Mexico Has Right to Police Use of Tequila Name in U.S.

Access practice tools, as well as industry leading news, customizable alerts, dockets, and primary content, including a comprehensive collection of case law, dockets, and regulations. Leverage...

By Anandashankar Mazumdar

The term tequila is not a generic name for a type of liquor, and a Mexican authority can police how the term is used in the U.S., the Trademark Trial and Appeal Board said Jan. 23 ( Luxco, Inc. v. Consejo Regulador del Tequila, A.C. , TTAB, No. 91190827, 1/23/17 ).

The ruling means Mexico’s Consejo Regulador del Tequila A.C., or the Tequila Regulatory Council, can register the word tequila as a certification mark with the Patent and Trademark Office. A certification mark’s owner doesn’t use the mark itself but sets conditions for others to use it.

Luxco Inc., which makes Rebel Yell bourbon, Everclear and a tequila-style liquor, failed to stop the registration by arguing that consumers don’t understand tequila as referring exclusively to products from Mexico. The board found that tequila is associated with a blue agave distilled spirit from a particular region in Mexico.

The beverage tequila was first produced in the 16th century, when European settlers in the area around what is now the city of Tequila began distilling a local drink made from the blue agave plant.

Mexican law decrees that distilled agave liquor may be called tequila only if it is produced in certain locations in the state of Jalisco and surrounding states. The government has given the council—a private, nonprofit entity—the exclusive authority to regulate the use of the term and to set standards for what liquors can be sold as tequila.

Mexican Entity Seeks U.S. Registration

In 2003, the council submitted an application to the Patent and Trademark Office to register the word as a certification mark for “spirits distilled from the blue tequilana weber variety of agave plant.”

In other countries, such regional terms can be protected under the concept of geographical indications, or words consumers understand as meaning that a product is from a certain place, such as champagne to indicate sparkling wine from France’s Champagne region. U.S. law doesn’t have a specific system for protecting geographical indications, but they can be protected as certification marks, such as Napa Valley wine or Idaho potatoes.

Luxco, a St. Louis-based maker of distilled spirits, opposed the registration, arguing that the word tequila is a generic term for a type of beverage, and that the council should not be able to control who uses the word in the U.S. Luxco’s website features three beverages labeled as tequila—Exotico, El Mayor and Juarez.

However, evidence showed that U.S. consumers understand the word tequila to specifically indicate a beverage from Mexico, not as a generic name for a type of distilled liquor, the board said. The council had the right to control the use of the term in Mexico and the U.S., and is entitled to a certification mark registration, it said.

Husch Blackwell LLP represented Luxco. Abelman, Frayne & Schwab represented the tequila council.

To contact the reporter on this story: Anandashankar Mazumdar in Washington at AMazumdar@bna.com

To contact the editor responsible for this story: Mike Wilczek at mwilczek@bna.com

For More Information

Text is available at: http://src.bna.com/lBn

Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.

Request Intellectual Property on Bloomberg Law