Beer Label Leads to Lost Job; IP Concerns for Beer Label Art

Well, this sucks. We all know beards are celebrated in brewing and beyond. See, for example, Rogue’s beard yeast brew. And, recently, Charleston-based Holy City Brewery decided to honor one glorious beard by depicting it on their cans. The beard’s owner was Dr. Paul Roof, a six-year professor at a small christian university in South Carolina, Charleston Southern University. Roof was also founder of the Holy City Beard and Moustache Society that holds annual beard and moustache championships, probably how the Charleston-based brewery discovered Roof’s impressive facial hair. All in all, a seemingly pretty rad situation, but things didn’t turn out that way. Evidently, Roof didn’t learn about the brewery’s plans to use his likeness until the beer cans were already in production. When the cans were released, Roof got a lot of support from people who knew him, including former colleagues and students, but the university didn’t like it one bit. As a result, Roof lost his job.  (We could say he got canned, but, you know, we resisted.)

Putting aside potential contractual issues between Roof and the university, this unfortunate story presents an opportunity to mention another area of law: right of publicity. Right of publicity laws protect an individual from commercial exploitation of their image or likeness, and they apply to celebrities and you and me alike. These laws are enacted or recognized by common law in individual states, so they’re not necessarily applicable everywhere.

Ultimately, the state of South Carolina’s ROP law has important implications for the brewery, as it might give Roof a cause of action against them. Arguably, though, we can imagine that Roof may have consented to the commercial exploitation of his image when he learned of the in-production cans but didn’t do anything to stop the beers from making it out into the public. We aren’t licensed to handle South Carolina state law issues, but it’s all quite interesting to think about.

Thinking outside these facts, though, if your brewery is planning to depict a real-life person on your cans, you’ll want to be clear about the right of publicity laws protecting that individual. Furthermore, even if you have consent from that person, if you’re working up your can or label art from a picture someone took, you’ll also want to make sure you have permission from the photographer. Even if the person or people in the picture consent, you can still run afoul of federal copyright laws by working off of that picture to form your own artwork. And, violations of copyright law can come with stiff consequences. For these sorts of questions and concerns, it’s best to consult with a lawyer knowledgeable about intellectual property rights.

For Dr. Roof, we hope that the publicity he’s getting from this surprising news story leads to some new good work—beard modeling, who knows? And, that also leads us to one last thing. We expect the brewery involved here had awesome intentions when honoring Roof on their cans. Still, assuming they consulted with a lawyer and assuming the lawyer said they didn’t technically need to seek Roof’s permission due to ROP law in that state, it doesn’t mean they couldn’t still ask before starting production. The inner workings of ROP law, copyright law, and all kinds of law aside, we believe that sometimes the best route for business and everyone involved is to adhere to the Golden Rule, which is often more than the bottom line of the law requires you to do.

Read More

In the News: Reforming Beer Franchise Laws

handshake-36806_640If you haven’t checked out the “Free Craft Beer!” New York Times Op-Ed from March 29, 2014, it’s worth a read here. Steve Hindy from Brooklyn Brewery, in collaboration with the gang at the Brewers Association, put out thoughtful commentary on so-called “franchise laws,” asking for change. Following up in the last couple of days, Brewers Association president and homebrewing papa Charlie Papazian released further commentary here.

For those not living in a strict franchise law state, or for those who refer to these laws under a different name, here’s an overview, though we encourage you to check out Hindy’s and Papazian’s pieces. Effectively, a franchise law forces breweries into single-distributor relationships, while making it very difficult to get out of those relationships. Imagine the too-common scenario of being signed with one distributor, then watching while your distributor lights up tap handles and shelves with a competitor’s brand, yet your beer sits on the warehouse shelves. Even if your contract has a “with or without cause” provision to terminate the relationship, state law can trump and require only certain kinds of “cause” for you to get out. Even if you have a good case—say they’re putting outdated beer on the shelves— it’s not going to be a fun case or a cheap one to duke out in court if your distributor pushes back. For start-up breweries, litigation cost may make it wholly impossible.

Now, we’ll come right out and say that many, many brewers have awesome relationships with their distributors—but just like any relationship in life, not every one is going to be a perfect fit, especially considering the close relationship brewers forge with their distributors. In seeking reform, most brewers aren’t asking to bypass distributors and take on full-blown self-distribution. To that, we can understand why states have a mega interest in holding onto in-state distribution channels to safeguard a massive tax-revenue stream. For example, imagine if all products sold over the Internet with no sales tax instead had to go through an in-state distributor before reaching your door. With that funneling effect, you can bet the state would raise more tax revenue than asking people to self report those out-of-state purchases, like most states do right now. It’d be a pretty sweet deal for the state, but an unconstitutional one, thanks to the Commerce Clause. Alcohol is different, though, by interpretation of the 21st Amendment, and states can force this in-state funneling effect. Again, we get why states want to keep doing so, since they can. But whether it’s this funnel or that funnel, it seems to matter much less, especially when one party wishes to terminate an agreement, and the negotiated agreement—but for the trumping state law—says the party can do so.

At any rate, given that states seem acutely aware of the jobs our breweries are creating (so long as their delicious beer keeps getting put out on the shelves and purchased), and the public is more aware than ever when brewers choose not to distribute in their states (many breweries skip states to avoid these wonky laws), it’s a prime time to put franchise-law discussion on the table. We applaud Steve Hindy, Charlie Papazian, and the BA for bringing these issues up in such a thoughtful manner, especially as some state legislatures recently have been considering bills that would make it practically harder to escape a relationship that’s just not working the way a brewery hoped, planned, or even agreed it would.

Read More