Blog Posts - The Law Offices of Brian D. Kaider, LLC

Distributor Agreements: 'Til Death Do Us Part?

1/8/2018

Many early stage wineries market their products via tasting room sales, wine clubs, direct-to-consumer shipments and, to the extent permitted, self-distribution to local restaurants, grocery stores, and wine stores. Eventually, winery growth will necessitate working with a distributor, a relationship not to be entered into lightly.

A distributor becomes an ambassador for the winery’s brand and, once retained, the supplier may have little control over how its wine is marketed. Further, these relationships can be difficult or financially impossible to break once established.

Supplier/distributor relationships are governed by franchise laws in many states. In the absence of franchise laws, the relationship is defined entirely by a distribution agreement between the parties. But, even in franchise states, the distribution agreement can play a critical role, particularly in the termination of the distributor relationship.

To read the rest of the article on The Grapevine Magazine website, click here.

Wine Labels 201: Protecting Your Design

11/14/2017

In the July/August Issue, The Grapevine published an article by attorney, Lindsey Zahn, entitled “Wine Labels 101: Navigating TTB’s COLA Process.” The article described the information that must be contained on the label as well as how the label gets approved for use.

This article will discuss how to protect the design of the label. Aside from the required information relating to contents, origin, etc., a label contains many creative aspects, including: brand names, logos, pictures, drawings, color schemes, unique label shapes, backgrounds, and fanciful descriptions of the winery and the product. But, in a crowded market, how can those elements be protected against copying by competitors? There are three tools available to wineries to protect their labels: trademarks, trade dress, and copyrights.

To read the rest of the article on The Grapevine Magazine website, click here.

Where Never is Heard a Disparaging Word ... Until Now?

9/14/2017

With apologies to Dr. Brewster Higley for changing the words to what would become the iconic folk song “Home on the Range,” a recent U.S. Supreme Court decision has opened the door to registration of a category of trademarks that would previously have been refused as “disparaging.” While the wine industry has typically not pushed the boundaries of disparaging marks, this case has implications for marks that are considered “scandalous” or “immoral,” as well. Further, this decision could dramatically affect the way that the Alcohol and Tobacco Tax and Trade Bureau (TTB) reviews Certificate of Label Approval (COLA) applications.

To read the rest of the article on The Grapevine Magazine website, click here.

MATAL v. TAM, Greater Freedom for Trademarks and Beer Labels

9/5/2017

On June 19, 2017, the Supreme Court of the United States issued a landmark trademark ruling in the case of Matal v. Tam. The case dealt with whether or not the US Patent & Trademark Office (PTO) could deny a trademark registration on the basis that the mark in question was deemed derogatory or insulting. While the case has implications for First Amendment jurisprudence generally, it is of specific importance to the craft beer community.

To read the rest of the article on the DC Brewers' Guild blog page... click here.

BA's "Independent Craft" Label Does Not Require New COLA Approval

6/27/2017

by Brian D. Kaider (KaiderLaw) and Gregory Parnas (DC BeverageLaw)

With the many acquisitions of craft breweries by Anheuser-Busch InBev and other large conglomerates, it is becoming increasingly difficult to determine which bottles on the shelves are truly "craft" in the sense of being small, independently owned brewers of high-quality beer.

Today, the Brewers Association announced the availability of a new seal to identify "Certified Independent Craft" beer.

The inverted bottle, symbolic of craft breweries turning the beer industry upside down, is meant to "give beer lovers an easy way to identify true small and independent craft brewers, something they have indicated is important to them."

This mark is available to use free of charge to any brewery that meets three criteria:

They must hold a valid TTB Brewer's Notice
They must meet the BA's definition of a "Craft Brewer"
They must sign a licensing agreement

The Brewers Association claims, and we have independently verified, that use of this new seal will not require a revised Certificate of Label Approval from the TTB, so long as the seal is the only substantive change.

The Brewers Association is correctly using the "TM" symbol next to their mark and presumably will file for registration of the seal as a "collective mark," which will further enhance its ability to limit its use to only members of the BA (i.e., independent craft brewers). As of this writing, no application appears on the U.S. Patent and Trademark Office website, but applications take some time to upload into the USPTO database.

As craft beverage attorneys, we strongly encourage all independent craft brewers to license and use this free symbol to distinguish their fine products from those of "faux craft."

The Supreme Court Says the Trademark Office Can’t Reject “Offensive” Marks

6/19/2017

In January 2016, I wrote a blog post, called “Can you Now Register Raunchy or Offensive Trademarks? Maybe.” At the time, the U.S. Court of Appeals for the Federal Circuit had ruled in a case brought by Simon Shiao Tam that the disparagement clause of the Lanham Act was unconstitutional and the USPTO violated Mr. Tam’s First Amendment rights by denying the trademark application for his band, “The Slants.”

The Supreme Court accepted the appeal of the Tam case and unanimously agreed that the disparagement clause is unconstitutional viewpoint discrimination. To read the opinion, click here. The underlying basis for its decision was that “[i]f there is a bedrock principle underlying the First Amendment, it is that the government may not prohibit the expression of an idea simply because society finds the idea itself offensive or disagreeable.”

“[s]peech that demeans on the basis of race, ethnicity, gender, religion, age, disability, or any other similar ground is hateful; but the proudest boast of our free speech jurisprudence is that we protect the freedom to express ‘the thought that we hate.’” - Supreme Court of the United States

In reaching its decision, the Court did not address whether or not Tam intended the mark to be disparaging (he says he wants to “reclaim” the term which has been used in a disparaging manner against him and others of Asian descent). Rather, the Court said, “[s]peech that demeans on the basis of race, ethnicity, gender, religion, age, disability, or any other similar ground is hateful; but the proudest boast of our free speech jurisprudence is that we protect the freedom to express ‘the thought that we hate.’” (emphasis added)

This is an incredibly broad-reaching decision that will affect the outcome of many other disputes, most notably the cancellation of the trademarks for the Washington DC football team, the Redskins.

It should also unleash a logjam at the Trademark Office. In light of the Supreme Court’s review of the Tam case, the Commissioner of Trademarks issued an informal directive to trademark examiners, indicating that applications for marks that might be considered disparaging should be suspended, pending the Supreme Court’s decision in the Tam case. Now that the Court has ruled, those suspensions should be lifted and the applications allowed to proceed.

So, as I noted last year, the USPTO can expect a blue-streak of vulgar and off-color applications heading its way as companies vie for position in an intellectual property gold-rush.

I will caution, however, that while the Trademark Office cannot reject an application on the basis that the mark is offensive, that does not necessarily mean that you can get a product to market with that mark…yet. The Alcohol and Tobacco Tax and Trade Bureau (TTB), for example, still has rules against allowing offensive terms on alcoholic beverage labels. In all likelihood, a challenge to that rule based on the Tam case would be successful, but would take time. So, unless the TTB withdraws that rule in light of the Tam case (which it could), you might still not be able to put a beer into commerce with an offensive name until that rule is challenged.

Anyone with a product for which they would like to register a trademark that may be considered offensive, should contact a trademark attorney as soon as possible to discuss not only the likelihood of getting the trademark approved, but whether there are any other laws or regulations that would keep the product off the market despite trademark approval.

BYOB? New Maryland Alcohol Law Could Hurt Local Wineries

7/28/2016

Governor Larry Hogan signed House Bill 733 to be effective July 1, 2016. The bill had two main purposes. First, to allow businesses with more than one alcohol licenses at the same premises to sell products from both licenses at the same location. In other words, if a brewery also held a winery license and made wine at that location, they could provide tastings of their beer and their wine from the same tasting room. Second, the bill allows those with a farm brewery license to hold multi-brewery events (beer festivals and tap take-overs) on-site.

But, the bill also eliminated several provisions that prohibited a licensee from selling "or allowing to be consumed at the licensed premises any product other than products produced by the license holder under the authority of this section.”
In other words, a winery or brewery can now sell products of other wineries or breweries. That sounds fine, but it's the "consumption" part of the eliminated language that is troubling.

Because most wineries (and some breweries) tend to be in very scenic locations, it is common for them to hold festivals in which people come and bring picnic lunches, listen to music, and often buy a bottle of the winery's product to drink on-site. Under the previous version of the law, the winery could not legally permit patrons to bring their own wine (from another winery) to drink during these events. Repeal of the section above appears to eliminate this prohibition. This could have a significant impact on local wineries, who spend a lot of time, effort, and money to promote these events. Every outside bottle of wine brought onto their property represents a lost sale of their products.

Martin City Brewing may finally get its Hard Way IPA trademark registered

2/15/2016

As I first reported on June 1, 2015, Anheuser-Busch's trademark application for "Brewed the Hard Way," it's now infamous refrain from the Super Bowl ad that aired on February 1, 2015, was suspended pending the outcome of a registration for "Hard Way IPA" that was filed by Martin City Brewing Company. After overcoming a minor technical issue with its application, Martin City's mark was published for opposition on August 11, 2015. This publication gives anyone who believes they would be harmed by the registration 30 days to file an opposition. On September 10th, Anheuser-Busch filed a request for more time to oppose, which was granted by the U.S. Patent and Trademark office. On November 24, 2015, they filed for another extension, which gave them until February 7, 2016 to file their opposition (ironically, February 7, 2016 was the date of this year's Super Bowl).

That deadline has now passed, apparently without an opposition being filed by Anheuser-Busch. With the right to oppose now effectively waived, Martin City's application should proceed directly to registration and Hard Way IPA should be ready for distribution with a shiny new (R) symbol on the label some time in late-Spring, early-Summer.

The big question now is, what effect will this have on Anheuser-Busch's application for "Brewed the Hard Way." Martin City's application proceeding to registration presents a potential obstacle to A-B's application as the Trademark Examiner may view the two marks to be confusingly similar. It seems unlikely that A-B would simply abandon this mark, particularly after this year's Super Bowl commercial, featuring the refrain "Not Backing Down."

So, it will be interesting to see what happens next in A-B's application. It is possible that A-B and Martin City agreed to co-exist in the market. A "consent agreement," for example, is a common device to resolve a trademark dispute. Basically, both sides acknowledge the other's right to use their mark and declare that they see no reason why there would be any confusion in the marketplace as to the source of their respective products. These agreements are more common between two parties of more or less equal size (two craft breweries, for example). But, if we do see one of these pop up in A-B's "Brewed the Hard Way" application, it may be a sign that they are willing to play nicely in the sand-box with small brewers, despite all the "Not a Hobby," "Not Sipped," "Not a Fruit Cup" rhetoric in their ads.

I, for one, would like to see that be the case, as there is plenty of room in the market for those who are proud to be big, international conglomerates and those who are proud to be independent and local.

Can You Now Register Raunchy or Offensive Trademarks? Maybe.

1/7/2016

The Lanham Act governs what may and may not be federally registered as a trademark and Section 2(a) of that law bars registration of any mark that contains immoral, deceptive, scandalous, or disparaging matter. Until recently, that provision was used by the U.S. Patent and Trademark Office (USPTO) to reject applications for trademarks that included profanity or racial epithets.

In 2011, Simon Shiao Tam, the front-man of the Asian-American rock band, “The Slants,” filed for registration of the band’s name. Mr. Tam named the band in order to “reclaim” Asian stereotypes. The USPTO rejected the application as likely to disparage people of Asian descent. In April 2015, a three-judge panel of the U.S. Court of Appeals for the Federal Circuit affirmed the USPTO’s finding that the mark was disparaging. However, one of the members of that panel questioned the constitutionality of the entire provision. The Federal Circuit then agreed to rehear the case en banc, meaning that the entire bench of judges of that court would hear the case together.

“It is a bedrock principle of the First Amendment that the government may not penalize private speech merely because it disapproves of the message it conveys.” - U.S. Court of Appeals for the Federal Circuit

On December 22, 2015, the Federal Circuit released its en banc opinion, finding that the disparagement proscription of Section 2(a) was unconstitutional. Its rationale was that “[i]t is a bedrock principle of the First Amendment that the government may not penalize private speech merely because it disapproves of the message it conveys.”

The press, of course, immediately drew comparisons to the Redskins case with many suggesting that the Tam decision would bolster the Redskins chances of having its trademarks reinstated. However, the decision of Judge Lee of The Eastern District of Virginia upholding the USPTO’s cancellation of the Redskins’ trademarks is currently under appeal in the U.S. Court of Appeals for the Fourth Circuit, a sister court to the Federal Circuit. While that court should consider the Tam decision, it is under no obligation to follow its rationale. Whether the Fourth Circuit follows the Federal Circuit or not, the Tam decision is likely headed to the U.S. Supreme Court and given its broad implications, there’s a good chance they will take it.

What does all this mean for those wishing to register “offensive” trademarks now?

For now, Tam is the law of the land and the disparagement proscription of the Lanham Act is unconstitutional. The USPTO can expect a blue-streak of vulgar and off-color applications heading its way as companies vie for position in an intellectual property gold-rush. But, there are two things to consider before joining the herd.

"The USPTO can expect a blue-streak of vulgar and off-color applications heading its way as companies vie for position in an intellectual property gold-rush."

First, while it usually takes about 7-12 months to get a trademark registered, if the Supreme Court takes up the Tam case, it could take 1-2 years before the Court issues a decision. That means someone filing an offensive trademark now may get their mark registered before the end of 2016, but if the Supreme Court overturns the Federal Circuit decision, the mark could be subject to cancellation in 2017-2018.

Second, getting the trademark registered does not necessarily mean you can put it on products. For example, in the craft beer industry (a market with a penchant for “edgy” names) all bottle and can labels must receive a Certificate of Label Approval (COLA) from the Tax and Trade Bureau (TTB) before they can be put into the market. Like the Lanham Act’s disparagement provisions, the TTB’s COLA regulations prohibit approval of labels that are “obscene or indecent.” After the Tam decision, it is very likely that someone will file suit against the TTB, challenging the constitutionality of its indecency proscription. But, that process could take years and if the TTB, in the meantime, sticks to its guns, beers with obscene or indecent names (in the view of the TTB) may not be able to hit the shelves notwithstanding a federally registered trademark for the name.

Anyone with a product for which they would like to register a trademark that may be considered offensive, should contact a trademark attorney as soon as possible to discuss not only the likelihood of getting the trademark approved, but whether there are any other laws or regulations that would keep the product off the market despite trademark approval.

Goliath (Anheuser-Busch) Needs More Time to Fight David (Martin City Brewing)

9/11/2015

As I reported here on June 1st, Anheuser-Busch's trademark application for "Brewed the Hard Way," a phrase that debuted in the notorious Budweiser Super Bowl commercial on February 1st, was suspended pending the outcome of another trademark application for "Hard Way IPA," filed by Martin City Brewing Company of Kansas City, Missouri.

The Trademark Examiner that reviewed Martin City's application found no existing marks that would bar registration of Hard Way IPA, so on August 11th, the application was published in the Federal Register for opposition. This publication gives anyone who believes that they would be harmed by the registration of the mark 30 days to file either an opposition to the registration or a request for extension of time to file an opposition. On September 10th, the last day of the opposition period, Anheuser-Busch filed a request for an extension of time to file an opposition.

Northern Brewer created a home brew kit: "Peach of Resistance" Pumpkin Peach Ale http://mnbeer.com/2015/02/04/northern-brewer-pumpkin-peach-ale/

Anheuser-Busch has already taken a great deal of flack over the Super Bowl ad, which was fairly insulting to the craft beer industry and craft beer consumers, mockingly saying to "let them have their pumpkin peach ale." Some hoped that when Martin City beat them to the punch for registering a "Hard Way" trademark, that Anheuser-Busch would simply let it go. Clearly that is not going to happen; they are going to take on the "little guy" and try to bully him out of his trademark.

This move was telegraphed on August 28th, when Anheuser-Busch amended its own trademark application to change it from an "intent to use" application to an "actual use" application. What does this mean? Well, before your trademark can be registered by the USPTO, you must be actually using the mark in interstate commerce. But, you can file your application before you actually use it by telling the USPTO that you intend to use it. Then, if the USPTO says that your mark is allowed, you have a certain amount of time to put the mark into actual use and then it will be registered.

What's interesting here is that the Super Bowl ad aired on February 1st, but when Anheuser-Busch filed their trademark application on February 6th, they filed it as an Intent to Use application, meaning that they were not already using the mark in commerce. This part isn't surprising, the Super Bowl ad used a lot of different phrases ("Proudly a Macro Beer," "Not Brewed to be Fussed Over," "Brewed for a Crisp Smooth Finish," "This is the Only Beer Beechwood Aged Since 1876," "Brewed for Drinking Not Dissecting," "The People Who Drink Our Beer Are People Who Like Beer Brewed the Hard Way," "Let Them Sip Their Pumpkin Peach Ale"). When the ad aired, the reaction to the "Brewed the Hard Way" line was strong and immediate, so it seemed that by filing their trademark application a few days later, Anheuser-Busch was simply latching on to a phrase that struck a nerve.

But, now Anheuser-Busch is saying that they not only intended to use "Brewed the Hard Way" as a trademark all along, but that they in fact were doing so as of February 1st. The most interesting part about this is that the support for their claim of using the phrase as a trademark was not the Super Bowl ad. As noted above, that ad had so many catch-phrases in it that it would have been tough to argue that any one of them was being used as a trademark. Rather, Anheuser-Busch has provided the USPTO with two pictures that purportedly show "A Point of Sale Display at a Retail Location."

However, these pictures do not provide any information about either their location or the date that they were taken, and neither does the submission that Anheuser-Busch provided to the USPTO. It will be interesting to see whether the sign in these pictures was actually in use as of February 1st or whether they are samples of how Anheuser-Busch is using the mark now and they are actually relying on the Super Bowl ad for the February 1st date.

Having filed for an extension, Anheuser-Busch now has another 30 days to file their opposition to Martin City's "Hard Way IPA" mark. They could also file for another extension of an additional 60 days upon a showing of good cause and could even extend another 60 days beyond that upon a showing of extraordinary circumstances. Regardless of when they file their opposition, this process will significantly delay Martin City's registration and dramatically increase the cost to a small brewer.