Craft Brewing and Trademark Infringement: What’s at Stake?

Posted by Jason Gladfelter, M.A. on April 10, 2013  /   Posted in Craft Brewery Conflict Mediation

According to the Brewers Association, the U.S. is home to over 2,300 craft breweries, with more opening each week.  Added to the international, national and regional breweries the total number of breweries in the U.S. eclipses 2,400.  Each brewery produces at least 2 different types of beer, and most breweries assign names to their brews (some use style-names like Pale Ale, Stout, etc).  With so many beers out there, and more on the way, it is not surprising that some beers might share the same name.  If a brewery trademarks a name, then disputes will arise. In fact, they have.

There are several issues stemming from a trademark infringement case.  Breweries can benefit from understanding them and the options available to manage such cases.

Business Protection: This is the evident  issue.  While citing trademark infringement against a brewery 3,000 miles away because they are using a name similar to a trademarked name may sound a bit paranoid and a bit uptight, technically it’s the right thing to do.  By claiming trademark infringement the holder of the trademark is actually protecting its investment in the current situation, and also in future situations.  In the trademark world, if you don’t protect it, then you may lose it.  Protecting now means stronger protection later, and perhaps against tougher challengers.

Community:  Many trademark issues involve members of the craft beer industry, which is a close-knit community.  Filing a trademark is a business move claiming rights to a creation. This is a necessary vice for craft brewers, who by and large love to create new beers. They get pleasure from the creation itself, seeing others enjoy this creation, and the new challenge that awaits them in the brew house. Commercial marketing and business dealings hold little interest and trademarks signify a infiltration of this community.

Social Media: The juxtaposition of business and community can create a hubbub on the Internet. Many craft beer consumers hold the sense of Community sacred.  No brewery is above and beyond this community, and to introduce trademark (or any) legal action is a severe violation. With the advent of social media, through which many breweries build followings, the emotions over this violation escalate and can turn downright ugly.  And this, in turn, is a violation of the Community. Consequences can be damaging and managing them may prove difficult, not to mention stressful.

The first issue has garnered acceptance among craft brewers.  It’s the business side that brewers reluctantly manage, or hire someone else to manage. When non-brewing issues arise, though, managers fall back on default methods for dealing with them. A common fall back for trademark infringement is immediately hiring an attorney.  While this is an understandable method, it does little to address the next two issues mentioned above. In fact, choosing this method first (and only) exacerbates both.  For one, the issue is no longer a part of the Community–control of it is in the hands of outsiders (lawyers, court system, judge).  Another reason is that all communication becomes private between legal counsels, there is no direct communication between the brewers.  The increasingly common cease and desist letter is a stale, impersonal symbol of corporate takeover of craft beer.  Consumers erupt.

On top of those two aspects, legal counsel is expensive and the court system slow.  Reaching a decision (a dictated judgment) can take months or years. While legal counsel is a viable option, and sometimes necessary, it is by no means the only one.

Brewers, realizing the issues at hand, can choose facilitation or mediation before retaining legal counsel. These alternatives methods allow brewers to communicate face-to-face  and give them an opportunity to create a solution together, thus “owning” the resolution of the issue.  They also illustrate to the craft beer community and consumers that beer and camaraderie are more essential than strict business maneuvers. Both methods are quicker than the court system, and do not require the same level of financial commitment. And while facilitated or mediated resolutions are not by themselves legally binding, the parties involved can allow them to be.

It is important to note that using facilitation and/or mediation prior to retaining legal counsel does not prohibit doing so in the future.  In other words, if facilitation/mediation doesn’t work, then legal counsel may still be sought.  In fact, most courts prefer mediation before cases go to court since it helps illustrate the issue, gets parties communicating with each other, affords a real chance at resolution, and does not add to an already jammed case load.  With a  success rate over 85%, mediation merits consideration.

So, before that cease and desist letter is sent (or even written) brewers should at least consider other options since there is more at stake than a name.

OvalOptions is a conflict consulting organization dedicated to helping individuals, families and businesses find the most efficient and cost-effective means for dealing with disputes throughout the Denver Colorado Area

We have successfully helped businesses, families and communities find better options for resolving disputes in each of our four main services areas: business, community, family and court.

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