The Sixth Circuit Court of Appeals ruled on Wednesday that Maker's Mark Distillery, Inc.'s registered trademark for its red dripping wax seal is enforceable because it lacks aesthetic functionality.
The court also concluded that defendant Diageo's Case Cuervo tequila bottles featuring a similar red wax seal were likely to cause confusion in the marketplace.
In an opinion that at times reads more like Modern Drunkard magazine than an appellate decision, the Sixth Circuit teaches us that:
While all bourbon may be made the same way, all bourbons are not equal. The Sixth Circuit noted that distillers compete intensely on flavor, but also through branding and marketing. Maker's Mark, eveloped in 1953, began using the red wax seal on its bottles in 1958. The company trademarked the wax seal in 1985.
Diageo challenged the Marker's Mark mark in 2001 when it introduced Jose Cuervo Reserva tequila bottles with a similar red wax seal into the North American liquor market. Maker's Mark responded with a trademark infringement lawsuit.
Diageo's attorneys told the Sixth Circuit that Maker's Mark's trademark was unenforceable based on aesthetic functionality, and argued that the red wax seal would not cause consumers to confuse their tequila with Beam's bourbon because tequila and bourbon are rarely confused.
Their arguments were not persuasive.
The Sixth Circuit Court of Appeals found that the red wax seal survived both of the possible tests for aesthetic functionality.
Since there's more than one way to seal a bottle with wax to make it look appealing, and it's not difficult or costly for competitors to design around Maker's trademark, Cuervo failed the comparable alternatives test. Cuervo similarly failed the effective competition test because "red wax is not the only pleasing color of wax ... nor does it put competitors at a significant non-reputation related disadvantage to be prevented from using red dripping wax."
Maker's Mark also prevailed under the Frisch factors balancing test for market confusion.
The Sixth Circuit concluded that there is a likelihood of confusion between Marker's and Cuervo's products after considering the strength of the plaintiff's mark, relatedness of the goods, similarity of the marks, evidence of actual confusion, marketing channels used, likely degree of purchaser care, defendant's intent in selecting the mark, and likelihood of expansion of the product lines. As such, the court ruled that Cuervo had infringed on the trademark.
How do you feel about this case? Are you relieved that the Maker's Mark red wax seal is safe, or are you ultimately disturbed that the court thinks that customers could mistake tequila for bourbon?