The Value of a Vineyard on a Label

How much is it worth to have the name of a vineyard on a label? Seems pretty simple, doesn't it? I grow a few grapes in my backyard and I put John's Vineyard on the label. That should increase the price I can charge for a bottle by what -- perhaps negative five dollars?

But, not all vineyards are alike. In Napa Valley, one of the most storied is the To Kalon Vineyard to the west of Highway 29 in Oakville. Originally planted by H.W. Crabb in 1861, when a label says To Kalon, the price jumps up. In fact, if you use grapes from Tuck Beckstoffer's part of the To Kalon Vineyard, there is apparently now a tie-in between the price of the grapes and the price of the bottle. And, those bottles are not inexpensive. Most are priced at more than $150 for a standard 750 ml bottle and many are far more pricey than that.

To my knowlegde, the parts of the vineyard not owned by the Beckstoffers is owned by Robert Mondavi Wines and Robert Mondavi is owned by global behemoth, Constellation Brands. And, Mondavi had enough foresight to trademark the name To Kalon (when Beckstoffer purchased its portion from Mondavi, it had similar rights to use the name). 

An upstart winery, The Vineyard House, a project of second generation Nickel family brothers (offspring of Nickel and Nickel founders) has a much smaller vineyard in the area. And, it borders the Mondavi (Constellation) To Kalon property. The land once, at least allegedly belonged to H.W. Crabb and the Nickel brothers allege that it was part of what Crabb named To Kalon. They sued to cancel Mondavi's federal trademark on the name. After all, if their grapes came from To Kalon, they should be able to use the name.

I'm not going to go into the legal details of the suit, but suffice it to say that the Northern District of California ruled in favor of Constellation Brands. Constellation's counsel argued that "Plaintiff believing it would win at trial by relying on the same arguments and evidence rejected at the preliminary injunction hearing [Constellation had gotten a temporary injunction stopping The Vineyard House from using the To Kalon name] would not only have been unreasonable, it would have approached the colloquial definition of insane." 

Because of that alleged colloquial insanity, Constellation has asked the Court for reimbursement by The Vineyard House of legal fees -- $4.4 million in legal fees. That's right; they spent $4.4 million defending the name of the vineyard. Imagine what they think the actual value of the vineyard and its name are.

More than John's Vineyard, I am certain.

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