The lawsuit claims the use of the term "Highland" and its spelling of "Whisky" falsely imply that the product is Scotch whisky wholly produced in Scotland. Whiskey made in the U.S. is spelled with an 'e.'
In a statement, CEO Gareth Moore said Virginia Distillery has always been upfront with its customers, with labels stating: "Whisky from Scotland, Married with Virginia Whisky." Moore said he's confident the complaint will be resolved.
The trade group is asking for an injunction.
This story has been updated to correct the spelling of the first name of Virginia Distillery CEO Gareth Moore.