Left Hand has answered the complaint in the DuClaw v. Left Hand dispute over the right to use BLACK JACK and SAWTOOTH on beers. Left Hand raises, count ‘em, 18 affirmative defenses and a number of counterclaims. Review our original coverage of this matter here. In a nutshell, it’s a case of a junior user registrant (DuClaw) versus an unregistered senior common law user (Left Hand), whose trading territories just crossed per Dawn Donut when Left Hand expanded into Maryland.
Before digging into the trademark issues at stake here, we’ll note that taking both sides’ timeline of the events, Left Hand could have raised a copyright claim against DuClaw, though that claim more than likely accrued too long ago to be actionable now. Check out the similarities between the two “Black Jack” designs.
Anyhow, turning to the trademark matter, the gist of Left Hand’s position is that DuClaw knew or should have known about Left Hand’s senior use, thus DuClaw fraudulently obtained its registrations for BLACK JACK STOUT and SAWTOOTH from the USPTO, and those registrations should be cancelled. It’s interesting because although the Lanham Act opens up a registrant to cancellation of their trademark if the mark was obtained fraudulently, see 15 U.S.C. §1064(3), the statute never defines “fraudulently.” It’s clear that having knowledge of an existing common law user yet seeking nationwide trademark rights as opposed to concurrent use does satisfy this “fraudulent” test. But, emerging TTAB decisions seem to suggest that if an applicant acts with reckless disregard for the truth or perhaps something more, the underlying registration can be a fraudulent one, too.
If this line of thinking holds up, it’s clear that today, a brewery looking to name itself or its new beer runs the serious risk of defrauding the USPTO by registering a beer or brewery name without conducting a clearance search—at the very least, Googling the potential name. But, given the availability of search tools, it’s possible a brewery would be affirmatively charged with doing much more. That aside, assuming there’s a reckless disregard standard that applies in this DuClaw case, it’s harder still to think about what constituted a thorough enough search to avoid recklessness back in 2001, when DuClaw initially filed for its marks. Google was just a fledgling search engine, not founded until 1998, and who knows what its boolean bretheren among the ranks of Jeeves, Yahoo, or Alta Vista could even pull together about beer names and brewery names back then, especially when breweries themselves probably didn’t all have websites. What’s more, although Left Hand notes that it sought state-level trademark protection and had obtained COLAs for its marks, it’s unclear just how accessible and searchable these registrations/documents were then.
In its answer, Left Hand points to GABF awards, write-ups in industry mags that circulated in Maryland where DuClaw was doing business, and other sorts of things you might infer actual knowledge from. Even more notably, Left Hand does allege that it was actually distributing in Maryland, Virginia, and Washington D.C. “[a]s of the registration date” of DuClaw’s marks. Keep in mind that the filing date is what matters, at least since November 16, 1989, and at any rate, this is all trickier still because it doesn’t seem Left Hand has been continuously distributing in Maryland since then, arguably abandoning any common law rights it had in Maryland, if it had them. Further, if Left Hand has established and retained superior rights in Maryland, Left Hand hasn’t seemingly asserted those allegedly superior rights in more than a decade. Indeed, if the oft-pleaded doctrines of acquiescence and laches ever had a prime place, this would be a time to assert them.
We’ll see what the court decides to do with this increasingly messy dispute, and will keep you updated here. Our takeaway, though, is that in order for breweries and beverage businesses to avoid lawsuits like this in the future, and avoid cancellation of their marks, it’s essential to run a thorough clearance search. It’s a small up-front investment to avoid losing the brand you’ve built up, not to mention the expenses associated with filing and registering a mark that eventually gets cancelled or limited, in addition to all the costs involved in having your lawyer help you navigate threatened or pending litigation. What is more, this case further suggests that, though it may not be fun to do, a trademark owner is best served by taking timely action to protect your own marks when you see others who might be infringing them. Of course, as we’ve noted in the past, there are better ways to do this than to send a sharply worded cease and desist, and oftentimes both breweries can find a way to co-exist. Indeed, we’ll credit Left Hand. They seem to do their best to reach out for the start of a settlement handshake by making an alternative argument in their answer: DuClaw can take exclusive rights to Maryland, where DuClaw is and has been conducting business for a long time now, but Left Hand would like to take the balance of the US.