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The Skinny on Red Bull vs. Old Ox Brewery: Understanding this Brewery Trademark Dispute

Posted on | February 11, 2015 by | No Comments

Virginia craft brewery Old Ox faces a trademark opposition from energy drink giant Red Bull. Is Red Bull being a Red Bully? Read on to learn more.

Virginia craft brewery Old Ox faces a trademark opposition from energy drink giant Red Bull. Is Red Bull being a Red Bully? Read on to learn more.

Here’s what Red Bull vs. Old Ox Brewery is and what it isn’t. If you read the Brewery Law Blog, you know I love craft beer trademarks more than the average Esquire. Same goes for craft cider trademarks, mead trademarks, the whole lot. Over the last year, I’ve appreciated seeing the public get fired up about a craft beer trademark dispute in the making. Having said that, there’s a lot of misinformation out there. This is especially the case when word of a brewery trademark spat takes off and spreads all over social media, as it definitely has this time. A lot of the misunderstanding stems from not knowing exactly what’s at stake in any given trademark dispute.

What Red Bull vs. Old Ox Brewery isn’t:

This trademark dispute is not a lawsuit over whether Old Ox Brewery can use its name or logo. This dispute has not reached federal court. It is not a lawsuit. That might happen. But, so far, this matter has nothing to do with whether Old Ox Brewery can call itself Old Ox Brewery or whether they can use their logo.

What Red Bull vs. Old Ox Brewery is:

This is an administrative opposition proceeding. This involves whether the United States should grant Old Ox Brewery a federal trademark (which gives you important rights). So, this matter completely involves Old Ox Brewery’s right to register their brand name. It has nothing to do with whether Old Ox Brewery can use that brand name. Of course, Old Ox Brewery may not want to use a brand name if they can’t use it with the benefit of important federal trademark rights.

It's important to understand what this proceeding between Red Bull and Old Ox is and what it isn't. Importantly, Red Bull hasn't sued Old Ox Brewery.

It’s important to understand what this proceeding between Red Bull and Old Ox is and what it isn’t. Importantly, Red Bull hasn’t sued Old Ox Brewery.

How the Red Bull vs. Old Ox Brewery dispute came to be:

We can’t know all the details and interactions. But, here’s how these sorts of proceedings typically get started.

  1. Old Ox Brewery prudently sought to protect its intended brand name. It applied for an intent-to-use trademark for both its name and its logo. Breweries can file intent-to-use trademarks, before they ever open up, so they can feel confident moving forward and investing in their brand and branding materials. If you read the blog, I champion proactive brewery trademark clearance and registration quite a bit.
  2. The United States Patent and Trademark Office (USPTO) examines every trademark application that comes in, and looks to see whether the mark should be allowed to register. There are technical defects in applications, and then there are issues like the mark being too descriptive or too similar to another registered mark.
  3. If USPTO thinks the mark is okay, the mark publishes for thirty days for others to review. Here, Old Ox Brewery’s marks published on September 30, 2014.
  4. Publication is a chance for everyone else outside of USPTO to protect their interests. Whereas USPTO may not find a problem with a mark during its limited review, actual brand holders have an important stake in their brand. They may see an issue with a potential mark that USPTO doesn’t or doesn’t catch, and publication gives everyone a chance to prevent a mark from registering. Keep in mind, if a mark registers, it gets important rights and becomes more difficult to combat.
  5. Red Bull no doubt has a legal team all over the USPTO Gazette (where marks publish each week). Notably, beer is in the same trademark class (032) as energy drinks, soda, bottled water, etc. That’s likely how Red Bull found it so quickly. They monitor Class 032 every week for problematic uses. However, bear in mind class has nothing to do with whether two marks are confusingly similar, it’s merely an administrative convenience for USPTO. Confusing similarity will turn on a number of things, including comparing the actual goods in the application vs. Red Bull’s.

Why Red Bull is doing this, even if you don’t think the marks are similar:

Opposition proceedings are relatively cheap. If a trademark owner sees a problem with another mark, an opposition proceeding can quickly nip it in the bud. It costs $300 to file and not much time to prepare a notice of opposition. On the other side, often small brands feel scared and don’t want to fight (or don’t have the funds to fight), so they willingly abandon their mark. This is often the case when it’s an intent-to-use mark (as Old Ox Brewery’s is), which typically means the mark isn’t yet in use at all or, at the very least, hasn’t been used too widely for very long. It appears Old Ox Brewery has been in operation for about seven months. So, $300, one filed document, and Red Bull potentially never has to worry about whether the Old Ox marks really are confusing again—because they’re gone. Some might think that’s bullying, others might think it’s effective brand protection.

What often happens behind the scenes in scenarios like the Red Bull v. Old Ox Brewery:

Usually, everyone wants out of an opposition proceeding. Here, Red Bull admittedly has a lot more in its cash reserves than the typical opposer. What can happen is that the two brands come to some agreement. They iron out a “coexistence agreement” which is essentially a plan for both brands to coexist in the marketplace to avoid consumer confusion. That might mean that one brand avoids the other’s colors and imagery or that Old Ox Brewery never makes an energy drink or a soda of any kind. In fact, given Red Bull’s statements to the media, it looks like they do want to iron something out:

“Red Bull has not sued anyone. Brands, big and small, seek to protect their trademarks every day. All we are asking for is to allow the administrative process at the US Patent & Trademark Office to run its course and we remain hopeful that a fair settlement can be reached by both parties.”

What could happen in Red Bull v. Old Ox Brewery:

If they don’t strike up a coexistence agreement, a few things could happen. Old Ox Brewery could forget about its trademarks and give up fighting on the USPTO front. As I highlighted before, though, this has nothing to do with whether Old Ox Brewery can use those marks. This is not a lawsuit. We might expect a full-on lawsuit from Red Bull in federal court, which they could file at any time given Old Ox is using their marks already in a territory Red Bull no doubt is in. Whatever you think of Red Bull’s merits in the lawsuit, they certainly have the most cash in the bank to drag things out and make it hurt. Thus, we typically a smaller brand like Old Ox Brewery just change its name, to avoid sinking cash into something like this, when it could be using that money to fuel its awesome growth. Meanwhile, whatever the outcome, Red Bull has scared off other users from adopting anything with the word “Ox” in the name going forward, showing everyone just how broadly they construe their brand. We’ll see where this one goes.

It’s also worth keeping in mind that beyond any confusing similarity between the marks, Red Bull can also toss in a claim of trademark dilution. If you have a famous mark, there’s an additional mechanism to protect it. We didn’t see this ground included in Red Bull’s Notice of Opposition, but it’s certainly something extra we might see tossed into any federal lawsuit, which would add even more to defend against, whatever you think of the merits.

Red Bull v. Old Ox Brewery, The Wrap-up:

I hope that gives everyone better insight into the Red Bull v. Old Ox Brewery matter. When reviewing an emerging trademark dispute, it’s important to pay attention to where it is procedurally. Is this in federal court involving a right to use a mark? Or is this an administrative proceeding before the Trademark Trial and Appeal Board involving a right to register a mark? That can help onlookers understand exactly what’s at stake. For more on trademark law, and why federal trademark rights matter, see our Brewery Trademark Law Explained (In a Nutshell) post here.

Danielle Teagarden on twitterDanielle Teagarden on linkedinDanielle Teagarden on email2
Danielle Teagarden
Brewery Attorney at Reiser Legal PLLC
Danielle Teagarden is a Seattle-based brewery lawyer, business attorney, and intellectual property advisor with particular focus on protecting trademark rights and handling trademark disputes. Danielle frequently represents craft breweries, start-ups, and small alcoholic beverage businesses, and she is Author and Editor of the Brewery Law Blog. You may reach her directly at danielle@reiserlegal.com

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Examining the Two Craft Beer Tax Bills: What Brewers Need to Know About the Fair BEER Act and the Small BREW Act

Posted on | February 8, 2015 by | No Comments

Beer tax law is on the table, and lawmakers will be evaluating two different beer tax positions. The good news is, should either bill become law, it will spell breaks for the majority of US craft breweries.

Beer tax law is on the table, and lawmakers will be evaluating federal beer tax policy. The good news is, should either bill become law, it will spell breaks for US craft brewers.

 

 

 

 

 

 

 

 

 

 

 

Edit: 2/15/2015 at 8:55pm PST. Thanks to journalist and Twitter comrade @WSJbeerbaron (Chris Drosner) who is working on a piece for The Beer Baron column relating to beer tax reform, he spotted a correction for the article. I had read language in the Fair BEER Act to maintain certain production rate carveouts for smaller producers. ‘Tis not the case. I have updated the article and calculations to reflect this. Cheers to Chris for taking on this heady issue to get the word out; I’ll link to his article when it’s in. I anticipate he’ll have a lot of great analysis coming your way.

Beer tax reform might be on the horizon, as two competing bills are teed up for debate in Congress. On the one side is the Beer Institute, which advocates for all sizes of breweries but is known for having Anheuser-Busch InBev and MillerCoors among its interested parties. They’re standing behind the Fair BEER Act and, as we’ll get to in a minute, the majority of breweries out there may be the biggest fans of what this act would offer. Another bill out there is the Small BREW Act, which the Brewers Association is behind. The Brewers Association advocates for the interests of those brewing under 6 million bbl per year. As we all know, that 6 million bbl distinction is big enough to sweep in a brewery like Boston Beer Co. (Sam Adams), but small enough to keep the two big guys out. As you’ll soon see, the Small BREW Act spells tax breaks across the board, including advantageous ones for the pretty-big-but-still-craft breweries, but not as dramatic of breaks for the majority of breweries in America. The Fair BEER Act would provide lowest tax rates of all.

What do the federal beer tax bills look like, whose interests are we looking at here, and why should you care? Let’s start with how federal brewery tax law operates right now. Then, I’ll walk through each of the proposed bills, and wrap up with examples comparing tax rates for different-sized brewing operations under all three schemes. Let’s dig in.

Brewery TTB Tax Law Part I

How Beer is Taxed Right Now at the Federal level

Presently, the Alcohol and Tobacco Tax and Trade Bureau taxes beer at two different per-barrel rates. There’s the Regular Rate of $18. Then, there’s the Reduced Rate of $7. Here’s how those rates are applied:

Small Breweries60,000 bbl or less? Pay $7/bbl
If you brew 60,000 bbl or less in a year, like the vast majority of breweries, you pay the Reduced Rate of $7/bbl (in addition to whatever your state tax rate may be).

Medium Breweries
If you brew more than 60,000 bbl but less than 2 million bbl (such as a brewery like New Belgium or Dogfish Head, for example), you pay a mixed rate. You get to take advantage of the $7/bbl rate for your first 60,000 bbl ($420,000, which is up to a discount of $660,000 off the regular rate). After that, you must pay the Regular Rate of $18/bbl for the rest of your lot.

Large Breweries
If you brew more than 2 million bbl (so, the two big guys, and also a brewery like Boston Beer Co. (Sam Adams) or D.G. Yuengling & Son (Yuengling)), you pay the Regular Rate of $18 for everything. The prime point being, they’re paying $11 more per barrel on the first 60,000 bbl than everyone else (that’s $660,000 more on those barrels).

As we all know, everyone would love to pay less, and that’s what this is about.

Brewery TTB Tax Law Part II

Fair BEER Act – Backed by the Beer Institute (Which includes the interests of Anheuser-Busch InBev and MillerCoors)

This bill would offer the most tax advantages to the vast majority of breweries out there, eliminating federal excise tax altogether for the typical neighborhood brewery and most that are engaged in community-wide distribution. At the same time, this bill would make even the biggest of brewers eligible for tax breaks. Essentially, it’s a graduated scale that applies to all breweries—and almost all breweries (90%) are at the bottom of the scale, which would mean zero excise taxes. Take a look.

The first 7143 bbl: Pay $0/bbl.
-Thus, if you brew under 7,144 bbl/year, you’d pay no federal excise tax. $0. This would mean roughly 90% of American breweries would pay no federal excise tax. This sounds pretty good for all of the small breweries and start-ups out there. Keep in mind that 7,144 bbl/year is more than 137 bbl produced per week. That’s a lot of headroom for most of our breweries today. Indeed, likely far more than the wildest dreams of many of the family-owned breweries we’re seeing nestle into our neighborhoods. Just to ground the numbers, that’s more than 13 brew days a week on a 10bbl system. Not possible.

The 7144th bbl/year to 60,000th bbl: Pay $3.50/bbl. 
-If you brew more than 7144 bbl/year and up to 60,000 bbl/year, you’d see your federal excise taxes cut in half. It’d be just $3.50/bbl. To ground that bbl/year figure, 60,000 bbl/year would translate to more than 1153 bbl/week. If you had a 100bbl system, that’d be more than 11 brew days a week. Again, not possible.

From the 60,001 bbl/year to 2 million bbl: Pay $16/bbl.
-So, this is a cut for the “medium” breweries noted above—eligibility for the lower breaks, with $2 off per barrel thereafter up until the two millionth bbl.

Everything after the 2 millionth bbl in a year? Pay $18/bbl.

-No change. This is the current rate, just that it only starts applying at your 2 millionth bbl. Before that, all breweries are eligible for the reduced rates on initial bbl leading up to it.

The Wrap-up on the Fair BEER Act:

Federal excise tax would be eliminated for nearly all craft breweries, putting an extra $7/bbl back into the brewery’s pocket. Most notably, huge breweries would get a break on beer leading up to the two millionth bbl. We’ll see how this plays out when we crunch the numbers later.

Brewery TTB Tax Law Part III

The Small BREW Act backed by the Brewers Association:

Craft Breweries – <6,000,000 bbl/year
-Change the definition of Small Brewery from those that produce under 2 million bbl/year to those that produce under 6 million bbl/year. So, sweep in folks like Boston Beer Co., just like the Brewers Association definition does by its definition.
-Create the following tax structure for all Small Breweries:
$3.50/bbl on the first 60,000 bbl (That’s the current reduced rate cut in half)
$16/bbl on the next bbl leading up to 1,940,000 bbl (a reduction of $2/bbl, but also a reduction on the quantity of barrels it applies to.)
$18/bbl on everything beyond 1,940,000 bbl.

Not Craft Breweries – >6,000,000 bbl/year
-$18/bbl on everything.

The Wrap-up on the Small BREW Act:

For most breweries, federal excise tax would be cut in half. The biggest winners are the folks like Boston Beer Co., who would become eligible for the reduced rate on the first 60,000 bbl and also a $2/bbl cut on a bunch of beer, too. Huge savings here, as we’ll walk through in a second. Though, again, for the majority of breweries in the United States, the tax breaks are not as dramatic under the Small BREW Act as they are under the Fair BEER Act.

Brewery TTB Tax Law Part IV

The three tax programs compared (Current, Fair BEER Act, and Small BREW Act):

Before providing a look at real numbers below, the gist is this. The Fair BEER Act would result in the lowest taxes of all strategies, and it impacts the majority of breweries in the United States by eliminating federal excise tax entirely. The biggest difference in federal brewery tax policy with the Fair BEER Act is that the biggest of the big remain eligible for significant tax breaks. In contrast, the Small BREW Act would result in more even-handed savings for craft breweries, no matter the size, but provide no benefits to the big guys. Nevertheless, the Small BREW Act lets a swath of extremely-big-but-still-considered-to-be-craft brewers get in on the tax breaks, while keeping things the same for the biggest of the big. (Side note here about conglomerates, just so no one is confused. These are called “controlled groups” and tax rate eligibility is calculated by adding up all of the production rates of all of the breweries within the group. So, just because A-B InBev owns Elysian now, they wouldn’t get tax benefits off of Elysian’s production rate.)

Check out the numbers below—note that I’m using formulas, but they were formulas made by this human whose best skills undoubtedly tip on the verbal side. The figures should give you the big picture of the competing bills, what’s at stake, and why different breweries at different sizes feel the way they do. If you spot any errors, please let me know—and I invite someone to make a fluid graph of all of the equations, which is beyond the time I have for this project at the moment:

If you brew 100 bbl/year:

Current Federal Excise Taxes on Beer: $700
Federal Taxes Under the Fair BEER Act (FBA): $0
Federal Taxes Under the Small BREW Act (SBA): $350

If you brew 500 bbl/year:

Current: $3,500
FBA: $0
SBA: $1,750

If you brew 1,000 bbl/year:

Current: $7,000
FBA: $0
SBA: $3,500

If you brew 5,000 bbl/year:

Current: $35,000
FBA: $0
SBA: $17,500

If you brew 7,000 bbl/year:

Current: $49,000
FBA: $0
SBA: $24,500

If you brew 7,143 bbl/year:

Current: $50,001
FBA: $0
SBA: $25,000.50

If you brew 7,145 bbl/year:

Current: $50,015
FBA: $7
SBA: $25,007.50

If you brew 10,000 bbl/year:

Current: $70,000
FBA: $9999.50
SBA: $35,000

If you brew 20,000 bbl/year:

Current: $140,000
FBA: $44,999.50
SBA: $70,000

If you brew 50,000 bbl/year:

Current: $350,000
FBA: $149,999.50
SBA: $175,000

If you brew 59,999 bbl/year:

Current: $419,993
FBA: $184,996
SBA: $209,996.50

If you brew 60,001 bbl/year:

Current: $420,018
FBA: $185,015.50
SBA: $210,016

If you brew 80,000 bbl/year: (Deschutes at approx. 89,000 bbl)

Current: $780,000
FBA: $504,999.50
SBA: $530,000 

If you brew 100,000 bbl/year:

Current: $1.14 million
FBA: $824,999.50
SBA: $850,000

If you brew 150,000 bbl/year: (Dogfish Head at approx. 175,000 bbl)

Current: $2.04 million
FBA: $1.62 million
SBA: $1.65 million

If you brew 200,000 bbl/year:

Current: $2.94 million
FBA: $2.42 million
SBA: $2.45 million

If you brew 250,000 bbl/year:

Current: $3.84 million
FBA: $3.24 million
SBA: $3.25 million

If you brew 300,000 bbl/year:

Current: $4.74 million
FBA: $4.02 million
SBA: $4.05 million

If you brew 500,000 bbl/year: (New Belgium at approx. 712,000 bbl; Sierra Nevada at approx. 800,000 bbl)

Current: $8.34 million
FBA: $7.22 million
SBA: $7.25 million

If you brew 1,000,000 bbl/year:

Current: $17.34 million
FBA: $15.22 million
SBA: $15.25 million

If you brew 1,500,000 bbl/year:

Current: $26.34 million
FBA: $23.22 million
SBA: $23.25 million

If you brew 1,939,999 bbl/year:

Current: $34.26 million
FBA: $30.26 million
SBA: $30.29 million

If you brew 1,940,001 bbl/year:

Current: $34.26 million
FBA: $30.26 million
SBA: $30.29 million

If you brew 1,999,999 bbl/year:

Current: $35.33 million
FBA: $31.22 million
SBA: $31.37 million

If you brew 2,000,001 bbl/year:

Current: $36 million
FBA: $31.22 million
SBA: $31.37 million

If you brew 2,500,000 bbl/year: (approximately Boston Beer Company)

Current: $45 million
FBA: $40.22 million
SBA: $40.37 million

If you brew 5,999,999 bbl/year:

Current: $108 million
FBA: $103.22 million
SBA: $103.37 million

If you brew 6,000,001 bbl/year:

Current: $108 million
FBA: $103.22 million
SBA: $108 million

If you brew 67,000,000 bbl/year: (approximately MillerCoors)

Current: $1.206 billion
FBA: $1.201 billion
SBA: $1.206 billion

If you brew 100,000,000 bbl/year:

Current: $1.8 billion
FBA: $1.795 billion
SBA: $1.8 billion

Danielle Teagarden on twitterDanielle Teagarden on linkedinDanielle Teagarden on email2
Danielle Teagarden
Brewery Attorney at Reiser Legal PLLC
Danielle Teagarden is a Seattle-based brewery lawyer, business attorney, and intellectual property advisor with particular focus on protecting trademark rights and handling trademark disputes. Danielle frequently represents craft breweries, start-ups, and small alcoholic beverage businesses, and she is Author and Editor of the Brewery Law Blog. You may reach her directly at danielle@reiserlegal.com

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New TTB Cider FAQ: TTB Clarifies Labeling and Other Regs for Cider Industry

Posted on | February 3, 2015 by | No Comments

TTB Cider FAQ: What Producers and Cider Start-ups Need to Know

New TTB Cider FAQ: What Producers and Cider Start-ups Need to Know, Straight from Uncle Sam.

There’s a new TTB Cider FAQ out. We’ve touched on Washington Cider Law in the past, but the feds play an important role in it too. Just today, TTB has provided helpful insight to the growing craft cider industry. Here’s a link to the new TTB Cider FAQ, with six bullet points from us below covering more notable stuff, especially for those comparing regs on the cider side with things on the beer side. Different worlds, but we help with both sides at Reiser Legal.

1. Cider is a wine, we know that. It’s not a malt beverage under the law.

2. From TTB’s labeling standpoint, to call a product just “cider” it has to come from fermented apples and optionally contain added sugar, water, or alcohol. Anything else, it’s not just “cider.” Fortunately, when you submit your formula, TTB will provide a suggested statement of composition to help you, and you can always designate a fanciful name on the label, so long as it’s not misleading.

3. If your cider contains less than 7% ABV, you do not need a COLA. This stems back from the TTB/FDA regulatory authority divide we’ve discussed in the past. If your cider is 7% to 24% ABV, you need that COLA to ship in interstate commerce, as you’re subject to TTB authority. Notably, Washington is going to want that COLA to get your project on the shelves here. Either way, even if you don’t need to obtain a COLA, if the cider leaves the premises, it still has to comply with certain basic labeling requirements.

4. Because cider is a wine, 7%+ ABV cider is subject to TTB’s standards of fill. That means 12oz packages (like the cans we know and love to see on the shelves) are no good for cider at that ABV. Below 7%, it’s all good. Notably also, as long as you’re shipping wine in containers above 18L (4.75G), you don’t have to comply with TTB’s standards of fill. Here are some standards of fill, which feel pretty arbitrary but it’s a reg so what do you expect:

  • 3 liters
  • 1.5 liters
  • 1 liter
  • 750 mL
  • 500 mL
  • 375 mL
  • 187 mL
  • 100 mL
  • 50 mL (just a sip at 1.6907!)

5. If you’re only making cider below 7% ABV, you don’t need a basic TTB permit. Keep in mind, you’re still subject to applicable federal authority, and your local liquor board (in Washington, the Liquor Control Board) more than likely has its own sets of permitting requirements and onerous regs.

6. If your cider has CO2 in it (technically about .392g CO2/100mL, be careful. If CO2 is coming from secondary fermentation in a closed vessel (like a bottle), it’s considered “sparkling.” But, if you’re injecting CO2, it’s artificially carbonated so it has to be labeled as such. Note that sparkling/carbonated wines are taxed at higher rates. Speaking of tax, there are all kinds of nuances with respect to how you’d be going about your cider business.

The takeaway on the TTB Cider FAQ:

Regulations are really confusing, inconsistent among industries, and you might be subject to a completely different set of regulations depending on how much alcohol is in your project. For anyone thinking about starting a cidery in Washington State, we’re happy to help you wade through these tricky regulations. We’ll post further resources for cideries on the blog soon.

 

Danielle Teagarden on twitterDanielle Teagarden on linkedinDanielle Teagarden on email2
Danielle Teagarden
Brewery Attorney at Reiser Legal PLLC
Danielle Teagarden is a Seattle-based brewery lawyer, business attorney, and intellectual property advisor with particular focus on protecting trademark rights and handling trademark disputes. Danielle frequently represents craft breweries, start-ups, and small alcoholic beverage businesses, and she is Author and Editor of the Brewery Law Blog. You may reach her directly at danielle@reiserlegal.com

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Craft Beer Musings from Seattle: On Elysian, that Budweiser Super Bowl Ad, and our Dear Seahawks

Posted on | February 3, 2015 by | No Comments

Corporate Beer Still Sucks—but with the Elysian buyout, not nearly as bad.

Corporate Beer Still Sucks—but with the Elysian buyout, not nearly as bad.

So, I’m a Seattle-based craft brewery attorney. Between the announcement that Anheuser-Busch InBev purchased Seattle-based Elysian Brewing Company last week, that now-infamous Budweiser Super Bowl commercial poking fun at craft beer, and then that bummer of a Seahawks loss, it’s all felt a little personal lately. So, here I am with some thoughts and observations about it all. I know all three of these recent events blew up and made the headlines, spawning endless clever Twitter posts, Reddit memes, and thoughtful articles across the Interwebs from people paid to do this stuff, with more time to pore over it all than I do. So, if I’m rehashing the hash, come check out the Brewery Law Blog next time. For the rest of you, let’s dig in a bit.

Here’s what we know, and then some reflections, about recent headlines.

WHAT WE KNOW about the Elysian purchase, that Budweiser Super Bowl ad, and those Seahawks:

1. Last week, Anheuser-Busch InBev’s purchase of Seattle-based brewery Elysian Brewing Company was made public knowledge.

2. The lone dissenter from Elysian in the purchase was owner Dick Cantwell, a champion of the craft brewing scene and, at least until now, very active with the Brewers Association.

3. Elysian, under the influence of Dick Cantwell, has produced a number of impressive and locally loved beers. Among the brews have been extremely creative pumpkin beers each fall. In fact, Elysian has been holding the Great Pumpkin Beer Fest for the last decade. Cantwell was featured in an American Homebrewers Association article giving tips on brewing with pumpkin beer. Man knows his pumpkin stuff.

4. As I found out this past fall over a taproom pour, Dick Cantwell gave fellow Seattle brewery Schooner Exact a hard time because Head Brewer Matt McClung hadn’t produced a pumpkin beer. In response to the heckling, Schooner crafted a batch of barrel-aged pumpkin goodness and named it “Whiskey Dick Cantwell” in a tongue-in-cheek nod to Cantwell.

5. Lots of people in the Seattle area and beyond were upset to hear about A-B’s purchase of Elysian. Fun fact, as you’ve probably read about so far—Elysian teamed up with Seattle’s indie record label Sub Pop to produce a beer with the tag line “Corporate Beer Still Sucks.” What you may not know, and I only put together anecdotally, is that the Sub Pop deal and that beer are probably dead because of it all. No surprise there, but it still makes for a fun story to relate in the wake of all this: At the Washington Beer Commission’s awesome Belgianfest in Seattle on Saturday, someone in my tasting group happened to be wearing a Sub Pop sweatshirt, and an Elysian pourer made a bummed comment about Sub Pop dropping them. Whatever’s underneath that comment, and whatever happened with Sub Pop, people are upset. People on seemingly both sides, even. They’re talking. We know that.

6. During the exorbitantly expensive advertising slots during the Super Bowl, Budweiser ran this ad. It attempted to frame Budweiser as proudly a “Macro” brand while poking fun at Microbrews.

7. In the commercial, Budweiser specifically made fun of the creativity and unusual ingredients in craft beers…making fun of a hypothetical “Pumpkin Peach” ale. The line, so you have it, was this: “Let them sip their pumpkin peach ale, we’ll be brewing us some golden suds.”

8. Sadly, the ad team didn’t do their research (or did?) because, as everyone on the Internet and I quickly Googled during the bowl and confirmed what we suspected. Yep, Elysian had produced a Pumpkin Peach ale, just this year, called Gourdgia On My Mind. (As you’d guess, Cantwell isn’t too happy about snarky tone of the ad.)

9. Wow.

10. The Seahawks lost.

REFLECTIONS from this Seattle Beer Lawyer, who feels a little extra connection, if only emotional, to all the goings-on:

1. Succession Planning. I really wasn’t too bugged about the Elysian purchase. If anything, it highlights the need for breweries-in-planning and those seeing some early success to think about the future. What’s your end game? Do you want to sell, if you can? Selling doesn’t necessarily mean selling out, either.

2. Breweries are Amazing Marketers. Okay, CRAFT breweries are amazing marketers. I can’t think of another industry where consumers get this riled up over David and Goliath, can you? Example. If a local artist stopped selling their screen-printed made-in-the-USA t-shirts and sold their designs to Target, we’d probably be happy for the local artist. It wouldn’t make headlines, at least not like this. If we cared that much about purely local t-shirts, we’d go find another one. On the other hand, craft breweries have created a tremendous sense of “us” against a very giant “them.” We’ve pulled this off, even despite a technical definition that makes many “craft” breweries quite huge. Extremely huge. Rapidly expanding nationally and internationally huge. Nevertheless, it seems to me that very few beer geeks and “craft” aficionados apply this same craft mentality to all aspects of life. I’m wearing Adidas sneakers and some Levis as I type this out. Maybe some little guys in other industries have something to learn from breweries as well as the nice work farmers markets and eateries have done with this whole “go local” push. Maybe food/drink, because they’re closer to each of us, are likewise easier to feel passionately about. Whatever the case, it’s interesting.

3. Budweiser is clearly aware of its loss of marketshare to craft brands. Of course, we all knew that already, what with all the layoffs. And the statistics.

4. Budweiser’s commercial may have worked. Yep. Maybe it was genius, apart from the whole Elysian gaffe. After all, anyone who was bugged by the commercial or took the time to write about it, present company included, isn’t buying Bud. Budweiser simply pointed to the divide that all of us beer geeks are already well aware of. If you were a loyal Bud drinker, or skeptical of craft beer, maybe this would actually stick you firmly on the other side, and arm you with some tools to make fun of the movement. For the rest of us, let’s get real. If you reacted to the commercial, or went to Twitter during the Super Bowl, the last time you probably had a Bud was in your old college bar or when your uncle pulled one from the fridge and it was Bud or no beer at that family gathering. (In that case, I’d choose Bud, every time. And that’s okay.)

5. Craft breweries need to keep up the marketing. It’s not time to pull off the gas pedal. As big guys snap up some great brands, a number of those brands will remain successful as they head into different marketplaces. But, maybe that’s a good thing. For me, it was the omnipresent and ad-dollars-fueled Blue Moon that opened my mind to Indiana University’s local Upland Wheat. I remember visiting the MillerCoors plant in Golden, CO in seventh grade, and my dad bought a Blue Moon t-shirt. It felt incredibly hip compared to Bud. Remember when MillerCoors was the little guy, when Leinenkugel was a good option out of not many? It was also stuff like Killian’s that helped a lot of people find Fat Tire and, from Fat Tire…beyond. I’m all for better beer out there, and craft breweries will just have to keep promoting their awesomeness, so as tastebuds evolve, beer-geeks-in-training find them eventually. For those of us who have already converted, there’s no turning back.

6. The Seahawks’ decision to pass wasn’t as bad as I thought at first. My brother helped me feel better about it, by pointing out the absurd statistics that favored passing instead of giving the ball to Beast Mode and running it on in. It still didn’t make it hurt much less. But, maybe this whole Anheuser-Busch buyout direction and their both-sides-of-mouth approach really isn’t the worst thing in the world either. Still, I felt the zing, too.

Whatever the case and whatever happens with the above, I propose a toast:

To craft beer fans everywhere, and on behalf of the would-be craft beer lovers out there that still represent A-B’s dominant share of the market—let’s keep rising up. Because, however you feel about recent events, I know I sure am glad everyone’s talking. What a good sign for craft beer.
Danielle Teagarden on twitterDanielle Teagarden on linkedinDanielle Teagarden on email2
Danielle Teagarden
Brewery Attorney at Reiser Legal PLLC
Danielle Teagarden is a Seattle-based brewery lawyer, business attorney, and intellectual property advisor with particular focus on protecting trademark rights and handling trademark disputes. Danielle frequently represents craft breweries, start-ups, and small alcoholic beverage businesses, and she is Author and Editor of the Brewery Law Blog. You may reach her directly at danielle@reiserlegal.com

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Lagunitas to Sierra Nevada: Let’s Call the Whole Thing Off

Posted on | January 14, 2015 by | 2 Comments

Edit 1/14/2015 at 2:06pm PST: Indeed, Lagunitas dismissed the lawsuit. Thanks to Twitter for breaking the news and the screen cap. As this fellow beer attorney points out and helpfully includes the filing, it’s dismissed in a way that Lagunitas could sue again, but I think we know what kind of uproar that would cause. That said, if anything was ever going to associate those two marks in consumer’s minds, certainly now this lawsuit will!

  See our coverage yesterday on the Lagunitas – Sierra Nevada lawsuit, directing you to the public’s overwhelming reaction in favor of Sierra Nevada. Lagunitas owner Tony Magee, via the tweets below, called yesterday the “worst day ever” in the brewery’s history and vowed to drop the lawsuit this morning. We’ll report back if that’s the case. Some Twitter followers are asking Tony Magee to apologize. Indeed, this particular dispute-that-was may well beat out the Magic Hat / West Sixth catastrophe. Turns out the increasingly trademark-savvy public is quick to defend even the big guys, too.

Danielle Teagarden on twitterDanielle Teagarden on linkedinDanielle Teagarden on email2
Danielle Teagarden
Brewery Attorney at Reiser Legal PLLC
Danielle Teagarden is a Seattle-based brewery lawyer, business attorney, and intellectual property advisor with particular focus on protecting trademark rights and handling trademark disputes. Danielle frequently represents craft breweries, start-ups, and small alcoholic beverage businesses, and she is Author and Editor of the Brewery Law Blog. You may reach her directly at danielle@reiserlegal.com

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