So you wanna start to make wine commercially?

So you wanna start to make wine commercially? What are my legal options, rights, and opportunities? Napa Valley College February 13, 2014 By K. Christopher Branch, Esq. Adjunct Professor of Wine Law Loyola Law School, Los Angeles Founder of Winelaw.net, a legal services firm providing operational wine law legal services to vintners and growers throughout the United States . winelaw.net/KC Branch Firm 707 204 9593

Pressures on the Wine Industry • Luxury Items that should be taxed according to Government • Evil Spirits that contributes to the delinquency of people that should be outlawed according to the Prohibitionists • The 3 Tiers restrict any Tier from becoming a controlling interest • Producer • Distributor -- not in reality • On/Off Sale Retailer • Consumer winelaw.net/KC Branch Firm 707 204 9593

Choose a Brand/ Mark Criteria: Uniqueness Legally Correct winelaw.net/KC Branch Firm 707 204 9593

Is your brand/unique in the wine industry according to the USPTO and the TTB? Research! http: ttb.gov – “colas on line” http: ustpo – “trademark search winelaw.net/KC Branch Firm 707 204 9593

Do other winemakers have the name in their brands/marks? May be possible to use, but may be less transactional costs to use non-used names winelaw.net/KC Branch Firm 707 204 9593

Gallo Winery v. Pasatiempos Gallo Do non-wine Companies Use the Brand/Mark? winelaw.net/KC Branch Firm 707 204 9593

Is the brand legally correct? Federal Government through the TTB must approve all labels. Ask yourself does the brand/mark contain - Any false, ambiguous, or missing statements which can mislead the consumer. winelaw.net/KC Branch Firm 707 204 9593

Any statement, design, device, or representation which is obscene or indecent. winelaw.net/KC Branch Firm 707 204 9593

Any statements disparaging a competitor’s product? winelaw.net/KC Branch Firm 707 204 9593

Any statement, design, device, or represent-ation of or relating to analyses, standards, or tests, irrespective of falsity, which the appropriate TTB officer finds to be likely to mislead the consumer. winelaw.net/KC Branch Firm 707 204 9593

Any statement (other than a statement of alcohol content) that leads you to believe the beverage is intoxicating. winelaw.net/KC Branch Firm 707 204 9593

Any pictures or statements that lead the consumer to believe the person (in the picture or endorsement) endorses or produces the product. w inelaw.net/KC Branch Firm 707 204 9593

Should I get a license to use art or name? winelaw.net/KC Branch Firm 707 204 9593

Start Your Brand Protection Register Brand on Intent to Use Basis with United States Patent and Trademark Office Consider State Protection Consider International Protection Google News Brand Protection Services winelaw.net/KC Branch Firm 707 204 9593

So now I have a brand, a company and a place to make my wine..now what? winelaw.net/KC Branch Firm 707 204 9593

MY CHOICES OF BUSINESS MODELS • Sole Proprietor, dba • Partnership • Limited Partnership • LLC • S Corp • C Corp winelaw.net/KC Branch Firm 707 204 9593

So now I have a company, what is my business model? Am I growing grapes to make wine? Am I buying grapes to make wine? Am I buying bulk wine and bottling it? Am I doing this in my own facility? Am I leasing a facility? Do I want to share a facility? Do I want someone else to do all of the work? winelaw.net/KC Branch Firm 707 204 9593

Answers! • Am I growing grapes to make wine? – yes • Then you need the following: • Land • Vineyards • California ABC winegrower type 02 License • TTB Permit • Bond winelaw.net/KC Branch Firm 707 204 9593

Answers! • Am I buying grapes to make wine? – yes • Then you need the following: • Contracts to buy grapes • California Ag License • TTB Permit • Bond • California ABC winegrower type 02 License winelaw.net/KC Branch Firm 707 204 9593

Answers! • Am I buying bulk wine to bottle? – yes • Makes you a negociant • Then you need the following: • Contracts for Grape Purchases • TTB Permit for bonded wine cellar • Bond • California ABC type 17/20 License winelaw.net/KC Branch Firm 707 204 9593

Answers! • Am I doing this in my own facility? – yes • Review local land issues • Review potential hazards • To vendors • To wine • To customers • Review facility for Compliance • ABC • TTB • ADA winelaw.net/KC Branch Firm 707 204 9593

Answers! • Am I doing this in in a leased facility ?– yes • Need a written contract with few limits on use • Review potential hazards • To vendors • To wine • To customers • Review facility for Compliance • ABC • TTB • ADA winelaw.net/KC Branch Firm 707 204 9593

Answers! • Am I doing this in in a shared facility ?– yes • Alternating Proprietorship • written contract with few limits on use • Can be large or small winelaw.net/KC Branch Firm 707 204 9593

Answers! • Do I want someone doing all of the work? - yes • Need a contract • Custom Crush Facility • 02 issue • No license issue • Who’ s wine is it really? • Who is responsible for wine? winelaw.net/KC Branch Firm 707 204 9593

Time to Apply for Permits and other nasty things • Federal Basic Permit • ABC 02 or 17/20 • Bond • Insurance • 60 – 90 days usually winelaw.net/KC Branch Firm 707 204 9593

Can I finally make wine? Yes! winelaw.net/KC Branch Firm 707 204 9593

Fast Forward --- I have the wine..how do I sell it? - depends upon your license - consumers - on premise - off premise - other wineries winelaw.net/KC Branch Firm 707 204 9593

What are the trade practice pitfalls? -FTC -TTB -ABC -Other state rules winelaw.net/KC Branch Firm 707 204 9593

The California ABC Act • The laws seek to avoid the evils and excesses of disorderly marketing conditions that plagued the alcoholic beverage industry prior to prohibition. • The Act seeks to remove the manufacturer’s influence over the retailer. • The Act is intended for the protection of “the safety, welfare, health, peace, and morals of the people of the State, to eliminate the evils of unlicensed and unlawful manufacture, selling, and disposing of alcoholic beverages, and to promote temperance in the use and consumption of alcoholic beverages.” winelaw.net/KC Branch Firm 707 204 9593

Enforcement Actions Failure to follow ABC rules, including irresponsible beverage service can be reported by the ABC itself, competitors, and the general public. Penalties include bad publicity, monetary fines, suspensions, and in severe situations, forfeiture. winelaw.net/KC Branch Firm 707 204 9593

Advertising • Catalog • On-Site Display Advertising • Premiums and Gifts to Retailers • Giving Out Consumer Advertising Specialties • Retailer Advertising Specialties • Contests, Sponsorships and Non-Profit Activities winelaw.net/KC Branch Firm 707 204 9593

Thank You This document and the information provided by KC Branch at this presentation is not intended to be legal advice and tailored neither to any specific situation nor an individual. These materials and the oral presentation of information are provided without warranty and any representation of the truth of any of the matters asserted by the KC Branch Firm. Thanks to Patrick of PB Media (pat@pbmedia.us) for some of the Photos. winelaw.net/KC Branch Firm 707 204 9593

So you wanna start to make wine commercially?