Magic Hat / West Sixth Breweries Use Mediation for Settlement

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

Last week, Magic Hat and West Sixth breweries reached a settlement of a trademark dispute without going to court.  According to initial reports, a magistrate judge served as mediator and the official dispute ended within a week.  We applaud both parties for choosing mediation to seek a mutually agreeable solution and avoid expensive, drawn out litigation. The light at the end of a litigation tunnel would have probably seen the demise of West Sixth and severe public blowback at Magic Hat. It is pleasing to see mediation save both from horrible consequences.  More breweries, and businesses in general, should install mediation as a step in their dispute resolution processes and policies.

Yet, while these breweries illustrate the importance and prospects of mediation, they also underscore how the complexities of communication, business and social media can escalate a disagreement to the point where litigation seems the only option left. This case saw a flurry of public venom that escalated the dispute further with each social media posting and legal step taken. And with escalation comes position entrenchment, making resolution that much more difficult.

This is an interesting case in that Magic Hat wielded one powerful weapon (impersonal legal motions), while West Sixth wielded another (modern social media platforms).  Magic Hat could not sway the public to their favoring by issuing cease and desist letters, and filing lawsuits.  They were quickly seen, and promoted, as a large corporation picking a small family business, bullying them into submission.  West Sixth learned that public statements will not make any difference in court. And going to court could ignite the possibility of losing the case and going out of business.

Beyond the clash of powers, it is also interesting to see how each power provides absolutely no help to resolve the dispute. Each time one side would issue a legal motion or post on social media, the dispute flamed on.   They seemed destined for a long, arduous court battle.  But, give them immense credit; somehow they paused along the slippery slope leading to damaging litigation long enough to consider and seek mediation.  That is not easy to do when emotions are simmering, or boiling, and businesses are taking a pounding on social media sites. Kudos to both sides.

All of this highlights the importance of mediation and other conflict management processes.  For one, this case demonstrates that mediation can halt disputes from going over the proverbial cliff. When all hope seems lost, mediation still saved the day.  Businesses, organizations and even families should take note that if mediation has not been used, that it still can be no matter how far the dispute has gone or how close litigation seems.

Another important lesson from this case is that not by engaging mediation or other conflict management processes from the beginning of the dispute it can result in ugly escalation, with some unmitigateable damages.  Neither litigation nor mediation can fix 100% the damages done to public image, hence the importance of seeking mediation early.  And how important is public image?  Just look at the joint press release; the largest paragraph is dedicated to an “apology” from West Sixth for misrepresenting Magic Hat in public.  That, above everything else, shows how important public image is, and the necessity of mediation in early stages of a dispute.

The press release also states that both breweries are satisfied with their solution and will go their separate ways.  While we do not know the details of the mediation, or any unmentioned specifics (attitudes, emotions, etc), it may be a good idea to enter a reconciliation process to address any “bad blood” that may linger, although we cannot recommend a specific process.  Good faith collaborations or meetings can go a long way in assuaging damage to public image, perhaps even to help other parties in similar trademark disputes.  There’s a lot left to be done after mediation. All of it is optional and promises little financial benefit up front, but as we have seen in this case, finance is not the only concern.

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