“I’ll Have What She’s Having” – Trademark Troubles in Craft Brewing

In case you haven’t been to your local “packie” lately, craft breweries are popping up faster than a hops vine. Occurring in tandem with this proliferation of breweries and quirky beer names, are incidents of breweries clashing over their names and the names of their products. We’re not the first to discuss this phenomenon, but given ongoing reports of trademark spats, the size of the craft brewery market, and the importance of branding to craft breweries, consideration of trademark issues is critical to anyone involved in commercial craft brewing.

With approximately 4,600 breweries operating in the U.S., it can be tough to come up with a new and distinctive name (there are only so many clever variations of the word “hops”). The vast majority of these breweries are small or independent microbreweries and nanobreweries, many only distribute their products locally or at a single location (think brewpubs), and many begin as a hobby, with commercial sales of products (and associated trademark concerns) initially unanticipated. Currently, there are over 20,000 applications and registrations on file with the USPTO for beer and/or brewery-related brand names. Moreover, as loyal readers of this blog, you already know that using a mark in connection with a product that is sold in commerce accrues “common law” trademark rights in the mark, regardless of whether the mark is registered at the federal and/or state levels. Thus, the number of existing breweries and associated product names can create a “minefield” for anyone trying to determine if a mark is available for use and registration as a beer or brewery name.

When conflicts do arise among product or brewery names, the roots of craft brewing as a hobby often mean that an adversarial approach is counter to the spirit (pun intended) of the craft beer movement. Often, one party simply doesn’t know of the other’s existence until a complaint is received, and if the later-adopted product is produced in a single batch, an agreement between the parties can be fairly easy to reach. As the size (in terms of sales and the geographic scope of those sales) of one or both parties increases, however, so do the stakes, and an agreement may be more difficult to reach without prolonged negotiation and/or litigation.

The key take-away from all of this is that as soon as a brewing operation is even considering commercial sales, and before investing in any domain or company name registrations, or opening social media accounts, an experienced trademark attorney should be consulted. Use of comprehensive trademark search tools can give a better picture of any potential trademark conflicts for a proposed name in this already-crowded field. In addition, commercial brewers should continue to be in touch with trademark counsel as they expand their operations and develop and launch new beers under individual product names. Breweries should be mindful that even though common law rights will accrue in their name and marks simply through use, those rights will be limited to the geographic area in which the beer is actually sold. Ultimately, if any brewery aspires to have out-of-state sales, federal registration is recommended. If a brewer receives a “cease and desist” letter from another brewery, or is presented with a proposed “settlement” agreement for signature, it is recommended that a trademark attorney first be consulted, particularly (but not exclusively) when the other party is represented by counsel. Finally, a brewery should remember that its brand is its biggest asset. Failure to enforce its trademarks against competitors in the marketplace—even though it may feel antithetical to the craft beer movement—could cause unwanted confusion and eventually dilute the value of the brand.