Trademark Litigation Spurs Collaborative Beer Series Between Strangeways Brewing and Strange Craft Beer Co.

We like this story because it gets at the unique spirit underpinning this whole industry. As you might recall, last year a beer-centric dispute emerged over the word “Strange,” which spilled over into federal court. The three players were (1) Strange Brew, a Marlborough, Massachusetts homebrew supply store with a federal trademark in Class 032 for beer; (2) Strange Brewing, a craft brewery in Denver, CO; and (3) Strangeways Brewing, a craft brewery in Richmond, Virginia. It all started when Strange Brew, the homebrew shop, sent cease and desists to both breweries, alleging they had infringed on their trademark. We won’t get into the nitty gritty of that whole dispute, because it no longer is one. If you’re curious about it, though, there’s good coverage here. Fortunately, the parties were able to settle, with MA-based Strange Brew and VA-based Strangeways keeping their names, and CO-based Strange Brewing changing its name slightly to Strange Craft Beer Co. We don’t know the details of the settlement, but what we do know is that in the wake of all this, the two craft breweries involved formed a bond. Certainly, we imagine that fighting shoulder-to-shoulder in an eight-months-long nasty trademark battle wouldn’t have been the breweries’ first choice in how their friendship formed. Still, what came of it all is pretty cool. Amid the litigation, the breweries decided they should see some good come out of this, and agreed they’d form a collaborative beer. The first is going to be a Belgian Dubbel, brewed with honey from both Colorado and Virginia. This collaboration will be available only from the Denver-based Strange Beer Co. taproom, while a not-yet-finalized future release will take place at Strangeways. Quite the satisfying—delicious, even—way to put this trademark turmoil behind them.

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FDA to Revisit Proposed Regulation of Spent Grain

A couple of months back in a guest post, our good friend and fellow beer attorney Brook Bristow provided a thoughtful overview of proposed regulations from FDA. The potential regs would affect brewers’ ability to sell their spent grain to farmers, requiring strict handling, testing, and record-keeping processes. Since the post, the Brewers Association and the farming industry have spoken out against the regulations. They’ve observed, the cost of compliance could turn brewers away from the practice, putting this beneficial grain into landfills instead of recycling it. Further, the loss of this feed source for farmers could end up raising the prices of goods like meat and milk.

We’re happy to report that FDA seems to be taking note of the brewing industry’s concerns, and is making revisions to the rule. FDA made the following statement:

“We anticipated some of these issues when we requested comment on the proposed rule and are already reviewing the extensive input received from brewers and others. We recognize this is an area that should be addressed and will reach out to those concerned. When the agency proposes revised language for this rule later this summer, we will include more on this issue and welcome comments.”

Hopefully, the new proposed rule will strike a better balance between FDA’s concerns and what is an environmentally friendly and long-proven safe practice.

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Kettle and Stone Brewing Changes Name to Avoid Trademark Dispute with Stone Brewing Co.

Here’s a position no 10-month-old brewery wants to be in. Out in Boulder, Colorado, a fledgling brewery initially selected the name Kettle and Stone Brewing, after a three-months-long name-selection process. As the brewery worked hard to brand themselves and build that brand, they received a letter from Escondido, California’s established and well-known Stone Brewing Co. observing that the use of “Kettle and Stone Brewing” was infringing on their trademark. In the letter, Stone gave the option of changing the young brewery’s name or keeping the name but just not expanding their trading territory, and Kettle and Stone didn’t want to fight this one out. They selected a new name, which they’ll announce soon, after they finish jumping through all the (expensive) hoops associated with name changing and settling things out with Stone, including selling off existing inventory branded with the former name.

On the flip side, no established brewery wants to be in the position this scenario put the folks at Stone in. The brewing industry is, after all, built on relationships and many established breweries are reluctant to deliver bad news to their brethren. Nevertheless, when you have a trademark, you’re charged with enforcing it, else you lose the strong rights you’ve established in it. Allowing Kettle and Stone Brewing might allow for further incursions into the Stone brand. One new brewery with the word “Stone” at the end of it might allow for another new brewery to open with the word “Stone” at the beginning of it, and so on. Before long, there could be a dozen breweries operating with the word “Stone” in it, and Stone has lost the branding power it sought and paid for in seeking a trademark registration. Sending a letter isn’t a malicious or petty move by a big brewery, as it frequently can be painted in the news. Still, there are friendly ways to deliver word that you think there may be a trademark conflict, and there are also friendly ways to react to that news. It looks like both breweries here did their best to politely and professionally address the issue.

So, if you’re a new brewery, how can you avoid getting a letter like this during your infancy, while you’re working hardest to establish your brand in your local community and beyond? Here, we can’t know whether Kettle and Stone Brewing conducted a professional clearance search with their lawyer before settling on the name. But, we really recommend doing so, for your brewery name and also for every beer you want to keep on brewing and potentially distributing into other markets. If you make a list of a few names you really like, your lawyer can let you know of any risks there might be in selecting those names. Keep in mind that just because your selected name is somewhat overlapping with another brewery’s, it doesn’t automatically mean you can’t use it. Think Russian River Brewing, Trout River Brewing, Six Rivers Brewery, Bent River Brewing, and so forth. And, the more distinctive of a name you choose—such as one involving a made-up word—the most confident you can be moving forward, both in avoiding getting letters like this and in avoiding having to send ones down the road.

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New Brewery Trademark Lawsuit: DuClaw Brewery, LLC v. Left Hand Brewing Company, Inc. (Docket Number 1:14-cv-00908)

In addition to the present “Nitro” TTAB tussle, Left Hand Brewing Co. is now involved in a different brewery v. brewery trademark dispute, a full-blown case that has spilled into federal court. This time, the matter is DuClaw Brewery, LLC v. Left Hand Brewing Company, Inc., Docket Number 1:14-cv-00908  filed in the District of Maryland. Based on the complaint and a bit of research, it seems this dispute will come with some tough consequences—unfortunately, ones that again could have been avoided through early registration of selected beer names.

Left Hand has not yet answered the complaint, filed by DuClaw on March 24, 2014, so facts from Left Hand’s official perspective are a bit limited. Still, information from the Great American Beer Festival archives helps flesh out the essential timeline.

The dispute involves two beer-category trademarks filed by DuClaw back in 2001, one for Sawtooth (Reg. No. 2571434) and one for Black Jack Stout (2571432). DuClaw claims they first started using both marks back in November 1998.

On the flip side, Left Hand currently brews a Sawtooth ESB and a Black Jack Porter. Left Hand does not hold federal registrations for those marks, however Left Hand has been brewing under those names for about four years longer than DuClaw. Indeed, Left Hand lore has it that Sawtooth was the brewery’s first batch of beer when they opened their doors on January 22, 1994, and that year Left Hand won GABF Gold for  the Sawtooth and Bronze for the Black Jack Porter.

It’s pretty clear that Left Hand started using the Sawtooth and Black Jack names before DuClaw, but never obtained a federal trademark registration. That makes all this a bit messy, and not a neat victory that maybe DuClaw was anticipating. Left Hand is technically a senior common law user, with superior rights to DuClaw’s in whatever trading territories Left Hand had established on the date DuClaw filed for the marks, September 20, 2001. Put another way, when you file a federal trademark, you get nationwide rights but you take them subject to whatever existing users are out there. Back in 2001, it might not have been as easy for DuClaw to run a thorough trademark clearance search to find users like Left Hand. Maybe they would have avoided the names. Still, keep in mind, the law doesn’t care if DuClaw picked those two names just because they saw Left Hand using them and really liked them. (Note, though, that if DuClaw knew of Left Hand, technically they should have carved out Left Hand’s trading territory from their application. This is a basis for cancellation of the mark, though this will probably all get sorted out as the court divvies up territories.)

One lingering question some may have is this: Given that DuClaw has had the TMs for more than a decade, Left Hand has been rapidly expanding during that time, and that when you Google “Sawtooth Beer,” for example, all sorts of Left Hand hits come up, why didn’t DuClaw act more quickly? The maybe unexpected answer is, DuClaw did act pretty quickly. Although there is a doctrine of trademark law out there called laches that requires TM owners to act with some expeditiousness, else sometimes forfeit their cause of action, that’s likely not what’s going on here. Instead, it seems DuClaw was relying on what’s one of the most frustrating principles of trademark law for TM owners, what’s known as the Dawn Donut Rule.

The oft-cited 1959 Dawn Donut case instructs that even if you own a trademark and have a superior right to use the mark in certain trading territories, you have a right to stop the other user, but no remedy in court until you actually cross trading territories with that user. You can issue a cease and desist, which might dissuade the other party from using the name (DuClaw issued one in 2010), but you can’t get any court to help you out and order them to stop using the name. As you can imagine, this can be really frustrating for those who wish to enforce their rights, especially when they know consumers are actually confused. Further, no brewery likely wants to prematurely expand just to enforce their rights…in a federal court in a state that’s far from their home turf. What makes it even more likely DuClaw has been waiting for Left Hand to expand into their home state of Maryland is that, Left Hand just started distributing into the state last month. From that perspective, DuClaw has waited no time at all to enforce its rights, now with a court-ordered remedy finally available.

It’s an interesting dispute, especially given the longevity of the dual uses and—at least for this writer—the secondary meaning of Sawtooth and the Black Jack portion of Black Jack Porter, currently tied to Left Hand and not DuClaw. Maybe DuClaw has no plans to expand outside of the East Coast, so the parties can come to some sort of an agreement. Maybe not. Still, there’s no doubt that had Left Hand registered its two names when it first started using them, back in the early 1990s, they wouldn’t be in court today, at risk of losing rights to their first-ever brew name, in much of the United States. As always, we’ll keep you posted about how the dispute progresses.

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Greetings from CBC 2014!

Right now, Reiser Legal is out in Denver at this year’s Craft Brewers Conference. If you’re out in this part of the world too, definitely get in touch with us, through this blog or otherwise—we’d love to meet up and say hello!

This year’s CBC has so far proven as informative and fun as ever, and we love being part of such a vibrant, growing community. Turning to CBC-local Colorado brew news, you might remember that we reported a few weeks back about Longmont, CO-based Left Hand’s opposition in trying to register the “Nitro” trademark, and all that is still brewing. But today, in sunny Denver, the spirit is all camaraderie and innovation. In fact, in related news, as attendees and maybe our readers would know, Colorado’s Oskar Blues has officially released its Old Chub Nitro in celebration of CBC—it’s the first-ever domestically produced can of nitro brew, which follows on the heels of Left Hand’s inventive nitro-bottled Milk Stout. Yes, the brewers of Colorado are certainly doing good things for beer.

So, as we spend these next few days immersed in all-things CBC, and getting to know even more of you, we’d like to say cheers—to innovation in craft brewing, in the industry, and in the law that surrounds it all.

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