Star Industries, Inc. v. Bacardi & Company Limited

412 F.3d 373 (2nd Cir. 2005)

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Nature of the Case

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Facts

P produces alcoholic beverages including the 'Georgi' brand of vodkas. Georgi vodka is sold primarily in New York state and is one of the top-selling vodkas in the New York metropolitan area. D produces, imports, and distributes 'Bacardi' brand rums. Bacardi is the largest selling brand of hard liquor in the United States. Anheuser-Busch, Inc. (D) is one of the leading producers of beers and malt beverages in the United States. In 2001 Anheuser-Busch (D) and D entered into an exclusive trademark licensing agreement under which Anheuser-Busch produces malt beverages bearing the D logo. P decided to develop an orange-flavored Georgi vodka. A new label was designed, consisting of the traditional Georgi label, which contains a coat of arms and a logo consisting of stylized capital letters spelling 'Georgi' on a white background, together with three new elements: an orange slice, the words 'orange-flavored,' and a large elliptical letter 'O' appearing below the 'Georgi' logo and surrounding all of the other elements. The 'O' was rendered as a vertical oval, with the outline of the 'O' slightly wider along the sides (about one-quarter inch thick) and narrowing at the top and bottom (about one-eighth inch thick); the outline of the 'O' is colored orange and decorated with two thin gold lines, one bordering the inside and one bordering the outside of the outline. Star was the first company to distribute an orange-flavored alcoholic beverage packaged in a bottle bearing a large elliptical orange letter 'O.' P hoped that consumers would come to refer to orange-flavored Georgi vodka as 'Georgi O.' PTO rejected Ps application. No evidence in the record suggests that Georgi vodka has ever been commonly referred to by consumers as 'Georgi O.' D began to develop an orange-flavored rum, under the name 'Bacardi O.' Bacardi O was produced and marketed bearing a distinct label consisting of the Bacardi logo and bat symbol above a large elliptical letter 'O' against a clear background. D claimed not to have had any awareness of the Georgi 'O' design until after the instant lawsuit was filed. Like the Georgi 'O,' the Bacardi 'O' was decorated with gold bordering, was colored in orange, and spanned most of the height of the bottle. D presented some evidence at trial suggesting that D's local sales representatives and regional managers were aware of P's product and its appearance. Anheuser-Bush (D) launched a new orange-flavored version of its 'Bacardi Silver' malt beverage, under the name 'Bacardi Silver O3.' This product also contained the Bacardi 'O' design on the label. P presented self-serving evidence that one of its Vice Presidents overheard someone standing outside a Dunkin Donuts casually comment to a friend that P's orange-flavored vodka was a D product and another employee had a conversation with a liquor store owner about the potential for consumers to be confused by the similar labels. And yet another P employee once saw a consumer at a liquor store select a bottle of Bacardi O in the belief that it was P orange-flavored vodka. P presented no consumer surveys or studies, while Ds each proffered a survey suggesting that there was no consumer confusion. The district court held that P's design was not protectable as a trademark, and even if it was it was not infringed because the products were not likely to be confused. On February 6, 2004, the PTO approved P's application to register its 'O' design. P moved in the district court to reopen the trial record to include evidence of the PTO's decision. The motion was denied. P appealed.