Supreme Court Rejects V&S Vin & Sprit AB's Appeal on Trademark Dispute

Business Wire, March 10, 2008

Swedish Supreme Court Refuses to Hear Appeal of Judgment Ordering Cancellation of Golden Gate Trademark Registration

SAN FRANCISCO -- Golden State Vintners, Inc. (GSV), a subsidiary of The Wine Group LLC (TWG), the world's third largest producer of wine by volume and the owner of such well-known brands as Franzia, Almaden, Inglenook, Concannon, Glen Ellen, and Gray Fox, announces that the Supreme Court in Sweden has rejected V&S Vin & Sprit AB's (V&S) appeal of the judgments of the Stockholm City Court and Svea Court of Appeal against V&S ordering the cancellation of V&S' registration of the Golden Gate trademark in Sweden. The judgments in favor of GSV are now final.

The Svea Court of Appeal and the Stockholm City Court have previously ruled in GSV's favor and have found that (1) V&S infringed GSV's trademark rights by falsely claiming that V&S secured permission from GSV to use GSV's Golden Gate mark on V&S' labels for the Golden Gate brand and (2) V&S breached a license agreement with GSV by registering the trademark Golden Gate in Sweden without GSV's permission, and selling wine under the trademark Golden Gate in Sweden from suppliers other than GSV.

"There are no more avenues left for V&S to try and spin its fictitious story of self-creation of the Golden Gate trademark," stated Ulrike Backhaus-Mueller, Managing Director of TWG - Europe. Ms. Backhaus-Mueller further remarked, "The Swedish Courts have consistently confirmed our contention that TWG is the rightful owner of the Golden Gate trademark and that V&S breached its license agreement by taking the mark and secretly registering it for its own benefit. V&S has rebuffed our numerous attempts to settle this dispute over the years and arrogantly continues to believe that it has committed no wrong when in fact it has consistently engaged in a series of bad faith actions with the intent to harm GSV. V&S' actions of engaging in deceptive marketing practices, continuing to sell counterfeit wine under the Golden Gate trade dress and perpetuating consumer confusion about the wine's origin and authenticity have completely destroyed the value of the one-time best selling and highly regarded Golden Gate brand in Sweden. GSV now intends to vigorously pursue its claim for damages which are approximately 235 million kronor.

"These judgments also confirm what we have been telling Systembolaget for over two years. Now that ownership of the Golden Gate trademark is finally settled, we call upon Systembolaget to at long last take immediate action to prevent further harm to GSV by suspending V&S' current listings of California White and California Red which contain images on the labels and packaging in violation of GSV's rights, and removing from its stores the inferior wine supplied under V&S' infringing packaging and labels. The brand sold by V&S in Sweden continues to violate the rights of GSV and is counterfeit, inferior wine produced by a different producer than the producer that created the best selling wine in Sweden. It is now time for Systembolaget to immediately rectify this situation and to take action to prevent any further harm to GSV by one of its top customers."