Descriptive fair use and "use in a trademark way"

Sazerac Brands, LLC v. Peristyle, LLC, --- F.3d ---- , 2018 WL 2975995, Nos. 17-5933 & 17-5997 (6th Cir. Jun. 14, 2018)

Filed 7 days after argument, which is interesting given that the panel creates a bit of a mess—essentially disagreeing with circuit precedent on use as a mark, but not going en banc on it.  This is going to be a pain for district courts; I take it that the best response for them will be to apply un-overruled precedent and leave it to the court of appeals to go en banc if they’re so unhappy with current precedent.

Colonel Edmund Haynes Taylor, Jr., “the most remarkable man to enter the whiskey industry during the post-Civil War years,” built the Old Taylor Distillery in 1887. Once the “most magnificent plant of its kind in Kentucky,” the distillery fell into disrepair after the Colonel’s death, and production ceased there in 1972. In 2014, Peristyle bought the property, renovated it, and eventually resumed bourbon production there. Peristyle regularly referred to its location at “the Former Old Taylor Distillery” or “Old Taylor” during the renovation period, though the property has since been renamed “Castle & Key.” Sazerac, however, acquired the trademark rights to “Old Taylor” and “Colonel E.H. Taylor” for bourbon in 2009. The court of appeals affirmed the finding of descriptive fair use.

Descriptive fair use “tolerate[s] some degree of confusion.” Here, Peristyle used the Old Taylor name in a descriptive and geographic manner: “to pinpoint the historic location where Peristyle planned to make a new bourbon, not to brand that bourbon.” In four years, when that bourbon hits the shelves, Peristyle didn’t plan to put “Old Taylor” on the bottle.  Its uses included a flyer titled “The Historic Site of The Old Taylor Distillery,” whicht notes that “We are busy making history and restoring this bourbon ICON, the Historic Site of The Old Taylor Distillery.” A social media post invited followers to the “VIP Mailing List for the Former Old Taylor Distillery.” Another promotes barrel storage services at “the distillery formerly known as: Old Taylor.” These were uses of Old Taylor descriptively to identify a geographic location, the Old Taylor Distillery. As the district court correctly ruled, “Peristyle is not attempting to trade off the goodwill of Sazerac. Instead, Peristyle is enjoying the goodwill already ingrained in the property it purchased and is advertising itself for what it is: a distillery first built by Colonel Taylor, subsequently abandoned, but once again purchased, renovated, and restored to life as Castle & Key.”

Peristyle also acted in good faith: “One reason why Peristyle referred to the distillery by name so often was that it had yet to settle on a brand name for itself. That process was extensive, lasting over a year, in part because ‘the reverence for [Old Taylor] is tremendous ... and to find a name that would justify the spirit and architecture and history of this place was a really tall order.’” Once it decided on a name, Peristyle’s fliers featured that name.  Even though it didn’t always use “former” or “historic” to precede Old Taylor, but context still indicated references to the physical distillery in a descriptive manner, e.g., “We’re saving a seat for you at ... Old Taylor Distillery.”

Sazerac objected to a four-hundred foot “Old Taylor Distillery” sign on the distillery’s barrel storage warehouse and a twenty-foot “The Old Taylor Distillery Company” sign above the entrance to its main building. “But both signs adorned the building before Peristyle purchased it confirming that the company did not put them there or otherwise use them in bad faith.” Peristyle used the signs only to identify the location of a site that’s on the National Register of Historic Places as the “Old Taylor Distillery.”

Peristyle plans to put up a Castle & Key sign next to the historic signs; “[t]rademark law demands no more.” Peristyle’s commercial activities at the distillery, including hosting events and renting barrel-aging warehouse space to third parties, didn’t constitute use of Old Taylor as a trademark; they were use of Old Taylor as a place. “One way to make sure that people get to an event is to describe the location accurately.”

Sazerac spent a lot of time challenging the Sixth Circuit’s threshold “trademark use” test, requiring the plaintiff to show that the defendant is using a mark “in a ‘[ ]trademark’ way” that “identifies the source of their goods” before any confusion (or descriptive fair use) inquiry takes place. This panel seemed to agree with the critics.  But those critics exaggerated the consequences of the test, since trademark use “resembles in nearly every particular the fair use defense that we just applied.”  There might nonetheless be fact patterns where it would make a difference because of burden-shifting or because of an absence of inquiry into whether the non-trademark use was made “fairly and in good faith.”  However, the court of appeals decided just to affirm the district court not on its trademark use holding (which the panel specifically noted was faithful to circuit precedent) but by finding that Peristyle made descriptive fair use, which was supported by the record.

[Query whether this maneuvering is consistent with saying that the trademark use test doesn’t consider good faith—of course, if you don’t really have a distinct idea of what good faith is other than non-trademark, descriptive use, then this result becomes a lot simpler. Also, to the extent that the Sixth Circuit requirement also deals with nominative fair use, this characterization doesn't work; part of the temptation to talk about "use as a mark for one's own goods/services" is that you don't have to spend time parsing that kind of distinction.]