Tuesday, February 28, 2012

Winery Exchange v. 7-Eleven - $2 million Supplier Dispute

An interesting case in the United States District Court for the Northern District of California recently came to our attention. Winery Exchange (“WX”), a private label wine and beer producer, has sued 7-Eleven Corporation (yes, that 7-Eleven ) alleging it breached a series of Private Label Beer Supplier Agreements to the tune of approximately $2.0 million. What piqued our interest was that WX sought a Right to Attach Order (“RTAO”) against 7-Eleven  as part of its case. An RTAO is a provisional remedy whereby a plaintiff in a breach of contract case can attach (i.e., freeze) a certain amount of the assets of the defendant if certain statutory requirements are met. Among the requirements for an RTAO are that the amount of damages sought be “certain” and that the attachment itself be sought for a “proper purpose.” Typically, this means that the amount of damages sought be easily ascertainable by referring to the contract at issue and that attachment be sought due to legitimate concerns about the defendant’s financial ability to ultimately satisfy any judgment entered in the action. According to Lex Vini’s sources present at the February 23, 2012 hearing on WX’s Application for RTAO, the Judge found there was insufficient evidence on these two key points to grant WX’s Application, and accordingly denied it. However, this case is far from over as these parties still must battle over the alleged $2.0 million breach. Stay tuned.

For more information or assistance on litigation matters in the alcohol beverage industry contact Dave Balter at

Wednesday, February 15, 2012

Courts Postpone Russian River Frost Protection Rules - For Now

Grape growers in the Russian River watershed were granted at least temporary relief from controversial new frost protection regulations earlier this month.  The regulations, originally due to be enforced starting March 15, were postponed by a Mendocino County judge pending the outcome of a trial on the merits set for March 23.  A similar action was filed in Sonoma County, but a Sacramento judge has ruled that the cases should be consolidated and the Sonoma County case moved to the Mendocino court.  The regulations affect growers in parts of Mendocino and Sonoma counties who draw water for frost protection from the Russian River, its tributaries, or from groundwater sources pumped within the Russian River watershed that are hydraulically connected to the Russian River stream system. 

Under the new law, each grower is required to submit a water management plan to the State Water Resources Control Board (SWRCB) by Feb 1 or join a larger water management plan.  Growers who fail to do so would be prohibited from spraying vines for frost protection between March 15 and May 15.  Those who are part of an approved water management plan must submit data reflecting the days when water was used for frost protection, the acres protected and hours of use. 

The purpose of the legislation is to prevent “stranding mortality” of endangered salmonids along the Russian River.  Stranding mortality is believed to occur when the levels of water in the river rapidly decline, leaving the fish stranded.  Regulatory agencies have identified frost protection measures by grape growers involving overhead sprinklers as a primary cause of stranding mortality. 

The legislation is controversial.  Growers view compliance with the regulations as unnecessarily expensive and burdensome, and argue that they are already taking the necessary steps to prevent stranding mortality without the need for regulation forcing them to do so.  Adding to the controversy is the fact that many growers view the evidence supporting the need for the legislation as tenuous at best.

The SWRCB has urged growers to voluntarily comply with the new regulations despite the Mendocino court’s ruling.  With the restricted frost protection season rapidly approaching and the status of the regulations uncertain, growers are left in limbo for the time being. 

For more information on the legislation or assistance with other grower issues, please contact Caroline Boller at   

Tuesday, February 7, 2012

Trademark for Alcohol Held Confusingly Similar to Identical Mark for Cigars

The U.S. Patent and Trademark Office ("USPTO") Trademark Trial and Appeal Board ("TTAB") recently refused registration of the mark MOCAMBO for rum based on a prior registration for the mark MOCAMBO for cigars.  In refusing the registration, the TTAB found that rum and cigars are complementary products in that cigars are enjoyed with a glass of fine rum and are marketed together for simultaneous consumption.  As a result, the TTAB concluded that consumers seeing these products labeled with the identical mark would likely believe that the goods originate from the same source and as a result the marks are confusingly similar.  To read the full opinion in this case follow this link: In re Licores Veracruz.

While this case did not involve a mark for wine, the same result likely would have followed if the goods at issue were wine and cigars since these goods are also marketed together for simultaneous consumption.  This decision is important because it indicates that in clearing a mark for adoption and use on wine, identical marks on complementary goods such as cigars must also be considered in the analysis.

For more information or assistance on trademark clearance contact Scott Gerien at