Wednesday, October 10, 2007

The Story of the TABASCO® Trademark

The Wall Street Journal today ran an article about one of my favorite trademarks – TABASCO®. The article (“Ingredients of a Family Fortune” by Mark Robichauz) reviews a new book by Jeffrey Rothfeder titled McIlhenny's Gold: How a Louisiana Family Built the Tabasco Empire, which investigates and details the history and growth of the McIllhenny family’s famous TABASCO hot sauce. While I am a huge personal fan of the red pepper sauce (going through about 1-2 two fl. oz. bottles per week and even having my own collection of Tabasco items), even I did not realize the interesting history behind the TABASCO trademark until I started writing this blog entry and doing some independent research of my own.

McIlhenny Co. generates $250 million in annual revenue with sales in more than 100 countries and profit margins in excess of 25%. The company produces as much as 600,000 two fl. oz. bottles of its famous hot sauce per day. The company remains closely held by approx. 200 shareholders (spread out among the McIlhenny heirs as they were ownership passed down from generation to generation) – even though it has received buyout offers of up to $1 billion. The Company’s classic pepper sauce is made the same way now as it has been for the past 138 years – picking the peppers at just the right time, mixing the pepper mash with salt and vinegar, and the aging the sauce for three years in oak barrels that formerly held Jack Daniels whiskey.

Rothfeder’s book of the McIlhenny family and its famous spicy red concoction was written without any cooperation from the family, which may have something to do with Rothfelder supporting a story that runs counter to the McIlhenny family legend of the origins of TABASCO sauce.

The official story, which can be read on the TABASCO website (link here), is that Edmund McIlhenny, a Louisiana banker, took some seeds of a Mexican pepper given to him by a Confederate soldier after the Civil War and planted them in his family’s Avery Island plantation as part of a condiment business he began in 1869. Another third party timeline of the origins of TABASCO sauce can be found here ( Edmund secured a patent in 1870 for a new process of preparing an aromatic and strong sauce from the pepper known in the market as Tabasco pepper.

Rothfeder’s story of TABASCO, however, begins pre-Civil War with a New Orleans plantation owner named Maunsel White. Mr. White, famous for his food servings at dinner parties, designed his own sauce made from a pepper named for its origins in the Mexican state of Tabasco and even bottled it for his guests. Mr. White supposedly had been growing Tabasco chili peppers on his plantation since 1849. Rothfeder cites to a letter that appeared in a New Orleans paper about the “Tobasco” pepper being introduced to the U.S. by Mr. White.

The story about Maunsel White is not new to the McIllhenny family. The Company even has a webpage titled “Some Common Myths About TABASCO® Brand Pepper Sauce” (link here) dedicated to answering questions about the Maunsel White story. McIllhenny disputes any claim that Maunsel White's sauce was advertised for sale as early as 1853, and instead puts the date that his sauce, known as “Maunsel White's Concentrated Essence of Tobasco Pepper," was first advertised for sale as 1864 – four years before Edmund McIlhenny started selling his own sauce. The sauce came to be known as "Maunsel White's” and not known as Tobasco. The company further notes that White’s product ceased to be manufactured during the 1870s, thus abandoning any rights he and his heirs would have to the name “Tobasco.”

The company also makes clear that there is no evidence that connects White’s peppers with McIllhenny’s peppers. In 1888, Edmund McIlhenny's pepper was even officially recognized by a noted American botanist and is now classified as Capsicum frutescens var. tabasco. Finally, the sauce recipes created by the two men were different (with White boiling his sauce, while McIllhenny allowed his sauce to ferment naturally).

The story behind McIllhenny’s now-famous TABASCO trademark is a lesson in legal persistence. For an interesting read on the subject, check out the excellent series of articles written by Roger M. Grace and published in 2004 in the Metropolitan News-Enterprise (link to the first article here).

Because the sauce’s main ingredient is the Tabasco pepper, competitors using the Tabasco pepper at the time were apparently surprised when the McIlhenny’s were awarded a trademark for the mark TABASCO in 1906. One particular competitor was B. F. Trappey, a Louisiana entrepreneur and former McIlhenny employee, who began growing Tabasco peppers from McIlhenny seeds. In 1898, Trappey founded B. F. Trappey and Sons, which began producing its own sauce labeled "Tabasco.”

McIllheny’s trademark registration for the mark TABASCO came just one year after Congress, in 1905, passed the act providing for federal registration of trademarks used in commerce between states that had been in exclusive use for the ten years prior to enactment. Given McIllhenny’s use of the term to identify its pepper sauce, John Avery McIlhenny, Edmund McIlhenny’s eldest son, signed an affidavit stating that McIllhenny was entitled to the registration of the TABASCO trademark under the 1905 Act.

Rival companies suspected that a friendship between John McIlhenny and then President Theodore Roosevelt (a second lieutenant in Roosevelt’s Rough Riders) may have influenced the government’s decision to grant the trademark. However, the Commissioner of Patents later withdrew the “Tabasco” registration in 1909 based on an alleged false declaration by John McIlhenny because McIllhenny could not claim that it had exclusively used the mark in commerce given the fact that other competitors had used the same term (i.e. McIllhenny had not used the mark exclusively). The action was upheld by the U.S. Court of Appeals for the District of Columbia in 1910.

McIllhenny Company was also sued for libel based on circulars titled “E. M. McIlhenny’s Son v. Infringers,” which were sent out by the company on July 17, 1906, publicizing its trademark registration and calling anyone else using the term “Tabasco” as an infringer. One competing Tabasco sauce maker, New Iberia Extract of Tabasco Pepper Co., Limited, sued McIllhenny and, in 1912, eventually won $5,000 in damages decision by Louisiana Supreme Court. The same court also determined that McIllhenny’s exclusive right to use the name Tabasco expired with its 1870 patent.

However, McIllhenny continued to fight for its right to use the mark exclusively. And on July 29, 1918, the Fifth U.S. Circuit Court of Appeals in Gaidry v. McIlhenny Co., 253 F. 613, recognized McIlhenny as the exclusive holder of the right to sell pepper sauce with the mark “Tabasco.” In short, the court found that despite the geographic descriptiveness of the word Tabasco, it had acquired a secondary meaning to the public as an source identifier, namely identifying McIllhenny’s red pepper sauce.

Spurred on by the Fifth Circuit decision that McIllhenny had a common law trademark right to Tabasco name, McIllhenny then filed a trademark infringement suit in 1919 against Ed Bulliard, who made a sauce named “Evangeline Tabasco Sauce.” In 1920, the U.S. District Court for the Western District of Louisiana granted an injunction to stop Bulliard from using the term Tabasco. The companies negotiated an agreement that would allow Bulliard (as McIllhenny had done with other competitiors) to list simply list Tabasco peppers as one of the ingredients. McIllhenny had to go back years later to file another similar lawsuit to stop Bulliard’s use of the term Tabasco. In 1929, the McIllhenny family also won a trademark infringement suit against Trappey, thus firmly securing McIllhenny’s exclusive right to have the only sauce that could be called “Tabasco.”

The end result is one of the world’s oldest and most recognizable brands. A link to the original 1906 registration is not available, but based on the prior registrations cited in the oldest TABASCO mark that is viewable through PTO’s TARR database (Reg. # 223,310 for TABASCO, which registered on February 1, 1927), these 1906 registrations are likely Reg. # 53,928 and # 53,929. Another TABASCO trademark is its signature bottle shape (pictured below), which McIllhenny registered on March 15, 1966 (see Reg. # 805,671).

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