Clase v. Casa Case Facts
Clase Azul and Casa Azul manufacture and sell tequila products. The brand names, both in Spanish, translate to “blue class” (Clase Azul) and “blue house” (Casa Azul). Clase Azul produces and distributes a premium distilled tequila priced from $135 per bottle, sold in distinctive ceramic bottles displayed behind locked cases in retail stores and in restaurants. Casa Azul sells both distilled tequila and canned mixed drinks, which are combinations of tequila, carbonated water, and flavorings, stocked alongside mid-market brands and wine coolers.
The brands also differ in their marketing approach and target audiences. Casa Azul’s promotions target younger consumers, emphasizing accessibility and convenience, while Clase Azul’s advertising appeals to connoisseurs and collectors of high-end tequila.
Clase Azul has sold its tequila since 2003 and obtained a U.S. trademark registration in 2008. Casa Azul registered a trademark in 2008 for its canned mixed drinks and, in 2018, expanded to include bottled distilled tequila. Clase Azul, produced by Casa Tradición S.A. de C.V., filed a trademark infringement action against Casa Azul, seeking a permanent injunction.
“Clase in Session”: Consumer Surveys
In trademark infringement litigation, consumer surveys provide evidence of whether a purchaser is likely to be confused by the source, sponsorship, or affiliation of goods. Both Clase Azul and Casa Azul submitted consumer survey evidence measuring the likelihood of consumer confusion, that is, whether consumers believed Casa Azul products were made, distributed, sponsored, or approved by Clase Azul. Casa Azul’s expert used the Eveready format, while Clase Azul’s expert employed a modified Squirt format.
Eveready Survey Format: Respondents are shown only the alleged infringer’s products or branding.
Squirt Survey Format: Respondents are shown both parties’ products (and often those of unrelated competitors) to simulate marketplace proximity.
Best in Class: Squirt vs. Eveready Survey Formats
The Clase Azul survey employed a modified Squirt format. The study presented respondents with the Clase Azul tequila bottle and its accompanying box, followed by two canned beverages: one from Casa Azul and a fictitious control brand, labeled Loma Blanca. This survey produced a net confusion rate of 29.2 percent.
Casa Azul submitted two Eveready format surveys: one assessing consumer confusion for canned beverages and another for bottled tequila. In the first, respondents viewed Casa Azul cans and were asked questions to determine whether they believed the brand was from, affiliated with, or sponsored by Clase Azul. In the second, participants were shown Casa Azul’s blanco, reposado, and añejo tequila bottles or a fictional control brand, Agave Azul, and asked the same questions. The net confusion rates were 1.7 percent for bottled tequila and 0.33 percent for canned beverages. Both fell below the threshold often used to indicate a potential likelihood of confusion.
Clase Azul’s expert argued that the Eveready format was inappropriate because Clase Azul is not sufficiently well-known to be “top of mind” among consumers. She contended that when products appear in proximity in the marketplace, an Eveready design can understate confusion due to limited brand awareness. Conversely, Casa Azul’s expert criticized the Squirt survey, arguing that the products are not sold near one another, and that the survey’s exclusion of third-party brands made it unrealistic.
Consumer Confusion and the Court Decision
The court excluded Clase Azul’s survey evidence but accepted the Casa Azul survey evidence, finding that a Squirt survey methodology “did not reflect the ways the products appear in the marketplace.” Whereas an Eveready methodology was “appropriate to the actual marketing of the products at issue,” the court said, and therefore “the more reliable method.”
Following a bench trial, the ruling held that Casa Azul was not liable for trademark infringement. Key elements of the decision included the likelihood of confusion surveys. Both companies sell tequila; however, their differences lie in price point, marketing channels and communication, target demographics, and product types. The court also noted that the canned mixed drink was “plainly dissimilar” to the premium bottled tequila.
The court relied on the low levels of confusion in the admitted survey evidence and noted the importance of conforming to market reality. When surveys fail to accurately reflect marketplace conditions at the point of purchase, results may not be reliable.
Survey Methodology Matters
The Clase Azul v. Casa Azul decision shows how properly designed and contextually appropriate surveys can be a decisive factor in trademark disputes. Selecting between Squirt and Eveready formats depends on factors such as brand awareness, product proximity, and market context.
IMS Legal Strategies brings decades of experience in designing and conducting Squirt and Eveready format surveys to measure consumer confusion in trademark infringement cases. For more information, please get in touch with IMS Legal Strategies.
