Brewers Head to the Courts to Protect Their Brands
It all begins with a name. A word or series of words, strung together, capturing an essence, a spirit. Telling the world who you are and what you’re all about. Maybe inspiration strikes in a flash. Or maybe it takes months of mental calisthenics. In the end, it’s perfect. Until the letter arrives or the phone rings. And then it’s not.
It all ends with a tweet, Facebook post or press release. Starting slowly then quickly cascading into a constant buzzing, strewn with wild accusations, expletive-laden @replies and even threats. Anger follows hurt begets bitterness. Welcome to the next era of modern beer: the great trademark wars.
The press, websites and Twitter are constantly buzzing with news of the latest trademark tussle between brewers. Whether small or large, breweries consistently must address issues related to branding and protecting their intellectual property. At the heart of these disputes lies a fundamental lack of understanding about the intricacies of trademark law, says attorney Candace Moon, who provides trademark-related services to more than 60 breweries. “There is not a lot of knowledge out there about how you actually get trademark rights,” she says. “Most of these breweries don’t know trademark law, and they don’t know what they can and can’t do and what their rights are.”
Attorney Mark Traphagen agrees and sees an inevitable increase in the number of such disputes. “I think it’s becoming a crowded field, and when a field is crowded, it’s always more likely that there’s going to be some sort of conflict between brand names, product names and other trademarks,” he says. Now in private practice, Traphagen previously worked as an attorney at the U.S. Patent and Trademark Office (USPTO), the federal agency that handles trademark registration for products and intellectual property identifications. According to Traphagen, his former employer currently has more than 12,000 brands of beer registered in addition to 45,000 registered wine and spirits brands. “When you take into account the possible relationships between those three fields, that’s a lot of marks,” Traphagen says. “It’s a challenge to come up with something that’s original.”
The ABCs of Trademark Law
With confusion in the community, both among brewers and the consumers they serve, legal experts are eager to educate the public and businesses about what trademark law covers and what it does not. In the brewing context, a trademark is a word, design, symbol or anything else that serves to identify a beer or brand and distinguish it from other brewery beers and brands, Traphagen says. “Those can be words, designs, and can include things called motion marks, such as the swimming shark mark that Dogfish Head has been using,” he says. All can serve as trademarks.”
One of many common misconceptions about trademarks is that simply thinking of a brand or product name and putting it out into the public sphere secures it against other uses. “A lot of people think they are protected if they register the company name with the state,” Moon says. “That does not give you trademark rights. That may give you the right to name your company that, but it doesn’t give you the right to put that name on a product or a brand name.” Moon further notes that registering a website or setting up a social media account does not provide a company with trademark protection. “It’s a big issue for breweries in planning because they’re the ones who can get burned the most because if they haven’t registered the trademark but they’ve done all of these other things,” she says.
A company can own and protect a trademark without registering it at the USPTO, though Traphagen cautions against this approach for brewers with any out-of-state sales aspirations. “The protection for an unregistered trademark is limited to the territory in which you are actually selling the beer or in which consumers actually recognize it,” he says. He points to a host of challenging and difficult-to-answer concerns for brewers holding so-called “use rights.” If a company lacks a registered trademark, parties have to determine where a brewery’s territory begins and ends against a competitor’s product.
A Rise in Number of Disputes
With the benefit of hindsight, the increase in and public visibility of trademark disputes between craft breweries seemed inevitable. “It’s just a matter of sheer numbers,” says Mike Hinkley, chief executive officer and co-founder of Green Flash Brewing Co. in San Diego. “With all the breweries coming out, there’s just that many more brewery names and beer names, and it’s pretty much unavoidable.”
The numbers are staggering. In 1994, the number of craft breweries operating in the United States stood at 537. By early 2011, that number had climbed to 1,701. Not even two years later, the number of craft breweries operating in America ballooned to more than 2,700. According to the Brewers Association, there are more than 1,600 more breweries in the planning stages.
The increase in total number of breweries has led to a spike in the number of brands. According to BeerAdvocate.com, the website now tracks more than 93,000 beer brands.
Managing issues involving brewery and brand names are now quickly becoming a frequent concern for brewers. “I have a trademark attorney that literally I exchange emails with almost daily,” says Hinkley. At Terrapin Beer Co. in Athens, GA, co-founder and president John Cochran has dealt with more than six trademark issues in the past year.
The boundaries of trademark jurisprudence seem tested by this wave of new breweries. “The people who wrote trademark law didn’t anticipate an industry with 2,500 participants all trying to come up with 20 hop-related puns,” says Scott Metzger, owner of Freetail Brewing in San Antonio. “There’s a finite number of them, so there’s just going to be an overlap. It’s unavoidable.”
Brewers also cite the relative inexperience of new brewers entering the marketplace as one reason for the rise in disputes. “Most of the companies are too small to actually go out and trademark their brand,” says Terrapin’s Cochran. “They’re too cognizant of the expenses and trying to watch every dollar.” These brewers end up failing to do the proper research before choosing a brewery or brand name, he says. Hinkley agrees. “You get some other guys that start up and you never hear about them, you never see them, you don’t even know who they are,” he says. “Then you see the sort of lack of due diligence they do in general when starting a business, and it carries over into some of this trademark stuff, and it creates problems.”
Another concern suggested is the increasing unfamiliarity among brewers stemming from such rapid growth in the industry. In the past, Metzger handled any issues, including trademark disputes, directly with other brewers he knew. That has changed, he says, with the lack of connection felt by brewers who have never met. “When there’s some guy is sitting in an office in one part of the country and doesn’t know this guy here in the other part of the country, they think, let’s just have our lawyer do it,” he says. “That’s inevitable, I think.”
Finding The ‘Clear Space’
Developing a good brewery or beer name is one of the most creatively challenging projects for brewers. A name defines a brewery and helps shape the brand narrative. In an environment with nearly 3,000 competitors, not including wine, spirits and millions of other brand names, developing a unique and signature appellation requires dedicated effort.
“It feels like there are no names available anymore because there are so many breweries opening and everybody’s making so many beers,” says Terrapin’s Cochran. “And I love it. I love the fact the industry’s growing, and I’m excited about that. But trying to come up with something unique and original is very, very difficult now.” Jeremy Ragonese, director of marketing at Boulevard Brewing Co., can relate to the effort required in selecting the right name. “The process of coming up with names for the beers has gotten quite arduous,” he says. “We’ve had several beers that we’ve had names selected, or at least had the list narrowed to a few choices, where we had to pretty much scrap them to avoid any conflicts.”
Ragonese, who spoke on a panel about managing trademark issues at last year’s Craft Brewers Conference in Washington, DC, advises other breweries to strive to find distinctive, unimpeachable names. “The identity of the beers is so important as you’re trying to carve out space or carve out your own niche within this segment, and it’s becoming more and more problematic,” he says. “We try and find clear space on any new brand that we’re producing, because we really we don’t have an intent of necessarily just releasing it and then not re-releasing it.”
Protecting The Brand
Whatever is causing the rise in trademark disputes, experts and brewers agree that the first step in choosing a brewery or brand name is to research whether anyone else is using it. “What we do internally is first to simply search for beer names on some of the community websites, like BeerAdvocate, RateBeer, and of course Google searches, just to give us an idea of what’s out there,” says Boulevard’s Ragonese. “That helps us narrow the list and look for potential conflicts.”
After reviewing these websites, attorneys and trademark-savvy brewers also recommend conducting a more-detailed search for already registered trademarks. The Alcohol and Tobacco Tax and Trade Bureau (TTB) and its Certificates of Label Approval (COLA) system, which brewers must use to complete federal label certification for their beers, is searchable and offers a window into existing brands and those beers in the pipeline awaiting release. The USPTO also maintains a free search engine that allows the public to review registered trademarks, both active and abandoned.
If the name appears available after a thorough review, the next step is to register it with the USPTO. “We’re filing trademarks on everything,” says Cochran. “When we were starting out, that seemed too expensive, but at this point, with a new beer coming out, we absolutely will trademark it.”
The final step in the process unquestionably presents one of the most controversial issues facing the craft beer industry: protecting the mark. Moon advises that “if you’re registered, no one else is going to make sure no one is using your mark except for you.” The downside of failing to enforce and defend your mark can be considerable. “If you don’t do anything about [potential trademark infringements], it can be later construed as complicit acceptance of them using that mark,” notes Shane Welch, president and co-founder of Sixpoint Brewery. Boulevard’s Ragonese agrees and advises other breweries to appreciate the importance of trademarks for their products. “Brands are not simply the domain of big breweries,” he says. “Brands are something that everybody needs to respect.”
When a potential trademark issue is discovered, advice differs, even among attorneys, as to what the next step should be for the brand owner. The first question often comes down to whether and when to get the lawyers involved. Traphagen errs on the side of having an experienced attorney handle most trademark issues. “If you think your trademark may be infringed, the first important thing to do is to get some advice from a lawyer,” he says. “The reason for that is if you go public and make some claim that another party may be infringing your trademark, you can make yourself vulnerable to a lawsuit from the other party.”
Moon generally advises clients to avoid involving the lawyers if possible. “I’m kind of the anti-lawyer lawyer,” laughs Moon. “Once you get lawyers involved, it’s expensive. People get defensive. Nine times out of 10, it’s not intentional and it’s that they didn’t know.” Eugene Pak, a California-based attorney who represented Bear Republic Brewing Co. in a trademark lawsuit against Central City Brewers + Distillers, agrees. He says that the craft beer industry and its communal reputation counsel against using lawyers in the first contact. “In this industry, in particular, firing off a cease-and-desist letter right away can be counterproductive and maybe sort of against the grain of the industry’s nature,” he says. “With most clients, I do recommend that they pick up the phone, do a direct craft brewer to craft brewer talk to see if they can work out something.”
Many brewers agree with this approach. Welch says that if a brewer thinks there’s an infringement, “I think the last thing you want to do is for the first contact to be done by an attorney. Not only is that impersonal, it seems really threatening.”
Trademark Disputes Go Viral
Most trademark disputes are handled quietly and amicably among the parties. Hinkley at Green Flash and Cochran at Terrapin recently settled a possible trademark issue over the Road Warrior brand name. Brewed on occasion by Terrapin for a local charity bike race, Road Warrior as a brand name appealed to the team at Green Flash. After performing the due diligence and discovering the existing use of Road Warrior, Hinkley reached out to Cochran, and the two reached an agreement to both use the brand name. “We’re going to coexist with that name, because we have our own separate little niche in which we want to use it and we found a way to cooperate,” says Hinkley. “And then we’re going to literally turn it into a promo, do some collaboration.”
A number of recent disputes, however, have resulted in publicized feuds between craft brewers and even consumers. The names of those involved in these public disputes are familiar now. Tired Hands and Brewery Vivant. Steamworks and Left Hand. Sixpoint and Renegade. Port Brewing and Moylan’s. Lift Bridge and Lucette. SweetWater and Lagunitas. Steelhead and Freetail. Magic Hat and High Jinx (now Foolproof). Strange Brew, Strange Brewing, and Strangeways. Coronado and Maritime Pacific. Coronado and Elysian. Coronado and Lagunitas. There was even a very mild trademark dispute between Brooklyn Brewery and some Trappist monks over bottle design.
The well-publicized and sometimes hostile row between Magic Hat and West Sixth, a Kentucky brewery, was the latest case study in how these disagreements can take on a life of their own. After initial discussions about a logo dispute did not resolve the issue, Magic Hat filed a complaint in federal court in Kentucky alleging trademark violations. In response to the lawsuit, West Sixth took to various social media platforms with entreaties to their customers to help fight back against one of their “enemies.” “[Magic Hat] decided to try and force us out of business by filing a silly and frivolous lawsuit against us,” one release read. West Sixth asked fans to sign a petition directing Magic Hat to drop the lawsuit, encouraged a boycott of the Vermont-based brewery and established the website NoMoreMagicHat.com. In response to the dispute, Magic Hat’s Wikipedia page was negatively altered and West Sixth fans took to Twitter and Facebook to rebuke the brewer of #9.
In a press release, Ryan Daley, brand manager of Magic Hat, responded that “West Sixth Brewing packaged the ‘perfect story’ of a large brewery beating up on a small start-up. The only problem is: It’s not true.” Magic Hat detailed its efforts to resolve the claim without litigation and offered its requested logo changes. In response to some of West Sixth’s online statements, Magic Hat amended its lawsuit to add claims for defamation and false advertising, according to West Sixth.
Two weeks after the dispute first splashed across the Internet, resulting in dueling press releases and hundreds of ugly tweets and Facebook posts, it quietly went away. The parties released a joint statement acknowledging that they had “mutually resolved the issues addressed in the lawsuit in a manner that eliminates potential confusion about product origin and resolves the lawsuit in a mutually acceptable way.” The joint statement also included language retracting seven allegations West Sixth made against Magic Hat, saying that “West Sixth regrets that it in any manner communicated any inaccuracies, and hereby corrects those errors.” Representatives for both Magic Hat and West Sixth declined to comment for this story.
Brewers and attorneys interviewed for this article hesitated to advocate for a public or social media role in resolving trademark disputes between craft breweries. “Both breweries should recognize that once a dispute crosses into the public sphere, the potential negatives far outweigh any positives gained from a windfall of vocal support,” says Boulevard’s Ragonese. “The matter can’t be decided in a court of public opinion, and the attention can only exacerbate an already sensitive legal situation.”
Pak generally counsels his clients to avoid public trademark fights, saying, “In general, especially in an industry like this, I think these kinds of things are best left out of social media.”
As one of the first brewers who went public with a trademark dispute, Metzger still has reservations. “I have mixed emotions,” he said. “For the most part, I think this is the kind of thing that doesn’t need to be on social media. Because at the end, one party looks whiny and the other looks like bad guys.”
Hinkley sees public disputes over trademark issues as an inevitability of today’s technology. “It’s just the modern age,” he says. “Social media is the avenue.”
The public nature of these recent trademark disputes has craft brewers concerned about the community spirit they often tout. “If we are serving to tear each other down and forcing our fans to choose Brewery A or Brewery B, then I think inevitably that is going to have some effect on that community spirit,” says Brian O’Connell of Renegade Brewing in Denver. After a mild public dispute with Sixpoint over their respective Ryeteous and Righteous brands, O’Connell shies away from airing inter-brewery disagreements in public. “I don’t want to make Sixpoint out to be the bad guy. They made the decision that they felt was best for their company. Running a craft brewery is not easy, and I know how hard it is to get started and how hard it is to keep it going.”
Cochran says he thinks “there’s still a lot of camaraderie out there. Yes, it’s getting harder, but it’s just like society in general. You’re going to have some that like to argue and fight, and you’re going to have some that like to get along.” Cochran’s soon-to-be collaboration partner, Mike Hinkley of Green Flash, agrees. “As far as the camaraderie, in our business it definitely still exists,” he says. “It’s just a little strained with the number of breweries and especially the ones that don’t seem to have as much of a history or seem to be jumping on a hot fad.”
While they agree that trademark disputes will remain common, brewers and attorneys agree that the crucial issue moving forward is how brewers handle these challenges. Sixpoint’s Shane Welch says that “what’s more important is the tone with which they are handled. I fear that breweries will use the overlap to turn it into some kind of sensational media circus.”
Despite their past disagreement, Renegade’s O’Connell agrees. “Our industry is different because it’s been run different since the beginning of it,” he says. “Let’s stop and think and use common sense to figure out solutions.”
Adds Welch: “I just hope people don’t lose sight of why craft beer has such momentum. It’s because it has great liquid, community involvement, and innovative ways of connecting with its customers. The trademark thing is such a sensitive topic for so many people. I hope it doesn’t become a distraction.”
Andy Crouch writes the monthly “Unfiltered” column for BeerAdvocate Magazine and is the author of Great American Craft Beer and The Good Beer Guide To New England.