Vancouver Island whisky maker in battle with Scottish association over name

In golden letters, the label clearly states it is a Canadian-made whisky, but the Scotch Whisky Association says that doesn't go far enough and it's taking the British Columbia distiller that makes the single malt to court to force it to change its branding.

"It's nonsense," said Graeme Macaloney, who owns and operates the Victoria distillery that makes Macaloney's Caledonian whisky.

"It's really a frivolous, quite damaging lawsuit, to be honest."

The Scotch Whisky Association, which represents the industry in Scotland and guards its brand around the world, launched the lawsuit in B.C. Supreme Court in March.

It says Macaloney uses words synonymous with scotch whisky that are "likely to deceive and mislead consumers in British Columbia to wrongly believe that the defendant's whiskies are scotch whisky."

It objects to Macaloney's use of the words "Caledonian," which it argues is synonymous with "scotch." It also objects to the use of the word "island" and the use of Macaloney's own surname on the branding.

Macaloney, who was born in Scotland, said he's not going to give up his family name.

"That's just absolute nonsense."

The distillery's name is a tip of the hat to British Columbia's past when a large part of it was known as New Caledonia and overseen by theHudson's Bay Company.

Macaloney said he would have called it New Caledonian whisky but feared that would cause customers to confuse it with the French Polynesian island that is also called New Caledonia.He also called it an island whisky because it is made on Vancouver Island.

Macaloney said when he started the distillery five years ago, he was transparent with the Scottish Whisky Association about how he was branding his whisky and worked with them to be compliant.

He said he made changes to his packaging to keep the association happy and made sure the Victoria address was prominent on the label. He added a gold embossed map of Vancouver Island on the box.

'David and Goliath' situation

He's incensed by the suggestion the Canadian distillery can't use Scottish terms in its marketing.

"Canadians are entitled to celebrate their Scottish heritage as much as the Scots are. We sent 16 regiments to World War One and World War Two. Highland regiments wearing tartan. Every province has tartan," Macaloney said. "And they try to tell us we can't use Scottish names. That's an insult to Canadians.

"This is a David and Goliath situation."

WATCH | Victoria whiskey distillery battles Scottish association over name:

Victoria whisky distillery in trademark battle with Scottish association over name

3 years ago

Duration 2:20

The Victoria distillery behind Macaloney's Caledonian Whisky is in a trademark battle. Despite packaging that acknowledges its Canadian origin, the Scotch Whisky Association is going after the distiller of the single malt.

Under federal regulations, Macaloney isn't allowed to call his product "scotch" whisky and he doesn't. These are the same rules that prohibit winemakers from calling sparkling wine champagne unless it comes from the Champagne region of France.

Innovation, Science and Economic Development Canada,the government department that oversees Canada's geographical index, said it can't comment because the matter is before the courts, but the prohibition is on a company using the term "scotch whisky."

In a statement to CBC News, the Scotch Whisky Association said it "consistently takes action in our global markets to prevent the use of Scottish indications of origin on whisky which is not scotch whisky."

The association argues that it has a duty to ensure distillers in other countries don't take advantage of the international reputation of Scotch whisky. It doesn't want the company to use the word "Caledonian" or Macaloney's surname on the label, among other things.

"In this instance, we have objected to the company's use of certain words and terms that are strongly associated with Scotland on its whisky, when the company's whisky is actually a Canadian product. This has the potential to confuse consumers."

The association also said it was open to resolution without further legal action.

Old world versus the new

Montreal-based trademarks lawyer Ekaterina Tsimberis said the association's job is not only to protect its members but also to protect consumers from possible misrepresentation.

"It's an interesting case because it almost pegs a bit of the old world with the new world and the interrelationships between people that come to this country as immigrants."

She said the association's legal argument requires a bit of a leap because it presumes how B.C. consumers understand the use of the word Caledonian.

"That is the test in trademark cases," she said. "It's whether the average British Columbia and Canadian consumer of whisky products would believe and would know that Caledonian or Caledonia refers to a geographical location or an old geographical location in Canada."

It's not the first time the Scotch Whisky Association has taken a Canadian distiller to court. In 2009, a federal appeals court ruled that Cape Breton whisky maker Glenora was allowed to continue using the word "Glen" in marketing its single malt. It continues to do so to this day.

• Whisky makers lose bid to ban Cape Breton 'Glen'

Affecting buying habits

Whatever the legal prospects, the association's move has soured whisky enthusiast Phil Nielsen's zeal for traditional scotch.

Sitting outside Macaloney's distillery beer gardenwith his wife, Bridgette, the two registered their distaste for the Scottish group's legal action.

"I really am annoyed that they're wielding their power. So many of the Scottish distilleries now are owned by multinationals. And they've got so much money and so much power," Nielsen said.

"I don't think that it's right that they're forcing a small Canadian enterprise like this to jump through hoops. So I think what it's going to do is just push me more towards buying local."

Bridgette Nielsen said she'll still buy Scottish, but questions the association's motives. She thinks Scottish distillers are envious of the national and international awards Macaloney's single malts have garnered.

"It's a bit of a wakeup call for them," she said.

The Nielsens believe the association should drop the matter and move on.

Macaloney thinks so, too. Instead of wrangling in court, he'd like to work with the association to educate the public about the history of scotch and the new traditions made on this side of the Atlantic.

"I think they're out of touch. They don't realize that there's a tidal wave of craft distillers. In the last 10 years, there's only 16 new distilleries in Scotland, in North America, 2,000, and all these Irish and Scottish diaspora will call their distilleries what they want," he said.

"What are they going to do now with hundreds and hundreds of names coming through?"