Case 2:12-cv KJM-GGH Document 1 Filed 07/02/12 Page 1 of 9 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF CALIFORNIA. (Sacramento Division)

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1 Case :-cv-0-kjm-ggh Document Filed 0/0/ Page of PAUL W. REIDL (State Bar No. ) Law Office of Paul W. Reidl Eagle Trace Drive Half Moon Bay, CA 0 Telephone: (0) paul@reidllaw.com Attorney for Plaintiffs The Wine Group and Maison des Futailles UNITED STATES DISTRICT COURT EASTERN DISTRICT OF CALIFORNIA (Sacramento Division) 0 THE WINE GROUP, LLC, a Delaware Limited Liability Company, and MAISON DES FUTAILLES, S.E.C., d/b/a Kruger Wines and Spirits, a Quebec Limited Partnership, Plaintiffs, v. Case No. 0 MARTITA S MIXERS, LLC, a Wisconsin Limited Liability Corporation, Defendant. Plaintiffs The Wine Group, LLC and Maison des Futailles, S.E.C. ( Plaintiffs ) for their Complaint against Defendant Martita s Mixers, LLC, alleges the following on information and belief: // // Page

2 Case :-cv-0-kjm-ggh Document Filed 0/0/ Page of 0 0 JURISDICTION AND VENUE. This is an action for declaratory relief under the Lanham Act, U.S. C. 0 et seq., and the Declaratory Judgment Act, U.S.C. 0 et seq. This Court has subject matter jurisdiction pursuant to U.S.C., (a) and 0 (a), and U.S.C.. Acts giving rise to the claims asserted herein have been expressly aimed at, have occurred in, and will continue to occur in California and this District.. Venue properly lies within this District pursuant to U.S.C. and in this Court because The Wine Group s principal place of business is in San Joaquin County. THE PARTIES. Plaintiff The Wine Group, LLC. ( TWG ) is in the business of producing and distributing wines and spirits internationally, in the United States, California and this District. It is the exclusive United States importer of LULU B. spirits. It imports these products through its Underdog Wine & Spirits division in Ripon, California.. Plaintiff Maison des Futailles, S.E.C., is a limited partnership organized under the laws of the Province of Quebec, Canada. It produces wines and spirits in Canada and exports them to the United States under the d/b/a Kruger Wines and Spirits ( Kruger ). It does not have any offices in the United States.. Defendant Martita s Mixers LLC ( Martita s ) is a Wisconsin Limited Liability Corporation. It is in the business of marketing and selling non-alcoholic beverages in the United States, California and this District. FACTUAL BACKGROUND. Kruger sells LULU B. wines. These are bottled and distributed in the United States by TWG. LULU B. wines have been sold continuously in the United States since 00. Page

3 Case :-cv-0-kjm-ggh Document Filed 0/0/ Page of 0. In early 0, TWG began distributing LULU B. spirit-based drinks made by Kruger and labeled as LULU B. FABULOUS COCKTAILS. These are lower calorie, lower carbohydrate drinks flavored to taste like cocktails such as mojito, cranberry cosmopolitan and chocolate martini. These have received critical acclaim and their sales and distribution are growing rapidly.. The front labels of the LULU B. FABULOUS COCKTAILS contain the phrase A Guiltless Indulgence, READY TO SERVE. This phrase is used on the label to communicate to consumers that the cocktails can be consumed without feeling guilty about the number of calories or carbohydrates contained in the product. This messaging is reinforced by text contained on the back label. The cocktails are packaged in a distinctively-shaped frosted glass bottle. The LULU B. packaging and labels are depicted below: 0. Lower calorie and lower carbohydrate products have been marketed for many years in the United States. These have frequently been marketed by suggesting that the consumer can consume them without the guilt associated with consuming a higher calorie, higher carbohydrate product. Although non-alcohol beverages have for many years been marketed in this manner, this Page

4 Case :-cv-0-kjm-ggh Document Filed 0/0/ Page of 0 0 has only recently occurred in the alcohol beverage sector. LULU B. FABULOUS COCKTAILS is one such entrant in this new category.. Martita s produces and distributes a non-alcoholic beverage called MARTITA S GUILTLESS or MARTITA S MIXERS. This product is made in Wisconsin and sold in Wisconsin and elsewhere, including into this District. One of the ways that Martita s markets its beverages is by using the services of the social networking site known as Facebook located in Palo Alto, California. Martita s has created its own advertising page for the brand which provides a platform for marketing communications directly with and from consumers. Defendants Facebook page may be friended by anyone including friends from California and this District, and it has nearly 00 such friends. The Facebook page links to the web site through which consumers throughout the country can purchase MARTITA S GUILTLESS beverages. Martita s also posts promotional videos on which is owned by Google, Inc. in Mountain View, California. These promotional videos can be viewed by anyone in California and this District. 0. Martita s has registered the term GUILTLESS as a trademark (No.,,) in Class for Non-alcoholic cocktail mixes and bases to be used in conjunction with alcohol to create alcoholic beverages, including margaritas, mojitos, and cosmopolitans. Martita s has applied to register a GUILTLESS trademark (No. /0) in Class for wine coolers.. At the time that Martita s filed the application to register the GUILTLESS trademark in Class, it had done nothing in furtherance of using the mark on wine coolers. It did not have the resources or contacts to make wine coolers. It did not know anyone who could make wine coolers for it. It was not licensed to make or distribute wine coolers and had done nothing in furtherance of obtaining such licenses. It had taken no steps to contact any distributors of alcohol beverages to see if they had any interest in distributing wine coolers. It does not use this mark on alcohol beverages. Page

5 Case :-cv-0-kjm-ggh Document Filed 0/0/ Page of. The packaging for MARTITA S GUILTLESS non-alcoholic beverages is depicted below: 0 0. By letter dated May, 0 ( Demand Letter ) sent to TWG, Maison des Futailles, and others, trademark litigation counsel for Martita s charged that by using the phrase A Guiltless Indulgence, READY TO SERVE on its label the LULU B. FABULOUS COCKTAILS infringed on Martita s rights in its GUILTLESS trademark for non-alcohol beverages. Page The Demand Letter asserted that there was a likelihood of confusion, namely, that consumers would mistakenly believe that the LULU B. FABULOUS COCKTAIL mixed drinks are made or licensed by Martita s. The demand letter also charged that by using guiltless on its label the origin of the product was falsely designated and that Plaintiffs were engaging in unfair competition under the Lanham Act.. The Demand Letter demanded that Plaintiffs immediately: (a) cease using the term guiltless in their businesses, (b) agree not to use any word similar to guiltless in their businesses,

6 Case :-cv-0-kjm-ggh Document Filed 0/0/ Page of 0 0 and (c) agree not to challenge Martita s exclusive rights to use guiltless in connection with alcoholic and non-alcoholic beverages. The Demand Letter threatened to seek legal action under state and federal law if plaintiffs failed to capitulate promptly to these demands.. By sending the Demand Letter to TWG, Defendants deliberately targeted TWG and its valuable LULU B. FABULOUS COCKTAILS franchise because it believed that it may not be able to obtain Federal Court jurisdiction over Maison des Futailles. It understood from the label of the LULU B. FABULOUS COCKTAILS that TWG s Underdog Wines was the importer and distributor of the product and that it was located in Ripon, California. It was aware of the great value of this brand to TWG as its importer and distributor in the United States and it specifically targeted TWG with the intention of destroying the ability of TWG to use and distribute the LULU B. FABULOUS COCKTAILS in its current package and to eliminate its ability to use a common English language term, guiltless, in any manner whatsoever even on products not associated in any way with LULU B. FABULOUS COCKTAILS. The whole point of sending the Demand Letter to TWG was to establish a claim against a company located in the United States and causing great harm, injury and damage to TWG and its valuable franchise in the process. FIRST CLAIM FOR RELIEF (REQUEST FOR DECLARATORY RELIEF). Plaintiffs incorporate by reference the allegations of paragraphs through as though fully set forth herein.. An actual controversy exists between Plaintiffs and Martita s that is within the Court s power to determine pursuant to the Declaratory Judgment Act, U.S.C //. Martita s asserts as follows: Page

7 Case :-cv-0-kjm-ggh Document Filed 0/0/ Page of (a) It has protectable and valid rights in GUILTLESS for the specified non-alcoholic beverages in Class ; and (b) That by using A Guiltless Indulgence, READY TO SERVE on its labels consumers of LULU B. FABULOUS COCKTAILS will mistakenly believe that product originates from, is sponsored by or is affiliated with MARTITA S GUILTLESS non-alcoholic beverages thus violating the Lanham Act and state law; and (c) That by using A Guiltless Indulgence, READY TO SERVE on its labels Plaintiffs LULU B. FABULOUS COCKTAILS competes unfairly with the MARTITA S GUILTLESS nonalcoholic beverages thus violating the Lanham Act and state law; and 0 (d) That by using A Guiltless Indulgence, READY TO SERVE on its labels the origin of Plaintiffs LULU B. FABULOUS COCKTAILS is falsely designated thus violating the Lanham Act and state law.. Plaintiffs assert as follows: (a) Martita s trademark application no. /0 for wine coolers is void ab initio because Martita s did not have a bona fide intention to use the applied-for mark on wine coolers as of the date the application was filed; and (b) Plaintiffs sales of LULU B. FABULOUS COCKTAILS does not create a likelihood of confusion as to source, sponsorship or affiliation with MARTITA S GUILTLESS non-alcoholic beverages because, among other reasons, the marks, the packaging and the goods are dissimilar; and, 0 (c) Plaintiffs LULU B. FABULOUS COCKTAILS are not falsely designated as to their origin because, among other reasons, the use of term guiltless is not a unique identifier for Martita s and there is no likelihood that consumers will believe that Plaintiffs mixed drinks originate from Martita s solely due to the use of the term guiltless on the label; and Page

8 Case :-cv-0-kjm-ggh Document Filed 0/0/ Page of (d) Plaintiffs LULU B. FABULOUS COCKTAILS do not compete unfairly with MARTITA S GUILTLESS non-alcoholic beverages because, among other reasons, they do not compete at all; and (e) Plaintiffs use of the term guiltless on the labels of LULU B. FABULOUS 0 COCKTAILS is not being used as a trademark but is being used fairly to describe a characteristic or quality of the goods and is therefore a fair use under U.S.C. (b)() and the First Amendment for which Plaintiffs cannot be held liable. 0. This Court s determination of the issues presented by the actual controversy between Plaintiffs and Martita s will afford relief from the uncertainty, insecurity and controversy with respect to the rights, status and legal relations between the parties. A declaration of the parties respective rights will settle the conflicting and disputed claims of the parties, will afford them the security of knowing precisely what their respective rights are, and will prevent a multiplicity of actions that will arise if the parties continue on their present course of action without a judgment from this Court. Declaratory relief is equitable, necessary and proper under the circumstances presented by this case. WHEREFORE, Plaintiffs respectfully requests that the Court enter judgment against Martita s as follows:. Declaring that: (a) (b) Martita s trademark application no. /0 is void ab initio; and Plaintiffs sale of LULU B. FABULOUS COCKTAILS does not create a likelihood of 0 confusion as to source, sponsorship or affiliation with MARTITA S GUILTLESS non-alcoholic beverages and otherwise does not violate any federal or state law; and (c) Plaintiffs LULU B. FABULOUS COCKTAILS are not falsely designated as to origin and otherwise do not violate any federal or state law; and Page

9 Case :-cv-0-kjm-ggh Document Filed 0/0/ Page of (d) Plaintiffs are not engaging in unfair competition under federal or state law by using 0 the term guiltless on the labels of their LULU B. FABULOUS COCKTAILS; and (e) The use by Plaintiffs of the term guiltless on the labels of their LULU B. FABULOUS COCKTAILS is a fair, non-trademark use for which they cannot be held liable under the Lanham Act and the First Amendment.. Granting such other and further relief to Plaintiffs as may be just and proper under the circumstances, including but not limited to costs of suit. LAW OFFICE OF PAUL W. REIDL By: _ 0 Dated: July, 0 Paul W. Reidl (CA Bar No. ) LAW OFFICE OF PAUL W. REIDL Eagle Trace Drive Half Moon Bay, California 0 Telephone: (0) 0-0 paul@reidllaw.com Attorney for Plaintiffs The Wine Group and Maison des Futailles, S.A.I.C. Page

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