Anyone remotely familiar with the craft brewing industry knows that Anheuser-Busch ruffled a lot of feathers with one of its Super Bowl ads this year. Taking aim at the craft beer industry, they proclaimed Budweiser a beer not to be fussed over or dissected, but for people who like beer "Brewed the Hard Way." The attack was personal, deliberate, and foolish.
Setting aside the obvious hypocrisy of mocking craft brewers while simultaneously buying successful craft breweries around the country, the ad insulted the fastest growing segment of the beer-consuming population. If you've been manning a radar tower in northern Alaska for the past six months and missed the ad, you can see it here:
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Five days after the Super Bowl, on February 6, 2015, Anheuser-Busch filed a trademark application for Brewed the Hard Way. Little did they know that they had awoken the sleeping giant that was the craft brewing industry and it was a little brewer from their own state of Missouri that would champion the cause.
On February 5, 2015, one day before Anheuser-Busch, small Kansas City brewpub, Martin City Brewing Company filed a trademark application for "Hard Way IPA." More importantly, from a trademark perspective, they filed their application as an "actual use" application with the date of first use in commerce listed as February 4, 2015.
By contrast, A-B filed its application as an "intent to use" application, meaning that they were not yet using "Brewed the Hard Way" as a trademark even though the words appeared in their ad on February 1st. This is significant, because trademark rights stem from usage and the first in the market has priority over all second-comers.
As a result, on May 13, 2015 the U.S. Patent and Trademark Office (USPTO) suspended the examination of A-B's trademark application pending the outcome of the earlier-filed "Hard Way IPA" application from Martin City Brewing. See the suspension letter here.
Although the USPTO has also issued an Office Action in Martin City Brewing's application, the rejection is based on a very simple procedural matter that can easily be overcome. Assuming they file a timely and appropriate response to the Office Action, what will happen next is that the USPTO will publish Martin City's trademark for "opposition." What this means is that there will be a time period for anyone who objects to the USPTO registering Martin City's trademark "Hard Way IPA" to file papers arguing why the mark should not be allowed.
Certainly, A-B has an army of attorneys and virtually unlimited resources to fight Martin City's trademark if they choose to do so. But, whether they would win that fight or not is almost irrelevant. I don't know what volume of Hard Way IPA Martin City has made (though I suspect that when word of this gets out their kegs are going to go dry very quickly), and if they were forced to re-brand their IPA, they would do so and I'm sure they would be fine.
The point is that Martin City's trademark application was a message. A-B's Super Bowl ad was an affront to craft brewers and craft beer drinkers. On behalf of the industry, Martin City Brewing Company picked up the gauntlet and, in the immortal words of Barney Stinson, proclaimed "challenge accepted!"
The best thing that A-B could do is to lick its wounds and walk away. Everyone makes mistakes and their ad was an example of extremely poor judgment. It was surely prompted by the fact that the craft beer industry is steadily chipping away at at A-B's market dominance. Last year, there was more craft beer sold in the U.S. than Budweiser. But, taking the craft beer industry head on is likely to erode their market share more quickly.
Craft brewers, even though they are competitors in a crowded market, generally don't see it that way. They are of the mindset that a rising tide lifts all boats, meaning that the success of any craft brewery, even their competitors', is good for the industry as a whole. If A-B puts its considerable resources into fighting this trademark issue, I would not be surprised to see the industry rally behind Martin City Brewing and make this a much bloodier fight than A-B might expect.