Protecting Our Barefoots: Policy Problems in the International Wine Market [Note]

Protecting Our Barefoots: Policy Problems in the International Wine Market [Note] Item Type Article; text Authors Reeves, Andrew M. Citation 27 Ariz. J. Int'l & Comp. L. 835 (2010) Publisher The University of Arizona James E. Rogers College of Law (Tucson, AZ) Journal Arizona Journal of International and Comparative Law Rights Copyright © The Author(s) Download date 27/09/2021 17:28:48 Item License http://rightsstatements.org/vocab/InC/1.0/ Version Final published version Link to Item http://hdl.handle.net/10150/658993 PROTECTING OUR BAREFOOTS: POLICY PROBLEMS IN THE INTERNATIONAL WINE MARKET Andrew M. Reeves* I. INTRODUCTION Although France, Italy and Spain remain the world's top wine producers by volume,' Western Europe's share of global wine production has fallen significantly since the 1960s. 2 So-called "new" wine regions-particularly the United States, Australia, New Zealand, South Africa, Chile and Argentina-have dramatically increased production and market share in that same period.3 These countries and wine regions have benefited from a number of fortuitous circumstances: a "hands-off' stance from government regulation, technological advances that, at times, feel like the world of wine is moving into the world of science fiction,4 a lack of the devastating phylloxera plagues and a general change in consumer preference. With growth, however, has come conflict. The current alcohol-related regulatory regimes in the United States and the European Community are, in many respects, fundamentally incompatible. While geographical indicators ('GIs') are the norm in the European Community6 . J.D. Candidate, Class of 2011, University of Arizona Rogers College of Law. With special thanks to John A. Reeves and Barak Orbach for helpful comments on previous drafts. Here's to Railroad Flat. 1 The Australian Wine and Brandy Commission estimates that, in 2008, these three countries provided nearly fifty percent of the world's wine. See The Australian Wine and Brandy Corporation, Market Insight Report, GLOBAL WINE SUPPLY MONITOR, Jan. 2009, at 6. 2 See, e.g., GLYN WITTWER & KYM ANDERSON, GLOBAL WINE MARKETS, 1961 To 2003: A STATISTICAL COMPENDIUM 83 (2004). 3 id. 4 See infra Section IV.A. 5 Discussion of the history and consequences of phylloxera is generally beyond the scope of this Note. In short, however, readers may wish to know that in the late 19t century, European wine regions were nearly destroyed by the presence of a type of aphid (the phylloxera). An entomologist for the U.S. Department of Agriculture, Charles Valentine Riley, eventually provided the only viable solution: graft French wine stock susceptible to the plague to American wine stock (vitis labrusca) that was generally immune and replant such stock in European soil. As a result of this successful solution, the French wine industry was saved from certain disaster. For more information, see generally CHRISTY CAMPBELL, THE BOTANIST AND THE VINTNER: How WINE WAS SAVED FOR THE WORLD 2005). See generally, Mark Silva, Sour Grapes: The Comprimising [sic] Effect of the United States' Failure to Protect Foreign Geographic Indications of Wines, 28 B.C. INT'L & COMP. L. REV. 197 (2005). 836 Arizona JournalofInternational & ComparativeLaw Vol. 27, No. 3 2010 in relation to the protection of wine-related intellectual property, the United States protects its wine industry primarily through trademark law and regulations promulgated by the Bureau of Alcohol, Tobacco and Firearms. As explained in Section II, these two systems have decisive differences that, for over a century now, have created a set of conflicts cumulatively known, only somewhat jokingly, as the "Wine Wars."' With other countries quickly expanding into the international wine market, and with most of those countries embracing trademark regimes, the problem has only been exacerbated. International law, especially the Agreement on Trade-Related Aspects of Intellectual Property Rights ('TRIPS') 8 passed by the World Trade Organization ('WTO') in 1994, has attempted to alleviate these problems but, as Section III will argue, so far the effort has proven futile. As a result of these "compatibility" problems between intellectual property regimes, the European Union has actively sought to establish bilateral agreements with other wine producing nations worldwide in an effort to protect their own GIs.9 Section IV will briefly analyze three such agreements executed as part of this strategy and will argue that, though possibly at odds with the mandates of the TRIPS agreement, Europe's proactive approach has been a success. It will be further argued that this success has come at the expense of the U.S. wine industry. Along these lines, Section V will point to the fact that, unlike the European community ('E.C.'), the U.S. government has paid scant attention to its relationships with fellow upstart wine countries and, because of the ineffective nature of international law and multilateral treaties in this area, will argue that this "hands off' approach is problematic. As an example, a recent conflict in Australia over the well-recognized brand "Barefoot," will be analyzed to show that, without bilateral treaties, American winemakers-saddled with a bizarre Prohibition-era distribution scheme and a number of somewhat nonsensical regulations-may find their intellectual property rights are not as well protected in foreign markets as those of their oenological counterparts in Europe. In conclusion, this Note will argue that, if the U.S. wine industry is to continue to make strides toward becoming an international wine exporter on the scale of the Europeans, bilateral treaties will need to be negotiated or much of the "regulatory remnants" of the temperance era will need to be swept aside. See, e.g., Stacy D. Goldberg, Who Will Raise the White Flag? The Battle Between the United States and the European Union Over the Protectionof GeographicalIndications, 22 U. PA. J. INT'L EcoN. L. 107 (2001). Marrakesh Agreement Establishing the World Trade Organization, Apr. 15, 1994, 1867 U.N.T.S. 154, Annex IC, Agreement on Trade-Related Aspects of Intellectual Property Rights,33 I.L.M. 1125, 1197 [hereinafter TRIPs Agreement]. 9 See, e.g., Agreement Between the European Community and Canada on Trade in Wines and Spirit Drinks, Can.-EC, Sept. 16, 2003, 2004 O.J. (L 35) 3. Protecting our Barefoots 837 II. TRADEMARK PROTECTION IN THE UNITED STATES AND AMERICAN REGULATION OF WINE LABELS A. The Lanham Act Trademark protection in the United States is generally achieved through enforcement of the Lanham Act.1 o Even before the effective implementation of this Act in 1947 the common law recognized the importance of trademarks in American commerce. As Justice Frankfurter once eloquently put it: The protection of trade-marks is the law's recognition of the psychological function of symbols. If it is true that we live by symbols, it is no less true that we purchase goods by them. A trade-mark is a merchandising short-cut which induces a purchaser to select what he wants, or what he has been led to believe he wants. The owner of a mark exploits this human propensity by making every effort to impregnate the atmosphere of the market with the drawing power of a congenial symbol. Whatever the means deployed, the aim is the same-to convey through the mark, in the minds of potential customers, the desirability of the commodity upon which it appears. Once this is attained, the trade-mark owner has something of value. If another poaches upon the commercial magnetism of the symbol he has created, the owner can obtain legal redress." Though extensive discussion of the Lanham Act and trademark protection in the United States is beyond the scope of this Note, a few sections-section 1125, the so-called "federal dilution statute,"' 2 and section 1127, the statute pertaining to abandonment of marks' 3-are well worth briefly analyzing. The beginning of section 1125, "the federal dilution statute" reads as follows: (a) Civil action (1) Any person who, on or in connection with any goods or services, or any container for goods, uses in commerce any word, term, name, symbol, or device, or any combination thereof, or any false designation of origin, false or misleading description of fact, or false or misleading representation of fact, which- (A) is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection, or association of such person with another person, or as to the origin, 1oLanham Act, 15 U.S.C. § 1051(2010). " Mishawaka Rubber & Woolen Mfg. Co. v. S.S. Kresge Co., 316 U.S. 203, 205 (1942). 12 15 U.S.C.A. § 1125 (West 2006). 13 15 U.S.C.A. § 1127 (West 2006). 838 Arizona Journal ofInternational& ComparativeLaw Vol. 27, No. 3 2010 sponsorship, or approval of his or her goods, services, or commercial activities by another person, or (B) in commercial advertising or promotion, misrepresents the nature, characteristics, qualities, or geographic origin of his or her or another person's goods, services, or commercial activities, shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act.14 Importantly, section (a)(1)(B) of the dilution statute sets a relatively low bar for possible infractions-the standard is one of misrepresentationrather than deception or the possibility of consumer confusion. 5 In relation to wine, this is especially problematic because designating the "geographic origins" of wine is not always straightforward in the complex American winemaking industry. For instance, does attaching the geographic signifier "Napa" to a bottle of wine produced in the Napa Valley with grapes from other California wine regions constitute misrepresentation? According to California courts, it does. In 2005, Bronco Wineries (famous for supplying Trader Joe's with the massive quantities of grapes needed to saturate the industry with "Two-Buck Chuck") was forced to test the limits of the dilution statute-and lost.

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