Pinot Law

For wineries quite a bit, particularly when it comes to American Viticultural Areas, or “AVAs”. There is a great article in today’s San Francisco Chronicle regarding the ongoing rulemaking proceeding at TTB addressing TTB’s rules governing AVAs.

TTB’s proposals constitute a fairly broad rewrite to its existing regulations governing AVA designations. What I think the article does a great job of capturing, is the significant cost and expense associated with both brand names and AVA designations. By the former, I am referring to those wineries which have spent significant time and capital establishing a respected brand name. As the article points out, in some instances these brand names can be greatly diminished — and actually rendered moot — when it collides with an established AVA.

My personal opinion is that TTB has struck the right balance on this issue with its proposal. Specifically, the article discusses the ‘rolling’ grandfather clause, that would permit certain wineries to use their established brand name regardless of the presence of an AVA application. For example, if a winery named “Millers Ridge Mountain” was approved for TTB label purposes and in use for a certain number of years, it would not be blocked from continuing to use that name even if an AVA designation is subsequently established for “Millers Ridge Mountain.”

Of course, this does not mean that everyone in Virginia should start running out to name their winery “Napa Valley Winery.” If the TTB’s rules are adopted, they would only apply to yet-to-be established AVAs.

The other interesting issue discussed in the article is the veritable explosion in AVAs over the last several years. I think even if TTB tightens up its alleged ‘rubber stamp’ approval, you will continue to see even more AVAs down the road.

used under a Creative Commons License courtesy of Stewart.

The TTB announced late last week that it was expanding the footprint for two West Coast AVAs — San Francisco and Alexander Valley — and establishing a new AVA in Lehigh Pennsylvania. Wines and Vines has a good summary of all three approvals here.

What I find most interesting, however, is that TTB had put a hold on AVA processing last November. Last week’s action represents the first movement in this area since TTB instituted its rulemaking proceeding late last year regarding proposed changes to how it reviews and approves AVAs. It remains unclear how TTB will ultimately rule in its AVA proceeding, although the indications are that the AVA approval process could get more strict.

We will keep you posted, but in the meantime, keep your eye peeled for wine from the newest AVA region in Lehigh, Pennsylvania!

There is something that has been troubling me lately. I have been reading a fair amount about AVA issues at the TTB. Particularly, they have one rulemaking proceeding addressing establishment of the Calistoga AVA, and another proposing broad changes to the AVA process. But in each of these proceedings, TTB — and even some of the commenters — seem to give short shrift to trademark.While I understand that TTB has broad authority with respect to labeling issues, does that authority trump trademark law? It seems to me that if the Patent and Trademark Office deems a trademark suitable for commerce, an argument could be made that the TTB lacks the requisite statutory authority to prevent the use of that trademark by a winery.

I examined some of the various AVA proceedings posted on the TTB website, and each makes passing reference to TTB’s view that wineries cannot use a designated AVA in their brand name, even if they have a trademark. At least one of the commenters in the Calistoga AVA proceeding raised a takings argument that a COLA is a protected property interest for purposes of the due process clause, requiring procedural due process before it may be revoked. They cited to the Cabo Distributing Co., Inc. v. Brady case, although this case seems to have a different outcome. But neither of these cases delve extensively into trademark issues?

Anyway, I thought it was an interesting issue and that I would throw it out there. If any of you have thoughts, feel free to comment.

The Law of Property in Shakespeare and the Elizabethan Drama used under a Creative Commons license provided by umjanedoan.

There is an interesting — and important — rulemaking taking place over at the TTB involving the manner in which that agency deals designates American Viticultural Areas (AVAs).

Among other things, TTB seeks comment on the effect that approval of an AVA may have on established brand names.  In other words, winery’s with brand names matching new AVA designations could be prevented from using that brand name in commerce.  TTB discusses this dilemma in its rulemaking.  To address this issue, TTB is considering a new grandfathering provision that would enable winery’s with brand names matching newly designated AVAs to continue using their brand name in commerce.

This to me is one of the more interesting aspects of the TTB’s rulemaking.  With the remarkable increase in the number of wineries in recent years, many have incorporated quasi-geographic regions into their names.  TTB notes — correctly I believe — that accomadations need to be made for  such circumstances.  Something not addressed by the TTB rulemaking is AVA designations may conflict with Trademark law.  In other words, solely on the basis of a newly designated AVA, could TTB prevent a winery from using an approved Trademark in commerce?  I will let the Trademark lawyers argue that one.

Other items the TTB is tackling include clarification of the regulatory standards for the establishment of AVAs within AVAs.  It also seeks to clarify the rules for preparing, submitting, and processing viticultural area petitions.  In this regard, TTB is really ‘upping the ante’ on what will be required to establish a sufficient petition.  Finally, from an administratve law perspective, TTB also inquires whether it can decline to proceed with a rulemaking.  In effect, TTB seeks the ability to deny an AVA petition without public comment.

The bottom line, there are a lot of key issues for wineries out there to be aware of in this rulemaking.  Comments are due on March 20th.  So if you are thinking of filing, get cracking on those comments!

Rhineland-Palatinate used under a Creative Commons License provided by Wolfgang Staudt.