Brewing Up Disputes: Beer Names and Trademarks

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As the number of breweries grows in the United States, trademark issues have become an increasingly hot area of the law.  A recent article discussed some of the issues involved with the proliferation of beer names and the problems encountered when names conflict.

More recently, two well-known California breweries were in the headlines when Lagunitas Brewing Co. sued Sierra Nevada Brewing Co. over the labeling of Sierra Nevada’s new “Hop Hunter IPA”, claiming that the packaging of Sierra Nevada’s new IPA offering was confusingly similar to Lagunitas’ own IPA.  Interestingly, a week after initiating the suit, and after a severe backlash amongst craft beer consumers on social media, Lagunitas dismissed the suit.

These stories again highlight not only the importance of trademark registration for breweries, but also the public relations problems posed when enforcement actions are required.

Trademarks Defined

A trademark is any individual or combination of words, phrases, symbols or designs that identifies or distinguishes the source of goods of one party from those of another.  A service mark does for services what a trademark does for goods.  The golden arches mean “McDonald’s,” even if the name “McDonald’s” does not appear.  Likewise, NBC often displays its quintessential “peacock” and plays its three-toned chimes without ever displaying the letters “NBC.”  These symbols, and even sounds, identify in consumers’ minds particular goods and services.

A trademark is different from a copyright and a patent.  A copyright protects the contents of an original artistic or literary work, and patent protects a new and novel invention.
Trademarks protect the intellectual property that owners create to identify goods and services, not the goods and services themselves.  Trademarks can also exist indefinitely (subject to ongoing use and renewal requirements), while patents typically expire after 20 years, and copyrights generally expire 70 years after the death of the creator.

Registering Your Trademarks

In the United States trademark system, trademark rights accrue through “use,” not registration.  This means that if you have already begun to use a mark as a trademark, you rights began to accrue as of that date of “first use” (this is commonly referred to as having “common law” rights).  Rights under Federal law begin to accrue on the date of your first use in “interstate” commerce (most businesses satisfy the “interstate” requirement, including making goods of services valuable through a website). These rights allow you to protect your trademark from infringement by others who would attempt to use the same mark or a similar mark after your date of first use.  Hence, anyone who “uses” a mark has a legal trademark under the common law.  Conversely, an owner has a “registered” trademark when the mark is listed either on the Principle Register or the Supplemental Register of the United States Patent and Trademark Office (“USPTO”).

Benefits of Trademarks

As the initial examples in this article demonstrate, a trademark is a way of creating a brand for one’s products.  A service mark, like the NBC chime sounds, does for services (e.g., software programming services) what a trademark does for goods (e.g., musical instruments).  Regardless of the type of business, trademarks and service marks help to establish a company’s brand equity.  An easily identifiable mark instills trust, confidence and loyalty in the product for the consumer, what is often referred to as “goodwill.”  A brand’s value to a company can range anywhere between 10% and 70% of the total value of the company.  For instance, a 2001 estimate measured the market value of Coca Cola’s brand at $68.9 billion, IBM at $52.7 billion, and Microsoft at $65.1 billion.  Trademarks and service marks are necessary to build brand value, and registration of your marks provides you with tools to protect and enforce your marks.

Benefits of Registered Trademarks

Common law trademark rights are legitimate, however, registering a trademark through the USPTO is potentially an easy and cost-effective way to establish and enforce trademark rights.  First, registration provides nationwide notice of the registrant’s claim of ownership of the mark and permits use of the Circle-R “®” symbol.  By doing so, it discourages others from using confusingly similar marks and it makes searching for similar marks easy.  The process of registration, as discussed below, also ensures that confusingly similar marks cannot conflict with one’s own marks.  Second, registration treats the mark as if used nationwide as of the application date, instead of the common-law treatment which limits trademark rights to the geographic area of use or reputation of the mark.  Third, registering the mark grants the owner the right to bring an action in federal court for matters concerning the mark, and, in certain cases, obtain significant monetary recovery including attorneys’ fees.  Fourth, registration with the USPTO provides a basis for trademark and service mark protection in foreign countries, and provides protection by U.S. Customs to prevent importation of foreign goods that might infringe on the owner’s trademark rights.

How to Register a Trademark

The process of registering a trademark or service mark begins by filing an application with the USPTO.  The USPTO employs attorneys who will review the application for proper legal and procedural grounds.  In many cased, the examining attorney responds to the application with an “office action.”  The attorney highlights any conflicts with the proposed mark, or any other objections to granting registration in the office action.  The applicant has the opportunity to respond to any conflicts or problems noted in the office action within six months.  After six months, if the applicant does not respond, the application is deemed “dead.”  If the application either receives no objections for registration, or if the applicant overcomes any objections within the six month period, the USPTO publishes the mark for opposition.  Any party, who may contest the registration of the mark, must do so within 30 days of the publication date.  If no one contests the mark, then the USPTO will register the mark, typically 12 weeks following the publication date.  Once you select a mark, the overall USPTO process from start to finish averages between 12 and 18 months.

Why Use an Attorney to Register a Trademark?

While the steps above may appear to be simple, in reality trademark registration is quite nuanced.  An experienced intellectual property attorney can provide the legal assistance necessary to successfully register your mark, and take full advantage of your portfolio of intellectual property including copyrighted material, patents and trade secrets.

Our office offers a host of services that ensure your mark will reach registration successfully, and your rights in that mark will be protected through all stages of trademark prosecution.  We have extensive experience in:

1) Performing searches of previously registered marks and other common-law marks to determine the most-effective way to apply for registration for your mark;

2) Consider registration strategies to help avoid trademark infringement;

3) Filing of the trademark application to help avoid pitfalls, and use legal arguments to persuade the examining attorneys to approve the application for registration;

4) Responding to arguments made by the USPTO that challenge the application;

5) Investigating potentially infringing trademarks;

6) Working with U.S. Customs to monitor the importation of potentially infringing trademarks;

7) Counseling clients on the importance of policing their marks to avoid abandonment; infringement, and genericide (the process of trademarks becoming part of popular culture, and thus losing their value as trademarks); and

8) Help clients file applications for their trademarks in other countries.

Careful trademark and service mark management can lead to a successful brand development and greatly increase the value of a company or product.  However, use and registration of trademarks and service marks can be a complicated and treacherous landscape.  The knowledge of an experienced attorney can help navigate the terrain of trademark law, and lead to an outcome of branding success.

Enforcement Issues

Generally speaking, if a trademark owner believes that their mark is being infringed by another, the typical first step is a “cease and desist” letter to the alleged offender, asking that they cease in their use of the offending name or logo.  If that does not prompt a response, the next step is to file an action in Federal court seeking damages and an injunction against further use of the mark.

In other words, Lagunitas took the usual steps in proceeding against Sierra Nevada.  The problem, however, is that there is a new “X” factor in these types of disputes; namely, social media.  The Lagunitas/Sierra Nevada dustup is not the first time that a party pursuing legal action for trademark infringement faced an online backlash.  In 2011, real estate broker and trainer Denise Lones faced “a firestorm of retaliation” on the Internet over a trademark infringement suit she filed last week against real estate agent and blogger Daniel Rothamel (who called himself “the Real Estate Zebra”).  One year prior to that, blog site promoted what it called “the best cease and desist letter we ever received” when attorneys for the National Pork Board took the owners of the site to task over a parody ad for “canned unicorn meat.”

So how does a brewery enforce its trademark rights?  Carefully.  Litigation should be a very last resort and the brewery bringing the action would be well advised to have a carefully crafted strategy ready to go to handle the public relations issues that arise from the lawsuit.