Consumers often wonder why trademark owners seem to sue competitors so often over allegedly-infringing names. A bourbon lawsuit from 1916 helps provide the answer.
The February 1, 1906 edition of The Wine and Spirits Bulletin reported that the G. & B. Gerdes Company—owners of the “Old Lexington Club” brand—had sued the Kentucky Distilleries and Warehouse Company (Kentucky’s Whiskey Trust) because the Whiskey Trust marketed a brand of whiskey called “Lexington Club.” The court in Old Lexington Club Distillery Co. v. Kentucky Distilleries & Warehouse Co., 234 F. 464 (D. N.J. 1916) explained the history of these two competing brands.
The Old Lexington Club distillery was located on Hickman Creek in Nicholasville, Kentucky, which is in Jessamine County, just south of Lexington. J. H. Reed started using the “Old Lexington Club” name in 1874 and he used it extensively in local advertising. Determining who used a name first is always important in these sorts of trademark fights.
While Reed joined with different partners—Jackson & Reed and later Warner & Reed—through when “Reed became financially embarrassed and the business was taken over by one of its creditors” in 1890, the “Old Lexington Club” name was used continuously.
On the other hand, a Cincinnati whiskey wholesale firm, Freiberg & Workman, started using “Lexington Club” in 1878 for its own whiskey. The Lexington Club brand became popular and was sold in “practically every state in the Union” while Old Lexington Club was limited to the Lexington area with some sales in New York, Chicago, St. Louis, and Cincinnati. In 1899, Freiberg & Workman sold out to the Whiskey Trust, which continued high-volume sales of its Lexington Club brand.
Fast forward to 1905; the new owners of Old Lexington Club tried to register a trademark for the brand, the Whiskey Trust objected, and litigation ensued. Old Lexington Club won the first two rounds, but the Whiskey Trust won on appeal in 1908. The court ruled that “Old Lexington Club” was a descriptive name not entitled to trademark protection and that “Old Lexington Club” hadn’t done anything about “Lexington Club” despite knowing about it for at least 15 years.
The final decision issued in 1916 partially rejected the earlier decision by ruling that “Old Lexington Club” was distinctive enough to be registered as a trademark. But that was a hollow ruling because the court also ruled that by taking no steps to prevent the Whiskey Trust from using a confusingly-similar name for well over a decade, it would be unfair to do so now. Basically, by failing to object earlier, Freiberg & Workman (and later the Whiskey Trust) spent time and resources building their brand and business to a much larger enterprise than Old Lexington Club. If Old Lexington Club was awarded the exclusive right to that name, then it would unfairly acquire all of the goodwill and business reputation built up by the Whiskey Trust.
So the lesson learned by distillers and all other brand owners is to be vigilant in monitoring potential infringement, to have cease-and-desist letters at the ready, and to sue seemingly at the drop of a hat to protect trademarks.