Redemption Whiskey Dodges a Bulleit...for Now

Just days ago, a jury returned a mixed verdict after a two-week trial focusing on Bulleit's bottle design.

Diageo North America, which owns the Bulleit brand of whiskeys, brought suit against Deutsche Family Wine & Spirits, which owns the Redemption brand of whiskeys. Diageo claimed that Deutsche's Redemption bottle design infringed on and diluted Bulleit's "trade dress," which, as I've explained before, refers to a product's design, shape, and overall feel. 

Take a look at the side-by-side comparison of the bottles - it's not hard to guess why Diageo sued. Among other things, Diageo asserted that Deutsche's Redemption bottle copied Bulleit's "clear canteen-shaped glass bottle with rounded shoulders," the "embossed brand name above the label" on the glass, and the "arched text in the top line of the embossed brand name."

The jury rejected Diageo's claim of infringement because it found that there was no likelihood of confusion with Bulleit's trade dress. Even so, the jury agreed with Diageo that Deutsche's Redemption bottle nonetheless diluted Bulleit's trade dress because the trade dress was famous and distinctive and because the Redemption bottle was likely to cause dilution by either blurring or tarnishing the trade dress. 

Unlike the infringement claim, Diageo did not have to show a likelihood of confusion to prevail on the dilution claim. That may explain the mixed nature of the jury's verdict. While the jury may have found that Deutsche's Redemption bottle improperly copied Bulleit's trade dress, the jury may have nonetheless also found that consumers were not confused by the similarities. In other words, the similarities might have diluted Bulleit's trade dress, but without confusion, there was no infringement. 

Although the jury ruled in favor of Diageo in part, it could not award Diageo a single dollar in damages because it found that Deutsche did not willfully dilute Bulleit's trade dress with the Redemption bottle.

So, what should we make of the jury's verdict? Diageo won on its dilution claim, but Deutsche did not have to pay any damages. Does the verdict mean that Deutsche got away with just a slap on the wrist? Maybe for now, but the case isn't quite over yet.

Because Diageo prevailed on its dilution claim, Diageo can now ask the court to issue an injunction against Deutsche and its Redemption bottle. If granted, the court could order Deutsche to cease using and selling the current Redemption bottle, which would force Deutsche to develop a new design and related marketing materials. While Deutsche will not have to pay damages to Diageo, there's no question that such an order would still cost Deutsche a significant amount of money. 

This case highlights the difficulties distillers face in designing their whiskey bottles. Even though Deutsche did not infringe on or willfully dilute Bulleit's trade dress, Deutsche incurred substantial legal expenses in defending this case and now possibly faces the burdensome and costly task of redesigning its whiskey bottle largely because the Redemption bottle was similar to Bulleit's bottle. When designing their whiskey bottles, distillers should learn from Deutsche's mistake and make sure their bottles are dissimilar enough from other bottles.

I'll post any updates on the possible injunction and appeal in this case.

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Diageo N. Am., Inc. v. W.J. Deutsch & Sons Ltd., No. 1:17-cv-04259-LLS (S.D.N.Y. 2022)

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