Tequilas del Señor

The arrangements made for this were set forth in an agreement, with the obligation that Toorank be allowed to sell the tequila in question under the SOMBRERO NEGRO brand. Seven years after giving this permission, the agreement with TDS was terminated. TDS informed Toorank that they were no longer allowed to use the name Tequilas del Señor, the brand SOMBRERO NEGRO and/or the NOM code NOM-1124. From that date, TDS also stopped supplying Toorank with tequila. Despite this ban, Toorank decided to market a product on its own, under the name Tequila Sombrero Negro.

TDS demanded an injunction against the use of the trademark, after which Toorank defended itself by claiming implied consent for the use of the SOMBRERO NEGRO trademark. They based this supposed consent on a fax letter dated March 1, 2000 terminating the agreement. Toorank believed it could infer from this that the use of the Tequila Sombrero Negro label was impliedly authorized. The preliminary injunction judge rejected Toorank’s defense. According to the judge, Toorank’s right to use the Tequila Sombrero Negro label and mark was based on the agreement. The termination of the agreement eliminated the sole basis for using the label and mark. The permission to use the SOMBRERO NEGRO mark, which resulted from the agreement, had been terminated by its termination.

In other words, Toorank was not allowed to use the trademark SOMBRERO NEGRO or the label Tequila Sombrero Negro after the termination of the agreement. TDS was vindicated in its claim and Toorank had to stop using the brand and label.