In our last post, we began looking at an ongoing lawsuit between two winemakers–one located in Clarksburg, California–which highlights the issue of federal trademark protection vs. state trademark protection. At the center of the disagreement is both companies’ use of the term “essential” on their wine labels.

Apparently, the Clarksburg winemaker began selling its product the same month the Colorado winemaker had its trademark registered with the USPTO, though both had been using the term previously. Some months later, the USTPO rejected the California winemaker’s trademark application based on a likelihood of confusion with the competitor’s brand. Subsequent discussions about an agreement between the companies fell through, and the Colorado winemaker ended up filing a lawsuit seeking a court judgment that it isn’t infringing on the California winemaker’s trademark rights. 

One issue this case highlights is the challenges of settling trademark disputes. In this case, the companies initially attempted to work out a coexistence agreement as part of a private settlement, but talks fell through when the California winemaker decided both labels couldn’t coexist in the marketplace. Various factors can impact companies’ willingness to reach a settlement in trademark disputes, and working with an experienced attorney who knows how to negotiate in such matters can make all the difference.

Another important issue is the potential advantage in this case of the Colorado winemaker’s possession of a federal trademark registration. As we’ve previously noted, federal trademark registration does provide a presumption of ownership and the exclusive right to use of a mark. At the same time, though, ownership of a trademark registration does not in and of itself definitively show that the owner of that trademark registration has the exclusive right to use the mark. Timing in the use of a mark can make a difference, even when one party has the mark registered with the USPTO. We’ll pick up on this point in a future post.

It remains to be seen exactly how this wine label dispute will turn out, but the case does highlight the importance of trademark protection in branding, and some of the challenges companies can face in navigating these disputes. An experienced attorney, of course, can help a business to work through these disputes with an eye toward both swift resolution and protection of a business’ rights and interests.