IP Law Daily, TRADEMARK—M.D. Pa.: Distiller’s efforts to cancel competitor’s BOXTAIL mark as generic survive a motion to dismiss, (Jan 11, 2023)

By Robert B. Barnett Jr., J.D.

The complaint sufficiently asserted claims for cancellation of the BOXTAIL mark on the grounds that the term was generic and that it was likely to cause confusion with an existing mark.

In a suit by a distiller, who allegedly owns common law trademark rights to BOXTAIL, asking for a declaration that its use of the term BOXTAIL is not infringing the rights of the owner of the registered BOXTAIL mark, the distiller’s additional efforts to have the BOXTAIL trademark invalidated have survived a motion to dismiss because the complaint sufficiently pleaded that (1) BOXTAIL is a generic term unworthy of trademark protection and (2) the defendant distiller’s use of the BOXTAIL mark was likely to cause confusion with prior rights of the common law owner, a Pennsylvania federal district court has ruled. In ruling that the two claims were sufficiently pleaded, however, the court also dismissed a third claim, which sought invalidation of the mark on the ground that BOXTAIL was a merely informational term, because this claim was redundant of the claim seeking invalidation on the ground of genericness (Central Penn Distilling, Inc. v. Drake’s Organic Spirits, Inc., February 4, 2022, Kane, Y.).

Background. Central Penn Distilling, Inc., distills, bottles, and sells crafted spirits. It has been in business for six years. In November 2019, it began selling boxed premixed cocktails under the common law mark “Boxtails.” In January 2021, Central Penn received a cease-and-desist letter from Drake’s Organic Spirits, Inc., a distiller that owns trademark rights in DRAKE’S ORGANIC BOXTAILS and BOXTAILS. Drake obtained the BOXTAILS mark registration on February 24, 2021.

Central Penn then filed suit, seeking a declaration that it was not guilty of trademark infringement. Central Penn’s suit also contained three counts seeking to have Drake’s trademark declared invalid because: (1) the term BOXTAILS is generic, (2) use of the mark by Drake causes a likelihood of confusion with the existing common law mark, and (3) the term is merely informational. In the industry, a “boxtail” is understood to be a premixed cocktail packaged in a box. Boxtails have been growing in popularity in recent years. Drake filed a motion to dismiss the three cancellation claims.

Generic term. The first claim seeks cancellation of BOXTAIL (the complaint no longer seeks cancellation of DRAKE’S ORGANIC BOXTAILS) based on the argument that “boxtail” cannot be trademarked because it is a generic term and is merely descriptive. The court concluded that Central Penn had met its pleading obligations by alleging that the term has become generic and was merely descriptive of a type of alcoholic drink. Marks that are neither generic nor descriptive can become generic or descriptive over time, the court noted, citing brasserie, escalator, thermos, yo-yo, and dry ice as examples. The fact that “boxtail” does not appear in the dictionary was not determinative of whether it was generic as Drake had argued.

Confusion. The second claim seeks cancellation of the BOXTAIL mark because its use by Drake will likely cause confusion with the pre-existing use of “boxtail” by Central Penn. Once again, the court concluded that the allegations were sufficient because Central Penn alleged that it acquired common law rights before Drake obtained its trademark, that both companies use the mark for the same product, and that confusion was likely to result.

In agreeing that the allegations were sufficient to survive the motion to dismiss, the court acknowledged that Drake may well have a valid argument that Central Penn’s common law rights did not actually pre-date Drake’s registration. At this point, however, the answer to that question could not be determined at the motion-to-dismiss stage.

Informational. The third claim seeks cancellation of the BOTXTAIL mark because the term “boxtail” is merely informational. The court agreed with Drake that if the trademark is to fail, it will fail because the term is generic, which is functionally the same as saying that it is informational. Thus, the court agreed to grant the motion to dismiss as it applied to the third claim because of redundancy.

Leave to amend. The court refused to grant Central Penn leave to amend because reasserting the informational claim would be futile.

The court, therefore, granted Drake’s motion to dismiss as it applied to the third claim, but otherwise the motion to dismiss was denied.

The Case is No. 1:22-cv-00179.

Attorneys: Evan C. Pappas (Tucker Arensberg PC) for Central Penn Distilling, Inc. Aaron David Sampsel (Christensen Law Office PLLC) for Drake's Organic Spirits, Inc.

Companies: Central Penn Distilling, Inc.; Drake's Organic Spirits, Inc.

Cases: Trademark PennsylvaniaNews