Fellowship member sues casino owner for $150,000

[ed. - Link to article, http://www.legalmetric.com/cases/copyright/caed/caed_202cv01593.html, is no longer active]

The Fellowship's Abraham Goldman and Associates represents Fellowship member Sar-Anne Frew in a $150,000 copyright infringement lawsuit against the owners of the Sands Regency Casino Hotel in Reno. Fellowship members Goldman, Dr. Thomas Neuschatz and Sharon Shelton submit declarations on behalf of Frew.

(The case will be settled out of court, and the action dismissed March 29, 2004.)

Renaissance Vineyard and Winery's use of "Da Vinci" brand name challenged

[ed. - When first designed in the late 1970s, the Fellowship winery was to be called the "Leonardo Da Vinci Winery." The name was eventually dropped (perhaps due to potential trademark concerns) and "Renaissance Vineyard and Winery" was adopted. Still, the Fellowship decided to use the "Da Vinci" brand for a second label, consisting of wines that fell short of the quality desired for the primary label. By the mid-1980s, before the agreement with Barcamerica, the Fellowship was already bottling and labeling a number of varietal wines under the "Da Vinci" label. (See the article below for one such example.) It is fairly obvious that the Fellowship, and its attorney Abraham Goldman were naive to the responsibilities and requirements under the licensing agreement with Barcamerica.]

The Naked Truth about Trademark Licensing
15-Jul-2002
San Francisco Daily Journal
by Robert B. Burlingame

Trademark owners and their attorneys beware! As the Ninth Circuit Court of Appeals confirmed in its decision issued May 6, 2002, owners can unintentionally forfeit their trademark rights if they fail to exercise quality control after granting another party the right to use a trademark. Barcamerica Int’l USA Trust v. Tyfield Importers et al., 2002 WL 850825 (9th Cir. 2002). Such a grant is referred to as a "naked license" and is deemed to constitute the owner’s abandonment of rights in the trademark.

In short, the Ninth Circuit held that Barcamerica had abandoned its rights in the trademark DA VINCI for wine because it granted a naked license to Renaissance Vineyards ("Renaissance"). Consequently, Barcamerica was unable to stop an Italian wine producer and its U.S. importer from using the trademark DA VINCI for wine. Furthermore, the court found it was appropriate to cancel Barcamerica’s U.S. registration for the trademark DA VINCI.

Although the concept of naked licenses is by no means novel, this recent decision is relatively unusual given its harsh result. The case serves as a strong reminder that a trademark owner’s work does not end with the execution of a license agreement, and that quality control clauses which are included in license agreements are not merely for show. The decision also confirms that the key issue in a naked license determination is whether the licensor (the party granting the right to use the trademark) is exercising quality control over the licensee (the party receiving the right to use the trademark) so as to maintain a consistent and predictable quality for all goods and services for which that trademark is used; the actual level of quality (be it high, low, etc.) is irrelevant.

The case teaches us that trademark owners and their counsel should work together to ensure that the owners regularly and effectively monitor the quality of the products and services for which the licensees use the trademark. For example, as the Ninth Circuit proposed, those who license wine-related trademarks should at least sample each year, in some organized way, an adequate number of bottles of the wine on which the licensee is using the trademark. On-site visits are another common product quality control practice. Owners should take such actions on a regular basis.

The history of the Barcamerica case is typical of many trademark disputes: an entity applies to register a trademark at the United States Patent and Trademark Office ("USPTO"); the USPTO refuses the application due to the existence of a trademark registration for a confusingly similar trademark; the applicant conducts an investigation and determines that the registrant is no longer using the registered trademark; and then the applicant petitions the USPTO to cancel the registration on grounds of abandonment.

In Barcamerica, however, after Italian wine producer Cantine Leonardo Da Vinci Soc. Coop. a.r.l. ("Cantine") filed a cancellation action against Barcamerica’s DA VINCI trademark registration, Barcamerica responded by filing for a preliminary injunction in federal court to enjoin Cantine and its importer from making any further use of the DA VINCI trademark. Barcamerica argued that it had not abandoned its trademark, as evidenced in part by the fact that Renaissance was using DA VINCI pursuant to a license from Barcamerica.

Under a valid license, the licensee’s use of a trademark is said to "inure" to the benefit of the licensor. Therefore, had the license between Barcamerica and Renaissance been valid, Renaissance’s use of DA VINCI would have been considered the equivalent of use by Barcamerica. However, the Ninth Circuit held that the license between Barcamerica and Renaissance was an invalid naked license because Barcamerica failed to exercise quality control over Renaissance’s DA VINCI wines.

Barcamerica had argued that one of its principals occasionally, informally tasted Renaissance’s wines. Barcamerica further testified that it relied on the good reputation of Renaissance and its now-deceased winemaker, Karl Werner. The court, however, found that such tastings and reliance on reputation did not constitute sufficient quality control.

The court also noted that the license agreement between Barcamerica and Renaissance did not contain any provision regarding quality control, and that Barcamerica and Renaissance did not have any close (e.g. parent-subsidiary) relationship which would amount to de facto control. Rather, Renaissance explained that Barcamerica never played any role in monitoring or maintaining the quality of Renaissance’s DA VINCI wines, and it refused Barcamerica’s request to sign a Declaration stating otherwise. It should be noted that licensees have no incentive to cooperate in such instances because invalidation of the license agreement would free the licensee from the agreement’s restrictions and would result in the licensee having the independent right to use the trademark.

Although Barcamerica argued that quality control was unnecessary because Renaissance made good wine, the court confirmed that a trademark license without quality control is inherently deceptive and thus invalid, regardless of the actual quality of the licensee’s product. "What matters," the court explained, "is that Barcamerica played no meaningful role in holding the wine to a standard of quality—good, bad or otherwise." Accordingly, the court determined that Barcamerica had forfeited its rights in the DA VINCI trademark.

The effect of Barcamerica’s involuntary forfeiture was significant. Not only did Barcamerica lose the right to halt others from using the DA VINCI trademark, but the court also held that Barcamerica had lost all rights to the DA VINCI trademark and that Cantine’s cancellation of Barcamerica’s U.S. trademark registration was therefore appropriate.

Interestingly, the Ninth Circuit did not recognize that some courts have held naked licensing to result in partial, rather than total, forfeiture of the owner’s trademark rights. For example, some courts have held that an owner should only lose rights in those geographic areas and/or in those product markets where use of the trademark was not controlled. This less severe approach may have been used had there been any equities weighing in Barcamerica’s favor.

Whether total or partial, any forfeiture of rights is significant to the trademark owner. Consequently, the lesson to be learned from Barcamerica is: (1) always include quality control provisions in your trademark license agreements; and (2) carry out those provisions by regularly and routinely monitoring the quality of the goods and/or services for which the licensee is using the trademark.

[ed. - Speaking of quality, tasting notes from a May 14, 1986 tasting by members of the Fellowship's San Diego "Centre" describe the Da Vinci Zinfandel (vintage not noted) as being "disappointing" and tainted by "volatile acidity" (vinegar character). The wine review below is interesting, noting that Renaissance released the Da Vinci Petite Sirah 25 years after bottling. If not for sale publicly, the wine was certainly available to Fellowship members over the years.]

Xmas: For Wine Geeks Who Think They Have Tried Everything

Posted by Fredric Koeppel

Those madcaps at Renaissance Vineyard and Winery have done it again, releasing a wine that’s not only unique but sort of crazy. If you think you have tasted everything, you must try this.

Da Vinci Petite Sirah

 

The wine is the Da Vinci Petite Sirah from the Sierra Foothills. (Da Vinci is a second label that Renaissance uses occasionally.) Notice that no vintage is stated on the label. That’s because this petite sirah is a “cross-vintage” blend from 1979, 1980, ’81 and ’82 — 70% from 1982, 20% from 1981, the remainder from 1980 and 1979. (Federal regulations state that if a label carries an American Viticultural Area designation, then 95% of the grapes must come from the stated vintage.) The wine was bottled in 1984 and was released on Oct 15 this year. That’s right, readers, this wine, in its finished state, has been aging at the winery for 25 years, though the base wines go back 30 years.

The Da Vinci Petite Sirah (nv) offers all the attributes of a well-made, perfectly aged and mature red wine. It’s mild and mellow, yielding hints of mint and white pepper, spiced and macerated black and red cherries and a touch of cedar and tobacco. Sporting a ruddy, luminous ruby-garnet color, the wine is smooth and harmonious; flavors of black and red currants are wreathed with cloves and spiced plums, and as the minutes wear by, a wafting of smoke emerges. Despite its age, there’s nothing puny about the wine, which is enlivened by bold but unobtrusive acidity and framed by gently faded yet still persistent tannins. A masterpiece!

Renaissance produced about 300 cases of this petite sirah, a true California classic. It’s the kind of wine you savor with duck or pheasant or squab. Most mature red wines from 25 or 30 years ago would cost hundreds of dollars, but the price here is $65. It’s available by mail from the winery in states where direct shipment of alcoholic beverages is legal, which of course it should be in every state of this union. I mean, come on, can’t we all act like grown-ups?

Sent to me as a review sample, and am I ever glad it was.

[ed. - Washington Times review of Da Vinci wine sourced from proquest.com.]

Da Vinci, Cabernet Sauvignon, Sierra Foothills, 1986, $9: [2 Edition]
By Paul Lukacs
Washington Times [Washington, D.C]
11 Feb 1998: E2.

Da Vinci is the second label of Renaissance Vineyard, a unique operation in California's Yuba County. Owned by the Fellowship of Friends, a group committed to the spiritual growth of its members, Renaissance's terraced, mountain vineyards represent a labor of love.

Far removed from the other wine regions, the Renaissance vineyards are difficult to farm and naturally low-yielding. They also produce wines of unquestioned distinction.

Renaissance's wines deserve to be better known. This cabernet has deep, complex flavors, firm tannins and a rich texture. Made in a Bordeaux style, it successfully walks the line between overt fruitiness and brawny structure. The result is a wine of considerable sophistication, with the patina of age but still some of the charm of youth.

At $9 a bottle, this wine is a fantastic bargain. Buy it by the case and drink it over the next year or two. Although we are only in February, it has to be a candidate for best buy of the year.

Copyright Washington Times Library Feb 11, 1998

The Fellowship's "Toilet of Venus" by Il Guercino's: real or fake?

[ed. - It appears that, on more than one occasion, the Fellowship attempted to sell this painting. Apparently, they eventually entered into an arrangement, perhaps with their ally Sotheby's auction house, perhaps with a private buyer, to lease the painting back to the Fellowship for display in its Apollo Galleria. I placed this in the timeline at the date of the 2002 Sotheby's auction.]

"YIC" wrote on the Fellowship of Friends Discussion blog, January 28, 2010: 

JFT and MHN [bloggers Just the Facts Ma'am and More History Needed] thank you for your answers, I asked because I did not know what you knew about this story and I see that your answer may be partially correct but they are not the reason why REB [Robert Earl Burton] is “persona non grata ” in the European community . You were honest JTF when you said “I could be wrong ” in effect I´m surprise not body here know the real reason why he is “not acceptable” . It is something that started in Italy with a lady that left the school and she reported to the authorities that an Italian painting that is in OH should not be there because belong to the Italian State and could not leave the Italian country, from there everything started.

Even in The FOF the people does not [know] the reason why He cannot go in Europe, they just think is something to do with VISA problems or something like that, off course somebody knows the full story but those want stay for convenience in top at the Fellowship Pyramid so they do not care about the true and somebody buffer it .

"Just the Facts Ma'am" wrote on the Fellowship of Friends Discussion blog, January 28, 2010:

182. YIC [responding to above] What you say, about state treasures in the way of artwork, may also be true. I vaguely remember something about that and will put the question to some friends that are artists and/or familiar with the art world. There is a 40 year tenure that could produce a good bit of bad bloody with various states both individually and as an organisation. But, what you state being the case, if it is so, does not negate the other reasons mentioned and they are more recent developments that you might not have been aware of until now. Also, these quasi-religions (Scientology, for instance, recently), have been taken to task by various jurisdictions because people can see through their facades.

"YIC" wrote on the Fellowship of Friends Discussion blog, January 28, 2010:

183. JTF [responding to above]

Yes, I did not know about the recent developments. I just know for sure that the “painting” has been the reason why REB started to be not accepted in the European community.

"dick moron" wrote on the Fellowship of Friends Discussion blog, January 28, 2010:

[Quoting] 187. YIC "Guercino. Venere´s Toilette."

Sorry, this painting is no national treasure - in Italy or the Kingdom of Apollo. I suspect that the only reason that mediocre work is still hanging in Oregon House, is the fact that is unsellable. The painting was in an old master paintings auction at Sothebys NY in about 1989 and it did not sell. The painting has “problems” as they say in the art world. You might also say it is “burned”.

"YIC" wrote on the Fellowship of Friends Discussion blog, January 29, 2010:

190.Dick Moron. [responding to above]

The reason nobody wants buy the Guercino is because they know it should not be there. It is a very nice painting , it is not mediocre, sorry.

"dick moron" wrote on the Fellowship of Friends Discussion blog, January 29, 2010:

195. YIC [responding to above]

Well, you seem to have a higher estimation of il Guercino than the rest of the modern world.

Anyway, I did a little research and saw that this painting, or a duplicate, sold at Sotheby’s London auction on July, 2002 for about 1,000,000 Great Britain Pounds. So did the FOF actually unload this dog of a painting? Looks like there might have been a little profit in that sale. So what’s the “treasure” issue with Italy if the thing sold at a public auction?? Do tell us.

"yic" wrote on the Fellowship of Friends Discussion blog, January 29, 2010:

 197.dick moron [responding to above]

Seems you do not know to much about the "Galleria”, maybe you are/were a little "far” from the life there! the Guercino is there at least from 20 years and off course is the authentic one, I do not know what you found they sold there but is not the same painting.

"dick moron"wrote on the Fellowship of Friends Discussion blog, January 29, 2010:

199.yic [responding to above]

Yes I have made it a priority to stay as “far” from the life at the Galleria as is possible.

For anyone who cares:

http://www.sothebys.com/app/live/lot/LotDetail.jsp?lot_id=3TGLL [ed. - Link no longer active.]

From the description, this appears to be the real Guercino. If there is another still in Oregon house, it is either copy or the sale in 2002 fell through.

Anyway, why would anyone trust the taste of the man who bought this trite work.

Sotheby’s London, July 10,2002
LOT 62
The Property of a West Coast Institution
Giovanni Francesco Barbieri, called il Guercino
Cento 1591 – 1666 Bologna
THE TOILET OF VENUS
1,200,000—1,800,000 GBP
Lot Sold. Hammer Price with Buyer’s Premium: 1,216,650 GBP

"another name" wrote on the Fellowship of Friends Discussion blog, January 30, 2010:

If my memory is correct this was the reason the painting was not sold a few years ago. The copy in the Galleria is most likely a copy. Of course Robert said: something “what a play it was that we had the painting back”. I remember him saying this in a meeting and he seemed to believe himself.

"Just the Facts Ma'am" wrote on the Fellowship of Friends Discussion blog, January 30, 2010:

[Responding to] 193. More history needed:

You don’t really expect anyone is going to read that jibberish you posted. But, thank you for the link to that translation.
~ ~ ~ ~ ~ ~
I hope this poop on the Guercino Venus Bathing (The Toilet of Venus) painting helps settle some issues a bit. The painting was removed from the Galleria around the time of the Sotheby’s sale (and possibly at other times) – as best as I remember. (BTW, the Sotheby’s page lists the provenance; seems like it was already out of Italy prior to its showing up in Oregon House; for what that is worth. Sotheby’s is pretty good at doing their home work.) The story was that it was up for sale and the story continued on that it did sell. Arrangement was made for a lease back, preservation, and housing of the object. This way, FoF could enjoy almost all the benefits of ownership without possessing it and tying up capital. Of course, it would mean making payments. But, it would be cared for and on display. It is a large painting – the figures being near life size. This writer does not particularly give it high marks, as Spock 89/203 stated: ‘Never had a moment of inspiration from that painting, or any sense of awe.’ It’s somewhat dark and brooding. A better description could be: The Vanity of Venus. She is looking at herself in a mirror. For me, it was primarily decorative and its main value was that its huge size covered a lot of wall space that otherwise would have required several paintings and decorative objects. So, yes, perhaps symbolic of the vanity of Fellowship of Friends. Here is large version:

http://s7d2.scene7.com/is/image/Sothebys/3TGLL_L02111-62

"dick moron" wrote on the Fellowship of Friends Discussion blog, January 30, 2010:

206. just the facts m’mam (joe friday) [responding to above]

How interesting about the Guercino. Sounds like it was bought at auction in 2002 by an investor group with an arrangement to lease it back to FOF (probably for not much money) as caretakers for their investment. An “on Loan” arrangement with a “non-profit museum”.

I wonder if it was the now-failed art investment group, Artemis Fine Art ltd. I know that R.B. and the FOF were involved with these guys in the early-1980s. The Guercino was in a Sothebys NY auction around 1989 and it not sell. I know because I was there monitoring the sale for the Burton.

And i agree that the painting is little more than a large wall covering that happened to be worth a lot of money at one time. But then, the entire Academy/Galleria is a just a little puff of decorative fluff.

"rock that boat" wrote on the Fellowship of Friends Discussion blog, January 31, 2010: 

What I remember is that the FOF’s Guercino turned out to be a fake.

 "dick moron" wrote on the Fellowship of Friends Discussion blog, January 31, 2010:

213. rock that boat [responding to above]

You might be thinking of the Ugolino which was discovered to be a fake when it was tested by the J. Paul Getty Museum. The Getty was going to buy the painting and no one suspected it was fake. Standard scientific testing revealed that it was not authentic.

The FOF had paid about $1,000,000 for it and I assume the money was refunded by the Swiss art dealer that sold the thing.

"WhaleRider" wrote on the Fellowship of Friends Discussion blog, January 31, 2010:

rock that boat: [responding to above]

You can’t possibly be suggesting that the FOF tried to sell something that was fake, are you?…that they possibly could have stooped so low as to have been attempting to profit from selling something that was in reality only a cheap imitation?

And once the truth was discovered that the work was in fact not what it appeared to be, that the FOF’s claim of its authenticity was proven to be unfounded…that the buyer backed out of the deal?
How could that be…I mean, given that the FOF operates only under the guiding hand of c-influence?
What a shock. This is so unexpected. I am wordless.