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p r a c t i c a l w i n e r y & v i n e ya r d J U n e 2 0 1 4 67 g r a p e g r o w i n g V ineyard-designated wine is one lesson in value-added agricul- tural branding that presents both the winery and vineyard owner or lessee with a number of marketing and legal issues. Recognition of the value of vineyard- designated names, vineyards have long been designating blocks within their vineyards with proprietary names. In this way, even though multiple win- eries purchase grapes from the same vineyard property, each winery can have a distinct name to refer to the vineyard block where the grapes were grown, also known as the "block designate." If a vineyard owner sells wine grapes to a winery under a vineyard designate or block designate, the winery may use that vineyard or block name on wine produced from those grapes to desig- nate origin, provided such use complies with the vineyard designation labeling re q u i re m e n t s o f t h e A l c o h o l a n d Tobacco Tax and Trade Bureau (TTB). Accordingly, the vineyard owner—not the winery—theoretically owns rights in the name. ToKalon Vineyard Wineries may consequently find their vineyard-designated wines embroiled in a trademark dispute between different winery owners. One of the most well- publicized vineyard name trademark dis- putes involved the famed To Kalon Vineyard in Oakville, Calif. Originally planted in 1868, To Kalon was eventually divided up and, by the 1990s, both the Robert Mondavi Winery and Andy Beckstoffer owned portions of the vineyard. Mondavi secured federal trademark registrations for both the To Kalon and To Kalon Vineyard marks. Schrader Cellars in Calistoga, Calif., entered into an agreement to purchase grapes from Beckstoffer, and Schrader planned to use the "Beckstoffer Original To Kalon Vineyard" designation on the label for its 2000 Cabernet Sauvignon. In 2002, Mondavi sued Schrader Cel- lars and sought an injunction to bar Schrader 's sale of "To Kalon Vineyard" designated wine. The parties eventually settled their dispute, and Beckstoffer was granted a royalty-free license to continue using the To Kalon name. Thus, when the vineyard is owned by another party, the risk to the winery in marketing vineyard- and block-desig- nated wines made from contract grapes is that once the contract ends, so can the rights to continue use of the vineyard and/or block designation. Risks and rewards A winery must accept that by producing and market i ng vi neyard-desig nated wine made from grapes grown in a vine- yard the winery does not own, the win- ery is potentially spending time and money building brand equity for some- one else. When the grape contract ends, there is considerable risk that the "brand" of the vineyard owner may be used by the vineyard owner itself, or potentially w i n e M a r K e T i n g Need a Better Cork Supplier? All Natural Cork Closures Fresh Corks Directly From Portugal 4th Genera on Family Cork Producer Free Branding Free Shipping Free iS Better Ask about our Progressive Discounts Experience the Slimcork® Advantage CALL TODAY phone (203) 681-7743 Cell (860) 335-0667 email: reliablecork@gmail.com • www.reliablecorksolu ons.com Branding strategies in agricultural commodities VineyArD AnD BLoCk DesignAtes Katja Loeffelholz, Dickenson, Peatman & Fogarty, Napa, Calif. BY AUGUST 20, 2014 8:00 AM – 4:30 PM 500 FIRST STREET (formerly Copia) NAPA, CALIF. ■ $195 for all sessions, closure tasting and meals ■ Register online at winesandvines.com/events/wvpack WINES & VINES PACKAGING CONFERENCE