A Note on Trademark Dominance; A Fresh Look at “Natty Greene’s” and “Natty Light.”

This past week, we’ve seen blogs light up with coverage of the “Natty Greene’s” trademark spat. It’s a simple one: a craft brewery has recently applied for the “Natty Greene’s” trademark and Anheuser-Busch InBev already holds a similar trademark in “Natty Light.” InBev is opposing the trademark application, saying it’s too close to theirs. There’s not much more to it than that. A few bloggers have been characterizing InBev’s position as “completely ridiculous,” and though we champion the little guys every day, it’s our view on this one at least that InBev’s position is completely understandable. Indeed, this dispute gives us a good opportunity to discuss something every current or would-be trademark owner should understand: dominance. Nope, we’re not talking machismo or market share. Rather, it’s important to consider, know, and be very careful to “clear” (more on that here) the dominant portion of your trademark (and, of course, the rest of it, too).

If you’ve ever selected a trademark, you know that it can be a persnickety process. A not-so-secret to avoiding struggles down the line is to make as certain as possible that the “dominant” portion of your trademark steers clear of someone else’s. (Of course, those someone elses not only include breweries but also other alcohol producers and potentially even restaurants with bar services.) How do you know what’s dominant? The body of trademark law has articulated a ton of ways to get there, but it’s fair to say that dominance is pretty much a hunch with a healthy dose of common sense. Let’s turn to the Natty dispute to illuminate this whole thing.

Right now, InBev calls its well-known frat juice “Natural Light,” and has a trademark for “Natty Light.” Consider that, just as you can’t claim extra-special rights to descriptive words like ale, lager, rauchbier, IPA, etc., InBev’s TM can’t claim exclusive sorts of rights in the word “Light.” Everyone else is free to use the word “Light,” so the thrust of the “Natty Light” trademark, what really matters, is that “Natty” portion. You could think of it as mostly a trademark for “Natty.” This makes sense. If the trademark was for “Natty Ale,” the part that you’d expect to resonate with consumers would, again, really fall on the “Natty” portion of the mark. We all know what the “Ale” or “Light” signifies, and it doesn’t tell us anything about the source of the product.

So, keep in mind that if you owned and paid for a trademark with a dominant portion of “Natty,” you’d have an affirmative duty to look out for conflicting uses. Otherwise, you can lose the rights you paid to get. Anheuser-Busch InBev takes active steps to police its marks, like we do for our clients, by reviewing a publication every week that lists all the new trademarks published for opposition. In recent weeks, “Natty Greene’s” was published for opposition, and InBev opposed. Even though “Natty Greene’s” is a pretty awesome name that tips its hat to Greensboro, NC’s namesake hero General Nathanael Greene, not all consumers outside the NC region are going to know that. If someone heard “Natty Greene’s” in a commercial, it might not sound much different from other sort of “Natty + descriptive word” marks such as “Natty Blue” or “Natty Red.” Just hearing a list of beers on tap, consumers might think that “Natty Greene’s” came from the same source that brought them “Natty.” And, when you get a nationwide federal trademark, you’re hoping to protect yourself from potentially confusingly similar uses like that. That’s where InBev is likely coming from.

Some commenters have also pointed out, and we’ve been hearing more buzz about lately, that there are tons of federal TMs out there in conflicting categories that make use of tons of words. It might seem like there’s too much already trademarked to be able to choose a protectable brand name. In our view, it’s definitely true that there are plenty of icebergs in the water to steer around. But, depending on how you use a word in your mark—in other words, what’s dominant in your mark—those existing trademarks may not be icebergs at all. Your TM-savvy beer attorney can help you figure that out.

Turning back to the matter at hand, “Natty Greene’s” may well make it past opposition, and we hope InBev and these guys can figure something out here. But, for the sake of discussing TM dominance, consider this. What if the applied-for TM wasn’t “Natty Greene’s” but instead “General Natty Greene’s.” There’s still the same word overlapping, but when you read it or if you say it, there’s way less weight on “Natty.” The emphasis is more balanced, and InBev would have a much harder road to say it was confusingly similar. In the existing application, the apostrophe does help, but not in quite as dominant of a way. Making it more obvious with just two more letters—”Mr. Natty Greene’s”—could arguably be enough to signal to consumers that this is a different source than the origin of that other barely-yellow stuff. Now, whether brands like “General Natty Greene’s” or “Mr. Natty Greene’s” are cool brand names would be up to the business owners in planning, but this is the sort of information every brewery should want before picking a name and investing in it both emotionally and financially. This is the sort of information Reiser Legal and fellow beer attorneys are glad to provide, because no one (these lawyers included) wants to be fighting a fight we can help you avoid in the first place.

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Why Every Brewery Should Care About Copyright Law: Part 2 of 2

Yesterday, we covered key differences between trademarks and copyrights. (There are a bunch more, so we’ll save them as future blog fodder.) Today, we zero in on just how important it is to take a thoughtful approach to copyright protection. With an exceptionally small time and money investment, your registered copyright may well work harder and faster for you than your trademark, should a problem ever arise.

1. You have to register quickly to reap the big benefits.

If you’re like the typical brewery or business, you have all kinds of marketing efforts going on at once. Maybe you have a designer or two working on the next label or a massive overhaul of the website. That means you’re creating copyrightable intellectual property at a surprising rate. The good news is, as we touched on yesterday, all that protectable material automatically gets a sort of “copyright,” and you don’t have to lift a finger or write a check to get it. The bad news is, the rights you get in the material are thin compared to the rights you get if you register the copyrighted works within a statutorily mandated time. What kind of rights do you get if you register?

Here’s the big one. Statutory damages. Unlike with a trademark dispute, where you’d typically be fighting hard to make someone “stop” or “change names,” copyright law sets a dollar amount you get if someone is infringing on your copyrighted work (and can also get them to stop). You don’t have to get out the calculator and try to put a number on just how much a misuse of your work damaged your business. The range is an automatic $750 to a whopping $30,000 per infringed work, and not a penny less. And, if the infringement was willful, the court can award up to $150,000. (If you’ve ever wondered why those music-pirating cases amounted to millions of dollars, consider these numbers times 100 downloaded songs.)

Now, we’re not fans of litigation and we shake sticks only when the peaceful way out isn’t possible. But, if there’s ever a stick to shake, it’s this one. If you have a legitimate concern that, say, your artistic logo has been ripped off in certain impermissible ways, this provision does a lot for you. It’s a lot easier to avoid court altogether and convince a problematic infringer to stop an even borderline-infringing use when you have these statutory damages available. (And, note that copyright law is immediately enforceable nationwide, and no matter whether the infringer is a brewery/alcohol biz or not, whereas trademark law requires that your trading territories cross and typically only applies to closely related businesses).

Changing gears a tad, it’s also important to note here that you can recover attorney’s fees through copyright law. Assuming the polite but powerful cease and desist didn’t work and you have to seek a court judgment, if you win and have registered your copyright, you can potentially get your attorney’s fees paid for—yet another reason the other side may want to avoid court in the first place.

2. Register within three months, but be selective.

So, to get the big sticks we’ve mentioned (and there are more), you have to register early. Wait, and you lose the sticks forever, though you’ll still have enforceable rights—just not as powerful ones. The timeline to get to the US Copyright Office with your registration is 3 months, and the clock starts ticking whenever you publish your copyrighted work in a public way. Posting a new label design on Facebook? That’s publication for these purposes. So, that’s why, if a brewery is not strategic about protecting copyrightable material, it’ll never get the full benefit of copyright law.

It’s our position that it’d be a waste of time and money to attempt to register every copyrightable thing your brewery puts out. That doodle you made on the back of your coaster? Well, it’s copyrightable. The doodle isn’t important, but your brewery’s logo and beer labels are. If it’s important to your business, brand, or brewery identity, that’s the material you want to best protect. That’s the material to copyright, and it’s material that might extend beyond what’s protectable with a trademark. Even your tap handle design, though it’s functional, could have protectable aspects. By deciding early on what sorts of things you want to protect, it’s best to come up with a game plan to protect them, so the three-month shot clock doesn’t run out.

3. As part of your strategy, know what you own—or how to own it.

This is an area of copyright law that even the savviest business owners can slip up in. Even though your brewery has paid an artist to make something, unless that artist is on your staff and it’s a typical part of the person’s job, the copyright doesn’t necessarily belong to you. You’d have a right to use it, sure, but all those important rights we’ve covered would belong to the artist. This is a problem, because the artist (and we hope they wouldn’t) could make all sorts of uses of the artwork you thought belonged to you. Depending on the kind of use, trademark law might stop them, but there are all kinds of uses TM law wouldn’t help.

A way out of this is to form a particular agreement with every artist who is going to make those important kinds of work you’ve identified. And, for work that’s already been made, a brewery could sweep those copyrights under your control by requiring that the artist assign their rights to you. Only certain kinds of language will work in these sorts of agreements, so it’s important to connect with your IP-savvy legal advisor and get it right.

Valuable IP can be affordable to secure, it just takes planning.

For breweries in the planning stages right now, it’s early enough to form a proactive strategy to protect your copyrightable and trademarkable material, making sure to collect those statutory “sticks” to best protect all your essential intellectual property. Even for existing breweries, it’s not too late to right the ship and make sure copyright is a part of your business plan as new beers and marketing campaigns unfold. Here at Reiser Legal, we believe that just as you take a measured approach to growing your business, it’s worth giving time and thought to make your intellectual property assets as valuable as possible. To that end, we offer affordable IP packages that cover both your trademark and copyright needs, and we can also help you form a proactive legal branding strategy to best achieve your business goals moving forward.

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Why Every Brewery Should Care About Copyright Law: Part 1 of 2

At this point, you know trademarks are important. But, despite the common misconception, a trademark is in no way a substitute for a copyright. The reverse is also true. Today, in part one of this two-part post, we take on an important question many of our clients approach us with:

What is the difference between a trademark and a copyright?

First, we’ll review the one everyone’s somewhat familiar with, trademarks.

What is a trademark?

Trademarks are all about protecting consumers. In operation, they also protect businesses, but the heart of trademark law is about consumers. Trademarks protect consumers because a trademark designates a unique source. When you look at a Coca-Cola can, you know it comes from Coca-Cola. If anyone could use the Coca-Cola logo and that red-and-white packaging, then it wouldn’t mean anything. Consumers would have no idea whether a product they bought was the secret formula the Coca-Cola company has been protecting all these years, or some cheap knock-off. Maybe it was Pepsi in disguise. Thanks to trademark law, when you go out and buy a bottle of Coca-Cola, you know exactly the quality of product you’re getting, good or bad, and you recognize who makes it. Without trademark law, the market would be a really uncertain mess.

Again, trademark law cares most about consumers. For the most part, it seeks to prevent the likelihood of consumer confusion. That’s why we also don’t see Coza-Zola out there on pop cans. And, in another sense, it’s why you can’t go open up the Coca-Cola Brewing Company. Consumers would be confused as to whether there was an affiliation of some kind. In fact, Coca-Cola has reached such fame that it’d be downright problematic if the word Coca-Cola was used by anyone else on any other kind of good . There’s a branch of law called trademark dilution that addresses that. But, cutting to the chase, the touchstone inquiry in a trademark law matter is whether consumers are likely to be confused. It’s why someone can’t open the Sierra Nevada winery tomorrow. It’s why you can’t go sell frozen foods or start a restaurant under a brand name of TGI Fundays. In the first example, it’s not exactly the same sort of good or service, and in the second example, it’s not exactly the same brand name we all know, but it’s all just too close. But, if you wanted to go start making high-tech computer chips under the Sierra Nevada name, you may well be able to do it. Assuming you saw a completely different logo, no green about it, would you think those high-tech computer chips came from the company that brought you that pale ale? That’s essentially what the US Trademark Office is going to be considering when they decide whether to issue a trademark, even when the same name is already registered on a different kind of goods or services. Is the ordinarily prudent consumer likely to be confused?

So, how do you get trademark protection?

Generally, you automatically get a mini sort of trademark protection whenever you open a business and start engaging in commerce. But, you can seek broadband nationwide trademark protection when you start engaging in commerce across state lines (in a brewery’s case, selling beer out of state) or you plan to engage in that sort of commerce within a few years. Again, though, a trademark only protects your business from any subsequent branding uses that would confuse consumers. If a brewery opens up with a name that has a word in common with yours, that might not be a problem, depending on the word. If you’re New Belgium or a consumer familiar with them, we expect Zen Belgium Brewing would feel a lot different than Old Belgium Brewing. Three letters, one word, big differences in overall consumer impression. But, let’s move on.

What is a copyright?

In contrast to trademark law, copyright law is concerned with protecting original works of authorship (that are fixed in a tangible medium of expression, but we’ll keep it simple for now). The deal is, once you create something, you’re in the realm of copyright law. But, the thing you create has to be more than just an idea, it has to be creative, original, and actually expressed. Your brewery’s name in Helvetica font? Not going to cut it. A highly stylized logo design with graphic elements? Now we’re talking. The artwork on your beer cans is probably protectable. That clever description you wrote about your beer? In the realm of copyright law. That beer name you just came up with? Nope, that’s trademark law. That Kickstarter promo video you just put together? Copyright law. Whereas trademark law is worried about consumers being confused about where things come from, copyright law wants to protect art/creativity by keeping creators from being completely ripped off. If you wrote a song and anyone could go cover it, or stick the chorus in their song and make millions of bucks without paying you a dime, we’d be worried you’d stop writing songs. You get the idea.

As you can start to see, trademark law and copyright law concern different things, but there can be some overlap, too. For example, if Pepsi started running holiday ads with pictures of real-life polar bears on its packaging, we’d mostly be in trademark land; polar bears, though usually cartoons, are a Coca-Cola branding thing. If Pepsi went and found last year’s Coca-Cola holiday ad and just had its graphic designers switch every Coca-Cola logo with a Pepsi logo, we’d still have a foot in trademark land but we’d really be in copyright land, too. Exact copying or the creation of something substantially similar, that’s what copyright law is about. And, copyright infringement can be a whole heck of a lot easier to prove than consumer confusion.

How do you get copyright protection?

The great thing about copyright law is that you instantly get nationwide protection. Your kid makes a finger painting? Bang, there’s copyright protection. That email you just sent? It’s actually copyrighted. But, here’s where businesses, breweries, and artists slip up, and it’ll be the main focus of the second part of our post tomorrow. Although copyright protection happens automatically, there are major benefits to taking active steps to protect your copyrighted works. Say you have a killer beer label design. It’s automatically protected by copyright, but does your brewery own the copyright or does it actually belong to the graphic designer you hired to make it? Probably the latter, and that can be a scary thought. And, putting aside the important issue of ownership, if you don’t actively and quickly register your new copyrighted works, which is mega-mega-mega cheap to do, you miss out on the most substantial perks that might well nip improper copying in the bud and, at any rate, make your case so strong that anyone ripping you off would rather pay up front to settle with you than take it into court. More on that tomorrow.

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Greetings from NHC 2014, Where Ciders and Sours Abound!

Day one of the National Homebrewers Conference is in the books and day two is shaping up to be just as much fun! No doubt about it, Grand Rapids, MI is abuzz with ambitious homebrewers and homebrewers-turned-pros, all geeking out over the latest brew gadgets, techniques, and trends. Indeed, some of the most boundary-pushing brewers and soon-to-be commercial breweries emerge from turkey-stand-laden backyards. For that reason, the seminar schedule is a good place to go to see what’s on the upswing and what we should expect out on shelves and in our local watering holes before too long. This year, the conference has a diverse set of offerings, but the slant of the schedule confirms what we’re all sensing: we should expect to see a whole lot more of cider. And, given consumers’ uptick in sour & funk interest, more and more homebrewers are wanting to give the bugs a go, while learning to harvest wild yeast from all sorts of places, too. Here’s to fellow homebrewers and our adventures in brewing. Wishing you all a fun, rewarding, (and at times, I hope, very delicious) NHC 2014!

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TTB Issues New Rule Exempting Barrel-aged and Specialty Beers from COLA Formula Requirements

We all know that when you’re shipping a beer into interstate commerce, it needs a TTB-approved label (also known as a certificate of label approval or a COLA). This past week, TTB issued Ruling 2014-4 that hands down some good news for a lot of producers throughout the country. In the past, TTB required brewers to take extra steps when seeking labels for brews featuring various fruits, spices, or other food-like ingredients that were nonetheless fairly common in classic brewing. Notably, barrel-aged beers fell into this more burdensome category, requiring that brewers submit formula disclosures to TTB.

Here’s a brief rundown on the new ruling. Those brewing with this list of added ingredients (ranging from honey and maple syrup to a variety of traditionally used fruits and spices), are no longer subject to this extra requirement. And, those aging using traditional processes with liquor or wine barrels, are also no longer subject to the extra requirement. TTB is also okay with tossing wood chips into the fermenter or otherwise using staves or spirals from barrels, without taking any extra formula-disclosure steps. Here’s the important caveat, though, on that. Some smaller breweries who may not wish to invest in a barrel may be borrowing from tried-and-true homebrew methods, soaking oak chips in bourbon, for example. TTB is still concerned about these methods and still requires formula disclosures for brews that come about this way.

So, for those aging in empty barrels or using non-soaked methods, this rule is a plus. But, here’s another important caveat. In the rule, TTB reminds brewers of its advertising regulations. If you’re getting oak flavor from woodchips but not barrels, you can’t suggest the beer is barrel aged. Probably not a problem for most brewers who err on the side of straightforward descriptions, but for those trying to add that “barrel flavor” in a non-traditional way, it’s worth reviewing your marketing and label copy to make sure you’re not getting too close to the line and misleading consumers. TTB specifically says that “lager with whiskey flavors,” “bourbon-flavored lager,” and “Chardonnay lager” would be prohibited as misleading.

We’ve hit on most of the big stuff, but breweries would be well served to review the rule and discuss its nuances with their beer attorneys. In particular, some of TTB’s naming conventions are worth reviewing. If you’re brewing with some of these exempt ingredients, for example, honey, it’s not enough to refer to it on the label as an “ale” or “beer” without modification. TTB would require that you specifically call out the ingredient (“honey ale”) or the category (“fruit ale”) in one of their sanctioned ways. The full text of TTB 2014-4 is available here, and Reiser Legal is available to answer specific questions about these new federal regulations for brewers that might have them.

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