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.
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 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."
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.
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.
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.
What does all this mean for those wishing to register “offensive” trademarks now?
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.
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.
This is an article I wrote for the 2015 IP Law Update for the Maryland Bar Association. It's written mainly for other patent attorneys, but it will give you an idea of how business method patents are being evaluated.
Anheuser-Busch Trademark Application for "Brewed the Hard Way" Suspended Over Martin City Brewing Company's Application for "Hard Way IPA"
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.
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.
There is a lot of talk about how the face of “craft” beer is changing in light of small brewery acquisitions by A-B InBev and others. Some even claim the industry will be unrecognizable by 2020. But, aside from the discussion of volume limits and access to tap handles lies a more philosophical question. How will these acquisitions affect the cooperative spirit among craft brewers.
As much as I would like to attribute this accommodating spirit entirely to industry comradery, in truth some of it is borne of necessity. A knock-down, drag-out fight over a trademark dispute is an incredibly costly venture and would simply break the budget of some breweries. But, what is going to happen when a “craft” brewery owned by A-B InBev gets into a trademark issue with an independent craft brewery?
Generally, large companies are far more protective of their trademark portfolios and police them more vigorously than small companies. Of course they do… they can afford to. They have huge litigation budgets with armies of attorneys at their disposal. So, will all of this industry consolidation mean the end of resolving trademark disputes with a handshake and a beer? I would like to say no, but realistically, the big conglomerates and private equity firms are likely to use their more expansive resources to bully smaller brewers into rebranding.
The best protection a small brewer has against this risk is to build its own trademark portfolio. Protecting your brand with registered trademarks is important in any industry. But, the net effect of the industry consolidation we are seeing in craft beer is to make trademarks essential. A registered trademark offers nationwide protection against another brewer, even a massive one, adopting the same or similar name.
For many start-up breweries, registering trademarks may seem like an unnecessary expense. But, compared to the cost of rebranding, both in terms of dollars spent and market recognition lost, trademarks are downright cheap.
If you would like more information about the benefits of registration or how to build a trademark portfolio without breaking the bank, give me a call.
Experienced litigation, patent, and trademark attorney