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David vs Goliath, Big Wine Goes after Small Retailer
David vs Goliath, Big Wine Goes after Small Retailer
Industry giant Ernest & Julio Gallo is suing a Seattle retail wine & specialty food retailer over pasta. The Spanish Table, which operates four retail locations, opened their Seattle store near Pike Place Market in 1995. This January, owners Sharon Baden and Steve Winston received a letter from a lawyer representing EJ Gallo, stating that unless they stopped selling the “Gallo” brand of pasta, which is imported from Italy (and not related to the wine company), they would be sued. (Apparently the pasta brand is pronounced differently - it is pronounced "guy-o.")
When I spoke with Winston, he expressed shock and dismay that the first contact he would have would come from a lawyer. Winston said that if someone from EJ Gallo had simply called to have a conversation regarding their concerns, he would have been open to it. Regardless, he states that they were still willing to stop selling the pasta, not because they felt that was right, but simply because they didn’t feel that a legal fight was worth it. Baden and Winston say that they contacted the Gallo attorney asking if "they preferred that we donate the pasta to a food bank or destroy it."
Then things got a little messy. The couple told me that it seemed that Gallo was willing to drop the threat of a law suit if the couple would disclose the name of the importer. Baden & Winston say they declined, and things went downhill. They stated that the Gallo attorney would no longer communicate with them at all, only with their attorney, in essence, forcing them to hire one. They say that they were given an April 16th deadline to hire an attorney and cease pasta sales, however, Gallo officially filed suit ahead of their own deadline on April 14th.
Baden "wonders why we were dragged into this at all, after all we are just retailers, we don’t produce the pasta nor have any control over the name." Gallo Pasta has been made for decades in Italy and is quite popular with their customers. Baden said that The Spanish Table customers have been very supportive and have "expressed outrage at the actions taken by EJ Gallo." The publicity surrounding the story has caused the remaining pasta to fly off the shelves.
KING 5 News in Seattle, says that The Gallo Winery released a statement to them. "The Gallo brand is known, recognized and trusted throughout the world. The brand represents our promise to the wine consumer that there are Gallo family members involved in the business who are passionate about making wine, who care about the quality and are involved in every detail to ensure that the consumer is receiving the best quality wine. Thus, we must always protect the image of our brand and the promise it represents," says Susan Hensley, Vice President of Public Relations for the E. & J. Gallo Winery.
The Modesto Bee
"Like many companies, we have understandings with companies around the world to not sell or market products in the United States under the 'Gallo' brand," she said in a written statement. "We have such an understanding with the Gallo pasta producer. Given this understanding, whenever we discover the product is being sold in the United States contrary to this understanding, we must take steps to correct the problem."
Hensley added that the matter likely "will be quickly resolved."
Modesto Bee reporter John Holland also wrote that this isn't the first time that the winery has sued to protect its name. Founders Ernest and Julio Gallo sought in 1986 to keep their brother Joseph from marketing cheese from Atwater under the "Joseph Gallo" name. They prevailed, and the cheese today is known as "Joseph Farms."
-Margie
King 5 News video
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Just sharing with you, something related to my country history http://www.gallo.pt/azeite/historia/en
GALLO, it's about Portuguese olive oil 
. . . i wonder if it is related or not with the article issue that you described!
Bartolomeu Lança
http://www.linkedin.com/in/bartolomeu
tannin.co.uk/consulting/5desetembro_winenotes.pdf
9 comments
Preserving (just like building) your brand is critical to success. E&J have a sizable investment and have the right to protect there name and images. Many companies are too loose with what appears to be minor infractions but in reality is the beginning of a slipper slope. Brands take money, time and energy to build and can be lost in mere seconds if not structured and protected properly.
Litigious actions should be dealt out appropriately and in this case it seems that their good intentions are ill placed.
- Steve Winston, Owner, The Spanish Table
Ernest and Julio Win Family Feud Over Gallo Name
Joseph, who has never been involved in top management of the famous Modesto, Calif., winery that bears the family name, began selling "Joseph Gallo" cheese in 1984, promoting it with jingles that played off E&J Gallo Winery's popular "all the best" advertising theme. Thinking that such advertising hit too close to home and led consumers to falsely think the cheese was winery-sanctioned, Ernest and Julio filed a trademark infringement suit.
On Monday, federal judge Robert Coyle permanently enjoined Joseph from using the Gallo trademark in retailing his cheese. The judge found "willful exploitation of the fame and advertising value of the Gallo brand" and said there was "mounting proof that the Joseph Gallo mark is confusing to customers."
FRESNO, Calif. -- The family feud is over at the Gallo house. Ernest and Julio got "all the best" of it.
The famous vintners got a boost in federal court here on Monday when a judge ruled that they could prohibit younger brother Joseph from using the Gallo trademark in advertising his cheese business.
Joseph, who has never been involved in top management of the famous Modesto, Calif., winery that bears the family name, began selling "Joseph Gallo" cheese in 1984, promoting it with jingles that played off E&J Gallo Winery's popular "all the best" advertising theme. Thinking that such advertising hit too close to home and led consumers to falsely think the cheese was winery-sanctioned, Ernest and Julio filed a trademark infringement suit.
On Monday, federal judge Robert Coyle permanently enjoined Joseph from using the Gallo trademark in retailing his cheese. The judge found "willful exploitation of the fame and advertising value of the Gallo brand" and said there was "mounting proof that the Joseph Gallo mark is confusing to customers."
"He is going to have to change his label," said Oliver Wanger, a Fresno trial attorney for the winery. Mr. Wanger said the ruling held that "there is no unlimited right of a person to use his name to infringe upon another existing and well-established trademark."
Denis Rice, a San Francisco attorney for Joseph Gallo, said "it is an erroneous ruling. He should be entitled to that mark on his goods because it is his legitimate name. I don't think the Gallos should have a monopoly on the adjective 'best' or on the Italian name for a rooster," which is gallo. He said an appeal is planned.
None of the brothers could be reached for comment.
The judge said Joseph Gallo could use his name as a trade name on his cheese to identify the source, but only in small print. He banned him from using the name in radio or television advertising. Mr. Rice said the ruling "throws him a half loaf." The ruling must be obeyed within 30 days unless it is stayed pending an appeal.
Mr. Rice said Joseph's cheese business has done well despite the litigation, with annual sales of about $30 million. The closely held Gallo family winery, the world's largest, is estimated to have annual sales of $1 billion. The winery doesn't sell cheese directly, but licenses it for sale through a Sara Lee Corp. unit.
The decision is the latest in a courtroom drama that has been bubbling along for years. Previously, Joseph sued his brothers for allegedly cheating him out of one-third of the family wine business. Last September, a judge rejected the claim
By Richard B. Schmitt. Wall Street Journal. (Eastern edition). New York, N.Y.: Jun 21, 1989. pg. 1
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