LAS VEGAS (Legal Newsline) -- An appellate court has reversed the summary judgment of a U.S. district court in a case between two vodka producers using virtually the same images in their designs. 

The case was remanded to the lower court.

The U.S. Court of Appeals for the Ninth Circuit stated that U.S. District Judge Miranda Du of the District of Nevada erred when she granted the summary judgment request of Jim Beam Brands Co. against JL Beverage in 2013. 

According to Senior Circuit Judge John Clifford Wallace, the district court failed to correctly identify the triable or material issues raised by the plaintiffs in the case. The Ninth Circuit panel also noted the lower court should have placed the burden of proof on Jim Beam. It failed to view the proof presented in the light most favorable to JL Beverage, the court said.

With this in mind, the appellate court ordered to reverse the earlier decision made in favor of Jim Beam and remanded the case to the district court to once again undergo trial. 

This means that the lower court must review the claims of JL Beverage, alleging false designation of origin, trademark infringement, and unfair competition against Jim Beam. In its documents, the plaintiffs cited the Lanham Act and the state laws of Nevada as the pertinent rules violated by the defendants.

The issue started March 8, 2011, when JL Beverage sent a cease and desist letter to Jim Beam regarding the use of the images of lips in their flavored vodka line called Pucker Vodka. According to the plaintiffs, the image was much too similar to the one JL Beverage registered in 2005.

Because JL Beverage had been actively marketing the brand carrying the same image earlier, it believed Jim Beam would be reaping the rewards for its efforts as consumers could get confused with the similar designs. The defendant refused to change its brand design for Pucker Vodka, which prompted JL Beverage to file a complaint against Jim Beam in July 2011 in U.S. District Court for the District of Nevada.

JL Beverage filed for a preliminary injunction but was denied by the district court. Later on, both Jim Beam and the plaintiffs filed for summary judgment. Judge Du granted the motion of the defendants and denied the one from the plaintiffs. JL Beverage also failed to have its motion for reconsideration granted.

Upon appeal to the Ninth Circuit, Wallace pointed out that the district judge failed to apply the correct standards in granting summary judgment. According to the senior circuit judge, the likelihood of confusion factors were not properly taken into consideration. The Ninth Circuit used the Sleekcraft test to determine whether the defendant’s use of the trademark would result in confusion about the source of goods.

Among the eight factors to be considered under the Sleekcraft test, the appellate court found that four satisfied the requirements, namely, “the strength of the mark,” “similarity of the marks,” “evidence of actual confusion,” and “the defendant’s intent in selecting the marks.”

“Balancing the Sleekcraft factors as a whole, we conclude there is a genuine dispute of material fact as to the likelihood of consumer confusion,” wrote Judge Wallace in the ruling.

Since it was remanded to the trial court by the Ninth Circuit, the case would go into trial to achieve resolution from a jury.

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U.S. District Court for the District of Nevada
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