Trek Bicycle Corporation loses lawsuit against Trek Winery

By Kirsten Robbins | Sunday, March 7, 2010 5.17pm

Wisconsin-based Trek Bicycle Corporation lost the federal lawsuit it filed against the California-based Trek Winery.

The bike manufacturer sued the winery for using its trademark name, however, US District Judge Barbara Crabb dismissed the case on Tuesday, March 2.

Trek is the largest bike manufacturer in the US and it argued that, by using its name, the Trek Winery infringed on federal and state trademark laws. Crabb dismissed the case for lack of jurisdiction because the bike maker failed to show that the winery had sufficient contacts with Wisconsin to satisfy legal requirements for the lawsuit to be heard in federal court in Wisconsin.

“The dismissal in Wisconsin was that the lawsuit was more properly in California,” said Bob Burns of Trek’s corporate counsel. “It wasn’t the lawsuit, it was a jurisdictional decision that the wine company didn’t have enough activity in Wisconsin for the lawsuit to be held there and that it should be in California.”

When asked if he was surprised by Judge Crabb’s decision, Burns said, “No, we were disappointed by it. We think the winery is in fact doing business in Wisconsin and the lawsuit was properly done but, we respect her decision. We will comply with it and evaluate our options in moving forward.”

The local-Novato winery opened in 2007 under the name Trek Winery. Owners Andy and Liz Podshadley defended their position stating that they had sold only three cases of wine in Wisconsin prior to the lawsuit.

“We didn’t market ourselves to Wisconsin residents and their argument was that we were,” Podshadley said. “The only people we sold wine to in Wisconsin was my cousin, my aunt and a Trek Bicycle employee. There has to be judicial jurisdiction to try a case there. Selling only three cases of wine, the judge decided that that wasn’t enough to try us there.

“We checked the Family Winemakers of California, an organization we belong to and it has a map that shows which states are shippable to and Wisconsin was on that map,” he added. “We found out that map was out dated and we shouldn’t have shipped there. But, we should be able to ship anywhere in the world, including Wisconsin if we buy a permit to ship there. We had the name approved by the Alcohol and Tobacco Tax and Trade Bureau (TTB) that governs all alcohol-type labels. We had that label approved three years ago.”

Burns did not disclose the amount it sued the Trek Winery for, however, he did say the numbers reported in the media are false.

“I don’t know where that was reported but that was completely inaccurate,” Burns said. “We never specified any damages in the lawsuit. This is probably what it is. When you file a lawsuit in federal court you have to specify that you are claiming damages in excess of $75,000 in order to get the jurisdiction of the court, otherwise you end up in small claims court. So that number might have been exaggerated.”

Burns wanted to make it clear that the lawsuit was not a dispute between bikes and wine. Trek Bicycle Corp. not only manufactures bikes but provides a broad array of products and services that are also sold under the Trek trademark name, a name it has used for 30 years.

“We own the Trek trademark for drinks,” Burns said. “We own the Trek trademark for Trek Travel that provides tours, in particular wine tasting tours, where this guy has his Trek Winery. So he is trying to set it up like this big company is trying to come down and crush this poor little winery.”

“When we found out that he was picking the name Trek for his winery, we did everything we could to work with him to try and not do that,” he continued. “We offered him a license which he refused. We don’t sue little guys, we did everything we could to try and work with him but he wouldn’t cooperate. We, like any other company, have to protect our trademark. He really didn’t leave us with any choice.”

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Podshadley says he also had no choice but to defend the Trek Winery and that the demands placed on them by the Trek Bicycle Corp. were so high they would have lost the winery trying to meet them.

“We offered them all these other options to have the name spelt differently such as, Trec or Trekk,” Podshadley said. “They never ever let us have or were even close to being reasonable to working something out. If they came to us in the very beginning we would have dropped the name and used any other name.

“It was because they waited so long into the process, a year and half after we had already labeled the wine,” he added. “Their demands were such that we didn’t have a choice. They wanted us to take the label off all the wine and uncork all the bottles, pay their attorney fees, pay them all the profits that we made since we used the label. The demands were so out of whack that we had to defend ourselves or we would have lost everything.”

When asked if Trek Bicycle Corporation will bring the lawsuit against Trek Winery to California jurisdiction, Burns said, “Whether we will re-file in California, or not, is something that we currently have under advisement. But we do intend to protect our trademark just like any other company.”

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