Majestic's tequila can't bully its way to registration

In In re Majestic Distilling Company Inc, the US Court of Appeals for the Federal Circuit has affirmed the Patent and Trademark Office's (PTO) ruling that there is a likelihood of confusion between Majestic's RED BULL mark for tequila and Stroh Brewery's RED BULL mark for malt liquor. While the appellate court did not rule on the PTO's decision to reject Majestic's registration, its ruling endorses the PTO's decision.

When Majestic sought to register the mark RED BULL for tequila, its application was rejected on the grounds that (i) Stroh had already registered the same mark for malt liquor, and (ii) there was a likelihood of confusion between the marks, even though Majestic had started using the mark before Stroh. Majestic appealed to the Federal Circuit.

The appellate court found that it was not empowered to consider the PTO's refusal to register the mark. Instead, it reviewed and affirmed the PTO's finding of a likelihood of confusion. The court found that:

• Majestic's RED BULL mark is identical to Stroh's registered mark RED BULL;
  
  
• malt liquor and tequila are (i) both alcoholic beverages, and (ii) often marketed in the same channels to the same consumers;
  
  
• even a brand-conscious consumer who knows RED BULL malt liquor could purchase RED BULL tequila in the mistaken belief that it is manufactured by the same entity;
  
  
• even though Stroh had in the past argued that the RED BULL mark could be used for other distilled spirits besides malt liquor without confusing consumers, this does not mean that (i) it would consent to Majestic's use of RED BULL for tequila now, or (ii) that the refusal to register Majestic's mark was improper; and
  
  
• Majestic's decision not to seek cancellation of Stroh's mark does not directly bear on likelihood of confusion.

The case is a reminder that the first user of a distinctive mark in the United States should take steps to register it straight away, so as to prevent similar marks from being registered at its peril.

Michael B Adlin, Piper Rudnick LLP, Washington DC