Cristal Maker Can Sue Over ‘Cristalino’ Cava

(CN) - Maker of the expensive French champagne Cristal can pursue its trademark claim against a Spanish winery that sells sparkling wine called "Jaume Serra Cristalino" and "Cristalino," the 8th Circuit ruled.

The St. Louis-based federal appeals court reversed dismissal of Champagne Louis Roederer's infringement claim against J. Garcia Carrion S.A. and Friend Wine Marketing, a U.S. importer known as CIV USA. Carrion merged with Spanish winery Jaume Serra in 1998 and kept operating under the Carrion name.

Roederer seeks to block Carrion from registering trademarks for Jaume Serra Cristalino and Cristalino in the United States.

Cristalino is a cava, a type of sparkling wine distinct from champagne. Roederer's Cristal, by contrast, was created in 1876 for Russian Tsar Alexander II and has since been dubbed the champagne of the "tsars and the stars."

The Jaume Serra winery introduced Cristalino to the U.S. market in 1989. By 1997, Cristalino sales had shot to nearly 400,000 bottles in the United States, surpassing sales of Cristal.

Over the next few years, Carrion spent 14 million euros improving Jaume Serra's cava production. By 2003, about 9 percent of its 15 million bottles were Cristalino.

In February 2002, the Spanish winemaker filed a trademark application in the United States. Roederer's attorneys responded with cease-and-desist letters, but Carrion refused to stop using the Cristalino name. Roederer retaliated with a lawsuit.

The district court dismissed the claims, saying Roederer knew about the alleged infringement as early as 1995, when its attorneys read an affidavit indicating that "a sparkling wine from Spain called Cristalino" had been found at a Cost Plus store in California.

The 8th Circuit, however, rejected the argument that Roederer can't win because it took too long to file suit, known as the laches defense.

Judge Sheperd said the lower court gave cursory treatment to the "doctrine of progressive encroachment," which measures the time of delay from when the alleged infringement became actionable, not when the plaintiff first learned of the potentially infringing mark.

The district court had merely stated that "the evidence shows that sales of Cristalino have been greater than sales of Cristal since at least the mid-1990s" and that "evidence of significant changes in the quality of the cava is lacking."

Sheperd acknowledged that the courts can't pinpoint the exact moment an infringement claim becomes actionable, but said "more is required than merely citing marginal or irrelevant factors without reference to any of the principles governing trademark infringement."

Carrion argued that it never would have invested so heavily in Cristalino had Roederer objected earlier. But the appellate court pointed out that Carrion knew or should have known that Roederer opposed the marks, because Roederer successfully blocked use of the Cristalino name in Spain in 1990.

"Carrion has failed to show that it suffered undue prejudice as a result of Roederer's delay in bringing suit," Sheperd concluded. "This failure by itself is sufficient to bar the appellees' laches defense."

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