JL Beverage Co. v. Jim Beam Brands Co.
| Decision Date | 14 July 2016 |
| Docket Number | No. 13-17382,13-17382 |
| Citation | 119 U.S.P.Q.2d 1506,828 F.3d 1098 |
| Parties | JL Beverage Company, LLC, Plaintiff–Counter–Defendant–Appellant, v. Jim Beam Brands Co.; Beam Suntory Inc., Defendants–Counter–Plaintiffs–Appellees. |
| Court | U.S. Court of Appeals — Ninth Circuit |
Colin Christopher Holley (argued), Jeremy T. Katz, and George L. Hampton, Hampton Holley, Corona Del Mar, California; Ryan R. Gile, Weide & Miller, Las Vegas, Nevada; for Plaintiff–Counter–Defendant–Appellant.
Mark J. Liss (argued), Claudia Stangle, and Angela Baylin, Leydig, Voit & Mayer, Chicago, Illinois; Jonathan Fountain and Michael McCue, Lewis Roca Rothgerber, Las Vegas, Nevada; for Defendant–Counter–Plaintiff–Appellee.
Before: J. Clifford Wallace, John T. Noonan, and Marsha S. Berzon, Circuit Judges.
WALLACE
, Senior Circuit Judge:
JL Beverage Company, LLC (JL Beverage) appeals from the district court's summary judgment in favor of Jim Beam Brands Company (Jim Beam) on JL Beverage's trademark infringement, false designation of origin, and unfair competition claims. We have jurisdiction pursuant to 28 U.S.C. § 1291
. Because genuine issues of material fact remain, we reverse and remand for further proceedings consistent with this opinion.
This dispute centers on two alcoholic beverage manufacturers, JL Beverage and Jim Beam, which sell competing lines of flavored vodkas. JL Beverage manufactures, sells, and promotes a line of flavored and unflavored vodka called “Johnny Love Vodka.” Restaurant owner and bartender Johnny Metheny created the Johnny Love line of vodkas around 2003–2004. To promote the new line, Metheny enlisted a friend to design a unique logo, and Metheny quickly adopted the proposed lips image. He believed the lips were “definitely sexy” and could “impart the flavor” of the vodka if colored to denote the flavor in the bottle of vodka. The lips were colored red for unflavored, purple for passionfruit, yellow for aloha, orange for tangerine, and green for apple. In 2005, Metheny sold the Johnny Love Vodka line to JL Beverage.
Since July 2005, JL Beverage has used the following two trademarks in connection with its sale of the Johnny Love Vodka products:
The first mark, called “Johnny Love Vodka” or the “JLV mark,” was registered on August 16, 2005, with the United States Patent and Trademark Office (USPTO) as Registration No. 2, 986,519 in International Class 33-Vodka. JL Beverage registered the second mark, called the “JL Lips Mark,” with USPTO on October 25, 2011 under Registration No. 4,044,182 in International Class 33-Distilled Spirits. Both images appear on the Johnny Love line of vodkas and flavored vodkas:
The JL Lips Mark is imprinted on the top of the bottle and on the back label, and is incorporated into the JLV Mark as the “o” in “Love.” The mark color on the back label also corresponds to the flavor in the bottle:
The Johnny Love Vodka bottles come in four different sizes.
After acquiring Johnny Love Vodka and the two trademarks, JL Beverage expended substantial resources developing, advertising, and marketing Johnny Love Vodkas throughout the United States. JL Beverage at one point had distributors in twenty states, and it holds a Federal Basic Alcohol Permit for national use. JL Beverage's nationwide marketing campaign included print-media advertisements, third-party publications, and the development of its own website. Although in recent years its sales have been substantially reduced, its overall marketing efforts resulted in millions of dollars in sales of Johnny Love products throughout the country.
In 2010, Jim Beam entered the flavored vodka market with a new line of flavored vodkas called “Pucker Vodka.” Jim Beam purchased the Pucker brand from Koninklijke De Kuyper, B.V. (KDK). KDK had marketed a line of liqueurs and cordials under the “Pucker” brand, and, in its original design, used lips images in connection with its labeling and logos. After Jim Beam purchased KDK's flavored vodka line, it decided to redesign and rebrand Pucker to “expand on the equity of the Pucker brand and lips” into flavored vodka.” To that end, Jim Beam hired the design firm of Libby, Perszyk, Kathman, Inc. (LPK) to independently “develop a new and unique look and feel” for its Pucker vodka product that would communicate “[i]ntense flavor and [i]ntense fun” in connection with the brand.
The redesigned Pucker Vodka bottle contains a prominent lips image on the center of its label. Like the Johnny Love Vodka labels, the lips image varies in color depending on the vodka flavor in the bottle:
Jim Beam instructed LPK to use both the Pucker name and lips as part of any design it developed for Pucker's new label. After LPK provided Jim Beam with several possible design options, Jim Beam's project team made final selections of the proposed Pucker Vodka products and sent their choices to the company's legal department for clearance. Jim Beam instructed its legal counsel to perform a clearance search for lips designs. The legal department found 40 references to lips for alcohol-related products. JL Beverage's JLV Mark was in the search report. Although JL Beverage's Lips Mark is incorporated into the JLV Mark, it did not separately appear in the search report because JL Beverage had not yet filed its registration application for the standalone lips mark. Based on its research, Jim Beam's legal department approved the Pucker brand's bottle shape and label.
Emily Johnson, a former Jim Beam employee, worked for Jim Beam as a financial and business analyst during the development of the Pucker Vodka product. Prior to her employment at Jim Beam, Johnson met JL Beverage's president, T.J. Diab, and learned about JL Beverage's products. In March 2010, during her employment at Jim Beam, she sent an email to Diab from her home account, which stated “I was reading through some reporting on vodka flavors and saw Aloha on the list!”
Jim Beam attempted to register the Pucker lips design around March 2011, filing applications for trademarks in the bottle and cap, the stylized Pucker wording, and the lips design. After the registration process began, an official in Jim Beam's legal department discovered that the lips mark that LPK had selected to be featured in the center of the Pucker Vodka label was “stock art” from iStockphoto LP. Because Jim Beam could not claim ownership in the lips image, it withdrew its USPTO application for the lips design.
Prior to withdrawal, Jim Beam also received notice from the USPTO that it had rejected Jim Beam's registration application. In the rejection letter, the USPTO cites JL Beverage's Lips Mark as a basis for refusing the registration.
Jim Beam officially relaunched its newly-designed Pucker Vodka products in March and April 2011. Jim Beam advertises Pucker Vodka products nationally through television and cable commercials, digital advertising, print advertisements in national magazines, and in-store and on-premise promotions at restaurants and bars.
Shortly after the Pucker Vodka launch, Shaun Robertson, a JL Beverage broker for Johnny Love Vodka, began receiving phone calls and messages concerning the similarities between the two vodkas. Robertson provided, in a declaration to the court, a summary of in-person conversations, text messages, and phone calls he had with friends and acquaintances in which those individuals confused a different flavored vodka product for Johnny Love.
JL Beverage delivered a cease and desist letter to Jim Beam on March 18, 2011. Jim Beam responded that it did not believe its Pucker Vodka logo infringed JL Beverage's mark. JL Beverage filed a complaint in the United States District Court for the District of Nevada in July 2011, alleging trademark infringement, false designation of origin, and unfair competition. JL Beverage moved for preliminary injunction, which the district court denied. JL Beverage and Jim Beam then filed cross-motions for summary judgment. The district court denied JL Beverage's motion and granted Jim Beam's motion. The district court subsequently denied JL Beverage's motion for reconsideration.
We review the district court's summary judgment de novo, including its decision on cross-motions for summary judgment. Szajer v. City of L.A. , 632 F.3d 607, 610 (9th Cir.2011)
; Guatay Christian Fellowship v. Cty. of San Diego , 670 F.3d 957, 970 (9th Cir.2011). Viewing the evidence in the light most favorable to the nonmoving party, we determine whether there are any genuine issues of material fact. Olsen v. Idaho State Bd. of Med. , 363 F.3d 916, 922 (9th Cir.2004). We review the district court's conclusions of law de novo, and its factual findings for clear error. Id. ; Lahoti v. VeriCheck, Inc. , 586 F.3d 1190, 1195–96 (9th Cir.2009). “[W]here it is unclear whether the district court relied on proper law, we may vacate the judgment and remand with instructions to apply the correct legal standard.” Lahoti , 586 F.3d at 1196 (citing United States v. Pintado
–
Isiordia , 448 F.3d 1155, 1158 (9th Cir.2009) ).
This appeal turns in large part on whether the district court correctly applied the standard for deciding a motion for summary judgment. The success of each of JL Beverage's claims turns on the same issue: whether there was a genuine dispute of material fact as to the likelihood of consumer confusion. JL Beverage asserts the following claims: (1) federal trademark infringement under the Lanham Act, 15 U.S.C. § 1114
; (2) false designation of origin and unfair competition under the Lanham Act, 15 U.S.C. § 1125(a) ; and (3) Nevada common law trademark infringement and unfair competition. The likelihood of consumer confusion is central to each claim. See 15 U.S.C. § 1114(1)(a) (providing that a person is liable for trademark infringement where he or she “use[s] in commerce any reproduction, counterfeit, copy, or colorable imitation of a registered mark in connection with the sale, offering for sale, distribution, or...
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