Trademarks in the Beer and Wine Industry

By on August 20, 2012

In any consumer-driven business, the selection of a brand name is one of the most important decisions a company will make when introducing a new product. This holds true in the craft beer industry where new brewers are entering the business at a historic clip.  In the U.S. alone there are over 2000 craft brewers with more arriving on the scene each week. Domestic wineries have seen a similar high-rate of growth with their numbers surpassing 6500.

Although brewery and winery owners will strive to come up with new names, the reality is that with so many competitors in the same commercial space, the likelihood of similar or identical names being used in the marketplace is rather high.For example, how many brewers have or will incorporate “HOP” into their beer’s name?    A recent search of the United States Patent and Trademark Office (“USPTO”) database revealed that there are 121 separate live applications and registrations  for a mark including the term “HOP” that have been submitted in connection with beer. Keep in mind, this number includes only live applications and registrations, not  unregistered common law marks which include “HOP” and are being used for  beer—a number that would no doubt be significantly greater.

Given the number of players in the industry, it is of paramount importance that    brewery owners take the time to select, register, and monitor their trademarks with at least a fraction of the level of care taken crafting their ales.

SELECTION AND PRE-CLEARANCE

Do not assume that merely because you have selected a mark it is okay to use.   Infringement of a third party mark is a real risk that should be assessed before using a mark in commerce.  Given the growth in the industry, it is increasingly important to vet a beer or wine name before committing significant time and resources to branding   under that name.  Failure to conduct proper due diligence on a trademark before using it can result in being forced to change your beer or wine’s name with a corresponding loss of consumer recognition of your product.  Worse, you could also be the defendant in an infringement suit, resulting not only in the loss of the ability to use your brand name but also the payment of money to a competitor.

The former occurred recently when Oskar Blues Brewery received a cease and  desist letter from the owners of Gordon Biersch Brewery Restaurant Group  regarding its use of GORDON for beer.  As a result, Oskar Blues was forced to spend what was likely a substantial   amount of money to change the name of its GORDON beer to G’KNIGHT. While spending money on trademark preclearance to vet a potential brand may seem to be an unnecessary cost when no product exists, the downside to skipping preclearance is far greater than the cost of doing it.

REGISTRATION

Business owners often misunderstand what they get when they register a trademark at   the USPTO.  A federal registration gives the owner of that registration the presumptive   exclusive rights to use the mark in the United States. The registration may be used by  examiners to prevent third parties from registering confusingly similar marks. In addition,   if you become involved in a trademark infringement suit, a federal registration creates the rebuttable presumption that the registrant has the exclusive rights to use the registered trademark. The trademark registration also provides notice to third parties that the   registrant is asserting exclusive rights to the mark.

The process for registering a trademark is not as simple as submitting a fill-in-the-blank  application.  It is rare that an application matures to registration in less than a year and   depending on the issues raised by the examining attorney and the type of application—intent to use versus use-based—it can take several years or more after the application is submitted to achieve registration.

Although you cannot register a mark until you have used the mark  in commerce, you can apply to register a mark that you intend to use in commerce prior to actually using it. This can be accomplished through submission of an intent to use application. The intent to use application is an important feature of the federal trademark  application system as it allows a prospective user to apply for a trademark before investing the time and money bringing  a new brand into the marketplace. With an intent to use application, the  application’s filing date become the constructive use date such that the filing date will be deemed to be the date that establishes the applicant’s seniority to    the mark against third parties. This can  be particularly useful as one can imagine a scenario in which a business owner decides to move forward with a new trademark that he has pre-cleared and expends time and money to do so only to find that another has started to use a confusingly similar mark in  the time between his preclearance and actual use in commerce.  By filing an intent to use application, the prospective user can establish his date of seniority in the mark to prevent others from swooping in and usurping his rights to the mark.

When registering trademarks, those in the beer and wine industry should note that USPTO precedent supports the proposition that beer sold under a similar mark as wine may be likely to cause consumer confusion. For example, Franciscan Vineyards, Inc., the purveyor of RAVENSWOOD wine filed an opposition to Black   Raven Brewing Company’s intent to use application for BLACK RAVEN BREWING COMPANY.  The Trademark Trial and Appeal Board at the USPTO agreed with Franciscan Vineyards that consumers  encountering both marks in the marketplace might believe that Black Raven beer is affiliated with, or sponsored by, RAVENSWOOD and sustained Franciscan Vineyard opposition to the application for BLACK RAVEN BREWING COMPANY.  Thus, brewers  will want to consider the risk posed by wine labels when considering a new beer brand and vice versa.

MONITORING AND ENFORCEMENT

Although a registration is highly recommended to help secure your rights to a brand name, the reality is that even with a registration, a trademark owner still needs to be diligent  about policing its mark(s).  The majority of business owners do not pay attention to the federal trademark registry and will not conduct a risk assessment prior to commencing use of a brand name.  Accordingly, an owner of a trademark will want to monitor third party uses of similar or identical marks that may overlap with their scope of use. Third party vendors such as Thomson & Reuters and Wolters Kluwer offer trademark watching services that will monitor both federal and state trademark registries as well as common law uses. These services are great resources to keep abreast of confusingly similar marks entering the marketplace and stopping them before they cause consumer confusion and dilute your brand.

SUMMARY

Selecting a brand name is not as simple it sounds. Conduct due diligence before committing to trademark to vet the risk   associated with the trademark. Once you pre-clear a mark and are committed to moving forward, it is important to register the mark to provide evidence of your exclusive rights to the mark. Finally, after securing a registration, monitor third party uses of identical or similar marks to ensure others are not creating confusion in the marketplace and/or diluting your brand.

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