Case 8:15-cv-00088 Document 1 Filed 01/20/15 Page 1 of 9 Page ID #:1

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PAUL W. REIDL (State Bar No. 155221)

Law Office of Paul W. Reidl
241 Eagle Trace Drive
Half Moon Bay, CA 94019
Telephone: (650) 560-8530
Email: paul@reidllaw.com

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Attorney for Stacked Wines, LLC
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UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

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a California limited liability company,

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Plaintiff,

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v.

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Case No.

STACKED WINES, LLC,

CAPE CLASSICS BRANDS, LLC,

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a Florida limited liability company,

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and

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COMPLAINT FOR DECLARATORY RELIEF

(NON-INFRINGEMENT OF TRADEMARK)

CAPE CLASSICS, INC.,

a New York corporation,
Defendants.

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Stacked Wines, LLC (Stacked), by and through its counsel, for its Complaint against Cape
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Classics Brands, LLC and Cape Classics, Inc. (Cape Classics), alleges and states as follows on
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information and belief:
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COMPLAINT FOR DECLARATORY RELIEF

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JURISDICTION
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This action arises out of the Lanham Act, 15 U.S.C. 1114, 1125 (a) and the

Declaratory Judgments Act, 28 U.S.C. 2201. This Court has subject matter jurisdiction over the

Federal claims pursuant to 28 U.S.C. 1331, 1338 (a), 2201 and 15 U.S.C. 1121. The Court has

personal jurisdiction because Plaintiff resides in this District, the Defendants do business in this

District, the harm caused by Defendants will be suffered by Plaintiff in this District, Defendants

conduct has specifically targeted Plaintiff and its business in this District, and Defendants wines are

distributed in California by Youngs Market which is located in this District.

2.

Venue is proper in this Court pursuant to 28 U.S.C. 1391 (b) because Defendants

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transact business in this District and a substantial part of the events giving rise to the claims asserted

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herein arose in this District.

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THE PARTIES
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Stacked is a California limited liability company having a principal place of business at

1661 North Raymond Avenue, Anaheim, California 92801.

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Cape Classics Brands, LLC is a Florida limited liability company having a principal

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place of business at 220 Puritan Road, West Palm Beach, Florida 22405. It is the record owner of the

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trademarks asserted against Stacked in this case.

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5.

Cape Classics, Inc. is a New York corporation having a principal place of business at 16

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West 36th Street, Floor Penthouse, New York, NY 10018. It is an importer, distributor and marketer

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of the wine at issue in this case. On information and belief, both Defendants share common

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ownership and officers.

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NATURE OF THE CASE

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This is a claim for a declaratory judgment of non-infringement of a claimed trademark.

It arises from a demand made by Cape Classics, during the national roll-out Stackeds XO, G wine,
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that Stacked cease using the allegedly infringing trademark with seven days. This has caused in

Stacked a real and reasonable apprehension of litigation, injury and damage.

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By this action, Stack seeks a declaration by the Court that: (a) Cape Classics has no

trademark rights in the alleged trademark, (b) assuming that Cape Classics has trademark rights in its

alleged trademark, that Stackeds use of its packaging design (1) does not infringe any rights of Cape

Classics, and (2) is unlikely to cause consumers falsely to associate XO, G with Cape Classics.

BACKGROUND

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8.

Stacked is a wine seller and marketer. It owns the patented StackTek single serve

packaging system. This system consists of four (4) 187 milliliter plastic wine glasses that are

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designed to snap together vertically to form the equivalent of a 750 milliliter bottle. This allows the

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consumer to purchase wine in the single serve format in the same amount as traditional 750 milliliter

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bottles.

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In mid-2014, Stacked developed the concept for an XO, G wine sold in the StackTek

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system. The wine would be sold to a single national chain retailer and would be supported by a

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celebrity spokesperson. The program was launched in early November and is currently in the process

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of a national roll-out. The current product line features a Ros, Pinot Noir and Pinot Grigio. The

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packaging is depicted below:

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10.

Stacked has invested a substantial amount of capital and goodwill in the development of

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the XO, G program and its success is critical to the financial success of the business in 2015. Stacked
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would suffer significant injury and damage, both financial and in its relationship with the trade, if it
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was required to cease using its packaging immediately. This would likely cause Stacked to go out-of16

stock during the current national launch and would significantly damage Stackeds relationship with

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the national chain retailer, the trade and consumers.
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11.
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Cape Classics sells a wine called JAM JAR. This is marketed as a sweet wine and is

currently sold in two flavors: sweet white and sweet shiraz. Cape Classics sells these wines at

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various chain retailers in this District, including Whole Foods and Cost Plus. The packaging is
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depicted below:
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On October 20, 2010, Cape Classics applied to register the following trademark for wine

with the United States Patent and Trademark Office:

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The application was assigned serial number 85/157,079. Cape Classics refers to this as the Diamond
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Design.
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On February 4, 2011, the Examining Attorney refused registration of the Diamond

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Design. She concluded that the Diamond Design was merely ornamental, not inherently distinctive
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and did not function as a trademark. This conclusion was correct as the Diamond Design is a
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common type of ornamentation that is used on a variety of goods and services such as paper cups.
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14.

Cape Classics responded to the Office Action on April 12, 2011. It did not attempt to

persuade the Examining Attorney that her conclusions were wrong. Instead, it asked the Examining

Attorney to register the mark on the Supplemental Register. Such a registration was issued on June

28, 2011 with registration no. 3,987,424.

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On January 13, 2015, Stacked received a letter dated one day earlier from Cape

Classics attorney with the large international law firm of Kelley Drye & Warren in New York City.

The letter asserted that Cape Classics owned trademark registration no. 3,987,424, that Stackeds

XO, G packaging was substantially and confusingly similar to the Diamond Design, and that this

infringed Cape Classics trademark rights and created a false association with Cape Classics. The

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letter gave Stacked one week to respond or else.

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There is a real and substantial dispute between Stacked and Cape Classics. The facts are

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well-established: does Cape Classics have trademark rights and are they infringed by the Stacked

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packaging? Stacked has a real and genuine apprehension of litigation and injury: Cape Classics is

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represented by one of the largest law firms in the country and given the demand to cease and desist

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Stacked would act at its peril if it did not comply with the demand. Stacked reasonably assumes that

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Defendants and their major international law firm has ample skills and resources to follow-through

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on the implicit threat of litigation if Stacked did not capitulate immediately. Stacked cannot cease

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and desist as demanded because this would destroy the ongoing national rollout.

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Changing the packaging of XO, G could destroy the program and cause extraordinary

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injury and damage to Stacked. Stacked was unaware of the JAM JAR packaging when it developed

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the ornamentation for the XO, G packaging. The design motif is merely a play on the X and O in the

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trademark.

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18.

In making its demand, Cape Classics has deliberately and intentionally targeted

Stackeds business, its brand and its goodwill. Cape Classics did so knowing that its claim that it had

enforceable trademark rights in a registered Diamond Design trademark was not true.

CLAIM ONE

DECLARATION OF NON-INFRINGEMENT OF A FEDERALLY REGISTERED

OR UNREGISTERED TRADEMARK OR TRADE DRESS

(15 U.S.C. 1114, 1125 (a))

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Stacked repeats and incorporates by reference each the allegations of Paragraphs 1-18 as

though fully set forth herein.

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Because of the allegations of infringement made by Cape Classics and the demand that

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Stacked cease using its packaging forthwith, and the great injury and damage that would be caused by

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such a cessation of use, a controversy has arisen between Stacked and Cape Classics under 15 U.S.C.

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1114 and 1125 (a) concerning whether the packaging for XO, G wines infringes Cape Classics

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rights, if any, in its Diamond Design.

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21.

The Diamond Design is merely ornamental and does not serve the source-identifying

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function of a trademark. It is simply a form of decoration that is not used by consumers as an

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indicator of source.

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22.

By asking the Examining Attorney to register the Diamond Design on the Supplemental

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Register, Cape Classics acknowledged that the design was not inherently distinctive and is therefore

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estopped from asserting otherwise.

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Registrations on the Supplemental Register confer no substantive rights on their owners

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and are not entitled to any of the presumptions or benefits offered by the Lanham Act. Cape Classics

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must therefore prove its exclusive ownership of the Diamond Design, that it functions as a trademark,

that it is a common law trademark and the geographic area of any proven common law trademark

rights.

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The Diamond Design is not inherently distinctive. The Diamond Design has not

acquired distinctiveness through its promotion and use by Cape Classics. Cape Classics has done no

look for advertising or taken any actions that would cause consumers to view the Diamond Design

as an indicator of source for wine.

25.

Both Cape Classic and Stacked use their designs as aesthetically functional

ornamentation for their packaging and not as an indicator of source. The trade dress of the JAM JAR

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and XO, G packaging are dissimilar and not likely to cause consumers to believe that XO, G

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originated from the same source, was sponsored by, or was otherwise associated with Cape Classics.

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26.

Accordingly, Stacked has not violated the Lanham Act by engaging in trademark

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infringement. There is a justiciable controversy between Stacked and Cape Classics and Stacked is

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entitled to a declaratory judgment of non-infringement.

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WHEREFORE, Stacked prays for relief as set forth below.

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DECLARATION OF NO FALSE ASSOCIATION

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(15 U.S.C. 1125 (a))

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Stacked repeats and incorporates by reference the allegations of Paragraphs 1-26 as

though fully set forth herein.

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For the reasons set forth herein, consumers are unlikely to believe falsely based on the

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XO, G background ornamentation that Cape Classics is the source, sponsor or licensee of the wine.

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Accordingly, Stacked has not violated the Lanham Act by engaging in false association. There is a

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justiciable controversy between Stacked and Cape Classics and Stacked is entitled to a declaratory

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judgment of no false association.

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WHEREFORE, Stacked prays for relief as set forth below.

PRAYER FOR RELIEF

WHEREFORE, Stacked requests that the Court declare as follows:

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That Cape Classics has no trademark rights in the Diamond Design; and

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That the XO, G packaging does not infringe any rights of Cape Classics; and

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That consumers are unlikely to falsely associate XO, G with Cape Classics; and

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That Stacked is entitled to the costs of suit, including Stackeds reasonable attorneys

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fees; and
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That the Court award such further relief as it deems just.

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Respectfully Submitted,

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LAW OFFICE OF PAUL W. REIDL

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By: /s/ Paul W. Reidl
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Dated: January 20, 2015

PAUL W. REIDL (State Bar No. 155221)

Law Office of Paul W. Reidl
241 Eagle Trace Drive
Half Moon Bay, CA 94019
Telephone: (650) 560-8530
Email: paul@reidllaw.com

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Attorney for Stacked Wines, LLC.
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COMPLAINT FOR DECLARATORY RELIEF