Many San Diego and California businesses understand the importance of trademarks. Many are familiar with the fact that registering trademarks is done through the US Patent & Trademark Office. However, it is less well-known that a San Diego business can register a trademark under California law and there are some good reasons to do so. First, some businesses, such as those running marijuana-related businesses, cannot obtain a federal trademark registration. Second, California trademark registration can help protect your trademark from dilution if your trademark is only known locally. Under federal law, the owner of a trademark can sue for dilution. Dilution is when a competitor’s use of a confusingly similar mark causes the first/senior trademark to be blurred or tarnished. Blurring is a weakening of the distinctiveness of the senior mark; that is, the mark stops being distinctive to consumers.

Only “famous” trademarks are protected under the federal statute. If you want to protect a locally famous trademark, you must have a state registered trademark.

Trademarks are, of course, an important part of any portfolio of intellectual property (“IP”). You need a skilled and trusted business attorney to provide legal guidance on how to acquire, maintain, and expand your IP. A recent US federal case involving San Diego liquor festivals provides a solid example of this.

California State Trademarks: Spirits Festivals Dueling in San Diego

Many San Diego residents may have attended the San Diego Spirits Festival (“SDSF”) held, most recently, in Port Pavilion on Broadway Pier. The SDSF is almost 10 years old now, its first festival was held back in 2009. According to reports, Fodor’s Travel Magazine has listed the SDSF as one of the “Best Cocktail Festivals in America.” Every year since 2014, Mayor Faulconer has proclaimed one of the days during the festival as “San Diego Spirits Festival Day.” See report here.

Business has been good for the SDSF and, in due course, the operators of the SDSF registered both federal and state trademarks for the name and related logos and obtained various Certificates of Registration of Service Mark from the Secretary of State of California.

Good business often inspires competition. In 2015, a competing festival started called “Distilled: San Diego Spirit & Cocktail Festival” which was located at the San Diego County Fairgrounds. See website here.

Needless to say, SDSF was not pleased and sued in federal court for infringement of their trademarks. See AEGIS Software, Inc. v. 22nd Dist. Agric. Ass’n, Case No. 15-civ-2956 (S.D. Cal. June 7, 2017). The main claim by SDSF was a dilution claim: the new festival’s name and logos were confusingly similar and were weakening the distinctiveness of the SDSF logo and other marks. Unfortunately for SDSF, the US District Court held the SDSF’s marks were not “famous” nationally and, as such, were not protected under federal trademark law on a dilution claim. Those claims were dismissed.

However, the claims under the California trademark statute were proper since the marks did not need to be famous nationally. Those claims were allowed to go forward and remain pending. Both festivals are gearing up for 2018, so, no doubt, there will be a flurry of legal activity leading up to next summer.

Contact San Diego Corporate Law Today

The dueling San Diego Spirit Festivals provide a local example of how and why California state trademarks are important. If SDSF is successful, the competing festival will probably have a large judgment entered against it and will likely need to rename itself. Both will help SDSF maintain and expand its marketshare.

If you need help with any legal issues with respect to running your business, including issues related to trademarks and other intellectual property, business contracts, and business formations, contact attorney Michael Leonard, Esq., of San Diego Corporate Law. Mr. Leonard provides a full panoply of legal services for businesses here in San Diego and surrounding communities. Mr. Leonard can be reached at (858) 483-9200 or via email.

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