Californians are no strangers to wine. Whether you drink it or not, you know wine is a massive industry that continues to grow. This growth may satiate wine lovers across the U.S. who thirst for more options, but it creates a problem for wineries who are finding it tougher and tougher to distinguish themselves in the marketplace. This is especially evident when it comes to the naming and labeling of wines. This is illustrated by a current case involving Bogle Vineyards and Next Wine LLC, — competing California wine makers who are locked in a dispute regarding use of the word “essential” on their labels. Although Bogle had been branding their wines for many years with the phrase “Essential Red” wine, they never applied for or obtained a trademark for the phrase. In 2013, Next Wine secured a trademark on the phrase “My Essential Red.” Shortly after, Bogle applied for a trademark on “Essential Red” wine, but the U.S. Patent and Trademark Office denied the request citing a likelihood of confusion. Although the labels look nothing alike, and the use and location of the “essential” element are very different between the brands, the parties attempted to work out an agreement that allowed them to coexist. Reaching an agreement was problematic, though, as Bogle demanded that Next Wine secure preapproval from Bogle regarding any future label designs. Considering that Next Wine holds the trademark and is in a much stronger legal and bargaining position, it is not surprising it turned down Bogle’s demand. Next Wine filed a lawsuit against Bogle calling its behavior, among other things, bullying, so they’re battling it out in court. Despite being in the early stages of litigation, the case is instructive that securing a trademark as early as practicable to protect intellectual property is important, especially in rapidly growing industries; otherwise, like a bad bottle of wine you may be left with a bitter taste in your mouth. Any business owner or executive with questions or concerns about trademarks or other means of protecting your company’s intellectual property would be wise to seek legal counsel to consider your options. There can be a lot on the line in these cases, from money to your company’s branding which may determine the success of your business.
CALIFORNIA AND NON-COMPETE AGREEMENTS
When you hire a new employee, you have them sign a non-compete agreement to protect your company’s trade secrets from competitors. But one of your former employees just resigned and started immediately working for your leading competitor. What legal action can you take against your past-employee for breaking their agreement? Recommended legal advisement California’s business laws are complex, and misunderstanding the laws can greatly compromise your business. Before you make any decisions based on legal principles, contact an attorney who can inform you of your rights and ensure that you are acting within the law. California and non-compete agreements Along with a handful of other states, California does not enforce non-compete agreements. You cannot lawfully prevent your employees from working any job after they leave your employment. Even if your company is headquartered in a state that recognizes non-compete agreements, you cannot enforce agreements with your California employees. This may seem incredibly unfair. After all, you trained your employees in the industry, and shared company secrets with them. But California is protecting the employee’s best interest, not yours. They want to keep California residents gainfully employed. Unfortunately, this allows your employees to learn all they can from you and immediately turn to your competitors, or start a competing business of their own. Significant exemptions California’s non-compete ban applies to almost all situations, but there are a few notable exceptions: 1) The non-compete ban does not extend to current employees. You are able to prevent current employees from taking a second job within the industry or with a competitor. 2) Once a business owner sells his ownership to a new owner, they cannot compete with the business in a way that would harm its value. 3) Business partners and members of a LLC can mutually agree that they will not compete after they leave their business. Remember, California’s courts will almost always side with past employees in regards to non-compete agreements. Speak with your attorney to learn your rights as an employer, and work with them to determine the best ways to protect your company’s property and privacy.