22 Sep Trademarks & Craft Beer: Everything You Need To Know
As most people know the craft beer industry has exploded in the past ten years. In 2005, there were slightly less than 1,500 craft breweries in the United States. Now there are almost 3,500. The explosion has led to a craft beer renaissance, which consumers have greatly benefited from. Breweries have been developing new styles and coming up with names that will make sure you never forget the beer you just finished. Names like Osiris® or Zombie Dust® automatically take our mind to a hop island paradise, and as the explosion of new brews crowds bar taps and shelf space, protecting brands has become increasingly important.
One of the best ways to protect your brand is to register your trademark. Doing so protects a brand’s reputation and helps distinguish the quality of your libations from that of others. With only so many ways to coin the name of your beer it is imperative to choose a name that does not infringe on somebody else’s.
As a small business owner the stakes are high. At risk is the chance of spending thousands of dollars marketing a new beer to only find out that another brewery already has trademark rights to that name. To make sure that you do not make that mistake, this article will hopefully answer some questions that a new brewer or interested beer drinker might have about the ins and outs of trademarks, the process of obtaining one, and the strategy for enforcing it.
So, what is a trademark?
A trademark is any name, word, symbol, design, or any combination of those, used in commerce to identify and distinguish between goods or services from one manufacturer or seller and those of another. On any typical day, a consumer encounters thousands of trademarks, from driving through a drive-thru to purchasing a six-pack at your local bottle shop.
These trademarks are important for the beer connoisseur and the brewery owner. They provide recognition and assurances that what you are buying is what it says it is. For example, say you walk into a liquor store and you see a symbol on a beer that contains a picture of a landscape depicting three hills and a blue sky. You would most likely recognize that beer as coming from Upland® because you previously enjoyed drinking Campside®. If you purchased that beer because of the association you made between the logo and the source of the beer, and later found out the beer was not actually a product of Upland®, you would likely be disappointed. To this end, trademarks benefit the consumer and the brewery because the consumer gets the quality of beer they wanted and the brewery gets the revenue generated by their brand’s previous successes (i.e. their goodwill).
Ok, you get that, but how do you determine if you can receive a trademark?
Prior to coming up with the next great name for your brewery or beer it is important to hire legal counsel to perform a trademark search and give feedback on whether your trademark is distinctive enough to receive trademark protection. With a trademark search, an attorney will give you an idea of what other marks are out there and they will determine whether your mark is distinctive enough to obtain trademark protection.
A trademark’s distinctiveness will fall into one of four categories: 1) arbitrary or fanciful; 2) suggestive; 3) descriptive; or 4) generic. Depending on which category your mark falls into has drastic effects on whether your trademark will be eligible for registration and how much protection it will receive from courts.
The first category is a mark that is arbitrary or fanciful, or, a mark that bears no relationship to the underlying product. An example of a beer name that would be arbitrary is Hunter from 18th Street Brewery®. The word “Hunter” bears no relationship to a milk stout, but when someone mentions that particular beer your mind associates that beer with the high quality you’ve previously enjoyed from 18th Street Brewery®. Any marks determined to be arbitrary or fanciful are considered inherently distinctive and given a high degree of protection.
The next category is a mark that is suggestive. A mark is suggestive if it evokes or suggests a characteristic in the underlying good. For example, Hopslam® is suggestive of a beer that will pick up your taste buds and drive them into the ground due to the obscene amount of hops in the beer. Your mind needs to take an imaginary leap to associate the word with the underlying product. A mark that is suggestive is similar to an arbitrary or fanciful mark because it is considered inherently distinctive and is given a higher degree of protection.
The third category is a mark that is descriptive. A mark that is descriptive is one that simply describes, rather than suggests, a characteristic or quality of the underlying product. For example, Citra Double IPA, Bourbon County Stout®, and Double Citra all describe an aspect of the particular beer they name. Citra Double IPA and Double Citra both describe the style of beer and the type of hops used in the beer; Bourbon County Stout® describes the stout as barrel-aged in bourbon. Unfortunately, a mark that is descriptive is not inherently distinctive, but instead the trademark owner must show that consumers already associate the brand with the source of their beer (i.e. their brewery).
The final category of marks are generic marks. A generic mark is a mark that describes the general category that the underlying product belongs to. For example, the term IPA (India Pale Ale) is a generic term that is now used to broadly describe hoppy ales. Therefore, a brewery would not be able to have an exclusive right to use that term with respect to those styles of beer. This makes sense because it would be unfair for a particular brewery to call their beer an IPA, and not allow any other to do so. Generic terms are not protected by trademark law because they are necessary for the consumer and brewery to identify the particular product.
Based on the distinctiveness of your mark, an attorney that practices trademark law will be able to give you feedback on whether your mark is likely to be registered prior to filing for registration.
That’s great and all, but how do you receive trademark protection?
A trademark qualifies for protection in two instances. The first and easiest way to receive trademark protection is to be the first to use the mark in commerce. Case law has interpreted the phrase “using the mark in commerce” as being the first person to sell your specific product to the public with your identifying mark on it: if you are the first to sell “Megahop Celebration” in connection with the sale of that beer, you will receive priority to use that mark over other future users. Unfortunately, the priority to use the mark is limited to the geographic area in which you sell your beer. So if you only sell “Megahop Celebration” in Indiana, and someone else comes forward later and starts selling the same beer in Oregon, it is unlikely that you will be able to prevent someone else from selling a beer with the same name in Oregon. Plus, because the United States is a first-to-file system, if the Oregon brewery files for a federal trademark before you, you would be limited to only using “Megahop Celebration” in Indiana.
So much for growing your brand.
The best way for a small business owner to prevent this issue from occurring is to file for federal registration of the mark with the United States Patent and Trademark Office (USPTO). A mark that is filed with the USPTO receives priority status over all other marks that were not previously used in the United States. Registration constitutes nationwide notice that the trademark is owned by the party that registered it. In addition to nationwide registration, any party that registers a trademark has the ability to bring suit in federal court and are able to recover additional damages not otherwise available.
The other benefit of filing with the USPTO is that you can file a trademark application to reserve trademarks that are not used in commerce. This type of filing is an intent-to-use application. This is a huge benefit for a new brewer beginning business plans to open a brewery because they can reserve a mark for the specific name they plan on calling their brewery or beer before spending large sums of money advertising the new brand.
Now that you have a mark, how should you enforce your trademark?
The final step in understanding trademarks is understanding how they are enforced. The trademark owner is responsible for conducting all enforcement. This process is extremely important because trademark enforcement (especially in the beer industry) has been blown up all over the news lately. If you do a quick google search you can find dozens and dozens of different anecdotal tales of one brewery enforcing their trademark against another (be on the lookout for an upcoming post on this topic). The news of these trademark disputes is often complemented with knee jerk reactions of beer connoisseurs on social media. In order to prevent any distasteful reaction, it is imperative to make sure that you have an artfully crafted enforcement policy.
If there is potential infringement an attorney would be able to walk you through the appropriate steps to take in order to take care of the action in a civil way. Sometimes a simple call to the other brewery’s legal counsel or owner can stop the infringer from using your mark, but in other situations further action may be necessary. However you choose to go forward with legal action it is important that you do so in a civil way.
Protecting your brand is important. Prior to selecting the name of your brewery or your next beer it is important to do a thorough job researching what names are already in use and what names are trademarked. If you have any experience dealing with trademark disputes or filing for your own trademark, please leave a comment, we’d love to hear from you.
Corben Lee works at Gutwein Law with offices in Lafayette and Indianapolis. He specializes in business law, and has experience working with startup companies. Corben graduated from Purdue University with a degree in Management and from Notre Dame Law School.