Kosher drinks distributor sued over 'counterfeit Kahlua'

Label versus labelPernod Ricard's Absolut division is suing a US liquor distributor of infringing the trademarks on its coffee liqueur brand Kahlua.

Happy Hearts Wine - an Orthodox Jewish distributor of kosher drinks based in New York that also operates as Happy Spirits - is accused of selling a coffee liqueur product called Kahfua that according to the suit mimics Absolut's trademarks and "distinctive packaging".

The "defendant's counterfeit Kahfua product is virtually identical to and substantially indistinguishable from the genuine Kahlua coffee liqueur product," says the lawsuit, which has been filed in the US District Court for the Eastern District of New York.

Kahlua has been on the market since 1938 and is the base of numerous cocktails such as White Russian, Black Russian and Mudslide.

It is the number one brand of coffee liqueur in the US as well as the sixth biggest-selling liqueur brand worldwide, selling almost 20 million bottles in 2013, says Absolut. US sales of the drink are in the region of $1bn over the last five years.

Happy Hearts Wine started distributing Kahfua in this spring, according to court documents filed on June 3. The activity came to the attention of the brand owner when the company filed for approval of the label for its Kahfua product with the federal Alcohol and Tobacco Tax and Trade Bureau, which is required before any spirit can go on sale in the US.

It can be extremely hard to identify trademark infringement in small commercial operations, but big brandowners are increasingly adopting a zero-tolerance policy against infringers, sometimes filing dozens of lawsuits to try to drive knock-offs out of the market.

"This is an action for trademark counterfeiting, trademark infringement, trademark dilution, false designation of origin and unfair competition under federal and New York law."

The suit is seeking an injunction on sales of Kahfua, court costs, and $2m in statutory damages per counterfeit mark as well as punitive or exemplary damages "as permitted under New York law."

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