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This week it’s time for one of those rare posts where I actually talk about the thing I spent three years being trained to talk about: the LAW. Over the past week my newsfeed has been full of articles about a lawsuit filed on July 3 by the heirs of the actor John Wayne against Duke University of North Carolina. (Full disclosure: I went to law school at Duke, and my law school friend Phil suggested this post, but my analysis will be even-handed.)

Most of the articles contain the same basic background information, which I will briefly summarize for you. John Wayne went by the nickname “Duke” or “The Duke” for most of his life (a nickname he took from the family dog, much like Indiana Jones, because he didn’t like his given name of Marion).

John Wayne also drank a lot of bourbon. In an effort to capitalize on people’s continuing love of John Wayne, the estate wants to market a bourbon called Duke bearing a label emblazoned with John Wayne’s likeness and his signature. (I haven’t been able to find out which Kentucky distillery John Wayne Enterprises (JWE) is partnering with to produce the bourbon.*)

In spring 2013 JWE filed two applications with the U.S. Patent and Trademark Office (PTO) to acquire trademarks in connection with Duke Bourbon. In autumn 2013 Duke University filed oppositions to both, which is exactly what it sounds like–they oppose the requests for trademarks and want the PTO to reject JWE’s applications. In response, JWE filed suit against Duke University seeking a judicial declaration that their bourbon trademarks would not be confusingly similar to Duke University’s trademarks.

All of the news articles essentially stop there. This is one of the problems with news media today: it’s all information and no analysis. Even The Hollywood Reporter‘s legal column didn’t offer any legal analysis. So I will. But I will try not to get too lawyerly on you.

Background

Trademark law has three general purposes: to protect the reputation and goodwill of sellers, to prevent consumer confusion or deception, and to promote competition in the marketplace. If you buy a particular brand of something and you like it, you as a consumer have the right to consistent quality meeting your expectations.

If I think Brawny paper towels are just the best paper towels ever, I want to be sure I’m getting the same product every time I buy them. If Brawny has a trademark, no one else is allowed to sell paper towels under the name “Brawny” because the quality might not be the same. My opinion of Brawny would be tarnished because I wouldn’t know that the inferior product wasn’t really made by the Brawny I know and love. I, the consumer, would be confused. And Brawny, the seller, would lose some of its goodwill and reputation.

A trademark must be used in commerce in connection with a good (a tangible item). If you are providing a service, you can get a servicemark, but that’s not within the scope of this post. When a trademark dispute comes to the courts, judges are generally concerned with determining whether there is a likelihood of consumer confusion. And because the law itself must be as confusing as humanly possible, there are multiple multi-factor tests that courts can use to analyze possible confusion.

The Second Circuit (a federal appeals court in the Northeastern U.S.) generally uses the seven-factor Polaroid test, so-called because it was first laid out in a 1961 case called Polaroid Corp. v. Polarad Elecs. The Federal Circuit (a federal appeals court based in Washington, D.C.) and the Trademark Trial and Appeal Board use the 13-factor DuPont test, named after the 1973 case In re E.I. du Pont de Nemours & Co. The Ninth Circuit (a federal appeals court in the Western U.S.) uses the eight-factor Sleekcraft test from the 1979 case AMF Inc. v. Sleekcraft Boats.

On top of all that, if a mark is famous enough, the dispute can be judged under a dilution standard, which is more favorable to the famous mark. I will discuss the multi-factor tests and dilution in more detail below.

JWE has requested two things from the court (in this case, the Central District of California, a federal trial court): (1) a declaration that there is no likelihood of confusion between JWE’s Duke bourbon mark and Duke University’s marks; and (2) a declaration that JWE’s Duke bourbon mark will not dilute Duke University’s marks. If the court rules in JWE’s favor, the PTO will be required to grant JWE’s application for a trademark and reject Duke University’s opposition. If the court rules in Duke University’s favor, the opposite will happen. (And in either case, the losing party could choose to appeal the case to the Ninth Circuit.)

Because the case is being heard in California and any subsequent appeal would be heard by the Ninth Circuit, I will use the Sleekcraft factors for this analysis. There is a good deal of overlap and similarity between the many multi-factor tests (which makes it all the more ridiculous that the courts can’t just decide on one multi-factor test to rule them all).

One more note before we get started (sorry, this is why lawyers are such a pain in the ass). Usually, when someone sues someone else in court, the person doing the suing is the plaintiff and the person being sued is the defendant. So if I sue you for trademark infringement, the question is whether your mark, as the defendant, is infringing my mark. In a declaratory judgment action (which is what we have here), those roles are reversed. JWE filed suit, but we are trying to determine whether their mark infringes Duke University’s mark, so JWE is the defendant and Duke University is the plaintiff. Okay, NOW we can get started with the analysis.

Factor One – Strength of the Mark

Here, we’re talking about the strength of Duke University’s mark. Duke University was founded in 1924 (leaving aside earlier iterations of the school that went by other names). According the the PTO database, Duke University marks date back as far as 1940. So the University has been using these marks in commerce for quite some time. And the strength of Duke University’s marks is practically incontestable. Thanks to its basketball team, Duke University is widely known throughout the country. (This is often the first thing people mention when hearing that I went there.) Duke University also has a strong reputation as an elite educational institution and a world-renowned hospital system. For many people, if they heard the word “Duke” out of context, their first thought would be “Duke University.” Therefore, this factor favors Duke University.

Factor Two – Similarity of the Marks

Duke-University-Basketball-Logo copyDuke University’s official colors are blue and white, and their mascot is the Blue Devil. All of their marks are blue and white, and many of them make use of the Blue Devil artwork. Duke shieldThe marks that do not use the Blue Devil instead use a heraldic shield and/or some form of specialized text, generally either block or Gothic lettering. Here’s a page with their standard logos/marks.

duke-bourbon-02Duke Bourbon proposes to use a red, brown, and black color scheme, an image of John Wayne, and the word “DUKE” in a sans serif, all caps font.

You tell me–do these images bear any similarity to one another? In its complaint, JWE calls the idea that Duke University could believe these marks will cause confusion “ludicrous.” I have to agree. I can’t imagine any sane person looking at the proposed Duke Bourbon label and thinking it has anything whatsoever to do with Duke University. This factor strongly favors JWE.

Third Factor – Marketing Channels Used

Goods bearing Duke University trademarks are typically clothing and hats, school supplies (notebooks, pencils, etc.), window stickers, beverage containers (mugs, shot glasses, to-go carafes, etc.), and other tchotchkes. These items are typically sold via the university book store, the university catalog, and various other retail outlets that carry that sort of merchandise. The one place they are certainly not sold is liquor stores.

As a liquor product, Duke Bourbon would be sold where liquor is sold. In many states, that would be a state-run liquor store. In some states, like California, it could be sold at Target. Only in those states with total deregulation of alcohol sales is it possible that Duke University-themed products could be sold in the same building as Duke Bourbon. And even in that case, the products would not be side-by-side on the shelves. Therefore, I believe this factor favors JWE.

Fourth Factor – Proximity of the Goods

This factor refers more to the similarity or relatedness of the goods, rather than to spatial proximity, such as placement on a store shelf. As with the third factor, the difference between the type of goods Duke University puts its mark on and the liquor JWE wants to sell results in this factor favoring JWE. The two organizations are selling very different things.

Fifth Factor – Defendant’s Intent in Selecting its Mark

Remember, “defendant” here means JWE. The question is whether JWE selected its mark hoping that the public would be confused into thinking that the bourbon is affiliated with Duke University, thereby trading on Duke University’s good reputation. If John Wayne had never gone by the nickname Duke, or if it had been a nickname only used by family and close friends and not something known to the general public, then Duke University would have a strong argument that JWE is trying to trade on its name.

However, John Wayne DID go by Duke, and he was generally known by that name. As people who were alive contemporaneously with John Wayne gradually die, it’s possible that John Wayne will become less of an icon, less well-known, less popular. It’s possible that fewer people will automatically affiliate John Wayne with his nickname. But John Wayne made movies, and his movies live on forever. JWE’s complaint, in establishing John Wayne’s presence in pop culture, states that Wayne has appeared in the top ten of the Harris Poll’s most popular movie stars list every year since the poll began (in 1963). It’s reasonable to assume that John Wayne’s popularity will continue for some time to come. JWE had legitimate reasons for choosing the word Duke for its bourbon product.

JWE does assert something in its complaint that I find to be disingenuous at best, and knowingly false at worst. They assert that “the actual and potential customer base of Duke University is vastly different from the customer base of JWE.” Um, are you aware, JWE, that Duke, like most other college campuses, has a huge underage drinking problem? Can’t you just picture the Duke frat boys sitting around in their Duke University t-shirts and mesh shorts drinking their Duke bourbon and thinking that they’re so cool? Because I sure can. Just because Duke Bourbon isn’t actually affiliated with Duke University doesn’t mean people affiliated with Duke University won’t find it cool to have a bourbon with the word Duke on it. In law school, we were amused by a Duclaw beer growler because it sounded like Duke Law when you said it.

I don’t think JWE had any bad intentions when it selected Duke for its bourbon, but to be conservative, I’m going to call this factor a draw.

Sixth Factor – Evidence of Actual Confusion

Duke Bourbon hasn’t gone on sale yet, so there’s been no opportunity to find out whether people would really be confused into thinking Duke Bourbon is somehow affiliated with Duke University. If this case goes to trial, I won’t be surprised to see Duke University hire a company to craft a survey asking consumers questions to try to determine whether confusion would exist if Duke Bourbon were to actually be offered for sale. Surveys are very popular in trademark disputes. Unfortunately, it can be difficult to craft an objective survey. JWE could easily conduct its own survey and the result could be two surveys with opposite conclusions. For those reasons, I’m calling this factor a neutral non-factor for now.

Seventh Factor – Likelihood of Expansion of the Product Lines

How likely is it that JWE is going to start selling sweatshirts, hats, notebooks, window stickers, and coffee mugs with the John Wayne figure and the word Duke? I would say it’s possible, but I wouldn’t call it “likely.” They sure would have an uphill battle if they tried. Those products are right in Duke University’s wheelhouse. This entire analysis would be completely different if we were talking about sweatshirts instead of bourbon.

At the same time, how likely is it that Duke University is going to sell a Duke University-branded bourbon (or any other liquor)? Extremely unlikely. Duke University’s trademark licensing policy specifically states that the use of Duke’s trademarks will not be approved in conjunction with “[a]rt depicting or implying the use or endorsement of . . . alcohol” among other things. Obviously Duke University could change its licensing policy at any time, but after nearly 80 years of not using its trademark on alcohol, it seems very unlikely that it will start. Therefore, this factor favors JWE.

Eighth Factor – Type of Goods and Degree of Care Likely to be Exercised by Purchaser

People tend to spend more time researching products that cost more money. They pay more attention to the details. The more attention to detail they pay, the less likely they are to be confused by similar marks.

The type of products Duke University puts its marks on and JWE’s proposed bourbon are not the type of products that most people are going to spend much time thinking about. It many cases, they are or will be impulse purchases. This factor is probably neutral, but to be generous, I’ll say it favors Duke University.

Final Tally

So factors One and Eight favor Duke University. Factors Two, Three, Four, and Seven favor JWE. Factors Five and Six are a draw. By this count, JWE should prevail in its action. There is no likelihood of confusion between Duke University’s existing trademarks and JWE’s proposed Duke Bourbon mark.

Dilution

But we’re not done! Remember dilution? JWE is also seeking a declaration that its trademark will not dilute Duke University’s marks. Dilution can come in one of two forms: blurring (whittling away the distinctiveness of the original mark) or tarnishment (sullying the good name of the original mark). It appears that Duke University is concerned primarily with tarnishment, but I’ll discuss both.

Trademark dilution is a relatively new concept, becoming popular only within the past couple of decades. It’s basically a way for very large, very well-known companies to strong-arm competition out of the marketplace. (I don’t have a high opinion of dilution jurisprudence, if you can’t tell.)

Dilution is not quite as cut-and-dried as likelihood of confusion (which is saying something, because likelihood of confusion analysis is not terribly cut-and-dried to begin with). Sometimes there can be debate over whether the original mark is famous or not. It can’t have niche fame–it must be famous coast-to-coast to the general public. As explained earlier, I don’t think Duke University would have any trouble arguing that it is famous enough to qualify. (John Wayne’s fame is irrelevant in this analysis.)

As far as blurring goes, I don’t believe Duke University has a very strong claim. They will license their trademark to be used on just about anything other than the taboo items in their licensing policy (alcohol, tobacco, firearms and other weapons, and illegal drugs, among several others). There also are  “Duke” products in the world that are not affiliated with the University, like Duke’s Mayonnaise, not to mention Duke Ellington. It would be hard to claim with a straight face that one more product in the world with the name Duke on it is going to whittle away Duke University’s distinctiveness.

With tarnishment though, JWE is going to have a harder argument. It’s clear that Duke University considers alcohol to have a negative connotation. Otherwise, it wouldn’t be on its list of unacceptable licensing categories. And then there’s that pesky underage drinking problem that colleges have to deal with. Duke University could successfully argue that having an alcohol product with the name Duke, even if it’s not similar to any of the University’s marks and even if there’s no chance for confusion, would encourage underage Duke students to consume the product.

JWE would logically counter with the fact that they don’t enforce U.S. laws on the consumption of alcohol and that it’s out of their hands who purchases and consumes their product. Unfortunately for JWE, logic doesn’t play a big role in dilution through tarnishment cases. And Duke University doesn’t even have to show any actual tarnishment; a likelihood of tarnishment is sufficient.

Given our country’s rocky relationship with alcohol (see, Prohibition), the fact that taxes on alcohol and tobacco are routinely called “sin taxes,” and the fact that alcohol advertising is strictly regulated, I think JWE will lose on dilution. Alcohol is such a dangerous subject in this country that affiliation with it is almost a per se tarnishment, especially for an educational institution.

Conclusion

JWE will be able to show that there is no likelihood of confusion between its proposed mark and Duke University’s marks, but Duke University will prevail on the question of whether the word Duke on liquor would tarnish its reputation and brand. This is unfortunate in my view because under traditional trademark law, JWE would prevail. Duke University’s brand wouldn’t be affected, consumers wouldn’t be confused, and JWE would get to market something that John Wayne himself would probably have enjoyed.

As it is though, JWE’s trademark applications will be rejected by the PTO, and they will have to name their bourbon something else. (They should avoid “Wayne Enterprises” though, unless they want to get sued by Batman.)

* As with all things bourbon-related, I consulted my friend Jordan about who JWE might be partnering with to produce this bourbon. He said that there are two companies who usually enter into this sort of branding arrangement: Heaven Hill and Lawrenceburg Distillers, but there’s a rumor that Wild Turkey is involved in this case. JWE plans to put the name Monument Valley Distillers on its bourbon bottles. This is a shell distillery, or non-distilling producer (NDP). Monument Valley is based in California, and John Wayne’s son Ethan co-owns it. They will purchase bourbon from Kentucky and repackage it with the Duke branding (or some other branding). The bourbon may or may not be any good. You’ll have to buy it to find out.

Update: Jordan managed to find the label application filed with the Alcohol and Tobacco Tax and Trade Bureau. The reverse side of the label indicates that the bourbon was made with the help of Jimmy Russell and Eddie Russell, and the distiller is listed as being in Lawrenceburg, Kentucky. Jimmy Russell is Wild Turkey’s Master Distiller, and they are located in Lawrenceburg. So I think it’s safe to say that Duke Bourbon is a Wild Turkey product. Whether Wild Turkey ever admits as much remains to be seen. Thanks, Jordan!

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