State of Texas Moves to Intervene in Alamo Brewery Trademark Dispute

Not too long ago, we reported on a new brewery v. brewery trademark dispute, Alamo Beer Company LLC v. Old 300 Brewing, LLC. The lawsuit just got more complicated. On Monday, the State of Texas moved to intervene in the dispute, contending they may have superior rights to the trademark and trade dress at issue in the dispute.

A quick recap on the lawsuit. Alamo Beer Company is suing Texian Brewing Company because Texian used a silhouetted roofline of the Alamo. Alamo Beer Company has a trademark for its name, and though it has not registered its logo, alleges that it has been using a silhouetted roofline of the Alamo since 1997 in conjunction with its beers. You can read more about that dispute in our reporting here.

800px-Alamo_panoNow, for the state of Texas. The big kahuna has entered the dispute, making this whole thing more complicated and more costly for the breweries. In its Motion to Intervene and accompanying proposed complaint, Texas alleges that it owns the historic Alamo Mission and has registered and unregistered common law rights to, among other things, use of the historic roofline in commerce. Texas may well have been using a silhouetted roofline of the Alamo in commerce well before Alamo Beer Company started using it, but the key question is whether consumers are likely to be confused by the two uses. We’re guessing that in the 17 years Alamo Beer Company has been operating, consumers haven’t thought that the beer came from or was endorsed by the State. We could be wrong, and maybe there’s some evidence of actual confusion—but why wouldn’t Texas do anything sooner? We’ll see what the court does with that, unless the parties settle.

Notably, too, an Exhibit attached to Texas’s motion indicates that Texas does not hold any federal trademark registration including the silhouette that predates Alamo Beer Company’s use. The State of Texas does hold a registration for the silhouetted logo for DVDs, CDs, mouse pads, and magnets, but only sought registration in 2013 (Reg No. 85854879). Texas has recently (last week) tried to jump in and register the silhouetted logo in Class 032 for bottled water (Serial No. 86259263), the same class of trademarks that beer is in. However, trademark classes are just an administrative tool for the USPTO. What matters is whether the goods are proximate enough to cause consumer confusion. We don’t think something like bottled water or these other Texas uses pose that kind of problem here. And, we’ll note that as to any bottled water / beer confusion, an agent for the State of Texas affirmed that they didn’t think confusion was likely either when they applied for the non-concurrent-use trademark eight days ago, undoubtedly when they already knew of the dispute and Alamo’s senior common law rights to the silhouetted logo. We’ll also note that there’s already a federal trademark registration for “Alamo Water,” since 1991 (Reg. No. 1695581) but that’s a wholesale distributor of water conditioning products and not a consumer-facing bottled-water retailer. Likely not a problem for Texas’s own trademark registration, but more on that in a second.

The bottom line is, Texas does not allege that it is any way in the business of beer, brewing, bars, alcohol, etc. Texas’s alternative angle, which they do allege in the proposed complaint, is that the Alamo mark it uses in conjunction with commerce is famous, and that use of the mark by anyone else would be dilutive. Texas makes this allegation, under both State and Federal law. We’ll leave Texas law analysis to a Texas beer lawyer, but from a federal perspective, to succeed on a theory of trademark dilution by blurring or by tarnishment, Texas would have to prove that its mark, commercially, became famous before folks like Alamo Beer Company started using something similar. As to dilution by blurring, one of the factors the court will have to consider in deciding whether blurring is at play here is “the extent to which the owner of the famous mark is engaged in substantially exclusive use of the mark.” See 15 U.S.C. § 1125(c)(d)(b). Given existing registrations for things like Alamo Water and Alamo Beer Company, not to mention widespread use by the arguably pretty famous Alamo rental car company, this seems like a fatal blow to Texas’s dilution case. We also have reservations about whether The Alamo is really famous, in a commercial sense, to warrant that kind of broad protection. See 15 U.S.C. § 1125(c)(2)(A). And, as to dilution by tarnishment, if someone like Louis Vuiton couldn’t prove that Chewy Vuiton dog treats tarnished its brand, we have doubts about whether a trier of fact could reasonably find that Texas’s Alamo brand, if it even is famous, has been actually or likely tarnished by what is probably pretty dang good beer.

An interesting turn of events in this case, to be sure, and we’ll be keeping you posted on any developments. As always, we’d love to hear your thoughts on this dispute, so feel free to find us in the comments or on Twitter.

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Things Still Tense in Florida Over Recently Revised SB1714

500px-Seal_of_Florida.svgFor the Florida beer industry, all eyes are on the legislature, where the clock is ticking, with four days left of the session. The still-in-the-works contentious Senate Bill 1714 would make drastic changes to the state’s distribution system, limiting brewers’ ability to sell their own beer and putting more power in the hands of distributors. We could report on the details of the bill, but our fellow beer lawyers down in Florida at BrewerLong have done a phenomenal job of keeping those in and out of Florida up-to-date on just what’s happening in the legislature. Indeed, they immediately reported on a late-night change last night that removed much of the most contentious provisions in the bill. A vote in the Senate is expected today, and if the bill passes there, it’s got to get through the House of Representatives before legislators close up shop for 2014. If you’re interested in what’s happening in Florida, stay tuned to BrewerLong’s coverage here.

As beer lawyers and beer fanatics, the development of the beer industry in every state, including its maybe-inherent politics, is all downright fascinating to follow. That’s why we wanted to be sure, today, to pass along one recent, insightful look at SB1714 from someone who sees a lot at stake for the business he’s work hard to build. In an impassioned press release, Cigar City founder and CEO Joey Redner breaks down the potential motives behind the bill (at least in its iteration before yesterday’s late-night changes), discusses the three-tier distribution system, and shares his thoughts about brewer-distributor relationships. It’s worth a read. See a short excerpt below, and head over to the Cigar City website for the full text:

“And the vast majority of states allow direct retail sales by breweries like those currently allowed under Florida law. Most without limit. Yet in all of these states private distributors still exist. In fact, many of the largest distributors are located in states with self-distribution. How can that be?

Well, the first reason is that distribution is a tough business. Like brewing, distributing beer is capital-intensive, heavily regulated, and requires managing a dizzying array of moving parts. As with anything that is difficult to do, those that can do it well add value to the system. A good distributor that can get beer to market more efficiently and with less overhead provides value to breweries and to consumers.

Fun fact: Most breweries, even in states where self-distribution is an option, ultimately choose to work with a distributor. Not because the government tells them to, but because it is a mutually beneficial business relationship. In the case of Cigar City Brewing, you couldn’t pry me away from my distributor with a crowbar! They do a phenomenal job representing Cigar City and through their hard work they bring value back to the brewery.

Those are the kinds of relationships government should foster; mutually beneficial partnerships, not government mandated servitude.”

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New Brewery v. Restaurant-turned-Brewery Trademark Dispute: Rogue (Oregon Brewing Company) v. Rogue’s Harbor Steak & Ale, Docket No. 5:14-CV-0428

RestaurantOregon’s widely distributed brewery known as Rogue has filed a lawsuit against a New York company called Rogue’s Harbor Steak & Ale, Docket No. 5:14-CV-0428. The case is technically captioned Oregon Brewing Company v. Rogue’s Harbor Steak & Ale, and you can find the complaint here. The case is not as tidy as it might seem upon first glance, and Rogue’s Harbor Steak & Ale has yet to file an answer, but a little digging on our part shows the makings of a bona fide turf war.

The timeline of events is, as it always is in trademark disputes, really important. We’ll do our best to take you through it here.

The complaint alleges that Rogue has held a federal trademark since the end of 2002. That trademark gives Rogue nationwide rights to use the name in conjunction with beer, but Rogue took those rights subject to the rights of existing unregistered common law users. More on that soon. Before 2002, though, Rogue had still been using the name on beers for quite a time, since 1989.

Turning to Rogue’s Harbor Steak & Ale (doing business as Rogue’s Harbor Inn), they do have some historic use of the name in conjunction with an inn since the early 1900s. You can read a bit about that here. It’s unclear whether that historic use has been continuous, but in our view, it really doesn’t matter. What’s critically important is that Rogue’s Harbor Inn began running a restaurant on the first floor of the inn since 1996. Again, 1996 is after Rogue had taken up use but before Rogue filed a federal trademark.

Although Rogue’s Harbor Inn wasn’t yet brewing (the company started brewing under the “Rogue’s Harbor Brewing” name in 2011), restaurants are arguably related to the alcoholic beverage industry and, it follows, that breweries or “brewpubs” could arguably be within a restaurant’s natural zone of expansion. Note that in a related close case, not binding on the Northern District of New York, the Federal Circuit has past decided that beer and restaurants are not related. See, e.g., In Re Coors Brewing Company, 343 F.3d 1340 (2003) (reversing the TTAB’s decision and finding that although an application for “Blue Moon” for beer was similar to an existing “Blue Moon” registration for restaurants, beer and restaurants were dissimilar enough under these circumstances to warrant simultaneous registration); but see In re Constellation Wines U.S., Serial No. 78803750 (April 17, 2008) [not precedential] (TTAB concludes that applicant’s Brickstone Cellars mark for wine would be confusingly similar to the registered Brickstones mark for restaurant services, finding restaurants and wine related).

If the court views restaurants and breweries as related and, in turn or otherwise, finds that brewing was in the restaurant’s natural zone of expansion (typically, a reasonable likelihood of expansion to include those goods/services), then Rogue’s Harbor Inn would appear to have earned its common law rights to keep on using the name for its brewery irrespective of Rogue’s federal trademark. That is, again, Rogue’s federal trademark only gave the brewery nationwide rights to places where existing common law users, likely to cause confusion, had not yet taken up use on the date of filing. We know Rogue’s Harbor Inn had started that restaurant before Rogue ever filed the trademark. Of course, Rogue’s Harbor Inn’s right—if attached to the restaurant’s zone of expansion—would only extend to wherever Rogue’s Harbor Inn had established secondary meaning on the date of Rogue’s filing, so maybe just Ithaca, NY and the closely surrounding area. Whew. Messy stuff.

We’d love to see what this court does with the restaurant/brewery zone of expansion question, and should make clear that Rogue is in no way alleging that the restaurant should discontinue its use of the name in conjunction with the restaurant—just the use of the name in conjunction with the 2011-established brewery. At any rate, for the parties’ sake, we hope they can find a way to settle this one. It’d be an expensive fight to the finish line.

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Can Brewery Taproom Managers Split Tips with Staff?

DollarsTip splitting or pooling is common practice, especially in busy bars and breweries. It’s generally legal, but only under certain circumstances. To that, one question we’re often asked is whether it’s okay for taproom managers to also receive a split of the tips. The answer depends on both federal and state law, so it’s best to talk to your in-state lawyer to be sure. However, very generally, it depends on the duties of the individual who would be receiving the tips.

The federal law at play here is the Fair Labor Standards Act. Under it, “employers” may not receive a split from the tip pool. To determine whether someone is an employer, it turns on their regular job duties. If your taproom manager is primarily serving customers, but also doing some other things on the side, such as handling the brewery’s social media presence, booking events, and scheduling staff, then this person really isn’t acting like an “employer” as the law contemplates. Splitting tips is okay from a federal perspective. However, if a manager is mostly in the back room working as an instrument of the owner, but comes out from time to time to help cover the bar during a busy hour, then this person more than likely can’t take a split of the tips. Also, it goes without saying, but the owner of a brewery is most definitely an “employer” under federal law, and is not the kind of person who can share in the staff’s tip pool.

For more information on wage laws, and to make sure your brewery is in compliance, contact your attorney. You can also find helpful information about how FLSA works here.

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A Dog of a Brewery Trademark Dispute: Thirsty Dog Brewing Company v. Sleepy Dog Saloon and Brewery, LLC, Docket Number 5:14-cv-00828

Leg Humper HefeweizenOn Thursday, April 17, 2014, Ohio-based brewery Thirsty Dog Brewing Company filed a lawsuit against Sleepy Dog Saloon and Brewery, LLC from Arizona. The dispute isn’t about their two brewery names. Rather, it’s about their brews, and Thirsty Dog has reason to be upset. Since 1999, Thirsty Dog has held a registration in Class 032 its beer called OLD LEGHUMPER. Sometime since, Sleepy dog started selling its Leg Humper Hefeweizen, similar in name and in label artwork. The case is Thirsty Dog Brewing Company v. Sleepy Dog Saloon and Brewery, LLC, Docket Number 5:14-cv-00828.

The complaint alleges that Thirsty Dog sent a cease and desist back at least as early as July 1, 2011. We don’t know what kind of talks or negotiations happened between then and now, but this timeline does present a good opportunity to bring up a historic doctrine of trademark law: laches. Laches is an equitable defense to a claim of trademark infringement. A court can find laches applies when a plaintiff has unreasonably and inexcusably delayed bringing a case against a defendant, and that delay has prejudiced the defendant in some way. It’s a fact-sensitive inquiry, but it’s notable that back in 1939, in a classic post-prohibition brewery v. brewery trademark dispute, the 9th Circuit observed that “[t]he delay of nearly three years in bringing the suit has no explanation in the evidence and we find and hold it to constitute laches . . . .” Golden West Brewing Co. v. Milonas & Sons, 104 F.2d 880, 882 (9th Cir. 1939).

Old LeghumperWe make no predictions about this case, as two-and-a-half years is not a tremendously long time, and there could be good reasons for Thirsty Dog’s delay in bringing suit. Still, it’s a worthy opportunity to point out that when a brewery chooses to send a cease and desist, you really have to mean it. If you set a deadline to respond or otherwise threaten legal action, and then do nothing, you threaten your case against them. Certainly, some delays are excusable, and it’s up to the court whether to apply the doctrine, but it’s one more reminder that when you register a trademark, you have affirmative rights to police and protect that mark—else lose the strong rights you sought in purchasing the registration.

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