A New York-based not-for-profit professional society dedicated to scientific research and exploration won a court injunction against an alcoholic beverages distributor whose line of whiskies uses the group’s name under the Johnnie Walker brand.
The Explorers Club, a century-old organization whose members have been to the moon and Mt. Everest, petitioned the New York state courts in a March 2014 complaint to bar Diageo, a premium drinks business, from using the same name in its “Johnnie Walker Explorers’ Club Collection”
The whiskey collection, launched in late 2012, includes the Trade Route Series, labeled The Spice Road, The Gold Route and The Royal Route.
The Explorers Club alleged that Diageo, which distributes other brands including Ketel One vodka, Captain Morgan, Tanqueray and Guinness, unlawfully used the name of a charitable organization “in an effort to affiliate its products with adventure, travel, exploration, and discovery” by promoting the product in spaces that resembled the club’s oak-paneled headquarters, leading consumers to believe the whiskey line was attached to the organization.
In a 24-page ruling issued Tuesday, Justice Charles Ramos agreed in In the Matter of the Application of The Explorers Club v. Diageo, 152524/2014.
The judge held that the club satisfied the three-prong test under New York General Business Law §135: that it is a charitable entity, that Diageo’s use of the name deceived the public, and that Diageo acted with intent to obtain a business advantage.
Diageo denied that its Johnnie Walker Explorers’ Club Collection, sold exclusively in duty-free outlets both internationally and in the U.S., tried to capitalize on the club’s name.
“Johnnie Walker and his agents indeed did walk the world. That’s how the brand got distributed,” Robert Raskpof, a partner at Quinn Emanuel Urquhart & Sullivan who represents Diageo, argued to the judge in oral arguments. “That’s the pride and the heritage and the history that is behind the development of this particular collection.”
The Explorers Club, represented by Boies, Schiller & Flexner, has also filed a federal action against Diageo in the Southern District for trademark infringement and unfair competition; it seeks damages in that case.
Diageo moved to dismiss the New York action based on the pending federal case, the doctrine of laches and lack of personal jurisdiction. It further noted that GBL §135 is “an obscure and draconian procedural mechanism” that is rarely invoked.
But Ramos held that the questions of law between the state and federal actions are “separate and distinct” due to the nature of the claims. He further noted that this type of special proceeding is “intended to be speedy and efficient, does not require a trial and is decided on affidavits alone, and may streamline the issues, rather than raise the specter of inconsistent rulings.”
The judge also denied the motion based on the doctrine of laches, which prohibits stale claims. While Diageo argued that the club waited 16 months to petition the court, Ramos noted that the company had been on notice of the club’s objections throughout that period. For instance, Explorers Club sent a cease and desist letter to the distributor in April 2013 and was prompt in opposing Diageo’s application for use of the name in its application for a federal trademark.
The judge further held that personal jurisdiction over Diageo was proper under New York’s long-arm statute.
“Diageo has adopted a nearly identical name as the club’s,” Ramos wrote. “In addition to this obvious similarity, the latter’s tie-ins to the club’s image and reputation of adventure and exploration in its marketing and commercial displays are blatant.”
In a statement to CLI, Diageo said it was “extremely disappointed and disagreed with the decision.”
“We are awaiting official receipt of the order and are planning to seek to stay the injunction while we immediately appeal this case,” the company said.
Joshua I. Schiller, counsel at Boies Schiller, said he was “very pleased with the decision.”
“It’s really a case of the club defending its name and its legacy,” he told CLI. “This law is on the books to protect charitable and nonprofit organizations. The ruling sets a precedent because it really represents the little guy taking on a conglomerate selling liquor with its name on the bottle.”