- Associated Press - Thursday, June 23, 2016

LOUISVILLE, Ky. (AP) - A federal judge on Thursday dismissed an Appalachian distillery’s lawsuit in a trademark dispute with the University of Kentucky, but the moonshine maker vowed to fight on.

The case pits the state’s flagship university against Kentucky Mist Moonshine, a small startup distillery in Whitesburg. U.S. District Judge Danny Reeves ruled that UK, as a part of state government, has sovereign immunity shielding it from the Kentucky Mist suit.

Despite the setback, Kentucky Mist co-owner Colin Fultz said his distillery would continue its push to trademark its logo “because we feel that no one should own the word ‘Kentucky.’”

“We’re not going to let them bully us,” he said. “We’re going to fight to the end.”

UK spokesman Jay Blanton said the university was pleased the judge’s ruling, issued in Lexington, recognized its sovereign immunity and its interest in protecting its trademark.

“We are also pleased the court recognized the university tried in good faith to reach an agreement that would allow Kentucky Mist to sell its merchandise while fully respecting the university’s trademarks,” Blanton said in a statement.

Kentucky Mist last year sued UK over use of the word “Kentucky” on clothing.

The distillery said it filed suit as a pre-emptive move after the university threatened legal action for the moonshine maker’s pursuit of a federal trademark registration.

Kentucky Mist claimed there was “no likelihood of confusion” between the two marks and wouldn’t dilute UK’s trademark - which is ubiquitous in a state where legions of fans support UK’s athletic teams. The distillery also said that “Kentucky” is a geographical location.

Earlier in the dispute, Blanton said UK didn’t tell the distiller it couldn’t use the word “Kentucky” in the business name or object to registering the logo for its product in the alcoholic beverage class but only asked that the logo not be registered in the clothing class.

“The university owns a federal registration for the mark KENTUCKY which it has used on athletic uniforms and fan apparel for decades,” Blanton said at the time. “A trademark owner is obligated to monitor its marks in order to prevent a weakening or a loss of rights.”

Kentucky Mist attorney Jim Francis said Thursday the distiller has multiple options, including a possible appeal of Reeves’ ruling, in pursuing its trademark rights.

Another option could be for the distiller to press its case with the U.S. Patent Trial and Appeal Board, where sovereign immunity would no longer be an issue, he said.

“We still feel we can succeed going forward,” Francis said. “It’s just going to take a different venue where they do not have sovereign immunity.”

Kentucky Mist makes fruit-infused moonshine currently sold in Kentucky, though the distillery intends to soon expand distribution to Illinois and South Carolina, Fultz said.

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