This really is a story about trademarks.
The State of New Jersey recently fined a bunch of bars for selling name-brand drinks but delivering generic booze instead.
Patrons ordered top-shelf drinks — specifying Maker’s Mark bourbon, for example. The bars charged top-shelf prices, but didn’t give their customers what they paid for, pocketing inflated profits in the process.
This really is a case of fraud. (It’s not relevant to the point, but I can’t help but reveal that many of the bars were T.G.I Friday’s. It sounds like it was an institutional practice — the chain agreed to pay a $500k fine and adopt a “Guest Satisfaction Assurance Plan” that apparently is intended to make sure patrons actually get what they pay for. Why a corporate “Plan” is needed to ensure that bartenders pour what customers order remains a mystery.)
This is an outrage. However, it also illustrates how trademarks work. If I want my martini made with BRAND X vodka, that’s what I tell my server. I expect to pay more than if I ordered a martini without specifying the liquor. But I most definitely also expect to have my order faithfully fulfilled.
Trademark infringement occurs when a later user selects a trademark that is likely to cause confusion with an earlier adopter in connection with similar goods or services. The consumer thinks he or she is buying from SOURCE A, but actually buys from SOURCE B. The consumer doesn’t get what he or she pays for, and SOURCE B gets a sale that was meant for SOURCE A. Nobody wins, except for SOURCE B.
What these bars are doing is even more insidious. They’re not tricking customers with an off-brand name that looks or sounds like a better-known, trusted brand. They’re pretending to deliver what was ordered and pass off one distiller’s liquor for another. The deceived consumer pays more and gets less.
It’s a breach of contract and breach of the public trust.
It also shows how vulnerable consumers can be when sellers fake trademarks.