Making Your Mark in the Craft Beer Business, Part One – Identifying and Protecting Your Trademarks

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According to the Brewer’s Association there were over 6,000 craft breweries operating in the United States at the end of 2017. In an increasingly crowded market, how do you ensure that the craft beer consumer is able to distinguish your brewery from your competitors? You should begin by identifying your trademarks.

A trademark is any word, phrase, symbol or design that uniquely identifies the source of one company’s goods from those of other companies. While the law in the United States recognizes a broad range of “source identifiers” as trademarks, most companies focus their intellectual property protection efforts on brand names, slogans and logos. Especially at the early stages of your business, it is important to focus your protection efforts on the essential elements of your brand. For example, your brewery may have a dozen regular varieties of beer, plus several small release or seasonal brews throughout the year. Seeking trademark registrations for each of your beers may quickly deplete your legal budget, and so a more focused approach is usually the best course of action. For most breweries, their primary protection efforts should focus first on their brewery name and logos, and then on the names of one or two of their flagship beers.

In the United States, a brewery’s trademark rights arise at the time it starts using the mark in commerce. This means that the first person to begin using a trademark in connection with the sale of beer owns that mark, and may be able to prevent others from using confusingly similar marks on beer and beer-related goods and services. That is, a registration with the United States Patent and Trademark Office (USPTO) is not necessary to own a trademark. However, these “common law” rights are limited in that they can only be applied to the geographic area in which you are selling your beer. Any business that is serious about protecting its brand should seriously consider applying for registration of the essential names and logos.

Some of the benefits that federal trademark registration provides to the trademark owner include:

(1) Preventing infringement problems before they begin by making your marks easy to find in a search of marks registered with the USPTO;

(2) Getting the USPTO to do a degree of enforcement on your behalf by preventing the registration of other marks found to be confusingly similar by the USPTO’s examiners;

(3) Giving you nationwide priority when your marks might otherwise be limited to the geographic area in which you are using the mark;

(4) Putting other companies on notice of your trademark rights so that they cannot claim that their subsequent use of your mark was in “good faith;”

(5) Creating a presumption of validity and ownership of your mark in the event that you need to sue another company for infringing your trademark rights;

(6) Providing the ability to recover treble damages and attorney’s fees in “exceptional” cases of trademark infringement;

(7) Providing the ability to recover statutory damages in cases involving counterfeiting;

(8) Giving you the ability to file for “incontestability” after five years of registration, which severely limits other companies’ ability to invalidate your trademark;

(9) Empowering Customs and Border Protection to block imports that infringe your trademark rights, including counterfeit products, once you record your trademark registration with Customs; and

(10) Granting you the right to use the ® symbol in connection with your beer, further putting your competitors on notice of your trademark rights.

Even if you’re in the planning process, and have not begun selling your beer yet, you may apply on an “intent-to-use” basis, meaning that you have concrete plans to begin using your mark in connection with the sale of beer. An intent-to-use application allows you to claim priority over other companies who might begin using your mark or a confusingly similar mark in the period between your application date and the date you start actually using the mark.

Keep in mind that you may not be able to establish exclusive trademark rights in a mark that is generic or descriptive of your products. For example, if you’re selling an IPA called “Hoppy IPA,” you will likely be unable to stop other breweries from using the name “Hoppy” in connection with their hop-forward beers. The “Hoppy” mark would be deemed descriptive because it describes a characteristic of the beer. The only way to establish trademark rights in a descriptive mark is to show that consumers associate the mark with your company. In the “Hoppy IPA” example, that means that consumers who hear “Hoppy” would need to immediately connect that term with your brewery.

On the other hand, you can reference a characteristic of your beer with a suggestive mark that requires consumers to use some imagination to connect your mark to the product. For example, consider Deschutes’ “Fresh Squeezed” mark for their IPA brewed with Citra hops, which alludes to the citrus notes in their beer. Stronger still are arbitrary names that have no direct connection to your beer or its characteristics (think “Stone Brewing” or “Rogue Ales”) or fanciful names you made up that have no literal meaning (like “Mikkeller” or “CANarchy”).

Stay tuned for Part Two of our brewery-focused trademark posts, in which we will discuss considerations regarding coexistence agreements.

Conkle, Kremer and Engel has assisted its clients in securing and protecting their trademarks for over thirty years. Whether you’re in the planning stages or already operating your brewery, contact Zachary Page or CK&E’s intellectual property team for help identifying or protecting your trademarks.

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Conkle Firm Attorneys at Craft Beer Summit

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Conkle, Kremer & Engel attorneys Evan Pitchford and Zachary Page will attend the California Craft Beer Summit September 6-8, 2018 in Sacramento, California.  The Summit is presented by the California Craft Brewers Association, the preeminent craft beer trade group and legislative advocate in California, which is in turn one of the most progressive states in terms of its policies towards the craft beer industry.  The Summit is one of the largest West Coast craft beer-oriented industry events, with thousands of industry professionals and exhibitors in attendance each year.

Mr. Pitchford and Mr. Page will attend to meet with industry professionals and keep current on the latest industry trends, including legal developments, craft brewing distribution and business issues, and evolving beer styles.  For example, this year’s Summit seminars include the cutting-edge topic of brewing, selling, and advertising products with cannabis-derived ingredients such as hemp and cannabidiol (CBD) oil, creative uses of ABC licenses, updates on the Tax and Trade Bureau’s guidelines and requirements, and discussions on the changing and more competitive retail environment in California.

Conkle, Kremer & Engel brings its decades of experience to bear on a number of beer industry-specific issues, such as brand protection and intellectual property, distribution and vendor relations, state and federal regulatory issues, advertising and labeling, employment law, and litigation and alternative dispute resolution in state and federal courts.  If you’re an industry professional or craft beer-related business who will be at the California Craft Beer Summit and would like to connect with Mr. Pitchford and Mr. Page before, during or after the event, please contact them at [email protected] and [email protected].  They would be happy to arrange free initial discussions about particular issues you may be facing.

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