The US Court of Appeals for the Sixth Circuit found that the defendant's use of the names "Old Taylor" and "the Former Old Taylor Distillery" (collectively, the Old Taylor names) to refer to its property and future bourbon distillery located on the site of the original 1887 distillery of the same name qualifies as fair use and does not infringe on the OLD TAYLOR and COLONEL E.H. TAYLOR trademarks. Sazerac Brands, LLC v. Peristyle, LLC, Case No. 17-5933/5997 (6th Cir., June 14, 2018) (Sutton, J). 

Judge Sutton's opinion opens with a love note to the state of Kentucky and its "richly preserved history of bourbon making." The opinion explains that Colonel Edmund Haynes Taylor is considered the founder of the modern bourbon industry and built the Old Taylor Distillery in Woodford County, Kentucky, in 1887. The building, which resembled a medieval limestone castle, eventually fell into disrepair and decay, and bourbon production at the facility ended in 1972.

In 2014, a team of Kentucky natives formed Peristyle and purchased the Old Taylor Distillery with plans to renovate the castle and resume bourbon production. Peristyle renamed the property "Castle & Key." In four years, when its first batch of bourbon will be available for sale, the company plans to sell the product under the CASTLE & KEY trademark.    

During renovation of the distillery, Peristyle released marketing posters, advertisements and social media posts referring to its location as "the Former Old Taylor Distillery" or "Old Taylor," which prompted a lawsuit by Sazerac, a distiller that bought the rights to the OLD TAYLOR and COLONEL E.H. TAYLOR trademarks in 2009. The district court granted summary judgment to Peristyle on Sazerac's claims of trademark infringement, unfair competition and passing-off, finding that Peristyle used the Old Taylor names descriptively and in good faith under the Lanham Act's affirmative defense of fair use. Sazerac appealed.

The Sixth Circuit explained that the fair use defense applies when "the use of the name, term, or device charged to being an infringement is a use, otherwise than as a mark . . . of a term or device which is descriptive of and used fairly only to describe the goods or services of such party, or their geographic origin." Thus, the two elements of fair use require that the defendant (1) use a name or term in a descriptive or geographic sense, and (2) do so fairly and in good faith.

The Sixth Circuit found that Peristyle satisfied both elements, noting that Peristyle used the Old Taylor names only to identify the historic location where it would be producing its CASTLE & KEY bourbon, and that it did so in good faith, since the record established that Peristyle continually recognized that the OLD TAYLOR trademarks belong to Sazerac and thus selected its own brand for its eventual bourbon product.

The Sixth Circuit also dismissed Sazerac's arguments alleging that Peristyle infringed the OLD TAYLOR trademarks by displaying "Old Taylor Distillery" signs on the building and using the property for commercial activities, such as hosting a wedding and renting out barrel-aging warehouse space. The Court noted that both signs in question adorned the building before Peristyle purchased it, which the Court considered confirmation that the company did not put them there or otherwise use them in bad faith. On the issue of "commercial activities," the Court clarified that what matters is not commercial or non-commercial activity, but whether Peristyle used the Old Taylor names descriptively or non-descriptively.

Finding that Peristyle's use of the Old Taylor names to describe the location of its events or services was "fair use at each turn," the Sixth Circuit confirmed that Peristyle's commercial activity did not equate to non-descriptive trademark use. Thus, the Court affirmed the district court's summary judgment grant for Peristyle holding that the company's use of the distillery name "finds shelter under the Lanham Act's fair use defense."

When Your Business Address Is A Trademark: Description Of Historical Location Is Fair Use

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