira, Tr. I at 67; see, e.g. , PX 6 (newspaper articles on J.W. Dant products); Lubbers, Tr. I at 196–201. The brand remains recognized and desirable to its loyal customer base, which "pulls" the bottles off the shelf without any advertising stimulus. And the company promotes J.W. Dant bourbon as part of its Bottled-in-Bond Certified-Premises program at liquor stores in Indiana and Kentucky, as well as in some advertisements. PX 6; Shapira, Tr. I at 67, 163; Lubbers, Tr. I at 192–95, 228.
In 2018 several of J.W. Dant's descendants—Wally Dant III, Lynne E. Dant, and Charles Douglas Dant—founded Log Still...
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