Fortune Brands wins Maker's Mark dispute

While Diageo PLC doesn't have to pay money damages to Fortune Brands Inc.'s Maker's Mark unit, the London-based company is barred from using a red dripping-wax seal on its Cuervo tequila products.

Ruling April 2, Judge John Gilpin Heyburn II said the damages in the seven-year-old trademark infringement case were "decidedly uncertain and certainly unproved." Diageo and Cuervo need not pay money damages "for a wrong from which they derived little benefit," he said in the 44-page ruling.

Deerfield-based Fortune's Maker's Mark, a bourbon distiller, sued Diageo in federal court in Louisville, Kentucky, in February 2003. It alleged it was harmed and the public was confused by Cuervo's use of a dripping red wax seal on its bottle.

The judge ruled that Maker's Mark's dripping-wax trademark was valid and infringed by Cuervo, and barred the future use of red drippings for the tequila bottle. He noted that Maker's Mark had used the seal for 52 years, and that the company's first national advertising campaign featured the seal.

The company registered the seal as a U.S. trademark in 1985, according to court papers. The infringement suit came after Cuervo put its Reserva de la Familia tequila on the market with a dripping-wax seal.

At trial Cuervo had argued that the dripping-wax seal was functional, and therefore unprotectable as a trademark. Judge Heyburn said he was persuaded by testimony from bottle-closure experts that the wax served "no true protective or preservative function" and that other, less-expensive means existed for creating tamper-proof closures.

Maker's Mark was represented by Edward T. Colbert, Eric C. Kane and William. M. Merone from New York's Kenyon & Kenyon LLP; and John David Dyche and R. Gregg Hovious from Louisville's Fultz, Maddox, Hovious & Dickens PLC.

The case is Makers Mark Distillery Inc. v. Diageo North America, 3:03-cv-00093-JGH-DW, U.S. District Court, Western District of Kentucky.