Gray Wine Leaves Bitter Taste in Importer’s Mouth: Wine Manufacturer/Distributor Secure Consent Injunction against Gray Market Wine Imports

Gray Wine Leaves Bitter Taste in Importer’s Mouth: Wine Manufacturer/Distributor Secure Consent Injunction against Gray Market Wine Imports

Santa Margherita S.p.A., based in Venice, Italy, is the source of pinot grigio wines authorized exclusively for sale in the United Sates by Paterno Imports (d/b/a Terlato Wine International). In January, Santa Margherita and Paterno Imports sued (11cv843/C.D. CA) Thomas Wine Imports, accusing Thomas Imports of the unauthorized importation and distribution of Santa Margherita pinot grigio wine in the United States that is materially different from authorized Santa Margherita wine (i.e. gray market Santa Margherita wine). According to the complaint:

Thomas Imports' unauthorized importation and distribution of Santa Margherita Wine as well as its use of Santa Margherita's SANTA MARGHERITA trademark and copyrighted Santa Margherita subject matter on Gray Market Santa Margherita Wine constitutes trademark infringement, unfair competition, and copyright infringement under U.S. and/or California law. Plaintiffs seek monetary and injunctive relief from Defendant's willful infringement of the SANTA MARGHERITA trademark and copyrighted Santa Margherita subject matter.

Gray Market Santa Margherita Wine is materially different from Authorized Santa Margherita Wine in several respects. The wines have different numbers of labels, different content in the text of the labels, different style of borders and design drawings on the labels, different font style in certain words on the labels and different colors of labels and foil tops, among other things.

In June, plaintiffs secured a consent judgment that permanently enjoined Thomas Imports from:

Importing into the United States, distributing in the United States, or selling in the United States, Gray Market Santa Margherita Wine, or otherwise using the SANTA MARGHERITA Trademark and Santa Margherita Copyrighted Label in the United States, or any variations likely to cause confusion with Plaintiffs or the SANTA MARGHERITA Trademark or Santa Margherita Copyrighted Label, in connection with any wine ...

In addition, Thomas Imports must:

provide Santa Margherita's counsel with the quantity of its inventory of Gray Market Santa Margherita Wine, including any in-transit inventory and will destroy all such inventory of Gray Market Santa Margherita Wine.

....

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