Ever since Old Crow and Old Taylor aggressively protected their trademarks in the 1800’s, setting the stage for current-day trademark law, bourbon brands have kept trademark attorneys busy.
Diageo’s Bulleit brand and W.J. Deutsch & Sons’ Redemption brand have been locked in litigation for years, but as of last week, the federal district court in the Southern District of New York entered a permanent injunction against Redemption. In sum, the court ordered Redemption to change its bottle and trade dress immediately.
In 2017, Bulleit sued Redemption, claiming that Redemption’s 2016 packaging redesign was “strikingly similar to that of Diageo’s Bulleit whiskey and copies the same vintage style and appearance,” and alleging that this infringed on Bulleit’s trademark and trade dress rights. Redemption responded with bluster, stating that Bulleit’s complaint “is devoid of any merit whatsoever” and asserted its own claims against Bulleit, even alleging that Bulleit had obtained its trademark fraudulently by making knowingly false statements to the Trademark Office.
Earlier this year, the parties went to trial in New York, with Redemption losing its counterclaims against Bulleit, but without Bulleit being awarded any damages. While Bulleit was not able to convince the jury on the issue of damages, the jury concluded that Bulleit’s trade dress is valid and protectable and that its packaging is famous, which paved the way for Bulleit to ask the court to enter an injunction.
That’s just what Bulleit did after the trial, and the court agreed that an injunction against Redemption was warranted. On September 7, 2022, the court recounted Bulleit’s use of its iconic bottle for 21 years, that it was nationally famous, and that Bulleit spent $56 million advertising in the five years before Redemption’s bottle redesign in 2016 (a year in which the court noted that Bulleit had $150 million in sales). It probably did not help that Redemption’s witnesses admitted that “consumers already know and love” Bulleit.
The jury’s conclusion that Bulleit’s trade dress was diluted by the Redemption packaging created a presumption that Bulleit was irreparably harmed, but Redemption still argued that Bulleit failed to prove a loss of any goodwill or erosion of its trade dress. The court disagreed, finding instead that Bulleit had provided “ample evidence show[ing] a loss of goodwill and the whittling away of the distinctiveness of Bulleit packaging to the detriment of its reputation and its ability to signify to the public that it is a unique product… .” When Redemption introduced its new packaging, Bulleit’s growth declined from the high 20’s, to 10 percent, and then single digits, while Redemption earned over $21 million in profits.
So, what does this mean for Redemption? First, although it might appeal, Redemption has been ordered to stop using its current packaging that looks like Bulleit’s. Whatever Redemption bottles had been sold by the brand as of September 7 can be sold to consumers, but there can be no new sales to distributors. Second, Redemption was ordered to redesign its packaging to “convey a substantially different commercial impression.”
While Bulleit’s victory was not nearly as convincing as Brown-Forman’s legendary triumph over Barton in the Woodford v. Ridgewood case, it continues a long line of authority that should keep new brands cautious and should act as a warning to marketers who push for brand redesign to capture the look and feel of popular brands. Originality is the safest way to avoid expensive lawsuits.