Stark et al v. Diageo Chateau & Estate Wines Company

Filing 78

ORDER by Judge Yvonne Gonzalez Rogers granting in part and denying in part 26 Motion for Preliminary Injunction (fs, COURT STAFF) (Filed on 11/1/2012)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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Northern District of California

United States District Court

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CHRISTIAN STARK et al.,

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Plaintiffs,

Case No.: 12-CV-4385 YGR
ORDER ON MOTION FOR PRELIMINARY
INJUNCTION

vs.
DIAGEO CHATEAU & ESTATE WINES CO.,
Defendant.

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Plaintiffs Christian Stark, Stark Wine LLC (“Stark Wine”), and Stay @ Home Sommelier,

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LLC (“S@HS”) (collectively “Plaintiffs”) bring this trademark infringement action against Defendant

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Diageo Chateau & Estate Wines Company (“Diageo”), alleging that the mark for Defendant’s “Stark

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Raving™” wine is confusingly similar to Plaintiffs’ “Stark Wine®” and “Stark Thirst™” marks.

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Plaintiffs bring seven trademark claims: (1) Federal Trademark Infringement under 15 U.S.C. § 1114;

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(2) Cancellation of Trademark Registration under 15 U.S.C. § 1119; (3) Federal Unfair Competition

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under 15 U.S.C. § 1125(a); (4) Trademark Infringement under Cal. Bus. & Prof. Code § 14335; (5)

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Unfair Competition under Cal. Bus. & Prof. Code §§ 17200 et seq.; (6) False or Misleading

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Statements under Cal. Bus. & Prof. Code §§ 17500 et seq.; and (7) Common Law Trademark

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Infringement.

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Plaintiff have move for a preli
fs
ed
iminary injun
unction to sto the advert
op
tisement, pro
omotion,

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distr
ribution and sale of Defe
endant’s “Stark Raving™ wine on the grounds that consum will like
™”
mers
ely

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and mistakenly associate Di
iageo’s “Star Raving™ wine with Plaintiffs’ w
rk
™”
h
wines, which will
h

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irrep
parably harm the Plaintif business
m
ffs’
ses. The par
rties submitt briefs, the Court held a two-day
ted
d

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hear
ring with live testimony, at the end of which cou
,
o
unsel present oral argu
ted
ument.
Having reviewed the parties’ bri
r
e
iefs, the adm
missible evidence offered into the rec
d
cord, including

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duri the hearing, the argum of counsel followin the close of evidence and having compared
ing
ment
e
e,
g
ng

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the marks thems
m
selves and th context of their use in the marketp
he
f
n
place, the Co hereby GRANTS the
ourt
e

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Mot
tion for Preli
iminary Inju
unction only as to Sonom County, o
ma
otherwise the Motion is DENIED.
e

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I.

BACKG
GROUND

Northern District of California

A.

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United States District Court

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Plaintiff Christian St
f
tark is a win
nemaker loca
ated in Sonom County, California. He started his
ma
h

STARK WINE
E

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busi
iness in 2003 and sold his first wine a 2003 vin
3,
h
es,
ntage, in 200 Since th time he h grown the
05.
hat
has

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busi
iness, and no produces eight variet
ow
s
tals, which h sells in ce
he
ertain parts o the United States.1 His
of
d

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pass
sion is the Rh
hône varieta Syrah an Viognier. Christian S
als,
nd
Stark testified that he had earned a
d
d

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repu
utation in the industry fo producing and selling ultra-premiu handcraf wines. H mission
e
or
um
fted
His

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was, and still is, quality ove quantity. He sells his w
,
er
H
wine with th slogan “d
he
deliciously do
own-to-earth
h.”

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Mr. Star testified ab
rk
bout his invo
olvement in the winemak
aking process over which he maintain
s
h
ns

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e
y
farmers with proven track records for
k
r
full control. He starts by selecting grapes grown by reputable fa

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wing excepti
ional quality fruit. He is responsible for fruit sou
y
s
e
urcing, grow relations and wine
wer
s
grow

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prod
duction. The reputationa evidence in the record for Stark W ® focuse on the win
e
al
i
d
Wine
ed
nemaker

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him
mself, Christia Stark,2 an the labels on his wine simply state “STARK” as shown below:
an
nd
e
”

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Pla
aintiffs’ Motio lists fifteen states: Cali
on
n
ifornia, New Y
York, Florida New Jersey Connecticu Montana,
a,
y,
ut,
New Mexico, Ma
w
aine, Rhode Is
sland, Oregon Colorado, V
n,
Virginia, Geo
orgia, Ohio, M
Minnesota, and Washington
d
n,
D.C. On the advi of counsel Plaintiff wo
ice
l,
ould not confi
firm, at deposi
ition or at the hearing, whe
e
ether he is
nsed to lawful sell his pro
lly
oduct in any of these states or the Distri of Columb
o
s
ict
bia.
licen
2

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Se Plaintiffs’ Exhibits 1, 8, 17, 18, and 23. Plaintiffs’ corresponde
ee
E
2
’
ence to custom connect the winemak
mers
ker
“Sta
ark” to the win (Exs. 10, 11, 14, and 15.)
ne.
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2

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Def. Opp’n, Dkt. No. 37, at 1; Dkt. No. 3, Ex. C at 18.

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Christian Stark sells Stark Wine® primarily direct-to-consumer in Garagiste, a tasting room

Northern District of California

United States District Court

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co-owned by Stark Wine LLC and located in Healdsburg, Sonoma County, California. He also sells
his wine online via starkwine.com,3 through wholesale accounts with California restaurants, wine
bars and retail shops, and through the Stark Wine Club. Stark Wine® ranges in price from $28 to $44
per bottle, with an average price point of $36. Output of Stark Wine® has increased from 150 cases
in 2003 to 850 cases in 2011. Christian Stark expects to produce 1000 cases of Stark Wine® in 2012.
Christian Stark individually owns the “Stark Wine®” trademark, registered in International

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Category 33 with a description of “Wine” with the United States Patent and Trademark Office
(“PTO”) since October 17, 2006, Registration No. 3,160,031. The “Stark Wine®” mark achieved
“incontestability” status on or about June 2, 2012.
B.

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In April 2012, Stark Wine LLC and S@HS launched a new sub-brand of wine called “Stark

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STAY @ HOME SOMMELIER4 AND STARK THIRST™

Thirst™.” Based in New York City, Kersten Krall Walz (“Krall Walz”) is the founder, marketing
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Plaintiffs’ moving papers and the accompanying declaration of Christian Stark stated that Stark Wine® was
sold through a number of third party websites. The evidence produced during the hearing contradicted this
assertion, as none of the third-parties identified sell Stark Wine®. Subsequent to the filing of his declaration
and motion, Plaintiffs arranged for the website www.lot18.com to sell Stark Wine®.
4

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A “sommelier” is a wine steward, the person in charge of the wines in a club or restaurant. See MerriamWebster’s Ninth New Collegiate Dictionary, p. 1124 (1988).

3

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director, and co-owner of S@HS. (Krall Walz Dec. ¶ 1.) A self-described Madison Avenue refugee,

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Ms. Krall Walz worked in New York City’s advertising industry for fourteen years, rising from

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administration to account director. (Id. ¶ 3.) Ms. Krall Walz worked at two of “Madison Avenue’s”

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flagship agencies: Young & Rubicon and Saatchi & Saatchi. (Id. ¶ 3.)

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In 2010, Krall Walz left the advertising industry to start a business that would allow her to

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“stay at home” to raise her son and to pursue her passion for wine. Prior to leaving the advertising

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industry, she spent five years taking classes to obtain a diploma in Wine Studies from London’s Wine

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& Spirit Education Trust, one of the world’s most comprehensive and rigorous wine study programs.

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(Id. ¶ 5.) She met Christian Stark in the fall of 2010. (Id. ¶ 7.) Initially, she did brand consulting for

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Stark Wine, helping to develop its current strategic brand position and update the website. (Id.)
In the summer of 2011, Krall Walz formed S@HS to merge her advertising experience with

Northern District of California

United States District Court

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her knowledge and passion for wine. At this point she had been working on several brand extensions

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for Stark Wine, i.e. using other words in combination with the word “stark” for purposes of selling

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wine. Krall Walz conceived of this idea on her own. Christian Stark never attempted brand

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extensions and did not assist in her work. In the summer of 2011, Krall Walz and S@HS partnered

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with Christian Stark to create the Stark Thirst™ brand extension.

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Ms. Krall Walz conducted market research, including holding focus groups to decide on a

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brand name and a brand identity using extensions on the word “stark.” Her target audience was

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Generation Y, defined in the alcohol industry as individuals in the 21-35 year range (“Gen Yers”).

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Her research revealed that (i) 24% of Gen Yers drink wine as their preferred alcoholic beverage, (ii)

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Gen Yers are looking for bottles priced under $15 and are socially conscious, and finally, (iii) the

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name “Stark Thirst” tested better than the other extensions.

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Plaintiffs launched Stark Thirst™ as a more affordable brand, marketed towards these

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younger wine drinkers. It retails for approximately $16 per bottle, with 10% of profits donated to

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WaterAid, an international charitable organization that brings safe drinking water to those in need.

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The mission for Stark Thirst™ is to give people a charitable way to drink delicious wine. Plaintiffs

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have produced 216 cases of Stark Thirst™.

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On October 19, 2011, S@HS applied to the PTO to trademark “Stark Thirst™.” In February

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2012, the PTO denied the “Stark Thirst™” on the basis that the dominant feature of both the “Stark

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Wine®” and “Stark Thirst™” marks is the word “Stark,” which the PTO stated is identical in sight,

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sound, and meaning. Subsequently, Christian Stark filed a consent agreement with the PTO noting

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that Stark Wine LLC and S@HS are business partners that sell wines under both the Stark Wine® and

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Stark Thirst™ marks.5 On June 20, 2012, PTO found that the “Stark Thirst™” appeared to be

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entitled to registration and approved the mark for publication. The trademark registration for Stark

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Thirst™ is pending with the PTO.

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C.

DEFENDANT DIAGEO CHATEAU & ESTATE WINES COMPANY

Diageo is a subsidiary of an international beverage conglomerate that owns such recognized

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Northern District of California

brands as Smirnoff Vodka, Jose Cuervo Tequila, Guinness Beer, Tanqueray Gin, Johnnie Walker

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United States District Court

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Scotch, Captain Morgan Rum, Veuve Cliquot Champagne and Dom Perignon. Diageo Chateau &

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Estate Wines Company focuses exclusively on wines. Its brands include Acacia Vineyard, Beaulieu

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Vineyard, Chalone Vineyard, Provenance Vineyards, Sterling Vineyards, and Rosenblum Cellars.

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Stark Raving™ is a sub-brand of Rosenblum Cellars.
In November 2011, Diageo began plans for sub-brands of wine to target the millennial

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consumer segment of the population, defined as ages 28-38. This resulted in the “Stark Raving™,”

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“Rose-N-Blum™” and “Butterfly Kisses™” sub-brands. Diageo wanted to create a wine that goes

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against the grain and celebrates the idea of doing things differently and with great passion. The

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concept for “Stark Raving™” was to bring to life the personality of Rosenblum Cellars’ founder,

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Kent Rosenblum, who left a successful career as a veterinarian to pursue his passion for winemaking.

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(See Declaration of Mary Frances Light Dusenbury (“Light Dec.”), ¶ 11 (“Our founder quit his day

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job to make wine in his garage. They said he was stark raving mad. Mad? We call it inspired!”).)

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The Stark Raving™ sub-brand revolves around a mad scientist persona and uses the tag line “Crazy

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Good Wine” as illustrated below:

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Separately another applicant, not a party to this lawsuit, applied for the mark “Stark Naked” and was denied
for the same reasons that “Stark Thirst™” initially was denied.

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Ex. 202
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Ex. 42

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The wine attemp to appeal to male mil
pts
l
llennials by being fruitie and juicier than other wines, and it
er
i

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is pa
ackaged in a screw-top bottle with a label design modeled on craft beers
b
n
n
s.

Northern District of California

United States District Court

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On Febru
uary 13, 201 Diageo applied to the PTO for th trademark “Stark Rav
12,
a
e
he
k
ving™” in

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International Ca
ategory 33 with a descrip
w
ption of “Alc
coholic beve
erages other than beer.” Plaintiffs

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alleg that Diageo not only knew of the “Stark Wine ®” tradema in the sam Internatio Categor
ge
e
ark
me
onal
ry

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33, but with a de
b
escription of “Wine,” bu in fact, kn that the “
f
ut
new
“Stark Thirs
st™” mark h been
had

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rejec days ea
cted
arlier for bein too simila to the “Sta Wine®” mark. Plain
ng
ar
ark
ntiffs allege t Diageo
that

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inten
nded to misl
lead the PTO by using th descriptio “Alcoholi beverages other than b
O
he
on
ic
s
beer” instead
d

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of “Wine,” know
wing that its application likely would be rejected if Stark Ra
d
d
aving™ was described as
s

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ine.” The ac
ctual evidenc produced at the hearin demonstr
ce
ng
rated that Diageo had file over 80%
ed
%
“Wi

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of all of relevan application in Internat
nt
ns
tional Categ
gory 33 with the broader description “Alcoholic

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beve
erages other than beer.” The PTO ap
pproved Dia
ageo’s applic
cation on Jun 26, 2012.
ne
.

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In the su
ummer of 2012, Diageo introduced S
i
Stark Raving wine. Its suggested retail price is
g™
s
i

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betw
ween $12.99 and $13.99, although ap
,
pproximately 75% of the wine is exp
y
e
pected to be sold at the

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sale price of $10 primarily through mass market retailers suc as Target. Diageo has produced
0.99
m
ch
.
s

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appr
roximately 80,000 cases of Stark Ra
8
s
aving™ wine Stark Rav
e.
ving™ wine began shipp
ping in June

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2012 and by the end of Aug 2012, Diageo had d
2,
e
gust
D
delivered 17,000 cases to distributors of which
o
s,

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7,00 had been delivered to retailers. As of August 15, 2012, S
00
A
t
Stark Raving wine was on the
g™
s

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shel
lves at over 1,500 stores across the United States In Octobe Diageo st
1
U
s.
er,
tarted rolling out a Stark
g
k
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1

Rav
ving™ food truck progra which of
t
am,
ffers wine ta stings of the Stark Ravin
e
ng™ sub-bra in
and

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coor
rdination wit food truck rallies acro the nation. (Light Dec. ¶ 16.)
th
k
oss
Plaintiff requested Diageo to ce
fs
D
ease and des ist from prod
selling wine under the
ducing and s

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“Sta Raving™ brand. Diageo refuse and Stark brought this action to en
ark
™”
ed
s
njoin Diageo from
o

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prod
ducing, prom
moting, distri
ibuting and selling the “ Stark Ravin
s
ng™” wines to prevent lo of
oss

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good
dwill and seek compensation for any damage alr
y
ready inflict 6
ted.

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II.

A prelim
minary injunc
ction is an ex
xtraordinary remedy, wh should b granted o
y
hich
be
only in limite
ed

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L
RD
LEGAL STANDAR

circu
umstances and where the merits of the case clea favor on party over the other. W
a
t
arly
ne
r
Winter v.
Natu Resourc Defense Council, 555 U.S. 7, 24 (2008).
ural
ces
4
The Cou considers four factors when decid
urt
s
ding whether to issue a p
r
preliminary i
injunction: (1)
(

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Northern District of California

United States District Court

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whe
ether the mov
ving party ha demonstrated that it i s likely to su
as
ucceed on th merits; (2) whether the
he
)

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mov
ving party will suffer irre
eparable inju if the rel ief is denied (3) whethe the balanc of the
ury
d;
er
ce

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hard
dships favor the moving party; and (4 whether t public in
4)
the
nterest favors granting re
s
elief. See

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Mill v. Califor
ler
rnia Pacific Medical Ctr 19 F.3d 44 456 (9th Cir. 1994) (en banc). I a trademark
r.,
49,
h
In

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case a plaintiff is entitled to a prelimina injunctio if it can de
e,
o
ary
on
emonstrate e
either: (1) a combination
n

17

of “p
probable suc
ccess on the merits” and “the possib ility of irrep
d
parable injury or (2) the existence of
y”;
e
o

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“ser
rious questio going to the merits” and that “the balance of hardships ti sharply in his favor.”
ons
a
e
f
ips
n
”

19

Sard Restaura Corp. v. Sardie, 755 F.2d 719, 7 (9th Cir. 1985) (quot in Brookf
di’s
ant
723
ted
kfield

20

Com
mmunication Inc. v. We Coast Entertainment Corp., 174 F
ns,
est
F.3d 1036, 1
1046 (9th Ci 1999)).
ir.

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This represents two points on the sliding scale in wh
s
o
g
hich the requ
uired degree of irreparab harm
e
ble

22

incr
reases as the probability of success decreases. Se Oakland Tribune, Inc v. Chronic Publishin
d
ee
c.
cle
ng

23

Co., 762 F.2d 13 1376 (9 Cir. 1985 The burd of showi a likeliho of succe on the
,
374,
9th
5).
den
ing
ood
ess

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mer is “placed on the part seeking to demonstrat entitlemen to the extr
rits
d
ty
o
te
nt
raordinary re
emedy of a

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preliminary inju
unction at an early stage of the litigat
n
tion, before the defendan has had th opportuni
nt
he
ity

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27
6

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Pla
aintiffs initiall moved for a nationwide injunction, b have since limited the r
ly
e
but
e
requested inju
unction to five
state California Florida, Illinois, New Yo and Texas
es:
a,
ork
s.

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to un
ndertake ext
tensive disco
overy or dev
velop its defe
enses.” Perf 10, Inc. v. Amazon.c
fect
com, Inc., 48
87

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F.3d 701, 714 op
d
pinion amen
nded on reh’ 508 F.3d 1146 (9th C 2007).
’g,
Cir.

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III.

DISCUS
SSION

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A.

5

The Lan
nham Act def
fines a trademark as “an word, nam symbol, o device, or any
ny
me,
or
r

OVERVIEW OF TRADEMA PROTE CTION
O
ARK

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com
mbination the
ereof used by a person … to identify and distingu his or h goods, in
y
y
uish
her
ncluding a

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uniq product, from those manufacture or sold by others and to indicate t source of the goods,
que
ed
y
the
f

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even if that sour is unknow
n
rce
wn.” 15 U.S § 1127. Thus, a tra
S.C.
ademark is an
nything that serves to

9

indicate the sour of one co
rce
ompany’s go
oods and to d
distinguish t
them from th goods of o
he
others. It “is
s

disti
inguishing mark or symb
m
bol—a comm
mercial signa
ature—upon the mercha
n
andise or the package in
e

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Northern District of California

mer a conven
rely
nient means for facilitati the prote
ing
ection of one good-will in trade by placing a
e’s
l

11

United States District Court

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whic it is sold.” United Dr Co. v. Theodore Rec
ch
rug
Th
ctanus Co., 2 U.S. 90, 98 (1918).
248
,

13

The own of a trade
ner
emark has a limited prop
perty right to exclude oth from us
o
hers
sing that mar
rk.

14

New Kids on the Block v. Ne America Pub., Inc., 9 F.2d 302 306 (9th C 1992). A person
w
e
ew
971
2,
Cir.

15

acqu
uires the righ by being the first to us it in the m
ht
t
se
marketplace, or by using it before the alleged
e

16

infri
inger. Unlik a copyrigh or a paten for an inve
ke
ht
nt
ention, a trad
demark is a p
property righ only in
ht

17

conn
nection with its use by an existing bu
h
a
usiness. See United Dru supra, 24 U.S. 90; R
e
ug,
48
Roger E.

18

Mei
iners, Patent Copyrights, and Trad
ts,
demarks: Pro
operty or Mo
onopoly?, 13 HARV. J.L. & PUB. POL’Y
3
.
L

19

911, 930 (1990) (“It is property only in the sense tha trade repu
)
at
utation or go
oodwill is a p
property

20

righ
ht.”).

21

Courts focus on prot
fo
tecting consu
umers in cas involving infringeme of a trade
ses
g
ent
emark which is
h

22

the reason for cl
r
lassifying it as a form of unfair comp
f
petition. See 15 U.S.C. § 1125(a)(1); Mars Inc. v.
e

23

Kab
bushiki-Kaish Nippon Conlux, 24 F.3d 1368, 13 (Fed. Ci 1994) (“T law of un
ha
C
373
ir.
The
nfair

24

com
mpetition gen
nerally protec consume and comp
cts
ers
petitors from deceptive o unethical conduct in
m
or

25

com
mmerce …. Patent law, on the other hand, protec a patent o
P
o
cts
owner from t unauthor
the
rized use by

26

othe of the pat
ers
tented inven
ntion, irrespective of whe
ether decepti or unfair
ion
rness exists.” “The law
”).
w

27

of unfair compe
u
etition has its roots in the common-la tort of de
s
e
aw
eceit: its gen
neral concern is with
n

28

prot
tecting consu
umers from confusion as to source. While that c
c
s
concern may result in the creation of
y
e
f

8

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‘quasi-property rights’ in communicative symbols, the focus is on the protection of consumers, not

2

the protection of producers as an incentive to product innovation.” Bonito Boats, Inc. v. Thunder

3

Craft Boats, Inc., 489 U.S. 141, 158 (1989).

interest in a trademark; and (2) defendant’s use of a mark similar to plaintiff’s trademark in a manner

6

that is likely to cause consumer confusion. See 15 U.S.C. § 1114(1).7 Likelihood of confusion is the

7

central inquiry in the trademark infringement analysis: whether a “reasonably prudent customer in

8

the marketplace is likely to be confused as to the origin of the good or service bearing one of the

9

marks” because of the similarities between the two marks. Dreamwerks Prod. Group, Inc. v. SKG

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Studio, 142 F.3d 1127, 1129 (9th Cir. 1998). “[B]ecause we are at the preliminary injunction stage,

11

[Plaintiffs] must establish that it is likely to be able to show such a likelihood of confusion.” See

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Northern District of California

The elements of a trademark infringement claim are: (1) a valid, protectable ownership

5

United States District Court

4

Brookfield, supra, 174 F.3d at 1052 n.15 (citing Sardi’s Restaurant, supra, 755 F.2d at 723). At this

13

time the Court is not making ultimate findings of fact after a full trial on the merits. The discussion

14

of infringement, and factual findings in that regard, is directed only towards Plaintiffs’ likelihood of

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success on the merits.8

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Section 43(a)(1) of the Lanham Act itself provides that:
Any person who, on or in connection with any goods or services, … uses in commerce any
word, term, name, symbol, or device, or any combination thereof, or any false designation of
origin, false or misleading description of fact, or false or misleading representation of fact,
which—(A) is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation,
connection, or association of such person with another person, or as to the origin, sponsorship,
or approval of his or her goods, services, or commercial activities by another person, … shall
be liable in a civil action by any person who believes that he or she is or is likely to be
damaged by such act.
15 U.S.C. § 1125(a)(1).

8

Plaintiffs’ state law and common law trademark infringement claims and claim under California’s Unfair
Competition Law based on infringement are subject to the same legal standards as their Lanham Act trademark
claim. See Rearden LLC v. Rearden Commerce, Inc., 683 F.3d 1190, 1221 (9th Cir. 2012) (citing Jada Toys,
Inc. v. Mattel, Inc., 518 F.3d 628, 632 (9th Cir. 2008). Therefore, the same findings that the Court makes with
respect to Plaintiffs’ entitlement to a preliminary injunction with respect to the federal trademark claim, also
apply to Plaintiffs’ related state trademark infringement and unfair competition claims.

9

B.

1
2

FIRST ELEMENT: VALID, PROTECTABLE OWNERSHIP INTERESTS IN THE
TRADEMARKS AT ISSUE

Rights in a trademark are obtained only through commercial use of the mark. One way to

3

establish trademark rights is through use of a trademark in commerce and federal registration under

4

the Lanham Act.

5

Registration constitutes prima facie evidence of the validity of the registered mark and of a

6

plaintiff’s exclusive right to use that mark. 15 U.S.C. § 1115(a). To acquire ownership of a

7

trademark under the Lanham Act it is not enough to have invented the mark first or even to have

8

registered it first; the party claiming ownership must have been the first to actually use the mark in

9

the sale of goods or services, and, therefore, a party pursuing a trademark claim must meet a

10

threshold “use in commerce” requirement. Id. § 1051 et seq.

Northern District of California

Once a registered trademark has been in use for five years and if certain statutory formalities

12

United States District Court

11

are met (e.g., timely filed affidavit of continuous use), the registration is considered “incontestable”

13

evidence of the registrant’s right to use the mark. See id. § 1065. Incontestable status provides that

14

the “validity and legal protectability, as well as [the registrant’s] ownership therein, are all

15

conclusively presumed.” Brookfield, supra, 174 F.3d at 1046-47 n.10; 15 U.S.C. § 1115(b).9 A

16

registrant may rely upon the incontestability of the mark in an infringement action. See Park ‘N Fly,

17

Inc. v. Dollar Park & Fly, Inc., 469 U.S. 189, 204 (1985).

18

1.

19

Stark Wine®

Since the “Stark Wine®” mark is incontestable, it is immune from challenge on certain

20

grounds. 15 U.S.C. § 1065; see Barentzen Dec., Ex. D at 1 (PTO’s notice of acceptance of

21

declaration of incontestable status). Diageo challenges the “Stark Wine®” mark on the grounds that it

22

was never used in commerce, and therefore, has been abandoned.

23

A mark is “used in commerce” when (1) “it is placed in any manner on the goods or their

24

containers or the displays associated therewith,” and (2) “the goods are sold or transported in

25

commerce.” 15 U.S.C. § 1127.

26
27
28

9

“Incontestable trademark” is a legal term of art which provides the owner with certain presumptions. It does
not mean that a challenge can never exist. For example, contests are appropriate where the trademark has been
abandoned, is being used to misrepresent the source of goods, or was obtained fraudulently. See Park ‘N Fly,
Inc. v. Dollar Park & Fly, Inc., 469 U.S. 189, 195 (1985).

10

1

Diageo points out that the wines are labeled “STARK,” not “Stark Wine®,” and that the

2

phrase “Stark Wine®” only appears in fine print to identify the company’s business name (this is both

3

on the front and back labels of the wine bottles). On that basis, Diageo challenges the use of the

4

“Stark Wine®” mark, arguing that Plaintiffs only use the phrase “Stark Wine®” as a trade name and

5

not a trademark.10 At the hearing Plaintiffs introduced evidence of Stark Wine’s use of the trademark

6

“Stark Wine®” on packaging and correspondence. (See Exs. 2-7, 9-10, 12-13, 16, and 18.)
For purposes of a preliminary injunction, Stark Wine is “likely” to be able to show that it has

7
8

a protectable ownership interest in the registered trademark “Stark Wine®” based upon the

9

trademark’s incontestable status and evidence that it has used the mark in commerce.

10

2.

11

Diageo challenges the validity of S@HS’s right to use the trademark “Stark Thirst™”

Stark Thirst™

Northern District of California

United States District Court

12

because the “Stark Thirst™” mark is not registered. Here, S@HS asserts common law trademark

13

rights in “Stark Thirst™” through its use of the mark in New York City, and in interstate commerce,

14

beginning on April 20, 2012. On June 20, 2012, the PTO found that “Stark Thirst™” appeared to be

15

entitled to registration and approved the mark for publication. The time to oppose registration has

16

expired. S@HS contends that its federal trademark registration is imminent.
To succeed on an infringement claim, S@HS will have to show use and geographic scope of

17
18

that use. “Stark Thirst™” is available for purchase at only three locations in New York City—a high

19

end wine store in Manhattan, and a wine bar and a restaurant in Brooklyn. S@HS’s use of the Stark

20

Thirst™ mark has priority over Diageo’s “Stark Raving™” in this geographic area.
S@HS is likely to be able to show that it has common law trademark rights in “Stark

21
22

Thirst™” in a limited geographic area to satisfy the first element.

23
24
25
26
27
28

10

A “trade name” is defined in the Lanham Act as “any name used by a person to identify his or her business.”
15 U.S.C. § 1127. In contrast to trademarks, which refer to words or symbols used to identify and distinguish
particular goods, trade names refer to the words or symbols used to identify and distinguish businesses. See
SunEarth, Inc. v. Sun Earth Solar Power Co., Ltd., 846 F. Supp. 2d 1063, 1073 n.6 (N.D. Cal. 2012), appeal
dismissed (Apr. 18, 2012) (citing 15 U.S.C. § 1127).

11

1

C.

2

To prevail on a claim for trademark infringement, Christian Stark, Stark Wine LLC, and

SECOND ELEMENT: LIKELIHOOD OF CONFUSION

3

S@HS must establish that Diageo is using a mark confusingly similar to their own marks. See AMF

4

Inc. v. Sleekcraft Boats, 599 F.2d 341, 348 (9th Cir. 1979) abrogated by Mattel, Inc. v. Walking

5

Mountain Productions, 353 F.3d 792 (9th Cir. 2003). The central issue in a trademark action is

6

whether consumers “‘are likely to assume that a product or service is associated with a source other

7

than its actual source because of similarities between the two sources’ marks or marketing

8

techniques.’” Nutri/System, Inc. v. Con-Stan Indus., Inc., 809 F.2d 601, 604 (9th Cir. 1987) (quoting

9

Shakey’s Inc. v. Covalt, 704 F.2d 426, 431 (9th Cir. 1983)); Official Airline Guides v. Goss, 6 F.3d

10

1385, 1391 (9th Cir. 1993) (issue can be recast as whether “the similarity of the marks is likely to

11

confuse customers about the source of the products.”).

Northern District of California

United States District Court

12

Courts in the Ninth Circuit use the eight Sleekcraft factors to guide the likelihood of confusion

13

analysis: (1) the similarity of the marks; (2) the relatedness of the companies’ goods; (3) the

14

marketing channels used; (4) the strength of mark(s) of the junior holder or senior holder or both; (5)

15

Diageo’s intent in selecting its mark; (6) evidence of actual confusion; (7) the likelihood of expansion

16

into other markets; and (8) the degree of care likely to be exercised by purchasers. E. & J. Gallo

17

Winery v. Gallo Cattle Co., 967 F.2d 1280, 1290 (9th Cir. 1992). Courts do not mechanically apply

18

these factors and then tally the results; some factors are considered to be more important than others

19

and each factor is not necessarily relevant in every case. Id. Accordingly, this list functions as guide

20

and is “neither exhaustive nor exclusive.” Id.

21

1.

22

The Ninth Circuit has developed “certain detailed axioms to guide this comparison” of

First Factor: Similarity of the Marks.

23

marks for similarity: (i) the marks must be considered in their entirety and as they appear in the

24

marketplace; (ii) the marks should be analyzed by their sound, sight, and meaning; and (iii)

25

similarities are weighed more heavily than differences. GoTo.com, Inc. v. Walt Disney Co., 202 F.3d

26

1199, 1206 (9th Cir. 2000) (citing Filipino Yellow Pages, Inc. v. Asian Journal Publications, Inc.,

27

198 F.3d 1143, 1147-50 (9th Cir. 1999); Dreamwerks, supra, 142 F.3d at 1131; and Goss, supra, 6

28

F.3d at 1392).

12

1

a)

2

Plaintiffs argue that the word “stark”—used in Diageo’s “STARK

Sound

3

RAVING™,” and Plaintiffs’ “STARK WINE®” and “STARK THIRST™”—is the dominant portion

4

of the trademark and is identical in sound, sight and meaning in all three marks. Plaintiffs base this

5

argument on the PTO’s rejection of the “STARK THIRST™” and “STARK NAKED” marks on the

6

grounds that those marks are similar in sound, sight, and meaning to “STARK WINE®” due to the

7

common use of the dominant word “stark.” Plaintiffs argue that because “STARK RAVING™,”

8

“STARK THIRST™” and “STARK NAKED” all begin with the word “stark” there is no difference

9

between the rejected “STARK THIRST™” and “STARK NAKED” marks, and the “STARK

10

RAVING™” mark. Therefore, Plaintiffs argue that these similarities in sound, sight, and meaning

11

due to the common use of the dominant word “stark” are case dispositive.
Plaintiffs rely too heavily on the PTO determinations regarding the STARK THIRST™ and

Northern District of California

United States District Court

12
13

STARK NAKED applications. The Ninth Circuit has held that a preliminary determination by a PTO

14

administrator is entitled to consideration but should not be accorded much weight where the examiner

15

did not have access to the all the evidence before the District Court.

19

Any such determination made by the Patent Office under the circumstances just noted
must be regarded as inconclusive since made at its lowest administrative level … .
The determination by the Patent Office is rendered less persuasive still by the fact that
the Patent Office did not have before it the great mass of evidence which the parties
have since presented to both the District Court and this court in support of their
claims.

20

Carter-Wallace, Inc. v. Procter & Gamble Co., 434 F.2d 794, 802 (9th Cir. 1970). Thus, even if the

21

PTO rejected Diageo’s trademark application for the “STARK RAVING™” mark, this evidence

22

would be entitled to minimal weight. Here, Plaintiffs did not call the PTO examiner to testify as to

23

the basis for the PTO’s rejection of the “STARK THIRST™” and “STARK NAKED” marks.

24

Nevertheless, in a vacuum while using the “sound” test, the use of the words “STARK

16
17
18

25

RAVING™” as compared next to “STARK THIRST™” and “STARK WINE®” in the context of

26

selling wine is likely to cause confusion. For instance, as seen11 on a menu or wine list, little

27
28

11

One cannot fully separate sound from sight or meaning in this context.
13

1

difference exists to alert the customer that the products are not related. Thus, the sound metric

2

weighs in favor of finding similarity.

3

b)

4

Diageo argues that aside from the commonality of the word “stark,” the marks

5

have nothing in common. Even if the dominant portion of the wines’ names is “stark,” this does not

6

mean that the other words in the name have no significance. Alpha Indus., Inc. v. Alpha Steel Tube &

7

Shapes, Inc., 616 F.2d 440, 444 (9th Cir. 1980) (“These other words are significant words, indicating

8

a different origin, not merely descriptive words.”).

9

Sight

The marks must be “[c]onsidered in their entirety and as they appear in the marketplace.”

be considered in light of the way the marks are encountered in the marketplace ); First Brands Corp.

12

Northern District of California

Goss, supra, 6 F.3d at 1392; Kern v. Mindsource, Inc., 225 F.3d 663 (9th Cir. 2000) (similarity must

11

United States District Court

10

v. Fred Meyer, Inc., 809 F.2d 1378, 1383-84 (9th Cir. 1987) (examining the “total effect of the

13

defendant’s product and package on the eye and mind of an ordinary purchaser.”); adidas Am., Inc. v.

14

Payless Shoesource, Inc., 529 F. Supp. 2d 1215, 1234-35 (D. Or. 2007) (“similarity of design is

15

determined by considering the overall impression created by the mark as a whole rather than simply

16

comparing individual features”). “The proper test for likelihood of confusion is not whether

17

consumers would be confused in a side-by-side comparison of the products, but whether confusion is

18

likely when a consumer, familiar with the one party’s mark, is presented with the other party’s goods

19

alone.” E. & J. Gallo Winery v. Consorzio del Gallo Nero, 782 F. Supp. 457, 466 (N.D. Cal. 1991)

20

(quoting Elizabeth Taylor Cosmetics Co. v. Annick Goutal, S.A.R.L., 673 F. Supp. 1238, 1248

21

(S.D.N.Y. 1987)). Here, the marketplace is not only restaurants, which may list only the name of a

22

wine on a wine list, but other consumer outlets where the consumer would see the labels of the wines

23

themselves.

24
25
26
27
28

14

1

Here Defendant argues that these:
e,
t

2
3
4
5
6
7
8
9
10

Ex. 20
02

11

Northern District of California

United States District Court

12

Ex 42
x.

look nothing lik these:
k
ke

13
14
15
16
17
18
19
20
21
22
23
24

See Def. Opp’n 1
O

E 43
Ex.

Kersten Krall Walz disagree and testifi that they all appear t come from the same s
W
ed
fied
y
to
m
source.

25
26
27
28

15
5

1

Diageo produced examples of other wines also using the word “stark” on the wine label which

2

are not the subject of this action and questioned Ms. Krall Walz about the possibility of confusion of

3

Plaintiffs’ Stark Wine® and Stark Thirst™ marks with these other wines, such as “Stark-Condé,” as

4

shown below:

5
6
7
8
9
10
11

Northern District of California

United States District Court

12

Ex. 218A

13
14

Ms. Krall Walz testified that consumers would not confuse Stark-Condé wines with either of the

15

Plaintiffs’ wines because the Stark-Condé label used a hyphen which suggested it was derived from

16

the name of a person.

17

The Court finds that in terms of the “sight” sub-factor as it relates to the Stark Wine® and

18

Stark Raving™ marks, it is not likely that consumers would be confused. The Stark Wine® label is a

19

sophisticated, traditional wine label, with block lettering, set against a linen background, and only

20

uses the word “STARK” suggesting the last name of the winemaker himself. The Stark Raving™

21

label is not traditional. The image of the mad scientist/inventor, with vibrant colored paint

22

splatters—blue, orange, red, or green, depending on the varietal―suggests the exact opposite of a

23

traditional, personally crafted, boutique wine affiliated with a winemaker. It is more radical in

24

approach and does not even list the wine’s vintage or vineyard, calling out the varietals in a non-

25

traditional way―Red, White, Cab (except for the Malbec).

26

The call is closer with respect to whether consumers would be confused about the source of

27

Stark Thirst™ and Stark Raving™. The similarities between the Stark Thirst™ and Stark Raving™

28

labels are more pronounced and the differences are more subtle than between the Stark Wine® and

16

1

Stark Raving™ labels. Both Stark Thirst™ and Stark Raving™ have non-traditional wine labels.

2

The Stark Thirst™ label appears to be a hand drawn picture of an old bottle with simple colors—

3

black and white, while the label for Stark Raving™ has a picture of a person, is more colorful―blue,

4

orange, red, green―and does not list vintage or vineyard.

5
6

This sub-factor weighs against a finding of similarity with respect to Stark Wine®, but in
favor of finding similarity with respect to Stark Thirst™.

7

c)

8

In this context, one cannot fully separate sight or sound from meaning. As to

9

Meaning

Stark Wine®, the most prominent feature of the label is the word “STARK.” On a wine label, the use

winemaker. The Court is not persuaded by Plaintiffs’ argument that their use of the word “STARK”

12

Northern District of California

of the single word “STARK,” without modifying another word, suggests solely the name of the

11

United States District Court

10

on a wine label conveys a meaning of “to the fullest extent” separate and distinct from wine produced

13

by Christian Stark. (Reply 8.) In this context, the word “STARK” is being used as a proper noun and

14

not as an adverb or adjective, and it evokes the name of the winemaker himself, not the dictionary

15

definition of the word.

16

On the other hand, because both Stark Thirst™ and Stark Raving™ are used as adverbs,

17

confusion is more likely as “stark” in this context means “to an absolute or complete degree.”

18

Merriam-Webster’s Ninth New Collegiate Dictionary, p. 1150 (1988). The image of a mad scientist

19

on the label for Stark Raving™ communicates a message that the consumer is bold, young and

20

rebellious. A picture of an old bottle with information that 10% of profits to WaterAid on the label

21

for Stark Thirst™ suggests complete thirst, and the impetus to buy wine which contributes 10% of

22

profits to WaterAid. While Stark Raving™ (“totally crazy,” or “completely wildly insane”) and

23

Stark Thirst™ (totally and completely thirsty), communicate distinct meanings, both labels

24

communicate more than just the name of a winemaker.

25

An analysis of the components of the similarity of the marks, in their entirety and as they

26

appear in the marketplace, and weighing the similarities more heavily than the differences, strongly

27

suggests a finding of no confusion between “STARK RAVING™” and “STARK WINE®,” but in

28

favor of finding confusion between “STARK RAVING™” and “STARK THIRST™.”

17

1

2.

2

“Related goods are generally more likely than unrelated goods to confuse the public as

Second Factor: Relatedness of the goods.

3

to the producers of the goods.” Brookfield, supra, 174 F.3d at 1055.12 Related goods are those

4

“‘which would be reasonably thought by the buying public to come from the same source if sold

5

under the same mark.’” Sleekcraft, supra, 599 F.2d at 348 n. 10 (citations omitted).
“[W]ines of all types constitute a single class of goods.” E. & J. Gallo Winery, supra, 782 F.

6
7

Supp. at 464. All of the goods at issue are wine; that is enough to satisfy the relatedness element.

8

adidas, supra, 529 F. Supp. 2d at 1236 (“Here, the parties’ products are essentially identical in use

9

and function. Both parties sell athletic and casual footwear. Aside from arguable differences in

10

quality, the parties’ products are ‘reasonably interchangeable by buyers for the same purposes,’ and

11

thus competitive.”) (citing 4 McCarthy, supra, § 24:23). This factor weighs in favor of confusion.

Northern District of California

United States District Court

12

3.

13

This factor considers how and to whom the respective parties’ goods are sold. 4

Third Factor: Common marketing channels.

14

McCarthy, supra, § 24:51. “Convergent marketing channels increase the likelihood of confusion.”

15

Nutri/System, supra, 809 F.2d at 606 (quoting Sleekcraft, supra, 599 F.2d at 353). If the “general

16

class” of purchasers of the respective products of the parties is the same, confusion is more likely.

17

Sleekcraft, supra, 599 F.2d at 353. In contrast, significant differences in the price of the products, or

18

the type of stores (i.e., discount or specialty) at which the respective products are sold may decrease

19

the likelihood of confusion. See L.A. Gear, Inc. v. Thom McAn Shoe Co., 988 F.2d 1117, 1134 (Fed.

20

Cir. 1993). In determining whether significant overlap exists between the general classes of

21

purchasers exposed to the products, relevant considerations include whether the goods are sold under

22

the same roof; the normal marketing channels are similar or parallel; the same sales methods are

23

employed; and the products are advertised in the same places (internet, newspapers and classified

24

telephone directories). Sleekcraft, supra, 599 F.2d 353.

25
26
27
28

12

To satisfy the relatedness factor Plaintiffs do not need to establish that the parties are direct competitors,
although where the goods are directly competitive, “the degree of similarity of the marks needed to cause
likely confusion is less than in the case of dissimilar goods.” 4 McCarthy, supra, § 24:22.

18

1

The evidence presented suggests no overlap in the parties’ channels. Mary Frances Light

2

Dusenbury, Defendant’s Senior Director of Marketing and Innovation, explained that wine is

3

distributed through a “three-tier” system whereby producers sell their products to distributors, who in

4

turn sell to retail accounts. (Light Dec. ¶ 18.) Consumers then can purchase wine “on premises” at

5

restaurants and bars or “off premises” from mass merchandisers, grocery stores, liquor stores, and

6

wine shops. (Id.)

7

Stark Wine® is sold in Christian Stark’s tasting room in Healdsburg located in Sonoma

8

County, California. Consumers can also purchase Stark Wine® over the telephone and on Stark

9

Wine’s website. Stark Thirst™ is sold off premises at one high-end wine store in Manhattan and

and one wine bar. Diageo estimates that approximately 90% of Stark Raving™ wine will be sold

12

Northern District of California

through the internet, and is available on premises at two locations in Brooklyn, one upscale restaurant

11

United States District Court

10

“off premises” through Diageo’s current network of distributors, approximately 80% of whom

13

exclusively distribute only Diageo products. According to Diageo, this means that Stark Raving™

14

wines are, and will continue to be, on the shelves at large national grocery stores and mass

15

merchandise chains (such as Safeway, Target, and Jewel-Osco) that require a large volume supply of

16

product, which Plaintiffs could not supply. And any on-premises sale would most likely be served at

17

“fast casual” chain restaurants like T.G.I. Friday’s.

18

Plaintiffs testified of future plans to sell their wines through channels similar to the channels

19

through which Diageo sells its Stark Raving™ wines. Plaintiffs’ expansion plans are relevant to the

20

seventh factor, infra, but are not pertinent to the analysis of whether there is any overlap in the

21

respective marketing channels now. Plaintiffs did not submit any evidence that the parties advertise

22

their products in the same places.

23

This factor weighs against finding confusion, as it seems that there is no overlap in the

24

parties’ respective marketing channels, except, perhaps to the extent consumers in Sonoma County

25

shop at the mass merchandise chains and boutique wine shops.

26

4.

27

The more likely a mark is to be remembered and associated in the public mind with

28

Fourth Factor: Strength of the mark.

the mark’s owner, the greater the likelihood of confusion. Brookfield, supra, 174 F.3d at 1058 (citing

19

1

Ken
nner Parker Toys Inc. v. Rose Art Ind
T
R
dus., Inc., 96 F.2d 350, 353 (Fed. C 1992)). The “strengt
63
Cir.
th”

2

of a trademark is evaluated both in term of its conc
i
b
ms
ceptual stren
ngth and its c
commercial s
strength. Se
ee

3

M
pra,
2 McCarthy, sup § 11:83.

4

a)

5

Mark can be con
ks
nceptually cl
lassified alon a spectrum of increas
ng
m
sing inherent
t

6

Conceptua Strength
al

disti
inctiveness, the weakest being gener and the st
ric
trongest bein fanciful:
ng

7

c
tive
estive → arb
bitrary → fa
anciful
generic → descript → sugge

8

See Brookfield, supra, 174 F.3d at 1058. A “weak t
F
trademark” i a mark tha is a meani
is
at
ingful word in
i

9

mmon usage or is merely suggestive or descriptiv of the pro
o
o
ve
oduct or service. “A ‘gen
neric’ term is
com

ervice is a sp
pecies. It ca
annot become a trademar under any circumstan
rk
y
nces.” Surgic
centers of
or se

12

Northern District of California

one that refers, or has come to be unders
o
stood as refe
erring, to the genus of w
e
which the par
rticular produ
uct

11

United States District Court

10

Ame
erica, Inc. v. Medical De
ental Surgeries, Co., 601 F.2d 1011, 1014 (9th C 1979) (c
1
,
Cir.
citing

13

Abercrombie & Fitch Co. v. Hunting World, Inc., 53 F.2d 4, 9-11 (2d Cir. 1976)). A descriptive
.
Wo
37

14

mar specificall “describes a characte
rk
ly
s”
eristic or ing
gredient of an article or s
n
service to wh it refers or
hich

15

its purpose (e.g., “Park ‘N Fly”), while a suggestive mark “sugg
p
F
e
gests,” rather than descri
r
ibes, an

16

ingr
redient, quali or charac
ity
cteristic (e.g. Sleekcraft) and thereby moves alo the spect
.,
)
y
ong
trum to the

17

stron
nger categor See Selfry.
-Realization Fellowship Church v. A
Ananda Chur of Self-R
rch
Realization, 59
5

18

F.3d 902, 910 (9 Cir. 1995
d
9th
5).
A “stron trademark is one used only in a f
ng
k”
fictitious, arb
bitrary, and f
fanciful man
nner.13 Mark
ks

19
20

that are suggesti arbitrary or fanciful “serve[ ] to identify a particular sou of a pro
ive,
y
urce
oduct, [and] are
a

21

deem inheren distinctiv
med
ntly
ve.” Two Pe
esos, supra, 505 U.S. at 768; Kendal
ll-Jackson W
Winery. Ltd. v.
v

22

E. & J. Gallo Winery, 150 F.3d 1042, 10 (9th Cir 1998). Arb
W
F
046
r.
bitrary mark are words, symbols,
ks

23

pictu
ures, etc., th may be in common lin
hat
n
nguistic use but which, w
when used in combinatio with the
n
on

24

good or service at issue, have no descr
ds
es
h
riptive conn
notation with those goods or services 2 McCarth
h
s
s.
hy,

25

supr § 11:11. Fanciful ma are “coi
ra,
arks
ined” words or phrases t are eithe invented o selected—
that
er
or
—

26
27
28

13

Fo example, Iv
or
vory soap is not made of iv
n
vory, and a “c
common” wo such as “a
ord
apple” can be used as an
arbit
trary and inhe
erently strong trademark on a product su as person computers 2 McCarthy supra, §
g
n
uch
nal
s.
y,
11:11.

20
0

1

i.e., words that are unknown or out of common usage at the time—solely for the purpose of

2

functioning as a trademark. Id. § 11:5.

3

Where a particular mark falls along this spectrum is determined by the “imagination test” and

4

the “need test.” See Earthquake Sound Corp. v. Bumper Indus., 352 F.3d 1210, 1221 n.4 (9th Cir.

5

2003) (citing Miss World (UK) Ltd. v. Mrs. Am. Pageants, Inc., 856 F.2d 1445, 1449 (9th Cir. 1988),

6

abrogated in part on other grounds as recognized by Eclipse Assocs. Ltd. v. Data Gen. Corp., 894

7

F.2d 1114, 1116 n.1 (9th Cir. 1990). The “imagination test” considers “how much imagination a

8

consumer must use to associate a given mark with the goods or services it identifies,” with greater

9

effort on the consumer’s part corresponding to a stronger mark. Id. The “need test” considers

10
11

whether “a mark is actually needed by competitors to identify their goods or services.” Id.
Typically, in analyzing the strength of a mark, the Court would evaluate the mark which had

Northern District of California

United States District Court

12

priority; a more well-known senior mark suggests greater likelihood of future or “forward” confusion

13

because a junior user’s mark is more likely to be associated with that established famous mark. In

14

that case, the concern is whether the junior mark-holder is benefiting from the goodwill of the more

15

well-known senior mark-holder.

16

In a reverse confusion case, as alleged here, the concern is that consumers will believe that the

17

senior mark-holder’s goods are produced by the junior mark holder or that consumers will believe

18

that the senior mark-holder is trying to “palm off” its goods as those of the junior mark-holder. For

19

that reason, the focus in a reverse confusion case is on the strength of the junior user’s mark.

20

Dreamwerks, supra, 142 F.3d at 1130 n.5 (issue was whether a consumer attending a Dreamwerks-

21

sponsored science fiction convention might do so believing that it is sponsored by DreamWorks)

22

(citing Sands, Taylor & Wood Co. v. Quaker Oats Co., 978 F.2d 947, 959 (7th Cir. 1992)).

23

Accordingly, the Court reviews the strengths of all three marks.

24

i.

The “Stark Raving™” mark

25

Conceptually, the “Stark Raving™” mark is arbitrary because the mark

26

“uses common words in a fictitious and arbitrary manner to create a distinctive mark which identifies

27

the source of the product.” Dreamwerks, supra, 142 F.3d at 1131. It is neither suggestive of the

28

21

1

goods–people do not ordinarily associate drinking wine with insanity–nor descriptive of the wine’s

2

characteristics–people will not go stark raving mad after they drink the wine.

3
4

Based on the foregoing, the Court finds that the mark “Stark Raving™” is arbitrary and
therefore conceptually strong.
The “Stark Wine®” mark

5

ii.

6

Diageo argues that Stark Wine®, as a personal name, is a descriptive

descriptive and not protectable unless it acquires a secondary meaning. 15 U.S.C. § 1052(e)(4), (f); 2

9

McCarthy, supra, § 13:1 (proof of secondary meaning is required to protect a family name). Where,

10

as here, “stark” has a non-surname meaning, the mark is not primarily a surname, and no secondary

11

meaning is required. See Lane Capital Management, Inc. v. Lane Capital Management, Inc., 192

12

Northern District of California

term. Under the trademark laws, a mark that is “primarily merely a surname” is considered

8

United States District Court

7

F.3d 337 (2d Cir. 1999) (mark Lane Capital Management is not a personal name mark requiring

13

secondary meaning because “lane” also has a non-surname meaning, even though “Lane” was the

14

nickname and middle name of the father of the founder of plaintiff and the middle name of the son of

15

the founder).

16

Stark Wine argues that its mark is “arbitrary” because the adjective “stark” has nothing to do

17

with wine. (See Reply 8 (“Stark is not only a surname, but also an adjective that appears in the

18

dictionary …. When it comes to describing wine, ‘Stark’ is arbitrary and, therefore a strong mark.”).)

19

The PTO initially rejected Christian Stark’s trademark application for the “Stark Wine®” mark on the

20

basis that “Stark” “is primarily merely a surname.” (Barentzen Dec., Ex. D at 52 (“in support of the

21

assertion that Stark is a surname, the examining attorney points out that the applicant’s surname is

22

Stark.”)). Christian Stark responded that “[t]he word ‘Stark’ is not primarily a surname. In many

23

instances it is used as an adjective … such as ‘a stark white room’ or a ‘stark contrast.’” (Barentzen

24

Dec., Ex. D at 44.)

25

Christian Stark testified at the preliminary injunction hearing that he was reluctant to use his

26

surname for his wine but felt that the dictionary definition of the word “stark”―complete, bold, to

27

the fullest extent―adequately captured the essence of his wines. While conceptually, stark would be

28

an arbitrary name for a wine—as one does not normally think of wine as being “bare” or “harsh,” or

22

1

“utterly” and “completely” so―Christia Stark and S@HS have closely ass
s
an
d
sociated the Stark Wine®

2

and Stark Thirst brands with Christian Stark as th winemake throughou its history of use. His
t™
w
n
he
er
ut

3

after
r-the-fact att
tempt to dist
tance himsel from this u is belied by his own documents:
lf
use
d

4

“Krall Walz is launc
W
ching her ow wine bran Stark Thi (of cours made by
wn
nd,
irst
se,
Christian (Exh. 18)
n)”

5
6
7
8
9

“Stark Wine is a refl
W
lection of ou passion fo family.” (
ur
or
(Ex. 8.)
“The nam Stark Wi derives from the own family n
me
ine
f
ners
name … Th goal is for
he
r
consume to associa the wine and its qual with the name ‘Stark
ers
ate
lity
k.’” (Ex. 23.)
“We cho the name Stark Thirs because Ch
ose
e
st
hristian Star is the winemaker.” (E
rk
Ex.
240.)
strates that
Thu while “sta
us,
ark” can be used as an ad
u
djective or a adverb, he the evide
an
ere,
ence demons

10

until Krall Walz partnered with Christia Stark it ha only, and intentionally, been used descriptive
z
w
an
ad
d
ely

11

dentify the wine with the winemaker himself.
w
e
r
to id

Northern District of California

United States District Court

12
13

Based on the foregoi the Cou finds that on this reco the mark “Stark Wine®” is, at bes
n
ing,
urt
ord
st,
desc
criptive and therefore rel
latively weak
k.

14

iii.

15

Plaintiffs argue that th “Stark Th
he
hirst™” mark is conceptu
k
ually strong

Th “Stark Th ®” mark
he
hirst

16

for the same rea
t
asons that the “Stark Win ®” mark is strong. (Se Reply 8 (“
e
ne
s
ee
“When it com to
mes

17

desc
cribing wine ‘Stark’ is arbitrary and therefore a strong mark
e,
a
d,
k”).) Conce
eptually, the “Stark

18

Thir
rst™” mark can be class
sified as sugg
gestive becau it “suggests” that the product is a beverage
ause
e

19

that will quench the consum
h
mer’s “thirst.” Based on the foregoin the Court finds that th mark
”
ng,
t
he

20

ark
”
ve
efore modera
ately strong.
“Sta Thirst™” is suggestiv and there

21
22

b)

Commerc Strength.
cial
.

None of the mark has acquir commerc strength Plaintiffs c
e
ks
red
cial
h.
contend that
t

23

Chri
istian Stark has “strength
h
hened his br
rand to acqui commerc strength based upon the favorabl
ire
cial
le

24

reviews of his wine, and its recognition as a charitab organiza
w
ble
ation.” Defendant does n dispute
not

25

that Christian St
tark is a goo winemake and that h wines hav received n
od
er,
his
ve
numerous ac
ccolades.

26

How
wever, neithe Christian Stark’s wine nor the “S
er
es
STARK WIN ®” tradem
NE
mark has com
mmercial

27

stren
ngth. At bes the goodw that Christian Stark has built int his brand t
st,
will
to
through favo
orable review
ws

28

and charity work has created recognition in Sonoma County onl
k
d
n
a
ly.
23
3

1

Plaintiffs’ companies are struggling financially, with little to no advertising budget. Stark

2

Wine LLC will spend approximately $1,000 out-of-pocket marketing Stark Wine® in 2012, while

3

S@HS has not spent any money advertising Stark Thirst™.14 Stark Thirst™ is a relatively new

4

brand, and Stark Wine produced no wines in either 2008 or 2010―Christian Stark testified that 2008

5

was a bad year for grapes and that he devoted 2010 to building his tasting room. Sales outside of

6

Christian Stark’s tasting room totaled $20,000 over the past two years, $500 in 2011. Kern v.

7

Mindsource, Inc., 225 F.3d 663 (9th Cir. 2000) (evidence did not show mark was strengthened by

8

mark holder’s activities: (1) his advertising in magazines aimed at lawyers and the purchase of a spot

9

on a local radio show was discontinued in 1996; (2) he had used his mark less than seven years and

produce any financial records of his business but only estimated annual sales to be “a couple

12

Northern District of California

there was at least one other federal registration for the same mark that predated his; and (3) he did not

11

United States District Court

10

thousand dollars, maybe”).
Additionally, Tony Yarborough, a private investigator with Robert & Jackson Associates,

13
14

discussed the relative unavailability of Stark Thirst™ and Stark Wine®. The investigator attempted

15

to locate the Plaintiffs’ wines on the websites where Plaintiffs Krall Walz and Christian Stark stated

16

by Declaration that Stark Wine® and Stark Thirst™ were available, but neither wine was available to

17

purchase on any of the websites.
Also relevant to the analysis is the extent of any advertising or marketing campaign by Diageo

18
19

that may result in “a saturation in the public awareness of the junior user’s mark.” Glow Indus., Inc.

20

v. Lopez, 252 F. Supp. 2d 962, 989 (C.D. Cal. 2002). Advertising, length of time in business, and

21

public recognition are factors taken into account when classifying the commercial strength of marks.

22

Sleekcraft, supra, 599 F.2d at 350; Brookfield, supra, 174 F.3d at 1058 (significant advertising

23

expenditures can transform a suggestive mark into a strong mark where that mark has achieved actual

24

marketplace recognition). Stark Raving™ has been marketed and promoted, only recently, on

25

Diageo’s website and via the website www.starkravingwines.com, through YouTube videos, and

26
27
28

14

Ms. Krall Walz has devoted a significant amount of uncompensated time marketing Stark Thirst™.

24

1

thro
ough distribu
ution of mark
keting mater
rials—includ
ding pallet w
wraps, playin cards, iPhone covers,
ng

2

bott carriers, bar mats, and menu inser
tle
b
d
rts.

3

With res
spect to Stark Raving™, whether Dia
k
ageo will ac
chieve comm
mercial streng or brand
gth

4

awa
areness rema speculati
ains
ive. Ms. Krall Walz test
tified that gi
iven Diageo’s resources it can

5

prom its Star Raving™ wine brand to create hig brand aw
mote
rk
gh
wareness. Ho
owever, she w unable to
was
t

6

quan
ntify the cos of creating such brand awareness i a wine lab given the saturation i the market.
st
g
in
bel
e
in

7

Ms. Light testifi that wine generally do not have brand awar
ied
es
e
reness, with G
Gallo being an exception
n.

8

Mor
reover, Ms. Light testifie that the co to gain su brand aw
L
ed
ost
uch
wareness wo
ould be extra
aordinary,

9

man millions of dollars. Ms. Light exp
ny
o
M
plained that she does not expect the Stark Ravin
t
ng™ brand to
o

plac any telev
ced
vision or radi advertisem
io
ments, and it internet ad
ts
dvertising ha been to en
as
ncourage we
eb

12

Northern District of California

gain brand awar
n
reness becau it does no have a suf
use
ot
fficiently lar advertisin budget. D
rge
ng
Diageo has not
n

11

United States District Court

10

user to visit the Diageo Chateau & Esta Wines C
rs
e
ate
Company web
bsite, www.diageowines
s.com.

13

Add
ditionally, wh Diageo has spent or committed more than o million d
hile
r
one
dollars to ma
arket the Star
rk

14

Rav
ving™ brand this marketing has been directed pr
d,
rimarily tow
wards distribu
utors and ret
tailers and not

15

cons
sumers.

16

c)

17

Finall Diageo argues that th Stark Win ® and Star Thirst™ m
ly,
a
he
ne
rk
marks are we
eak

18

beca
ause many other wines also using the word “star on their l
o
a
rk”
label. “Use of similar m
marks by third-

19

part companies in the relev industry weakens th mark at is
ty
s
vant
y
he
ssue.” M2 So
oftware, Inc v. Madacy
c.

20

Entm 421 F.3d 1073, 1088 (9th Cir. 2005) (citing Miss World supra, 856 F.2d at 144 Quality
m’t,
d
8
2
d,
6
49);

21

Sem
miconductor, Inc. v. QLog Corp., C-93-20971 J 1994 W 409483, a *2 (N.D. C May 13,
gic
C
JW,
WL
at
Cal.

22

1994 (“an arbit
4)
trary mark may be classi
m
ified as weak where ther has been e
k
re
extensive thi party use of
ird

23

simi marks on similar goo
ilar
n
ods”) (citing General M
g
Mills, Inc. v. K
Kellogg Co., 824 F.2d 62 627 (8th
22,

24

Cir. 1987).

25

Third par use
rty

Diageo has provided evidence of the use of t word “st
h
d
the
tark” by a nu
umber of oth
her

26

emakers (an potential infringers). Mr. Yarboro
nd
i
M
ough, Diageo private in
o’s
nvestigator, testified abo
out
wine

27

the market avail
m
lability of ot
ther wines th use the w
hat
word “stark” on their labe “Stark-C
el:
Condé”; “Stark

28

sed
Win
nes” made by Stark Wine LLC, a Minnesota bas company that has be making i Stark
y
es
M
y
een
its

25
5

1

Wines for over a year; a dessert wine “Stark’s Star”; “Starkweather Alley” Pinot Grigio; and Indian

2

Creek Vineyard’s “Stark County Red.” In response, Plaintiffs contend that Stark-Condé, Stark

3

County and Starkweather Alley relate to a name or place and therefore are not relevant; Stark Wines

4

makes “fruit wine” and is therefore not a competitor; and Stark’s Star describes a grape varietal.

5

After considering the relative conceptual and commercial strengths of the parties’ respective

6

marks, the Court finds that this factor weighs against a finding a likelihood of consumer confusion

7

between Stark Wine® and Stark Raving™ or between Stark Thirst™ and Stark Raving™.

8

5.

9

If intent to deceive consumers is shown, courts will presume that the defendant will be

Fifth Factor: Intent of holder of alleged infringing mark in adopting mark.

at 1293); Network Automation, supra, 638 F.3d at 1154 (defendant’s intent relevant insofar as it

12

Northern District of California

able to accomplish its deceptive purpose. Goss, supra, 6 F.3d at 1394 (citing Gallo, supra, 967 F.2d

11

United States District Court

10

bolsters a finding that the public will be deceived by the junior mark-holder’s use of the mark). Thus,

13

when “an alleged infringer knowingly adopts a mark similar to another’s, courts will presume an

14

intent to deceive the public.” Goss, supra, 6 F.3d at 1394; Interstellar Starship Services, Ltd. v. Epix

15

Inc., 184 F.3d 1107, 1111 (9th Cir. 1999), superseded by statute on other grounds (“Adopting a

16

designation with knowledge of its trademark status permits a presumption of intent to deceive”).

17

Generally, the intent factor will be of minimal importance because intent can be hard to prove and

18

“intent to confuse customers is not required for a finding of trademark infringement.” Brookfield,

19

supra, 174 F.3d at 1059 (citing Dreamwerks, supra, 142 at 1132 (“Absence of malice is no defense to

20

trademark infringement.”)). Further, this factor generally focuses on whether the junior holder of the

21

mark intended to “palm off” its goods as those of the senior mark-holder, thus plays a less critical

22

role in a reverse confusion case. Chattanoga Mfg., Inc. v. Nike, Inc., 140 F. Supp. 2d 917, 930 (N.D.

23

Ill. 2001), aff’d as modified on other grounds, 301 F.3d 789 (7th Cir. 2002)

24

Here, Diageo was aware of both the Stark Wine® trademark and the Stark Thirst™ trademark

25

application at the time it sought to register its Stark Raving™ mark. Diane Plaut, Diageo’s Director

26

and Senior Counsel of Intellectual Property, commissioned a trademark search for the word “stark”

27

which uncovered both the Stark Wine® trademark and the Stark Thirst™ application. Ms. Plaut spent

28

26

1

a few hours reviewing the 298-page trademark search report.15 (See Ex. 29.) Even though Diageo’s

2

legal team was aware of the Plaintiffs’ trademarks, Diageo chose to file an application to register the

3

“Stark Raving™” mark.
Plaintiffs contend that Diageo not only was aware of their trademarks, but that Diageo

4
5

intended to mislead the PTO by describing its wine as “Alcoholic beverages other than beer” rather

6

than “Wine.” As proof, Plaintiffs argue that on April 2, 2012, which was within two months of

7

applying for the “Stark Raving™” mark, Ms. Plaut, who filed the “Stark Raving™” application, filed

8

a trademark application for another brand of wine Diageo was launching for Rosenblum Cellars

9

called “Butterfly Kisses™,” but in that application, Diageo disclosed that the trademark was for the

10

goods “Wine.”
For purposes of this proceeding, the evidence provided at the hearing supports Ms. Plaut’s

11

Northern District of California

United States District Court

12

testimony that her practice on behalf of Diageo was to apply for the broadest possible protection of its

13

trademarks so that if the opportunity arises in the future it can expand its product line. First, she

14

testified that Diageo has expanded wines into spirits. Second, Ms. Plaut testified that to her

15

understanding the description “Alcoholic beverages other than beer” was an acceptable description

16

for a wine because it includes wine. And, third, business records showed that approximately 80% of

17

all of the trademark applications that she had filed for wines while she has worked at Diageo had

18

been more expansively described as “Alcoholic beverages other than beer,” not “wine.”
Awareness of a senior mark-holder’s trademark is not dispositive of a junior mark-holder’s

19
20

intent or bad faith in adopting its mark. Thus far, the Court is aware of no evidence to show that

21

Diageo believed that its “Stark Raving™” mark would be confusingly similar to the “Stark Wine®”

22

or “Stark Thirst™” marks when Diageo selected the “Stark Raving™” mark. Likewise, there has

23

been no showing that “despite acting innocently, the junior user ‘was careless in not conducting

24

proper research to avoid infringement prior to development of its trademark.’” 4 McCarthy, supra, §

25
26
27
28

15

The standard practice at Diageo is for the legal team to render its own report after conducting the trademark
search. Diageo did not produce that report in discovery or testify about the contents of that report at the
hearing, asserting that the information is protected by attorney-client privilege and the work product doctrine.
The parties did not brief this issue nor is it ultimately material in this context.

27

1

23:10 (quoting Mars Musical Adventures, Inc. v. Mars, Inc., 159 F. Supp. 2d 1146, 1152 (D. Minn.

2

2001)).

3

Balancing the competing considerations, the preponderance of the evidence does not suggest

4

that Diageo intended to deceive the public, and therefore, this factor weighs against a finding a

5

likelihood of confusion.

6

6.

7

In the end, “consumer confusion” constitutes “the sine qua non of trademark

Sixth Factor: Evidence of actual confusion.

8

infringement.” Network Automation, supra, 638 F.3d at 1149. Because of the difficulty in obtaining

9

such evidence, the failure to prove instances of actual confusion is not dispositive. Id. at 1151 (citing

heavily only when there is evidence of past confusion or, perhaps, when the particular circumstances

12

Northern District of California

Sleekcraft, supra, 599 F.2d at 352). Consequently, like the intent factor, this factor is weighed

11

United States District Court

10

indicate such evidence should have been available but was not provided. Sleekcraft, supra, 599 F.2d

13

at 353. Given that there is no evidence of actual confusion, this factor is neutral.

14

7.

15

“Inasmuch as a trademark owner is afforded greater protection against competing

Seventh Factor: The likelihood of expansion into other markets.

16

goods, a ‘strong possibility’ that either party may expand its business to compete directly with the

17

other will weigh in favor of a finding that the present use is infringing.” Sleekcraft, supra, 599 F.2d

18

at 354 (citing Restatement of Torts § 731(b) & cmt. c). When goods are closely related, any

19

expansion is likely to result in direct competition. Id.

20

Stark Wine and S@HS claim that they plan to grow Stark Wine® and Stark Thirst™ into

21

nationwide brands. S@HS “is aggressively seeking a wider distribution for [Stark] wine in various

22

markets throughout the U.S.” (Stark Dec. ¶ 11.) Stark Wine LLC and S@HS also “plan to grow the

23

[Stark Thirst™] brand and sell it nationally by 2015.” Ms. Krall Walz testified about Plaintiffs’ five-

24

year plan to grow Stark Thirst™ to a 20,000 case per year brand and Stark Wine® to a 3,500 case per

25

year brand. Within two years Plaintiffs expect to be selling their wines in all of the major wine

26

markets: New York, California, Texas, Florida and Illinois, and nationally within five years.

27

Starting as early as 2014, Plaintiffs plan to introduce additional “Stark” sub-brand extensions,

28

including Stark Wild, Stark Naked and/or Stark Raving Mad. When cross-examined about the

28

1

likelihood of these plans materializing, Ms. Krall Walz explained that Stark Wine and S@HS have

2

access to capital to implement their plans and thus far, S@HS has met every one of its growth goals.

3

By contrast, Ms. Light’s testimony revealed that penetration of the wine market is incredibly

4

difficult and expensive. Christian Stark himself is a boutique winemaker with no experience in

5

nationwide marketing or business. He lacks any significant third-party distribution chains even for

6

his small enterprise and does not demonstrate a sophisticated knowledge of the challenges of the

7

market at issue. On this record, the possibility remains speculative as to whether Plaintiffs can

8

expand to Diageo’s current market position. However, Diageo is fully capable of accessing Stark

9

Wine’s established market in Sonoma County. Accordingly, this factor weights in favor of no

10

finding of confusion except as to Sonoma County.

Northern District of California

8.

12

United States District Court

11

In assessing whether there is a likelihood of confusion, courts look to the reasonably

13

prudent purchaser exercising ordinary caution. Sleekcraft, 599 F.2d at 353 (“The care exercised by

14

the typical purchaser, though it might virtually eliminate mistaken purchases, does not guarantee that

15

confusion as to association or sponsorship is unlikely”). “[T]he standard of care to be exercised by

16

the reasonably prudent purchaser will be equal to that of the least sophisticated consumer.” Ford

17

Motor Co. v. Summit Motor Prods., Inc., 930 F.2d 277, 293 (3d Cir. 1991). Wine is considered a

18

good with which the average consumer does not exercise care when purchasing. E. & J. Gallo

19

Winery, supra, 782 F. Supp. at 465 (with respect to wine drinkers, “lack of consumer sophistication

20

significantly enhances the likelihood of confusion between the two products”); Taylor Wine Co., Inc.

21

v. Bully Hill Vineyards, Inc., 569 F.2d 731, 734 (2d Cir. 1978) (“the average American who drinks

22

wine on occasion can hardly pass for a connoisseur of wines. He remains an easy mark for an

23

infringer.”).16 This factor weighs in favor of finding consumer confusion.

Eighth Factor: The degree of care likely to be exercised by purchasers.

24
25
26
27
28

16

Diageo attempts to distinguish purchasers of its wine from consumers of Plaintiffs’ wines to suggest that the
two classes of consumers are so different that no confusion can occur. Diageo argues that due to the relative
unavailability of Plaintiffs’ wines, consumers will need to seek them out. This niche audience is “far more
likely than the average consumer to have achieved the level of connoisseurship that would allow them to
distinguish between the parties’ products.” Sutter Home Winery, Inc. v. Madrona Vineyards, L.P., C 05-0587
MHP, 2005 WL 701599, at *11 (N.D. Cal. Mar. 23, 2005). In contrast, Diageo characterizes consumers of
Stark Raving wine as less sophisticated wine drinkers, which Diageo believes precludes them from knowing or
29

1

9.

2

“There are at least three types of proof of likelihood of confusion: (1) survey evidence;

Overall Analysis of the Sleekcraft Factors

3

(2) evidence of actual confusion; and (3) an argument based on an inference arising from a judicial

4

comparison of the conflicting marks themselves and the context of their use in the marketplace.” Dr.

5

Seuss Enterprises, L.P. v. Penguin Books USA, Inc., 109 F.3d 1394, 1404 n.14 (9th Cir. 1997).

6

Plaintiffs did not present survey evidence or evidence of actual confusion. This leaves a judicial

7

comparison of the marks.

8
9

As set forth above, the Court has compared the marks using the Sleekcraft factors. As to
Plaintiffs’ collective claims, the factors which weigh in favor of confusion focus on sound (i.e. the

purchases will not exercise due care. By contrast, the factors weighing against confusion include the

12

Northern District of California

use of the word “stark”), the fact that all goods at issue are wine, and the presumption that wine

11

United States District Court

10

visual comparison of the product labels, the meanings and marketplace associations connected with

13

each of the variations (Stark Wine®, Stark Thirst™, and Stark Raving™), the lack of both conceptual

14

and commercial strength in Plaintiffs’ marks, and the lack of any actual intent on Diageo’s part to

15

confuse consumers.

16
17

Based upon that collection of evidence, the Court concludes that Plaintiffs have not shown
generally a “likelihood of success on the merits.”

18

D.

19

Under the Lanham Act, a district court has the “power to grant injunctions, according to the

THE EQUITIES

20

principles of equity and upon such terms as the court may deem reasonable.” 15 U.S.C. § 1116.

21

Even if “serious questions going to the merits” existed, the balance of the hardships does not tip

22

“sharply in favor” of granting the full scope of the requested injunction. Brookfield, supra, 174 F.3d

23

1046 (where there are “serious questions going to the merits,” to obtain an injunction, plaintiff must

24

show that “the balance of hardships tips sharply in his favor”). On the current record, the balance tips

25

in Diageo’s favor except as to Christian Stark and Stark Wine LLC’s own market in Sonoma County.

26
27
28

caring about Plaintiffs’ wines. It is the care exercised by this less sophisticated consumer that the Court must
consider in the likelihood of confusion analysis.

30

1

1.

2

Even where infringement has been proven, a plaintiff cannot be granted injunctive

Harm to Plaintiffs Absent an Injunction

3

relief unless it can show irreparable injury absent an injunction. This requires a plaintiff to

4

“demonstrate a likelihood of irreparable injury—not just a possibility—in order to obtain preliminary

5

relief. “ Winter, supra, 555 U.S. at 21. Irreparable injury means an injury that is imminent, and that

6

cannot be remedied by an award of money.
Misidentification of goods poses a threat to goodwill and reputation. A trademark holder is

7

goodwill or loss of control over one’s reputation cannot be measured precisely and “may constitute

10

irreparable harm for purposes of preliminary injunctive relief.” SunEarth, supra, 846 F. Supp. 2d at

11

1083 (quoting Mortgage Elec. Registration Sys. v. Brosnan, 2009 WL 3647125, at *8 (N.D. Cal.

12

Northern District of California

entitled to control the reputation and goodwill associated with its mark. This potential loss of

9

United States District Court

8

2009)).

13

Both Christian Stark and Ms. Krall Walz testified about a subjective fear that if Diageo floods

14

the wine market with Stark Raving™ wine, it will be impossible to undo the damage to Plaintiffs’

15

goodwill and reputation. Christian Stark testified that reputation is everything in the wine industry

16

and that people will assume that he produced Diageo’s Stark Raving™, which will damage his

17

reputation. He testified that consumers will come to expect low quality “stark” wine, which will

18

prevent him from selling his Stark Wine® at its current price point of $28 to $44 per bottle. The

19

alleged difference in price and quality between the wines could be damaging to the Stark Wine®

20

brand. Because there is not a likelihood of confusion generally, it is unlikely that there will be such

21

reputational harm or loss of goodwill except in Sonoma County.

22

Ms. Krall Walz testified that the Stark Wine® and Stark Thirst™ brands would be damaged

23

beyond repair. Ms. Krall Walz and Christian Stark testified that if an injunction does not issue, they

24

will lose the opportunity to expand their businesses nationally, which they argue is a harm that cannot

25

be quantified. Ms. Krall Walz testified that absent an injunction, Stark Raving™ wine will be on

26

shelves in the same stores where Plaintiffs plan to sell Stark Wine® and Stark Thirst™.

27
28

31

Plaintiffs did not present credible evidence of the reputation or goodwill associated with the

1
2

Stark Thirst™ mark. S@HS has not advertised the brand, and its wine is available at only three

3

locations in New York City.
Plaintiffs testified that they will not be able to do their brand extensions because the Stark

4
5

Raving™ wines will damage the reputation of the word “stark” in connection with wine. However,

6

neither Ms. Krall Walz nor Christian Stark own the trademark rights to these brand extensions—one

7

acquires the exclusive right to use a trademark through its actual use in commerce; expansion plans

8

are not use in commerce.

9

2.

Balancing the Relative and Potential Harm to Each Party

Diageo has identified concrete and particularized harm that an injunction would cause

10

Northern District of California

to its business. First, Diageo claims an injunction will end the Stark Raving™ brand. Ms. Light

12

United States District Court

11

testified that retailers have reserved shelf space for Stark Raving™, which would be lost if Diageo

13

could not ship (or had to recall) cases of Stark Raving™ wine.17 Additionally, an injunction would

14

also harm Diageo’s goodwill with these distributors and retailers who have agreed to distribute and

15

stock the wine. Ms. Light explained that the Stark Raving™ sub-brand is Diageo’s first foray into

16

this wine submarket and its success impacts Diageo ability to establish itself as serious competitor in

17

that submarket. Diageo argues that it would be cost prohibitive to do anything other than destroy the

18

bottles if the wine cannot be sold under the Stark Raving™ label.

19

Plaintiffs argue that any hardship is of Diageo’s own making. See Cadence Design Sys. v.

20

Avant! Corp., 125 F.3d 824, 829 (9th Cir. 1997) (“a defendant who knowingly infringes another’s

21

copyright cannot complain of the harm that will befall it when properly forced to desist from its

22

infringing activities”) (internal quotations omitted). Plaintiffs also discount the potential harm to

23

Diageo. They argue that Diageo could just re-label the bottles if enjoined.18 According to Plaintiffs,

24

the Stark Raving™ sub-brand was introduced to the market recently, with no goodwill in its

25
26
27
28

17

Diageo has produced approximately 80,000 cases of Stark Raving wine, approximately 17,000 cases were
delivered to distributors and in turn 7,000 of those cases have been delivered to retailers. As of August 15,
2012, Stark Raving wine is on the shelves at over 1,500 stores across the United States. Neither party
proffered evidence of the cost of relabeling or recalling the bottles already shipped.

18

The Court notes that the actual relief sought in this action includes destroying the bottles.

32

1

trad
demark, and that Diageo is a large co
t
ompany with a large port
h
tfolio of bev
verages, of w
which the Sta
ark

2

Rav
ving™ sub-brand is a sm compone
mall
ent.

3

The harm from an er
m
rroneously is
ssued, wides
spread injunc
ction far out
tweighs any harm should
d

4

such relief be er
h
rroneously denied. By th same toke closing S
d
he
en,
Sonoma Cou
unty off from Diageo wil
m
ll

5

have little impac and will protect Plaint
e
ct
p
tiffs locally. In that cou
unty, evidenc exists that Plaintiffs
ce
t

6

have built a positive reputat
e
tion for Stark Wine® and there consu
k
d
umers are mo likely to be confused
ore
d

7

thus bolstering Plaintiffs’ cl
s
P
laim of hards
ship and tipp
ping the scal in their fa
les
avor.

8

3.
3

9

Before issuin an injunct
B
ng
tion a court a must en
also
nsure that the “public int
e
terest would

Publi Interest.
ic

conf
fusion serves the public interest and there is a str
rong policy in favor of p
protecting rig to
ghts

12

Northern District of California

not be disserved eBay v. MercExchan LLC, 54 U.S. 388, 391 (2006). Preventing consumer
b
d.”
M
nge,
47
g

11

United States District Court

10

trad
demarks. As set forth abo the pote
ove,
ential for con
nfusion is lo to Sonom County. The public
ocal
ma

13

inter is served by an injun
rest
d
nction in tha county.
at

14

IV.

CONCL
LUSION

15

For the reasons set forth above, the Court wi GRANT a preliminary injunction, limited in
r
fo
t
ill
y

16

geog
graphic scop to Sonoma County, California, in favor of Ch
pe
hristian Stark and Stark W LLC,
k
Wine

17

only Stay @ Home Somme
y.
H
elier, LLC’s request for a preliminar injunction is DENIED.
s
ry
n
Therefor the Motio for Prelim
re,
on
minary Injun
nction is GRA
ANTED AS TO SONOMA COUNTY,
O

18
19

CAL
LIFORNIA, an otherwise DENIED.
nd
e
Defenda its office agents, servants, emp
ant,
ers,
ployees, and attorneys ar hereby EN
d
re
NJOINED and
d

20
21

RES
STRAINED fro directly or indirectly using the m
om
y
mark “Stark R
Raving” in c
connection w the
with

22

adve
ertisement, promotion, distribution, offering for sale or sellin of wine o related go
p
d
ng
or
oods or

23

serv
vices in Sono County, California.
oma
,
Issuance of this preli
e
iminary inju
unction is con
ntingent upo Plaintiffs filing proof of issuance of
on
f

24
25

a bo in the am
ond
mount of $50
00.0019 by no later than 2
o
2:00 p.m. on November 30, 2012. Should
n
r

26

19

27
28

Ru 65(c) of th Federal Ru of Civil Procedure req
ule
he
ules
P
quires that the party seekin an injunctio must post
e
ng
on
secu
urity “in an am
mount that the court consid proper to pay the costs and damage sustained b any party
e
ders
o
s
es
by
foun to have bee wrongfully enjoined or restrained.” F R. Civ. P 65(c). D
nd
en
y
Fed.
Pro.
Defendant seeks a
$5,0
000,000.00 bo based upo its expected harm if the Court issues a nationwide injunction. There is no
ond
on
e
show
wing that Diag will suffe more than negligible har if enjoined from Sonom County. T
geo
er
n
rm
d
ma
There is no
33
3

1

Plaintiffs fail to file proof of such undertaking by that time, this injunction shall be dissolved without

2

further Order by the Court.

3
4
5
6

This Order Terminates Docket Number 26.
IT IS SO ORDERED.
Date: November 1, 2012

_______________________________________
YVONNE GONZALEZ ROGERS
UNITED STATES DISTRICT COURT JUDGE

7
8
9
10
11

Northern District of California

United States District Court

12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

evidence that Stark Raving™ wine is being sold in Sonoma County or that Diageo will be harmed if prevented
from entering that market. The Court, in its discretion, will require Plaintiffs post $500.00 as security.
34