Two wine giants are squaring off over a labeling spat in a follow-up to a similar lawsuit in the '90s.
By W. Blake Gray | Posted Tuesday, 06-Apr-2021
A decade after the death of Jess Jackson, the company he founded, Jackson Family Wines, has rediscovered one of his passions: filing lawsuits, especially against E. & J. Gallo Winery.
Jackson Family Wines, the ninth largest wine company in the US, filed a lawsuit last month accusing Gallo, the world's largest wine company, of infringing on Jackson Family's copyright for La Crema with a new Gallo wine called Cask & Cream.
The suit is like a Hollywood reboot, although Jackson Family must be hoping for a different ending this time. In 1996, Jackson Family sued Gallo, claiming that Gallo's Turning Leaf brand was a ripoff of Kendall-Jackson Vintner's Reserve Chardonnay. A jury in 1997 decided that Turning Leaf did not infringe on Jackson Family's trade rights.
Jackson Family is making many of the same arguments against Gallo this time around. It's a familiar story for Jackson Family to be suing someone. Before Jess died, he sued three former advisors over thoroughbred horses he bought in Kentucky and earned a $3.5 million settlement.
Jess Jackson was a lawyer, specializing in property rights issues, before he got into the wine industry. He became one of the most successful vintners in California. He was instrumental in the growth in popularity of Chardonnay, making K-J Vintner's Reserve one of the most popular brands in America. While running for president, Barack Obama told People magazine it was his house wine; when he was elected in 2008, Kendall-Jackson announced it was sending him a few congratulatory cases.
Jackson once sued a former winemaker, Jed Steele, to prevent him from revealing winemaking "trade secrets" of the "formula" to create Kendall-Jackson Vintner's Reserve, which is slightly sweet and very fruit-forward. Jackson won a decision in 1992, which stunned winemakers who are accustomed to sharing winemaking information.
But the lawsuit against Gallo over Turning Leaf didn't go as well, despite the fact that – now it can be said – the labels do look a lot alike, and K-J Vintner's Reserve was definitely first. Jackson claimed in court that competition from Turning Leaf had cost his company $19 million in just one year.
In 1997, jury foreman Michael Willis told the San Francisco Examiner that the jury decided what Gallo did was just legitimate competition.
"I believe our final decision was business is business and what they did was part of business," Willis said.
Back to the future: this lawsuit claims that Gallo's new wine label Cask & Cream "will cause irreparable injury to the value and goodwill of the La Crema mark".
A brewing battle
According to the suit, the two companies have been communicating about Cask & Cream for some time.
Gallo claims it first used the trademark Cask & Cream for brandy in 1996, and got a US trademark for it for brandy in 2004. In 2013, Gallo filed for a trademark to use Cask & Cream for "alcoholic beverages except beers". Jackson Family objected and, the lawsuit says, Gallo amended its trademark application to be for "distilled spirits".
But, in 2019, Gallo filed for a trademark to use Cask & Cream for wine. Jackson Family objected again, and in the course of discovery, learned that Gallo had already obtained label approval from the Alcohol and Tobacco Tax and Trade Bureau (TTB) for three labels of Cask & Cream California Cabernet Sauvignon. The approved labels also have the slogan "Rich Balanced Oaky".
How similar is Cask & Cream's label to La Crema? Well, "crema" is Spanish for "cream".
But unlike the Vintner's Reserve-Turning Leaf case, where Gallo, er, independently came up with a three-color leaf on a white label that just happens to, er, coincidentally look very similar to KJ's, Cask & Cream does not have anything like the small triangle on La Crema's label. The fonts are different. The color schemes are different. And unlike Turning Leaf Chardonnay, Cask & Cream, at least right now, is even focused on a different grape variety, though that could change if Gallo wins this suit.
Once again, Jackson Family is making the argument that its valuable brand La Crema will be damaged if Gallo can make and sell Cask & Cream.
Never accuse Jackson Family of understatement. The lawsuit claims: "As a result of their efforts and acclaimed wine making, (La Crema) wines are widely considered by consumers and industry experts to be among the finest in the United States." Sure they are.
Whether that's true or not, there's no doubt La Crema is very successful, just like Vintner's Reserve Chardonnay before it. From the lawsuit, "From fiscal year 2016 to fiscal year 2020, JFW sold over 80,000,000 bottles of La Crema wine. In fiscal year 2020, alone, JFW sold over 15,000,000 bottles of La Crema wine."
The lawsuit claims that in 2020 La Crema Chardonnay was the second-best-selling Chardonnay in the US, and La Crema Pinot Noir was the third-best-selling Pinot Noir in the US.
Jackson Family wines is asking the US District Court to enjoin Gallo from using Cask & Cream for wine; to destroy all materials bearing the trademark; to withdraw all wines from the market; to turn over any profits; and to pay triple damages and attorney's fees. It's also asking the court to cancel Gallo's trademark for Cask & Cream, even for brandy.
In an official statement, Gallo told Wine-Searcher: "E. & J. Gallo Winery takes intellectual property rights seriously and has consistently respected the IP of others; however, we do not comment on pending legal matters."
This isn't the first lawsuit by Jackson Family regarding La Crema. In 2018, Jackson Family sued Enovation Brands and Terravant Wine Company over a Chardonnay called "Creme de la Creme." While the fonts and symbols were different, the labels were the same color; they're not as similar as Vintner's Reserve and Turning Leaf, but much more similar than Cask & Cream and La Crema. That case was settled out of court and the Creme de la Creme Chardonnay does not exist anymore.
And in 2014, Jackson Family sued Constellation Brands when the latter tried to create a wine called Crème Solaire. Constellation backed off and Jackson Family dismissed the case. Jackson Family also sued Diageo Chateau & Estate Wines in 2011 when it attempted to create a wine called Crème de Lys Chardonnay with a very similar color scheme on the label; that case also ended when Diageo backed off and gave up on making the wine.
If Jackson Family-Gallo: Label Wars 2 makes it to trial, one argument from 1997 could come back to haunt Jackson Family. The company argued then that Turning Leaf would damage its valuable Vintner's Reserve Chardonnay brand.
The 1997 article in the San Francisco Examiner about the verdict includes this: "The ruse – which Jackson said was pushed by Ernest Gallo – extended to Gallo pressure on merchandisers to put the two wines side by side so confused wine buyers would think Turning Leaf was a second label of Kendall-Jackson. It worked, according to a parade of expert market research witnesses and consumers who testified in the two-week trial. As a result, Kendall-Jackson sales, after a steady increase for more than a decade, leveled off, then declined after Turning Leaf was introduced."
Reading that, you'd think the verdict in favor of Gallo, combined with its marketing power, would have sunk Vintner's Reserve Chardonnay within 20 years.
Instead, Kendall-Jackson's website has a page labeled "A Brief History of America's Favorite Chardonnay", written by Christy Canterbury MW and published on September 29, 2016. Here is the final sentence: "The Vintner’s Reserve Chardonnay has been the number one selling Chardonnay in the USA since 1982."
April 06, 2021 at 07:02AM
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Jackson versus Gallo: Label Wars 2 | Wine-Searcher News & Features - Wine-Searcher
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