What a year for craft litigation. Whether it was an attempt to define “craft beer” or efforts to own IPA, 2015 sure had its fair share of notable legal spats.
One of the more memorable cases in 2015 involved two of California’s largest craft producers — Lagunitas and Sierra Nevada. In January, Lagunitas asked a judge to file a restraining order against Sierra over the company’s Hop Hunter IPA. In the suit, Lagunitas claimed Sierra’s use of the letters “IPA” infringed on Lagunitas’ well-known IPA logo designs and argued that the larger brewery had attempted to emulate Lagunitas’ “capital, large, bold, black ‘IPA’ lettering in a font selection that is remarkably similar to the iconic Lagunitas design.”
Lagunitas founder Tony Magee quickly dropped the suit, however, following a backlash from what he called “the court of public opinion.”
“We spent a lot of time trying to understand what was going on,” he said at the time. “The overwhelming sense was that people object to litigation in the craft industry.”
Another important ruling this year could shed more light on the kinds of products considered to be “craft beer.” In April, “beer aficionado and home brewer” Evan Parent sued MillerCoors over its representation of Blue Moon as a craft brand. In the class action lawsuit, Parent claimed the use of terms like “Artfully Crafted” on Blue Moon’s labels were deceptive and misleading. He argued that he would have paid less for the product had he known it was mass produced by MillerCoors rather than “Blue Moon Brewing Company.”
A California judge would dismiss the case in October, saying that the company’s use of the Blue Moon Brewing Company name on its label “shielded it from liability under California’s consumer protection laws under safe harbor doctrine,” according to Law 360.
“The Court cannot conclude that ‘it is probable that a significant portion of the general consuming public… acting reasonably under the circumstances,’ could be misled by Blue Moon’s internet presence when MillerCoors ‘prominently’ displays Blue Moon on their own company website,” official court documents read.
Those are just two of the many disputes 2015 had to offer. David Kluft, a partner at Boston-based law firm, Foley Hoag, recently published an exhaustive year-end review of the major trademark events and disputes in the beverage industry.
So what do Kluft and other craft-minded attorneys think about the increasing amount of trademark disputes? Brewbound reached out to four of the industry’s leading experts in trademark and copyright law to get their thoughts on notable cases in 2015 and ones to watch next year.
David Kluft
Dave Kluft is a partner in Foley Hoag LLP’s Intellectual Property department and a member of the Trademark, Copyright and Unfair Competition group; the Business and Commercial Disputes
group and the Advertising and Marketing group. As co-editor of the Trademark and Copyright Law blog, his articles have appeared in IP Litigator, Law360, Managing Intellectual Property Magazine, the Boston Bar Journal and the Massachusetts Lawyers Weekly. Headquartered in Boston, Foley Hoag has represented clients from numerous industries serving a wide variety of legal needs for over 70 years. He tweets over at @dkluft.
Brendan Palfreyman
Brendan Palfreyman is an attorney with Harris Beach PLLC in Syracuse, and a member of the NYS Brewers Association and NYS Distillers Guild. Mr. Palfreyman has appeared on Beer Sessions Radio hosted by Jimmy Carbone to discuss craft beer and trademarks. An active craft beer advocate, he is an award winning homebrewer and covers industry news via his twitter account @bpalfrey10. Harris Beach provides a full range of legal and professional services for clients across New York state, as well as nationally and internationally.
Eugene Pak
Eugene is a partner at the law firm Wendel, Rosen, Black & Dean LLP where he heads the firm’s craft brewery law practice. With more than twenty years of experience, Eugene represents craft breweries in a wide variety of areas including trademarks, financing and formation, advertising, licensing, real estate, regulatory and litigation matters. He also shares industry news via his Twitter account @BeerAttorney.
Dan Christopherson
Dan is the head of the trademark group at Lehrman Beverage Law, located in the greater Washington, DC area. He helps new and established alcohol beverage companies develop their business models, comply with state and federal authorities, and protect their intellectual property. Dan has been cited in numerous publications as an expert in, and has written articles on, the topic of intellectual property law for breweries, wineries, and distilleries.
Lehrman Beverage Law, PLLC specializes in the regulatory needs for a wide variety of beverage categories including wine, distilled spirits, kombucha, and malt beverages. The firm also devotes substantial attention to trademarks, non-alcoholic beverages and non-beverage foods. He tweets over at @dcbrewlaw.
Editor’s note: Though hard to believe, the following interviews have in fact been condensed and edited for clarity.
Brewbound: Which case(s) from 2015 will have the greatest impact on trademark and copyright liberties for craft brewers and cider makers?
David Kluft: For my money, the case with the biggest impact may be In re Tam. The Federal Circuit recently held that Section 2(a)’s ban on the registration of “scandalous” marks was unconstitutional. This was not a case about beer or beverages at all, but I think in the long run it will impact the industry. The Federal Circuit is only one of the federal courts of appeals, and the others are not obliged to follow. But if they do, or if the Supreme Court ultimately agrees with this ruling, it will mean that more racy, edgy and even downright dirty marks can be registered. Is this likely to affect the major brands? Not directly. But, for craft brewers trying to differentiate themselves in the marketplace, this ruling could open the door for “shock” labels or brand names from which brewers might otherwise shy away because they would have been ineligible for federal trademark protection.
A case in a similar vein – or at least with a related theme- was Flying Dog Brewery, LLP v. Michigan Liquor Control Commission, 597 Fed. Appx. 342 (6th Cir. 2015), in which the sixth circuit rejected a state government’s ability to control the content of a beer label, owing to the protections of the First Amendment. Taking these two cases together (this case and In re Tam), one could argue we are moving towards an environment where it will be easier to use shocking or risqué labels in the marketplace, and also easier to register them and thereby prevent others from using them. Could there be a gold rush on naughty names? Maybe. One can imagine that certain naughty phrases which would be natural alcohol names, like “F**KED UP,” will be the first to go! This would also mean that craft brews like “LEFT NUT” and “NUT SACK” beer (see my article for details), both the subject of drawn out TTAB appeals before they were registered, likely would have sailed through the registration process instead.
Brendan Palfreyman: The big story is obviously Lagunitas vs. Sierra Nevada. There, Lagunitas sued Sierra Nevada over the label design for Sierra’s Hop Hunter IPA, and specifically, the appearance on the label of the letters “IPA.” The fascinating aspect of this story is the speed with which Lagunitas voluntarily dropped the lawsuit. The reaction on social media and in the press was so vehement that Tony Magee of Lagunitas decided to withdraw the lawsuit within 48 hours of having filed it. The likely effect of this case going forward will be to make craft brewers more cognizant of the public relations costs of lawsuits before filing, especially when there is not a clear case of infringement. On the other hand, if the allegations in a trademark lawsuit seem more plausible, the public backlash, if any, may not be as great. For example, I personally did not see much or any of a negative reaction to the lawsuit filed by Brooklyn Brewery, which owns a trademark for BLACK OPS, against Black Ops Brewing.
Eugene Pak: Although not strictly trademark and copyright matters, I think that the various false advertising cases involving the use of “handmade” on labels or advertising materials, which have to date been limited to distilled spirits makers, could eventually affect craft breweries and cider makers. These false labeling class action cases first started in the food industry and were focused on the use of “natural” and other terms on food labels, but now have bled into the distilled spirits industry. The large macro-breweries have also been hit with false advertising cases involving where their beers are brewed (e.g., the Beck’s and Kirin beer suits) and whether a beer is sold as a “craft” beer or not. I think the larger craft breweries should be on guard as being possible targets for future suits, and should review and scrutinize their marks and labels with this in mind. For those breweries and cider makers who make organic products, they should also be careful about using “organic” especially after the California Supreme Court’s ruling in Quesada v. Herb Thyme Farms, Inc. — holding that state claims for intentional false or misleading labeling can go forward even where a producer has complied with federal law regarding certification as an “organic” product.
Dan Christopherson: Parent v. MillerCoors may be the most significant, due to the potential implications for the usage of the word “craft” by macro-brewers. While this was not technically a trademark case, macro-brewers have so far largely avoided using the word “craft” on beer. In this case, MillerCoors produced a beer (Blue Moon Belgian White) that has certainly been the most successful attempt by a macro-brewer to tap into the craft beer marketplace — using the phrase “artfully crafted”. While the Brewers Association and the American Distilling Institute have attempted to provide their own definitions of “craft,” both of which notably exclude products produced or owned by macro-producers, I expect that at some point one of the macro-brewers will defy these definitions and describe their products as “craft”. This issue will come up again in the not so distant future, I predict.
BB: What trends did you notice in the trademark and copyright lawsuits and complaints filed this year that may affect craft brewers and cider makers?
DK: An important trend is the tension between beer and other alcoholic beverages. Are they related for trademark purposes? You are seeing more and more beer trademarks being opposed by makers of other types of beverages. We all know that BUD and BUDWEISER are beer marks, and that a similar or identical mark for beer shouldn’t be registrable. But what about wine? Turns out that there is an increasing willingness on the part of courts and the TTAB to find that beer and other beverages (alcoholic or otherwise) are related goods for trademark purposes, making it much more likely that a wine mark would be confused with a beer mark. This was a big issue in the WINEBUD case, as well as less high profile matters like BLACKHAWK wine v. BLACK HAWK Stout.
Even something as far flung as fruit jam was found to be related to beer in one case, preventing a jam maker from registering the ALLAGASH mark for jams. These developments will further add to the feeling some craft brewers have that they are “running out of names.” On the other hand, some cases suggest that there are still ways around this dilemma. For instance, Brutopia Brewery & Kitchen in Rhode Island applied to register BRUTOPIA BREWERY for beer and “Pub” services. The Trademark Examining Attorney refused registration in light of the prior registration of the mark, BREWTOPIA, for beer festivals. The TTAB affirmed the refusal with respect to the BRUTOPIA mark for beer, but not for pub services — noting that the record contained no evidence of a confusion-causing relationship between pubs and beer festivals.
BP: One trend is the increased number of lawsuits and trademark opposition/cancellation proceedings before TTAB. Every once in awhile there is a happy story about a dispute that ends amicably, but there seem to be many more instances of brewer-on-brewer legal action. This increase should not be surprising given the 4,000+ breweries in the US, each of whom is typically making 3-8 or more beers, and the maturation of the craft beer industry.
Another trend relates to trademark lawsuits filed by or against breweries great distances from one another with little to no geographic overlap in sales. This, of course, would be very typical aside from the fact some plaintiff breweries are filing such lawsuits in their home states, despite the fact that the defendant brewery had no presence there. This implicates a legal principle known as personal jurisdiction, according to which defendants cannot be forced to defend against lawsuits in states where they have no ties. If a brewery is sued in a state where it does not operate or have certain minimum contacts, that brewery should be able to dismiss the lawsuit against it because the brewery is not subject to personal jurisdiction there. For example, in 2015, New Belgium, which is based in Colorado, sued Oasis Texas Brewing Company over the beer name SLOW RIDE but filed the complaint in Colorado. Oasis moved to dismiss the lawsuit because it did not sell beer in Colorado. New Belgium tried to argue that Oasis subjected itself to personal jurisdiction in Colorado by participating in the Great American Beer Festival in Denver, but the court rejected this argument and the lawsuit dismissed. The lesson? Lawsuits should only be brought in states where the defendant is subject to personal jurisdiction, and if your brewery is sued in a state where you have no contacts, consider moving to dismiss based on lack of personal jurisdiction.
We also could see an uptick in lawsuits and trademark disputes between formerly independent craft breweries purchased by global beer makers and craft breweries. It will be interesting to see if the new ownership of some of these breweries is more litigious with regard to trademark rights.
EP: There are definitely more trademark lawsuits than ever between alcohol beverage makers. These can be craft brewery against craft brewery, winery against cider maker or brewery, or any other permutation. The craft brewery industry is and continues to be a collegial industry where many trademark issues are settled well before any litigation. But with over 4,000 craft breweries in the country now, and many more beer brands in the marketplace, the gloves are beginning to come off. It’s inevitable.
DC: I am seeing more and more trademark disputes between breweries. This is going to only become more and more common as the number of breweries continues to grow (along with the number of cideries/wineries/distilleries). Also, as larger, regional craft breweries continue to get gobbled up by macro brewers, expect those macro brewers to become more aggressive at “defending” the valuable trademark rights that were bundled into those acquisitions. In 2015 alone, AB-InBev obtained Arizona’s Four Peaks Brewing Company, Colorado’s Breckenridge Brewery, Washington’s Elysian Brewing, and California’s Golden Road Brewing, pushing their craft brewery tally to seven. While smaller brewers may have been able to coexist with these larger, regional craft brewers in the past, expect that some of these unsuspecting and less well funded brewers experience less friendly waters now that they are under the control of large, well-funded corporations with their litigation attorneys on speed dial.
BB: What is the most important unresolved case(s), that breweries and cider makers should keep an eye on in 2016?
DK: Cases I’m most interested in for 2016 include:
- In re Tam and the sister cases that come before other courts of appeals, as discussed above.
- The Blue Moon case – This case goes to the heart of how craft beer makers differentiate themselves from the larger companies in the market. It’s outcome could have an effect on the extent to which larger companies can co-opt the themes, imagery, and most important advertising language of craft brewers.
- The Jack Daniels v. VIP case is interesting to me from a legal academic perspective, because the concept of “parodies” of brands by other brands is fascinating – probably won’t affect many others.
- Finally, of course, one of the most interesting issues in this day and age is the extent to which fictional brands become real. The Duff beer opposition is a fascinating example of this. Duff started as a fictional brand but has become a real beer brand now – I’m right near the brewery as I write this, and will send pictures! It is trying to block the registration of MILTON DUFF – which is a much older brand but failed to renew its registration somewhere along the way.
BP: Frankly, a huge case that should be monitored by breweries going forward is the lawsuit between Moosehead Breweries and Adirondack Brewery currently pending in upstate New York. The reason this case could be important has to do with the recent emergence of brewery-made hard sodas such as Not Your Father’s Root Beer. In this lawsuit, Moosehead, which makes lagers in Canada under the name Moosehead, accused Adirondack Brewery of trademark infringement via Adirondack’s Moose Wizz Root Beer. Should a decision be rendered in the case it would be important because there has not been a ton of precedent about whether sodas, and especially hard sodas, are related to beer and other alcoholic beverages for trademark purposes. As more breweries, e.g., Abita, Saranac, Coney Island, move into the hard soda space, expect to see more trademark disputes involving hard sodas and beers.
EP: It may not be the most important case, but certainly the most talked-about one is the consumer class action suit against MillerCoors over its apparent marketing of Blue Moon beer as a “craft” beer. Despite some media representations, the case is still ongoing. I believe the plaintiff is amending or has amended its complaint, so it’s not entirely over yet, though the plaintiff has an uphill battle.
In light of all of the above, I would advise breweries and cider makers to carefully review and scrutinize the trademarks they chose and the marketing copy they use on their labels, packaging, and websites; if they don’t, someone else will and may bring suit.
DC: There are several cases worth watching:
- In one case, the pop sensation LMFAO sent the brewery Pigeon Hill Brewing Co. a cease and desist letter over its usage of the term LMFAO as the name of its stout. To date, alcohol beverage companies have enjoyed a fairly wide latitude to use names from pop culture as the name of a beer or brewery, as many song, book, and movie titles are often not eligible for trademark protection. This case may be a sign of things to come for alcohol beverage companies that have found naming inspiration from the entertainment industry, especially as more and more creatives decide to get involved in the alcohol beverage industry.
- Another case, Red Bull v. Old Ox Brewery, pits a gigantic multinational energy drink corporation against a small brewery in Northern Virginia. This is not the first case between energy drinks and beer (remember a dispute between Monster Energy and Vermont’s Rock Art Brewery over the name VERMONSTER back in 2009). Old Ox issued an open letter (worth a read) to Red Bull pleading its case and asking for peace. If this case goes the distance, we should see a decision later this year. This case will have important ramifications regarding whether, and to what degree, there is a likelihood of confusion between beer and energy drink brands.
B C Marketing Concepts dba Full Sail Brewing v. several companies. Since Full Sail was acquired by the Encore Consumer Capital investment group, the company has been aggressive at enforcing Full Sail’s trademark rights. Recently, BC has taken on numerous third parties for the usage of brands that incorporate the term SESSION. As most beer aficionados will know, the term “session” refers to a style of beer that can be consumed in a somewhat higher quantity over a period of time (i.e., a session), owing to its lower-than-average alcohol content. I expect that in 2016 we will find out whether BC’s trademark registration for the term will hold up. This case will have ramifications relating to the legal and non-infringing use of the term SESSION by breweries and cideries.
- Anheuser-Busch LLC v. MCBCo Brewery. I wouldn’t say that this case is quite as important as the others listed here, but it is certainly an entertaining one. Here, AB ran a Super Bowl ad bragging that its beer was made “the hard way.” Potentially seeing an opportunity, and undoubtedly taking issues with AB’s ad, MCBCo Brewery LLC d/b/a Martin City Brewing Company filed a trademark application for HARD WAY IPA. Martin City’s application was filed just one day before AB’s own application for “BREWED THE HARD WAY.” Accordingly, Martin City’s application was approved by the USPTO, and AB’s application was rejected, citing Martin City’s application. AB has since filed paperwork at the USPTO to preserve its ability to oppose Martin City’s application, and it appears the parties are discussing settlement. I expect to see this case quietly settled in the near future, likely with Martin City receiving a nice amount of cash in return for its handing over the mark to AB.
