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Winestore Holdings LLC v. Justin Vineyards & Winery LLC

United States District Court, W.D. North Carolina, Charlotte Division

September 18, 2019

WINESTORE HOLDINGS LLC, Plaintiff,
v.
JUSTIN VINEYARDS & WINERY LLC and THE WONDERFUL COMPANY LLC, Defendants.

          ORDER

          ROBERT J. CONRAD, JR. UNITED STATES DISTRICT JUDGE

         THIS MATTER comes before the Court on Defendants’ Motion to Dismiss, or in the Alternative, Stay, (Doc. No. 5); the Magistrate Judge’s Memorandum and Recommendation (“M&R”), (Doc. No. 19); Plaintiff’s Objections, (Doc. No. 20); Defendants’ Response to Plaintiff’s Objections, (Doc. No. 22); and Plaintiff’s Reply in Support of Objections, (Doc. No. 21).

         I. BACKGROUND

         Plaintiff Winestore Holdings LLC (“Plaintiff” or “Winestore”) is a wine retailer based in North Carolina. (Doc. No. 1, ¶ 10.) Plaintiff has five stores located throughout North Carolina and also offers its products online through its website. (Doc. No. 1, ¶ 10.) Defendant Justin Vineyards & Winery LLC (“Justin”) is a wine retailer based in California. (Doc. No. 1, ¶ 11.) Justin offers its products in stores throughout the United States and online through its website. (Doc. No. 1, ¶ 11.) Justin is a subsidiary of Defendant The Wonderful Company LLC (“Wonderful” and collectively with Justin, “Defendants”). (Doc. No. 1, ¶ 11.)

         Plaintiff filed U.S. Trademark Application Serial No. 86/851, 094 for the mark OVERBROOK on December 16, 2015. (Doc. No. 1, ¶ 14.) Plaintiff’s application was approved by the U.S. Patent and Trademark Office (“USPTO”) and published in the Official Gazette on May 23, 2017. (Doc. No. 1, ¶ 15.) Plaintiff has been using the OVERBROOK mark in connection with wine since at least April 4, 2016. (Doc. No. 1, ¶ 16.)

         Defendants own the OVERLOOK® trademark, which is the subject of U.S. Trademark Registration No. 3, 158, 532. (Doc. No. 1, ¶ 17.) On April 25, 2017, Defendants’ counsel sent an email to Plaintiff’s counsel stating, in relevant part:

We have learned that your client has filed a trademark application for “overbrook, ” U.S. Serial No. 86851094, for use with wine in International Class 33.
Our client believes that this trademark is too similar to its OVERLOOK® trademark and its use could be interpreted as intending to trade off of the goodwill of our client’s distinctive trademarks, creating a likelihood of confusion, mistake, and deception as to your client’s affiliation, connection, or association with JUSTIN among consumers and the trade. Such unauthorized uses may also dilute our client’s trademarks by, among other things, blurring the distinction between JUSTIN and your client’s company. These unauthorized actions, therefore, may constitute trademark infringement, false designation of origin and unfair competition under the laws of the United States and state law.
JUSTIN prefers to settle matters amicably where possible. Therefore, please contact me at your earliest convenience . . . .

(Doc. No. 1-2.)

         On June 14, 2017, Plaintiff filed an action in this Court seeking a declaratory judgment that use of its OVERBROOK mark does not violate any law or any purported trademark rights of Defendants (the “First Action”). See Winestore Holdings LLC v. Justin Vineyards & Winery LLC, No. 3:17-cv-00326, 2018 U.S. Dist. LEXIS 133669 (W.D. N.C. Aug. 8, 2018). Plaintiff’s sole basis for filing the First Action was Defendants’ April 25, 2017 email. See id.

         On June 15, 2017, Justin filed a Notice of Opposition with the USPTO’s Trademark Trial and Appeal Board (“TTAB”). (Doc. No. 1-3.) In its opposition, Justin contends that Plaintiff’s registration and use of the OVERBROOK mark “is likely to cause confusion, mistake, or deception[.]” (Doc. No. 1-3, ¶ 13.) Justin alleges that “[t]he purchasing public is likely to be led to believe that wine or related goods bearing the OVERBROOK Mark emanate from or are . . . legitimately connected with or affiliated with [Justin], or that [Plaintiff] and its business are owned by or are affiliated with [Justin] and its OVERLOOK® branded products.” (Doc. No. 1-3, ¶ 14.) Justin further states that it would be damaged from the resulting confusion if Plaintiff were permitted to use the OVERBROOK mark. (Doc. No. 1-3, ¶ 15.) Justin requests that the TTAB deny Plaintiff’s application for registration of the OVERBROOK mark. (Doc. No. 1-3, ¶ 16.)

         Defendants filed a motion to dismiss the First Action for lack of subject matter jurisdiction, alleging that their April 25, 2017 email was insufficient to meet the case or controversy requirement for a declaratory judgment action. Winestore Holdings LLC, 2018 U.S. Dist. LEXIS 133669, at *4. This Court granted Defendants’ motion on August 8, 2018, concluding:

At the time of Plaintiff’s complaint, only Defendants’ email had been exchanged, and this support is insufficient to support a controversy that is substantial, “definite and concrete” and of “sufficient immediacy and reality” to require court involvement. For these reasons, the Court finds Defendants’ email insufficient to meet the actual controversy requirement for a Declaratory Judgment action, and therefore GRANTS Defendants’ Motion to Dismiss. The Court acknowledges the alleged dispute may ...

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