04.02.2018  
 

Thornhill Wins Wine Brand Infringement Case

CustomVine admits to using Turn Key and other brands to sell 'inferior' wine

 
by Bill Ward
 
“trademark“
 
The Thornhill Companies successfully sued CustomVine for using the Eleanora Marie brand (top label) for a California appellation wine.

Santa Barbara, Calif.—Thornhill Companies has reached a cash settlement and obtained a contributory trademark infringement finding against CustomVine Corp. and its CEO after a lengthy dispute over wines sold under a Thornhill brand name.

Nicholas Miller, whose family's Thornhill Companies holdings include the Turn Key brand, said that CustomVine CEO Kevin Boyer began bottling and selling inferior wine using Turn Key and other labels. “They took our Santa Barbara Chardonnay with my brother’s only daughter’s name on it and put a California appellation on it,” Miller said, noting that this was just one of the wines that CustomVine, a custom-wine producer and brand developer, sold under Turn Key-owned labels. “It was such a callous disrespect for other people’s marks. We had federally registered that name [Eleanora Marie].”

U.S. District Court Judge R. Gary Klausner entered a judgment against CustomVine and CEO Kevin Boyer for contributory trademark infringement against four Turn Key brands, and the parties reached a $315,000 settlement, Miller said.

Miller is vice president of sales and marketing for Thornhill, and his brother Marshall is vice president of operations. Their father, CEO Stephen Miller, runs the company, which manages three vineyards, including the esteemed Bien Nacido in the Santa Maria Valley, as well as custom-crush wine facilities and estate wine labels, among other concerns.

The Millers originally hired Boyer in 2013 as an executive consultant and national on-premise sales manager, after Boyer left his post as vice president of online retailer Lot18. When Boyer and Lot18 wine flash site founder Philip James launched CustomVine, Turn Key was one of the original investors.

“At the time we thought we had a synergistic arrangement,” Nicholas Miller said. “But basically none of the programs Kevin said were going through were hitting. Of all the restaurants Kevin brokered, none of them came through. He spent all of our money and made all these promises. We took the loss and walked away from them, with 6,000 cases of aging inventory.”

Shortly thereafter, the Millers discovered in the spring of 2016 that Boyer “took these brands of ours and went to other suppliers and to Lot18 to print new labels.”

The wines were designated California rather than Santa Barbara, Miller said.

When Turn Key slapped cease-and-desist orders on CustomVine and the affiliated Penrose Hill to stop selling wines under Turn Key’s trademarked brands, “they accelerated their sales instead of stopping,” Miller said. “All we wanted was for them to stop, but they sucked us into a year and a half of pain.”

CustomVine offered “to just walk away,” Miller said, “and we said ‘no no no, we need to know the damage here, we need to understand what happened to our brands.’ ”

After a year of wrangling, in December 2017 the two sides reached the monetary settlement and received the District Court rulings: a finding against Boyer, another against Boyer and CustomVine for brand infringements (on Turn Key, Compass Point, Eleanora Marie and Wayside) and one against Penrose Hill for the Turn Key trademark.

Boyer, who remains president and CEO of CustomVine (James is president), had no comment on the case. “Unfortunately [there’s] nothing to talk about,” he said via email.

Boyer’s lead attorney, Massachusetts-based Louis Miller Ciavarra, said that after extended discussions, “the parties got to a place where they felt they could reach an agreement and move on.”

But the saga is not completely over, because the Turn Key brands have been “tarnished for a long time,” Miller said. “There’s a lesson here in how other people disregard the value of your own trademarks. Once people take it and run with it, they can have it a long time. Then it takes a long time to repair the damage that’s been done.”

Related litigation on the rise
Protecting brands has been part of Wines & Vines’ ongoing coverage on facets such as the vigilance needed to protect intellectual property and the basics on dealing with brands at risk.

J. Scott Gerien, a partner with wine-industry law firm Dickenson Peatman & Fogarty in Napa, Calif., said that cease-and-desist orders such as those Thornhill used have limited effectiveness. “Cease-and-desist is the first step,” Gerien said, “because if it works that’s great and sometimes people are innocently doing it, most of the time there’s a resolution. But if people have bad intent, they’re not going to go ‘oh, we’ll cooperate.’ ”

He added that getting a national trademark is essential, especially in an era in which so many brands already exist. In December 2017 for example, Sonoma County’s Davis Family Vineyards sued a newer Napa Valley winery called Davis Estates over trademark infringement.

But problems exist with even more generic names. “You have to be pretty original to find one that’s available,” Gerien said. “It is more difficult to find a mark that’s clear, and as a result of that we are seeing more litigation.”

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