Injunction Issued Against Casa Cuervo Preventing Red Wax Seal on Reserva de la Familia Tequila
Submitted by Tequila.net
April 05, 2010
LOUISVILLE, Ky. — The dripping red wax seal on a bottle of Maker's Mark is not only distinctive, it's now exclusive legal property of the bourbon company.
A federal judge on Friday issued an injunction preventing a rival liquor company from using a dripping wax seal on its tequilas sold in the United States, ending a seven year legal battle over the bottle topper.
The ruling by U.S. District Judge John G. Heyburn II comes in a long-running lawsuit between Maker's Mark and competitors Diageo North America and Casa Cuervo over the Fortune Brands trademark on the wax seal. Deerfield, Ill.-based Fortune Brands owns Maker's Mark.
"The Court considers the red dripping wax seal inherently distinctive, because it is a unique mark used in an unusual way to draw in the consumer," Heyburn wrote.
Mexico-based Cuervo used a dripping red wax seal on special bottles of its Reserva tequila, which was distributed by London-based Diageo.
Heyburn's ruling barred the companies from using the seal, but did not award damages to Maker's Mark.
Calls and e-mails to spokesmen for Maker's Mark, Diageo and Cuervo were not immediately returned Friday.
The Samuels family, which created Maker's Mark, in 1958, trademarked the distinctive seal, which serves only a decorative purpose.
Cuervo opted to include a dripping wax seal on bottles in 1997 as part of an effort to create an artisan look. The bottles of Reserva with the new seal entered the U.S. market in 2001 in a limited production of 3,000-to-4,000 bottles. The bottles remained on sale in the U.S. for about three years.
Maker's Mark, bottled in Loretto in central Kentucky, sued over the seal in 2003, claiming it violated the long-standing trademark. Cuervo dropped the dripping wax seal five years ago.
During a six-day trial in Louisville last year, Casa Cuervo CEO Juan Domingo Beckmann testified that he made a business judgment to stop using the seal after being sued.
"I like the way it looks, and I would like to be able to use the dripping wax because it looks more hand-crafted," Beckmann testified. "But if I am going to be sued over it, or if I have to pay in order to use it, I simply wouldn't."
Heyburn found that idea "laudable," but not persuasive enough to forestall an injunction.
Maker's Mark spends about $22 million annually to market its bourbon, and sells about 800,000 cases annually. The ad campaigns focus heavily on the dripping red wax seal. The company occasionally will make a wax seal of a different color, such as its recent promotion raising money for a charity with University of Kentucky basketball coach John Calipari. In that case, Maker's Mark produced a limited number of bottles with a blue wax seal.
Along with the advertising campaigns, Maker's Mark uses onsite dipping stations that allow customers to make their own wax seals on bottles, as well as bartender training.
"Because of the unique nature of the advertising's focus on the red wax, the mark has in some ways taken on a life of its own, garnering significant attention beyond the purchased advertising," Heyburn wrote. These efforts have cultivated something akin to a cult following of the brand among whisky enthusiasts."
Heyburn declined to award damages, saying Cuervo violated the trademark, but did not focus its marketing efforts on the red wax seal to the point of damaging Maker's Mark's brand. Cuervo spent only about $500,000 of its $100 million overall branding budget on the Reserva tequila and sold its bottles for $100 each, while Maker's Mark went for about $24 a bottle, Heyburn found.
"The price difference in products suggests that Reserva appeals to connoisseurs," Heyburn wrote.