Washington Brewers Trademark Dispute

The state of Washington is beautiful; as is the state of Washington beer. It's no less beautiful due to the recent trademark conflict among in-state breweries. But, those launching brands would be well-served to review trademark best practices, and budget for a defensible long-term brand-protection strategy.
The state of Washington is beautiful; as is the state of Washington beer. It’s no less beautiful due to the recent trademark conflict among in-state breweries. But, those launching brands would be well-served to review trademark best practices, and budget for a defensible long-term brand-protection strategy.

Over the weekend, the hard-working Kendall Jones over at the Washington Beer Blog reported on the latest trademark dispute to hit Washington breweries. This time, between them.

The issue?

Three Magnets Brewing Company over in Olympia had called their flagship IPA “Rainy Day IPA.” They got into a scuffle with another Washington brewery, not named in the article, and ended up changing the beer name.

No matter the breweries involved, the lesson is the same in the others we’ve seen. It’s the same for any industry, not just brewing. Before naming a business or investing in the release of branded flagship products—before launching any brand material you’d be bummed to change—the process is the same:

  1. Proactively clear the mark yourself. For the beer industry, that means using Google, Ratebeer, Untappd, Beer Advocate. Basic clearance involves looking for beers, but also wines and spirits. If it’s a brewery name, it involves looking into the names of bars and restaurants out there. Strike ‘em off the list or seek the counsel of a trademark attorney when finding a potential conflict or issue. The visual similarities between the marks matter, as do similarities in sound and in meaning.
  2. After pre-clearing and locating marks that seem potentially clear (or, at least, less fraught with problems), the next steps is to seek a professional trademark clearance report and analysis. Sure, you can search the trademark register yourself as a part of your pre-clearance processes. But, recognize that it’s not just the “hits” that matter; it’s the interpretation of the hits, the status of the marks, and how to interpret the results. It’s also knowing how to conduct the right search in the first place to not miss potentially confusingly similar (not just identical) marks. Getting a professional opinion from a trademark attorney doesn’t have to cost a fortune. And it shouldn’t.
  3. When finding a direction that appears clear, file. Not next week or next month, but immediately. The trademark register moves quickly. Beers are launched every day. Both filings and unregistered releases have implications on your potential trademark rights. You can file an intent-to-use trademark application before you launch products. Before you open the brewery.
  4. Now that you’ve done it right, stay on the lookout. Monitor for potentially conflicting applications and uses.

In closing, I will make one general note, when looking toward the future. Keep in mind that having a pending application or even a registration doesn’t immunize a brewery from potential name issues; despite careful planning, no one can predict how broadly others will construe their brands (See, for example, Red Bull opposing Old Ox Brewing). Even when you’ve done everything right, it can be expensive to maintain rights. Others can infringe, and you may have to stop them. Others may find you infringing and it’s expensive to fight it, even when they have a bad case. That’s an unfortunate reality. But, taking these steps is not just best practice, it’s essential practice for any brewery or beverage business that wants to stake a strong and long-term claim to its branding material. Budget for protection, the same way you’d budget for opening a brewery in the first place or planning for expansion. Get yourself on the register and visible to others looking to protect their brands.

It’s a minimal investment given that properly staked-out rights can potentially belong to the business forever.

Danielle Teagarden
Danielle Teagarden
Brewery Attorney at Reiser Legal PLLC
Danielle Teagarden is a Seattle-based brewery lawyer, business attorney, and intellectual property advisor with particular focus on protecting trademark rights and handling trademark disputes. Danielle frequently represents craft breweries, start-ups, and small alcoholic beverage businesses, and she is Author and Editor of the Brewery Law Blog. You may reach her directly at danielle@reiserlegal.com

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Can a Washington Brewery Sell Cider?

Recently signed Washington Bill, H.B. 1342 gives a big hug to  the beer and cider industry, allowing microbrewery sales of cider for consumption and to go, starting in late July 2015.
Recently signed Washington Bill, H.B. 1342 gives a big hug to the beer and cider industry, allowing microbrewery sales of cider for consumption and to go, starting in late July 2015.

 

Edit (5/9/2015): You all are astute readers, and it’s awesome. Thanks to a comment I received via email from one such reader, it appears there *has* been a tweak to the 25% rule. Although, it seems to be more of a sensical one to help keep taproom managers from breaking out calculators. I’m grateful for the note; and in my laser-like focus on the cider stuff, I didn’t cover this nuanced tweak. See my strikethroughs and underlined additions below; and I’ll be making a new post specific to this change where I also will point out some wonderfully inconsistent quirks in the bill. Look for that in the next day or so. -DT

Guest taps are a great thing. But, what about a cider guest tap in a State of Washington taproom? Can a Washington brewery sell cider? The reality right now is no (but if you can wait until July, I’ll have a different answer…read on).

Today, a brewery cannot legally have cider guest taps unless that Washington brewery is also a restaurant meeting certain food minimums (and even then you need a proper endorsement). This has been a bummer for cider fans of course, and also those needing and seeking to avoid gluten in their diets. It’s also kept beer and cider producers, who share a similar ethos, from doing a bit of teamwork to get presence in the marketplace. Of course, it’s also been an untapped revenue stream for both sides.

In any event, I have some good news for you. This legislative session, we saw House Bill 1342 introduced, which aimed to remedy just that. Thanks to our craft-savvy government, H.B. 1342 swiftly moved through the House and Senate and was recently signed by the Governor. H.B. 1342 not only permits cider guest taps, but it also allows sales for off-premises consumption. So, whether by the glass, growler, or packaged to go, cider has the forthcoming green light at Washington breweries, now with no extra regulatory or food-prep fuss.

When can you expect cider to (legally) pour at Washington breweries? The effective date is July 24, 2015.

A few last notes. Keep in mind that nothing about House Bill 1342 changes the 25% rule on guest taps, covered over in this recent post, and it’s a welcome change in favor of common sense.

 


What Changed About the 25% Rule (Added 5/9/2015)

If you recall my first post on the 25% rule, you’ll remember that it was a weird rule. Under it, guest taps couldn’t exceed 25% of a brewery’s own on-tap offerings. It sounds great in theory, but the technical wording is actually annoying to apply. To make numbers easy, say you have 100 beers on tap. You could have 25 additional guest taps. Why? Because you have 100, you can have 25 guest taps (for 125 totals taps) because the additional 25 is no more than 25% of your own brands. As you can see, the law was confusing. So confusing, it’s hard to write out here. It would make a lot of sense if you could just count the taps, and not commit more than 25% of those taps to guests. For example, have 100 taps? Great, you can have 25 of them as guests—and that’s what I believe House Bill 1342 has done, even if it perhaps wasn’t its main intent.

Here’s the relevant part of H.B. 1342 with respect to this point:

(3) Any microbrewery licensed under this section may also sell from its premises for on-premises and off-premises consumption:

(a) Beer produced by another microbrewery or a domestic brewery ((for on and off-premises consumption from its premises)) as long as the other breweries’ brands do not exceed twenty-five percent of the microbrewery’s on-tap ((offerings of its own brands)) offerings; or

(b) Cider produced by a domestic winery.

So, what’s up with these changes? A couple of things. First, it becomes notable that if you have cider on tap, it’s a part of your “on-tap offerings”, so having cider on tap becomes part of your offerings for the purposes of your 25% calculation. Maybe that’s the only thing the law was written to do. I’d like to believe, though, that it was also intended to eliminate the weird calculation problem above. Even if not, it appears to do so. Read the excerpt again. You can sell beer produced by another brewery, as long as guest taps don’t exceed 25% of your on-tap offerings. You can’t commit more than 25% of your total tap share to brewery guests. Interestingly, though, the law doesn’t say split about restricting your cider offerings. I’ll report separately about that (as well as another implication about the 25% rule I’d like to note…so stay tuned if you’re into this stuff).

Whatever the case, House Bill 1342 is a bit of a win for anyone who (1) doesn’t want to break out the calculator to compliantly allocate guest taps and (2) wants to allocate a bit more to guest taps. Let’s apply it. Under the new law, it seems that if you have 100 taps, 25% can be guests. So, 75 of them must be your beer or ciders, and then 25 can feature your favorite third-party breweries. Compare this to the old setup. Let’s say you had 75 of your own beers on tap. The old law said guests couldn’t exceed 25% of that. We know that 25% of that is 18.75. So, they compare this way:

Compliant Under New Law: 75 house taps or cider taps, up to 25 guest taps.

Compliant Under Old Law: 75 house taps, 18 guest taps.

Clear as mud? I’ll follow up soon to cover this, and a few other notable notes.


 

Last, bear in mind that H.B. 1342 also was specifically focused on getting cider flowing, and did nothing (but pave the way for the bright craft future) to get wine flowing at a non-restaurant microbrewery with a proper wine endorsement. In any event, it still counts as another win for the Washington beer industry, and our kindred cider-producing spirits. Though, speaking of spirits…well, we’ll leave that for another day. Here’s a link to the passed bill.

Danielle Teagarden
Danielle Teagarden
Brewery Attorney at Reiser Legal PLLC
Danielle Teagarden is a Seattle-based brewery lawyer, business attorney, and intellectual property advisor with particular focus on protecting trademark rights and handling trademark disputes. Danielle frequently represents craft breweries, start-ups, and small alcoholic beverage businesses, and she is Author and Editor of the Brewery Law Blog. You may reach her directly at danielle@reiserlegal.com

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Update on “Slow Ride” Brewery Trademark Dispute

Slow ride, indeed. Here's an explanation of what just happened in the New Belgium and Oasis brewery trademark dispute over rights to Slow Ride.
Slow ride, indeed. Here’s an explanation of what just happened in the New Belgium and Oasis brewery trademark dispute over rights to Slow Ride.

A few months back, we reported on the “Slow Ride” brewery trademark dispute involving New Belgium in Colorado and Oasis in Texas. The gist is, New Belgium filed a lawsuit in Colorado seeking clarification of its geographic rights to “Slow Ride.” Both breweries had a beer by the name, New Belgium had filed for a trademark, but the Texas brewery had sold some beer under the name before New Belgium filed for the trademark. You can review our basic notes on the case here.

Today, we have an update. It’s a bit of a nerdy procedural one, but for any non-J.D. onlookers, it’ll help make sense of what happened. A Colorado judge has dismissed the case (Here’s a link to the judge’s order). The dismissal, though, doesn’t mean the dispute is over. Parties to a lawsuit typically seek to file the lawsuit near their home court, so they don’t have to go prosecute a lawsuit in another state. Here, New Belgium filed in Colorado. Importantly, though, the legal system does not allow a company to sue just anywhere it pleases. There is a requirement that the defendant have a sufficient connection to the state to make holding the lawsuit there just. I’ll note that any law students reading this have just cringed, recalling first year Civil Procedure discussions about what’s known as Personal Jurisdiction. In any event, due process requires that the defendant have sufficient minimum contacts with the forum state such that the maintenance of the suit in that forum does not offend traditional notions of fair play and substantial justice. (Thanks, Professor Cooper.)

A lot of money can be spent about whether there’s personal jurisdiction to support the lawsuit, and that’s what happened here. A judge has not gotten to the merits of the trademark dispute at all. A Colorado judge merely found that Oasis did not have a sufficient enough connection to Colorado to hold the lawsuit there. What kinds of connections did New Belgium allege that Oasis had to Colorado, to support holding the lawsuit there? Attending the Great American Beer Festival in Colorado, and then also sending cease and desist letters to New Belgium in the state. These weren’t enough to make it just to hail an out-of-state brewery into Colorado federal court.

So, where do we stand? No doubt, New Belgium’s filing of the declaratory judgment action was a maneuver to avoid having to deal with a lawsuit in Texas, which would be on Oasis’s home court. Moreover, and most likely, it was also filed to hopefully spur (Texas pun initially unintended) this lawsuit into settlement. Both parties have made public statements that they’re interested in settling. But, it’s a slow ride indeed. We’ll see what happens, and report back when we know more.

Danielle Teagarden
Danielle Teagarden
Brewery Attorney at Reiser Legal PLLC
Danielle Teagarden is a Seattle-based brewery lawyer, business attorney, and intellectual property advisor with particular focus on protecting trademark rights and handling trademark disputes. Danielle frequently represents craft breweries, start-ups, and small alcoholic beverage businesses, and she is Author and Editor of the Brewery Law Blog. You may reach her directly at danielle@reiserlegal.com

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What Beers Need TTB Formula Approval?

When does your carefully craft brew require a TTB formula approval? It's not as straightforward as it seems.
When does your carefully crafted brew require a TTB formula approval? It’s not as straightforward as you might hope. Read on for important background on TTB formula approval requirements.

Government authorities are great at drawing confusing lines. One example is understanding what beers need a TTB formula approval. (Note that TTB, or the Alcohol and Tobacco Tax and Trade Bureau, is the primary federal regulatory authority over alcoholic beverages and producers.) Before getting to the question of which beers require TTB formula approvals, it helps to cover some background material, and the necessary rigmarole it takes to get one. What are they, what beers need them, when do you apply, how long does it take? Read on and we’ll roll through it.

What is a TTB formula approval?

When brewing certain kinds of beer with certain ingredients and processes, TTB requires that the agency first approve your formula (your recipe / process essentially) before it will consider your beer for a Certificate of Label Approval (COLA). That process is commonly referred to as a TTB formula approval. This is required for a range of beers, as we’ll cover soon.

When do I seek TTB formula approval?

The time to seek formula approval is when you’re planning to package and distribute a product across state lines. That’s when you’d need to get something else, called a Certificate of Label Approval (which authorizes you to move that beer across state lines). The formula approval is a prerequisite to the COLA for beers that need it. Here’s another scenario that’s important to know. If your state requires a COLA before packaging and selling your product even within the state, then you’ll need to go through the formula-approval process first. (Submitting your TTB COLA label approvals is technically required by the Washington State Liquor Control Board, for example, so you’d need your (1) TTB formula approval and then (2) TTB COLA label approval, before you have authority to sell packaged product in the state).

How long does it take to get a TTB formula approval?

TTB does a great job, but it’s not as fast as getting your COLA. You can view average TTB formula approval processing times at this website. At the time of writing, it’s taking TTB about 53 days (so almost two months) to issues its formula approvals. In part, TTB’s backlog is due to the increase in number of producers and, thereby, the beers hitting the market and crossing state lines. Sneak preview, though…Based on statements from TTB correspondents at the Craft Brewers Conference this year, they’d like to see the number of required formula approvals go down, and may be easing requirements even more, letting more beers through the gate without requiring approvals first. We’ll touch on that in a second. In any event, you will want to budget this time when planning to release any beer to market that requires a formula approval. And then you’ll want to keep in mind that, after the formula approval, it’s going to take some time to get your COLA as well. (Current TTB COLA approval wait times here. Battle Martin does a fantastic job getting through these. Yes, it’s one guy at TTB who does every beer label, and he’s refreshingly also most awesome to hear speak and to deal with.)

Which beers require a TTB formula approval?

Well, let’s be glad not all of them do. But, the line drawing here doesn’t make the most sense. TTB requires formula approval for any beer that is made using nontraditional processes. If you’re brewing up a traditional recipe, this doesn’t need to be on your radar. Water, malt, hops, and yeast? No worries. It does, however, come into play when you start using adjuncts or creative processes.

As a general rule, the kinds of beer recipes listed below require a TTB formula approval. However, there are very important exceptions to this rule which I’ll cover below.

To which flavors or other nonbeverage ingredients (other than hops extract) containing alcohol will be added;
To which coloring or natural or artificial flavors will be added;
To which fruit, fruit juice, fruit concentrate, herbs, spices, honey, maple syrup, or other food materials will be added; or
That is designated as saké, including flavored saké and sparkling saké.

Which beers are exempt from the general TTB formula approval rule?

Here’s a list of the exempt ingredients below (thanks to a ruling in 2014 relaxing the standards). This list came from urging by the Brewers Association, wanting to relax the onerous approval requirements for beer ingredients and processes that really were traditional. As you peruse the list, you’ll see that certain fruit additions are okay…but not others, at least right now. For example, coconut doesn’t make the cut. So if you’re using coconut in any beer, you need a TTB formula approval. Moreover, a multitude of spices got the green light, but if you’re using something creative like lemongrass in your wheat, it’s not going to pass muster. Last, and fortunately, ingredients like brown sugar, chocolate, coffee beans and grounds, honey, lactose, maple syrup, and the like are all okay. But, notably, if you’re brewing a batch of coffee and then using that brewed coffee in your beer process, that is not okay. Just the beans or grounds. Hmm.

Fruits (whole fruits, fruit juices, fruit puree or fruit concentrate)
apples
apricots
blackberries
blueberries
cherries
cranberries
juniper berries
lemons
oranges
peaches
pumpkins
raspberries
strawberries

Spices
allspice
anise
pepper/peppercorns
cardamom
cinnamon
clove
cocoa (powder or nibs)
coriander
ginger
nutmeg
orange or lemon peel or zest
star anise
vanilla (whole bean)

Other Exempted Ingredients
brown sugar*
candy (candi) sugar*
chili peppers
chocolate**
coffee (coffee beans or coffee grounds)
honey
maple sugar/syrup *
molasses/blackstrap molasses *
lactose

The below processes are also exempt. As you review the list, keep in mind that you can use woodchips (remember, though, you can’t say it’s a barrel-aged beer then or say on its label that it has barrel flavor, that gets to labeling issues), but you can’t soak those woodchips in alcohol.

  • Aging beer in plain barrels or with plain woodchips, spirals or staves made of any type of wood.
  • Aging beer in barrels, containing no discernible quantity of wine or distilled spirits, that were previously used in the production or storage of wine or distilled spirits.
  • Aging beer with woodchips, spirals or staves derived from barrels, containing no discernible quantity of wine or distilled spirits, that were previously used in the production or storage of wine or distilled spirits, or with woodchips, containing no discernible quantity of wine or distilled spirits, that were previously used in the aging of wine or distilled spirits.

In Conclusion, TTB Formula Approval: Moving Forward

Ultimately, based on comments from TTB authorities who attended the 2015 Craft Brewers Conference in Portland, TTB seems to be revisiting further ingredients / processes to include on the list. We’re hoping coconut and a multitude of other now-traditional ingredients make the cut. We’ll include them in a post whenever we get word. But, for now, as you make plans to expand into other territories, keep in mind that the COLA isn’t the first step for many of your creative beers. Instead, it’s TTB formula approval, then the important step of TTB COLA approval. Forgetting this, or doing them out of order, can add significant delays to your beer’s release time. If you have questions or concerns about your upcoming COLA or TTB formula approval needs, Doug and I can help, no matter where in the U.S. your brewery is located. Feel free to send us a note.

Danielle Teagarden
Danielle Teagarden
Brewery Attorney at Reiser Legal PLLC
Danielle Teagarden is a Seattle-based brewery lawyer, business attorney, and intellectual property advisor with particular focus on protecting trademark rights and handling trademark disputes. Danielle frequently represents craft breweries, start-ups, and small alcoholic beverage businesses, and she is Author and Editor of the Brewery Law Blog. You may reach her directly at danielle@reiserlegal.com

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Washington Brewery Guest Taps – Applying the “25%” Rule

Are guest taps legal at Washington breweries? Indeed, they are, but subject to an important restriction.
Are guest taps legal at Washington breweries? Indeed, they are, but subject to an important restriction.

Are guest taps legal at Washington breweries? If you’ve been on a brewery crawl here in the evergreen state, you know the answer has to be yes. But, are there any restrictions on what a Washington brewery can pour at its taproom? Let’s dig in.

In Washington, we’re lucky to have a fairly de-regulated market. Just look at some of the Southern states, for example (where in Alabama homebrewing only became legal in 2013, sheesh). However, it’s not a free-for-all as far as guest taps are concerned.

In Washington, the on-point law can be found in RCW 66.24.244. It provides that any properly licensed microbrewery can sell beer produced by another microbrewery (those on the craft side) or domestic brewery (the big guys), but with one major caveat. The guest taps cannot exceed “twenty-five percent of the microbrewery’s on-tap offering of its own brands.” That might seem straightforward, but let’s break it down.

First, the excerpt one more time:

“Any microbrewery licensed under this section may also sell beer produced by another microbrewery or a domestic brewery for on and off-premises consumption from its premises as long as the other breweries’ brands do not exceed twenty-five percent of the microbrewery’s on-tap offering of its own brands.”

Understanding the Washington Brewery 25% Guest Tap Rule:

  1. Under the microbrewery license, standing alone, a brewery can only have beer guest taps. Not wine, not cider, not mead. The rule only applies to beer.
  2. The 25% rule is clear, but its application may not be. It’s easiest to break it down by using a number. You might read the 25% rule and think it’s simple. Say, I have 20 taps. A quick read may suggest to you that 25% of those can be guest taps. So, then, fifteen of my own beers and then five guest taps—75%/25%, right? It’s actually a little different. What the law says is that a microbrewery can’t exceed 25% of the brewery’s own brands. So, if you have 20 of your own beers on tap, then you could have an additional 25% allocated to guest taps. That’d be 25 total taps. 20 of your own beers, 5 guest taps. Important distinction. So, if you only had 10 total taps, no more than two could be guest taps.
  3. You probably caught it in the read through, but one last note. The law permits on-premise sales and off-premise sales, too. So, the law gives Washington breweries the green light to fill growlers from guest taps as well.

Ultimately, I love a good guest tap. And, I love that this industry is so supportive of one another that guest taps are a mainstay. The Revised Code of Washington, as applied by the Washington Liquor Control Board, ensures that Washington brewery guest taps are alive and well throughout the state. However, the 25% rule prevents a Washington brewery from, say, operating a full-fledged beer bar, while only dabbling in its own on-tap offerings. (Which, for me, is a bit of a bummer. I’d love to see a nano get rolling as a great beer destination—a fun atmosphere, an awesomely curated selection—then transition over into a bit more brewing. But, alas, that’s not the law.)

Danielle Teagarden
Danielle Teagarden
Brewery Attorney at Reiser Legal PLLC
Danielle Teagarden is a Seattle-based brewery lawyer, business attorney, and intellectual property advisor with particular focus on protecting trademark rights and handling trademark disputes. Danielle frequently represents craft breweries, start-ups, and small alcoholic beverage businesses, and she is Author and Editor of the Brewery Law Blog. You may reach her directly at danielle@reiserlegal.com

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