Kendall Jenner’s 818 tequila brand is on the receiving end of a new lawsuit, in which a fellow spirits company claims that the reality star-slash-model is on the hook for “intentionally” co-opting its branding. According to the complaint that it filed in a federal court in California on February 16, ClipBandits, LLC alleges that in connection with the launch of K & Soda, LLC dba 818 Spirits, Jenner’s company opted not to create its own branding, but instead, “simply and blatantly copied the branding of 512 tequila,” which ClipBandits says that it began offering up years prior.
Setting the stage in its complaint, ClipBandits alleges that in 2015, it started selling tequila under the 512 name and “using a highly distinctive logo and color scheme” that it says is identifiable to consumers – and thus, that it maintains trademark rights in. In addition to having trademark rights in (and a registration for) “512” for use on tequila, Austin, Texas-based ClipBandits claims that it has amassed common law rights in (and a pending trademark application for registration for) trade dress of the label that appears on its bottles for use on alcohol products. According to ClipBandits’ trademark application, the trade dress consists of “a vertical rectangular yellow background behind a black square with the word TEQUILA appearing above the word 512.”
As a result of years of “continuous and exclusive (but for the defendant’s recent infringement) use” of these trademarks, ClipBandits argues that consumers have come to “associate and recognize the marks as representing a single source or sponsor of [its] goods,” and those marks have acquired goodwill in the minds’ of consumers, thereby, giving rise to valuable trademark rights.
Against this background and in an (alleged) attempt to piggyback on its established appeal, ClipBandits claims that “rather than trying to compete on their own merits,” Jenner’s brand “simply used [ClipBandits’s] marks with immaterial tweaks, hoping to grab [ClipBandits’s] customers as a ready-made customer base by deceiving them into falsely believing that the defendant’s 818 tequila is another product sold by [ClipBandits] or has some other affiliation with [ClipBandits’s] 512 tequila.” Comparing the two companies’ tequila products, ClipBandits alleges that “customers would easily believe, incorrectly, that [they] are related” when there is no such affiliation at play.
And in fact, ClipBandits claims that 818’s “infringing branding has already caused actual confusion in the marketplace, with consumers thinking [the 818] brand is related to .” This alleged confusion is particularly problematic, per ClipBandits, given that 818 charges “substantially” more for its lower quality products, thereby, leading to “consumer ill will,” and because Kendall Jenner (who is not named as a defendant in the lawsuit) and 818 have been “widely accused of cultural misappropriation of the Mexican tequila heritage.”
With the foregoing in mind, ClipBandits sets out claims of trademark infringement, unfair competition, and unfair business practices under California state law, and is seeking monetary damages, as well as injunctive relief to temporarily and permanently bar 818 from continuing to engage in such alleged infringement by way of its lookalike tequila branding.
As for the merit of ClipBandits’ lawsuit, it is worth noting that product packaging and labeling neatly falls within the bounds of trade dress law, which provides protection for the design and shape of the materials in which a product is packaged, assuming that it serves a source-identifying function. So, from that perspective, there are not an immediately-obvious issue. Likelihood of confusion, however, could prove challenging for ClipBandits; it is somewhat striking that while ClipBandits argues that consumers have actually been confused about whether there is a connection between the 512 and 818 products, it does not provide any specific allegations or examples of such “actual confusion.” It seems significant (to me, at least) that the company does not even include screenshots of consumers’ social media commentary, which while a potentially questionable way of showing consumer confusion, is, nonetheless, commonly relied on by trademark infringement-asserting parties.
At the same time, reflecting on the critical issue of likelihood of confusion, trademark attorney Jessica Stone Levy stated that it when looking at the 818 bottle, itself, it is “easy to argue that it merely suggests 512 moved and refreshed its label slightly.” Echoing the potential for confusion, IP attorney Marc Whipple asserts that 818 could be viewed in the same way as a different model of ClipBandits’s tequila “like the difference between Johnny Walker, Johnny Walker Red, and Johnny Walker Black.”
And in a final note: the complaint is not devoid of gaming/metaverse-related allegations. ClipBandits argues that in its newly-initiated lawsuit that in May 2021, 818 promoted its tequila “as a virtual product that could be purchased on the mobile app game of Kendall Jenner’s sister: Kim Kardashian Hollywood.” However, ClipBandits alleges that “the image that 818 used in the app was of a bottle of [its] 512 tequila.” (The original bottle in the game did not appear to use the numbers 512 but did include a combination of a yellow rectangle, black square and black writing on a bottle.)
While ClipBandits claims that it contacted 818 about the use of its bottle in the game (and 818 “changed the branding on the bottles in the app to a green circular branding very different from the yellow rectangle branding that Defendant uses on its actual bottles”), it does not claim that such virtual use gave rise to any confusion or that it serves as the basis for any of its causes of action.
UPDATE (Nov. 7, 2022): The parties have reached a settlement, and “through their respective counsel of record, stipulate[d] to the dismissal with prejudice of the action,” alerting the court that “each party shall bear its own attorney’s fees, costs, and expenses.” Tequila 512 CEO Nick Matzorkis said in a statement that the two companies “have the right to use their existing names and will both make changes to their labels to clarify that they are not related to each other.” While it is not immediately clear what changes Jenner’s company will make to its branding, Tequila 512 will add “Est. 2012” to its labels.
The case is ClipBandits, LLC v. K & Soda, LLC d/b/a 818 Spirits, 2:22-cv-01071 (C.D. Cal.)