Brewery Copyright Beer Label Woes: A Tale From Canada

What’s the inspiration behind your beer label? Do you know if it’s original?

So many of our brewery clients have rad acquaintances who are graphic designers, eager to get onboard and build out brand material for little cost. Other breweries may not have the personal connections, but recognize the importance of brand material, and make significant investments in outside creative professional services. Both are great routes, and our post last year touched on copyright concerns in structuring even the most informal of those relationships, to make sure copyright ownership flowed fully to the brewery. Today, I’ll renew our discussion, highlighting another important point. This one is unfortunately inspired by headlines involving our friends up there in Canada, and it emphasizes again how important it is to get a strong creative services agreement in place whenever you’re engaging outside help.

This is the original label design Canada’s Central City Brewing had adopted for it saison, before getting word of a potential copyright infringement claim.

Take a look at these two images. One is a beer label, the other an excerpt from a comic book. Eerie similarities, right? It turns out that Canada’s Central City Brewing hired an agency to create a beer label for its saison. The day before its release, the brewery proudly posted its rocking label art on its Twitter account.

This is artwork from the Powers comic book series, depicting character Deena Pilgrim. I think we can all agree that artist who made the beer label did not independently arrive at the design.
This is artwork from the Powers comic book series, depicting character Deena Pilgrim. I think we can all agree that artist who made the beer label did not independently arrive at the design.

Literally hours before the beer was due to be in stores, Twitter fans pointed out the infringement issue with the character Deena Pilgrim from the comic book series Powers. It seems the brewery had no idea, and thought it was getting a cool piece of original artwork.

So, what happened? The brewery had to put the release on hold and paste 24,000 new labels by hand onto its bottles. Below is an image of the new beer label. (Sidebar: Bear in mind that ideas are not protected by copyright law, but expression is. The concept of a foxy detective wielding her badge isn’t infringement, but as you drill down into specific choices—the placement of fingers on the badge, the style of the hair, the facial expression, the angle of the stance, the decisions involving light and shadows—that’s when you cross the line from idea over into expression. That’s when you run into problems.) Ultimately, this is a frustrating outlay of cash. And, although we’d like to think it was avoidable on the part of the ad agency, I’d like to think it’s easily reimbursable based on the agreement in place between the companies.

Here's the design that Central City ended up landing on for their Detective Saison. It may still have the same idea behind it, but the expression is what matters here.
Here’s the design that Central City ended up landing on for their Detective Saison. It may still have the same idea behind it, but the expression is what matters here.

So, how do you avoid this sort of issue? First, it’s important to get an agreement with your designer in writing that not only vests ownership in the brewery, but one that also is designed to address situations like this. That’s what a contract does, it sorts out who is liable for what, in the event all sorts of things go wrong with the relationship. This is the sort of thing that could foreseeable go wrong with a creative services relationship. We don’t know what was in the agreement here. But, it’s important to note that it was a professional agency that turned out the problematic work. Do you know where the design direction for your logos came from? Do you know what works were used as inspiration? It’s important to note that even the most talented of designers may not be familiar with the nuances of trademark and copyright, which are often confused in the media. In evaluating trademarks, a comparison of the goods/services in question comes into play. A badge-wielding agent could be used in connection with computer speakers and a brand of beer, and consumers probably wouldn’t be confused. But, when it comes to copyright, protectable elements of a work are afforded strong rights, even and especially when they’re used in different media and on different goods and services.

Best practice is to be proactive and get a copyright agreement in place. On the flipside, best practice is also to copyright your own works as soon as they’re created. No one wants to be the one slapping new labels on through the night, with doubt in your mind about just how easily you’ll get this expense covered. Beyond that, no one wants to be the company whose valuable brand material just got infringed upon. Taking both steps help best protect your brewing business, no matter how the dice roll.

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Is Your Trademarkable Beer Name Distributable?

This beer label was rejected by TTB due to the imagery, as TTB deemed it to appeal to kids.
This beer label was rejected by TTB due to the imagery, as TTB deemed it to appeal to kids. (Speaking of kids, Happy Halloween!)

It’s no secret, I’m a big believer in proactive brand protection. To that, I’ve been pleased to see breweries get out in front of trademark issues by asking for early clearance reports for their new beer names, then filing a 1(b) trademark application to secure the name. It’s a big part of what I do at Reiser Legal.

However, I wanted to flag one issue for those working through some potential beer names with the beer attorneys. I’ve recently noticed a number of published trademarks that appear to tout the effects of drinking alcohol. There have been word marks and then also boundary-pushing design marks as well. Bear in mind that, even if a mark makes it past USPTO’s initial review, to get the mark to register, a brewery would eventually have to put that mark into use in interstate commerce. For most breweries, the way to prove that use is packaging and shipping across state lines. But, to package and ship across state lines, you’ll need a TTB-approved label (Certificate of Label Approval, or COLA for short)—even some states require a COLA before getting product into retail in state. Notably, TTB has strict labeling requirements and rejects labels that go too far in touting alcohol’s effects.

In other words, even if a brewery can obtain a federal Notice of Allowance for a beer name, federal (or even state) labeling laws might not allow the brewery to package and ship that beer anywhere but the brewhouse, jeopardizing the ability to actually get that trademark to register. Side note there, as beer-blogging-brethren have noted, TTB has been looser on animals who are appear under the influence than humans.

Keep in mind also that TTB has other bases to reject beer names / labels, and even if they don’t, a state authority may find a boundary-pushing mark or design objectionable. Designs or marks that would draw kids in, for example, are problematic at both levels—which might make some branding angles hard to build out, even if a brewery gets the trademark for the direction it wants its brand to go. Here at Reiser Legal, we love the DIY ethic that pervades the brewing industry. However, sometimes shooting a branding direction to a beer attorney is worth it, before doing too much building out and, worse, investing in a trademark direction that has uncertain label approval chances.

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Washington State Beer Label Requirements

For fun, here's a little behind the scenes look at this gal's current stash.
For fun, here’s a little behind the scenes look at this gal’s stash.

So, you’re ready to package. Awesome. What should be top of mind when preparing a Washington-ready beer label? There are a few things to note but, in general, compliance with TTB regulations will get you close to compliant with LCB. However, there are some extra Washington laws and regs to keep in mind.

If a Washington brewery is ready to package and sell—or an out-of-state brewery is interested in beer distribution in the State of Washington—there are certain labeling requirements set forth by the Washington legislature and the Washington Liquor Control Board (LCB). Fortunately, the beer labeling requirements are not particularly cumbersome. Notably, LCB’s direct label approval is not required. However, LCB does require that in-state breweries and out-of-state breweries alike obtain a federally approved label, known as a Certificate of Label Approval (COLA) before getting beer on the shelves. To be ready to ship or distribute beer in Washington, the producer must submit a copy of the federal COLA to LCB and, it goes without saying, have proper licensure. If a brewery makes changes that require a new label approval from TTB, the brewery likewise will have to submit that new label to LCB.

As for Washington’s own beer-labeling requirements, if a brewery is complying with federal regulations, the brewery is likely to be okay under LCB’s approach. However, the LCB does reserve the right to deny any label that doesn’t conform to their basic requirements and rules. What are those? Things you’d expect, and things that the Alcohol and Tobacco Tax and Trade Bureau (TTB) mostly already requires (though LCB and TTB may disagree about some subjective calls). No label can be misleading, you can’t make labels that especially appeal to children, and if you’re going to show adults on the label, the depiction has to be dignified and can’t promote illegal consumption of liquor. There are some other ones, so be sure to review the relevant regs and statutes, or shoot the proposed label to your beer lawyer for a quick review before submission.

As a reminder that regs can be quaint at times, LCB expressly prohibits subliminal messaging on labels or in beer advertising. So, for you crafty cats, make sure there’s nothing up your sleeves.

Last and maybe most notably of all, if a brewery wants to ship strong beer in Washington (that’s over 8% ABV), the brewery must include the ABV amount on the label. This differs from federal requirements, as TTB does not require an ABV statement. Something for producers to keep in mind.

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The new .beer domain name, should you be concerned?

Today, we direct you to some emerging stuff on domain names. To be sure, when you’re in the back, cleaning kegs, your online presence is about the last thing on your mind. But, we all know the web is an important face of any brand. Now, you might have heard some hub-bub recently about the new Top Level Domain names coming out. This article from some fellow beer attorneys provides a nice overview. The gist is, Top Level Domains (TLDs) are things like “.com” or “.net” and, drum roll please, the “.beer” domain name is going to come out soon.

google-76522_640Certainly, the new .beer TLD is a fun one. Some blogger will no doubt secure “drink.beer” or “ilove.beer” and we’re happy for whoever manages to nab those up. But, the question the folks behind the article above pose is an interesting one. That is, should you take advantage of a special period of time right now to secure the domain name for your brand? Check out their article, but the short of it is that if you’re already a trademark owner right now (and that doesn’t mean registered with USPTO) you can take some steps ASAP to get your brand’s domain.

Our view is that if you’d be heartbroken you didn’t have that domain name, then you may want to look into it. But, for most breweries, sinking time into this sort of thing isn’t a huge deal. You have your .com, Google’s going to help people get there, and if anyone starts improperly using a website suggesting they’re affiliated with you, there are existing routes to take care of that. Your brand is important to you, and it’s important to your consumers. But, the likelihood is that, unless you’re one of the biggest of the big, no one wants to fork out cash to secure a domain name similar to your brand’s. In fact, our guess is you probably don’t own the .net, .org, etc. already, unless your domain registrar sold it hard enough in a package deal. There are too many other places to spend money when you’re starting up or once you’re well past launch.

For those looking to stake a claim, however, now’s the time to do it—before the gold rush. And, again, if you’d be heartbroken not to have the domain, it seems worth getting out in front of this one right now. Otherwise, just with any domain name, you can wait until it’s available for the public to register, and go ahead and register the one you want and that’s available.

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

Barrel-aged Beers
Thanks to TTB’s newly issued Rule 2014-4, beer that is traditionally aged no longer requires a formula disclosure to obtain its COLA.

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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