One distilled agave drink . . .
Two distilled agave drink. . .
Three distilled agave drink. . .
Sometimes only Tequila will do the trick. But how do you know if what’s in your shot glass is the real thing? Fear not, the Trademark Trial and Appeal Board is here to help. The TTAB recently resolved a seven-year running dispute over the meaning of Tequila, finding that the term is not generic, but rather refers solely to a distilled spirit from a specific variety of the blue agave plant grown only in certain regions of Mexico and manufactured in accordance with Mexican standards. See the TTAB Opinion.
The dispute arose after the Consejo Regulador del Tequila A.C., or the Tequila Regulatory Council, a non-profit entity authorized by the Mexican government to regulate and set standards for sales of tequila, sought to register TEQUILA as a certification mark with the U.S. Patent and Trademark Office to be used on “spirits distilled from the blue tequilana weber variety of agave plant.”
We pause here for the reader to get salt, lime, and a refresher on the qualities of a certification mark, compared to other types of marks: (i) it is not used by its owner, but rather by authorized users, and (ii) it does not indicate a common source of goods or services, but rather indicates that the goods or services have been certified as to a particular characteristic. A common type of certification mark is used to certify the geographic origin of goods or services. For example, COGNAC is used on distilled brandy to certify that it originates from a specific region of France. The owner of the certification mark is responsible for controlling its use to ensure that the mark is only applied to goods or services that meet the requirements established for certification.
The Council noted that under Mexican law, distilled agave liquor may only be called tequila if it originates from specific regions near the city of Tequila in Mexico. The Council’s position was bolstered by regulations promulgated by the U.S. Alcohol and Tobacco Tax and Trade Bureau (formerly the U.S. Department of Treasury, Bureau of Alcohol, Tobacco and Firearms), which since 1973 has enforced regulations stating that the term “Tequila” may not be used commercially in the United States to describe any product not manufactured in Mexico by Mexican standards.
Challenging this view, Luxco, Inc.—makers of Rebel Yell, Everclear, and other spirits—opposed the Council’s application on the ground that tequila is a generic term for a type of liquor, and does not denote geographic origin. Luxco’s interest in the case arises from its own use of the term tequila on three of its liquor brands (Juarez, Exotico, and El Mayor). At the TTAB, Luxco argued that TEQUILA is generic and not registerable because consumers perceive the term TEQUILA as the name for this type of liquor, regardless of geographic origin. On the other side, the Tequila Regulatory Council argued that TEQUILA is perceived as an indicator that the liquor originates in Mexico.
The Board noted that even if TEQUILA can serve to identify a type of liquor, it would not be generic if it also serves to identify a geographic origin. To assess whether TEQUILA identifies geographic origin, the Board considered evidence including dictionary definitions, online search results, advertisements and signage, bottle labels, news articles, and consumer surveys. Evidence presented by the Tequila Regulatory Council showed that tequila is typical labeled as “Product of Mexico” or “Hecho in Mexico,” contains Mexican themes, and that 55.4% of survey respondents believed that TEQUILA indicates the product is made in Mexico.
Luxco’s evidence included recipes introduced to show descriptiveness of the term, articles lacking any geographic reference, and third-party applications disclaiming use of “Tequila” as a generic term, among other items. Notably, the Board faulted Luxco’s survey evidence for its overbroad universe of respondents, which included drinkers of hard liquor, but not necessarily purchasers of tequila.
Ultimately, the Board concluded that the evidence on record was mixed, but tended to show that TEQUILA has significance as a designation of geographic origin. As a result, the Board ruled that Luxco failed to meet its burden of proof as to genericness, and the opposition was decided in the Regulatory Council’s favor.
As a result of this ruling, purveyors of alcohols and spirits may want to take special care in distinguishing their Tequilas from other distilled agave drinks.
