630-868-5061

Trademark Law for Craft Brewers: Disputes Abound in the Beer World

Trademark Law for Craft Brewers: Disputes Abound in the Beer World
Naming a new beer case study

Beer has been a pivotal piece of human history, predating bread and likely being a major contributor in man’s transition from hunter/gatherer to agricultural society; with the first example of beer estimated to date back to 10,000 BCE at Godin Tepe in Sumeria. The production and commercialization of beer has been around since 3,000 BCE, and laws regulating beer sales have existed since Hammurabi, and the laws regulating modern beer production date back 500 years (Reinheitsgebot of 1516).

Today, however, brewers face a plethora of complex considerations on the local, state, national, and industry level that affect the way they establish a business, distribute products, and operate their business. One of the biggest issues facing brewers today (aside from a hop shortage) is that of naming not only the beers one intends to serve, but the brewery itself.

Trademark Trouble Brewing for Upstart Breweries

As of June 30, 2016, there were 4,656 breweries operating simultaneously and another 2,200 in planning—nearly 15 times more operating breweries than 25 years ago, and over 50 times more than beer’s low water mark of 1978. With hundreds of thousands of unique beers from nearly 5,000 U.S. breweries, usage of anything from a hop pun to the term ‘Black Ops’ has become grounds for litigation.

“In […] Fresno, Calif., two civil engineers and a lawyer set out in late 2014 to turn a love of beer-making into more than just a hobby. They named their operation Black Ops Brewing, in honor of family members in the armed forces, and started brewing four barrels at a time, opening their doors to customers on nights and weekends…

Within months of launching, Mr. Broussard and his partners heard from Brooklyn Brewery clear across the country. The message: They needed to stop using the name Black Ops Brewing, because the New York brewery already had a beer named Brooklyn Black Ops.

Three months of litigation and one preliminary injunction later, and the Fresno business is now called Tactical Ops Brewing Inc. “They probably spent four to five times what our company is worth in legal fees,” fellow co-founder Justin Campagne said.”

Trademark applications and opposition are being filed at an increasing rate, as in addition to the increasing number of breweries in the U.S., many breweries are ramping up production of new beers for the purpose of generating social buzz around and foot traffic to the brewery.

High Profile Claims by and against Brewers

This has created an environment rife with trademark claims, cease and desist letters, and settlements—breweries have been on the receiving end of complaints filed by other breweries, wineries, distilleries, hard soda makers, and more; even early-2010s pop groups and energy drink companies have all been sending cease and desist letters to craft brewers in recent years:

  • Red Bull Files Opposition to Old Ox Brewing Trademark Application
  • Hansen Beverage (Monster Energy) Sends Cease and Desist to Rock Art Brewery over Vermonster Barleywine (later backs down)
  • “Party Rock” Duo LMFAO Send Cease and Desist to Pigeon Hill Brewery over LMFAO Stout (Agreement reached September 2015)
  • Moosehead Brewing files infringement Adirondack Brewery over nonalcoholic Moose Wizz root beer
  • Moosehead Brewing comes to agreement with Big Sky Brewing of Montana over Moose Drool Brown Ale following nine-year lawsuit.
  • SweetWater and Lagunitas do Battle over “420” Branding
  • Lagunitas files complaint against Sierra Nevada over Hop Hunter IPA

These are just a few examples of high profile complaints filed, with rare occurrences of collaboration (Avery and Russian River agree to Belgian Ale collaboration after both naming beer “Salvation”).

The Litigious Nature of Trademark Protection

More diverse output from an increasing number of breweries has created an environment rife with trademark claims, cease and desist letters, and settlements—breweries have received complaints filed by other breweries, wineries, distilleries, hard soda makers, and more; even early-2010s pop groups and energy drink companies have all been sending cease and desist letters to craft brewers in recent years.

Trademark litigation is costly, and the larger/older the brewery, the more aggressive the tactics will be if you toe or cross a line. The jury trial is a ‘nuclear option’ used only by the most aggressive companies, but if it comes to one, the results will be costly, if not a death sentence for a small brewer.

Alternative to Litigation: Trademark Coexistence Agreement

Additionally, two amicable brewers could work together to form a trademark coexistence/consent agreement if neither sees a problem with a similar name in the marketplace. The purpose of the trademark consent agreement is to concisely set forth the main terms of the coexistence agreement, in a way aimed toward presentation to the USPTO trademark examining attorney.

Minimizing Risk of Trademark Infringement Claims

According to attorneys Jacob Paul and Kay Collins of Coan, Payton, and Payne, LLC, there are several steps brewery owners can take to minimize their chances of ending up in costly trademark litigation.

Commit a thorough search of a proposed name before deciding to use the term.

The search should not be limited to exact marks and exact products, but must include similar terms and goods that may create consumer confusion. A properly conducted search of the trademark database of the United States Patent and Trademark Office, as well as a common law search for unregistered marks, will reveal the names that must be avoided.

Register the mark with the United States Patent and Trademark Office.

Skip state registrations, and head straight to the USPTO. Federal trademark registration gives the owner the presumptive exclusive right to use the mark all over the United States and prevents third parties from registering confusingly similar marks.

Police the mark by monitoring use of similar or identical marks

A trademark owner could lose trademark rights in its name if it allows unlicensed use by others. Generally, craft brewers are an amicable group to whom the idea of sending cease and desist letters is not appealing, and you should be able to find a solution without litigation.

You Brew It, We Brand It, They Buy It

It takes a lot of creativity and a bit of legal smarts to run a brewery. It takes the same mentality to brand a product or organization.

A few years back, I learned that as much as I love beer, my venture into homebrewing taught me that I should probably stick to branding.

Luckily for all of us, you’re the one making the beer.

If you ever need some help brewing up some big branding ideas, we’re here to help. If you need a brewer, you can head to brewbound.

IDeas BIG has worked with companies of all sizes, of all industries to take great products and turn them into great products with better names, logos, packaging, and more. Learn more about what we do, learn more about our experience in the beer industry and in protecting trademarks, and get in contact with us for more details.

Content Marketing, Social Media, PR, and much more. Fueled by Monster, Coffee, and an anxious desire to see a Cubs World Series Victory.

0 Comments

Leave a reply

Your email address will not be published. Required fields are marked *

*