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Constellation wins $2.3 million in atty's fees in winery trademark spat

3 minute read

REUTERS/Michaela Rehle

  • Vineyard House sued Constellation over 'To Kalon' name
  • Constellation won ruling barring VH from using the name
  • Choice to take case to trial 'baffling,' judge said

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(Reuters) - Robert Mondavi Winery owner Constellation Brands was awarded $2.3 million in attorney's fees by a California federal judge for having to defend itself against another winery's claims that the judge said should "never have been tried" and possibly "never been brought" at all.

U.S. District Judge Yvonne Gonzalez Rogers in Oakland wrote Wednesday that Vineyard House's arguments lacked merit "across the board," and found it "baffling" that it would reject a walk-away settlement offer before trial after being preliminarily blocked from using the name in dispute.

Constellation and its attorney Edward Colbert of Hunton Andrews Kurth didn't immediately respond to a request for comment, nor did Vineyard House or its attorney Jeffrey Judd of Buchalter.

Vineyard House and Mondavi both own wineries on land in Oakville, California, that once belonged to H.W. Crabb, a winemaker famous for his "To Kalon" wine in the 1800s. Vineyard House sued Constellation in 2019, seeking to clear its use of the name and cancel Constellation's federal "To Kalon" trademark. Vineyard House argued Constellation was using the name to sell wine that may not have come from the original To Kalon location, among other things.

Constellation filed its own lawsuit against Vineyard House last year, alleging Vineyard House's use of "To Kalon" infringed its trademarks, which Mondavi had been using for over 30 years.

"TVH's vineyard is not located on any land that was used by Crabb as a vineyard," the complaint said. "Rather, TVH is merely using the fact that its land may have been owned by Crabb — even if not used for grape growing — as an excuse to use Constellation's 'To Kalon' Marks."

Rogers awarded Constellation a preliminary injunction the next month blocking Vineyard House from using "To Kalon", and Vineyard House later declined an offer to drop the case in exchange for stopping its use of the name. Rogers ruled for Constellation earlier this year on all of the claims after a bench trial and banned Vineyard House from using the name permanently.

Constellation asked for over $4 million in attorneys' fees. On Wednesday, Rogers agreed that attorneys' fees were justified, awarding Constellation over $2.3 million.

"Courts should be used in good faith and not as a relatively free means to test one's self-centered, unfounded ideas," Rogers said. "An award of attorneys' fees impresses upon those who use the courts primarily for self-indulgent purposes, and without regard for the law, that the cost will be greater than that expended on their own side of the ledger."

Rogers noted several things that made Vineyard House's continued prosecution of the case unreasonable, including that Constellation has owned an incontestable "To Kalon" trademark since 1988, the U.S. Patent and Trademark Office warned Vineyard House against using it, no historical records showed Crabb ever used Vineyard House's land to grow grapes, and Vineyard House owner Jeremy Nickel was "obsessive in his desire to leverage" the name, "ignoring the advice of his own employees."

"Usually, resources or business judgment serve to counsel reasonableness," Rogers said. "Unfortunately, no such external force bridled the plaintiff here."

The case is Vineyard House LLC v. Constellation Brands U.S. Operations Inc, U.S. District Court for the Northern District of California, No. 4:19-cv-01424.

For Vineyard House: Jeffrey Judd of Buchalter

For Constellation: Edward Colbert of Hunton Andrews Kurth

Blake Brittain reports on intellectual property law, including patents, trademarks, copyrights and trade secrets. Reach him at blake.brittain@thomsonreuters.com

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