Brewery Trademark Coexistence Agreements

Often trademark coexistence agreements include a consent agreement (the picture is an excerpt from one), whereby the parties consent to one another's registrations. The USPTO, however, does not have to accept such agreements.
Often trademark coexistence agreements include a consent agreement (the picture is an excerpt from one), whereby the parties consent to one another’s registrations. The USPTO, however, does not have to accept such agreements.

When trademark disputes pop up, often breweries agree to get along. In doing so, two beverage businesses can seek what’s called a trademark coexistence agreement. This is an agreement that essentially sets forth trademark restrictions on both brands, as the businesses mutually form a plan to distinguish themselves in the marketplace. A trademark coexistence agreement might, for example, provide that one business will only use the trademark in the name of its brewery. In turn, the other brewery may agree to only use the trademark as a single beer name. These agreements can be between two breweries, or they might be between businesses in different product categories. For example, a trademark coexistence agreement may be between an energy drink company and a brewery, a distillery and a winery, and so on.

One boon of a trademark coexistence agreement is that it settles the matter between the parties, giving each confidence in moving forward using its brand. Another boon, however, is that a trademark coexistence agremeent may help both brands obtain a federal trademark registration.

Imagine this common scenario.

Brewery A applies for a trademark, we’ll make up a mark and say the mark is GREEN PARADE.

Brewery A receives a trademark office action response. The response is an Office Action stating a Section 2(d) refusal to register the mark. The reasoning behind the Office Action is that another brewery, Brewery B, has a registration for, say, “BLUE PARADER BREWING CO.” The trademark examiner cautiously sees the closeness between GREEN PARADE and BLUE PARADER BREWING CO., and sees that both are on beer. The examiner believes there is a likelihood of confusion. Brewery A then has six months to respond to the Office Action and urge why confusion is not likely, else Brewery A may not be able to obtain its federal trademark.

Notably, though, he United States Trademark Office may refuse a trademark application when the two parties themselves don’t necessarily see a problem. For example, Brewery B called BLUE PARADER BREWING CO. may have no problem with Brewery A’s use of GREEN PARADE. Perhaps GREEN PARADE is the name of Brewery A’s IPA, and that’s it.

In this instance, Brewery A and Brewery B could hammer out an agreement between them that sets forth a plan to coexist in the marketplace. This is a trademark coexistence agreement. Typically, the document contains an ancillary agreement called a trademark consent agreement. The purpose of the trademark consent agreement is to concisely set forth the main terms of the coexistence agreement, in a way aimed toward presentation to the USPTO trademark examining attorney.

The trademark examining attorney can use the consent agreement as evidence there is not a likelihood of confusion. After all, if the mark owner itself does not see a problem, it makes sense to defer to that mark owner’s judgment.

That said, the trademark examining attorney is not bound to accept the consent agreement. Sometimes, if the marks are just too close, even if the breweries agree, both may not be able to obtain a federal trademark registration. Of note, there was a recent matter where two breweries agreed to coexist. One brewery had TIME TRAVELER BLONDE, and the other brewery had just TIME TRAVELER. Despite a coexistence agreement and a consent agreement, the examining attorney believed the marks were nevertheless too similar. There was an appeal, and the Trademark Trial and Appeal Board agreed with the trademark examining attorney.

Here is a link to the decision of the Trademark Trial and Appeal Board.

And here is a link to the consent agreement that was filed in this particular matter.

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

In the big ocean of trademarks, choosing a brewery name involves a lot of iceberg avoiding. An understanding of "dominance" can help breweries navigate around potential trademark disputes and select beer and brewery names with a low risk of costly collision.
In the big ocean of trademarks, choosing a brewery name involves a lot of iceberg avoiding. An understanding of “dominance” can help breweries navigate around potential trademark disputes and select beer and brewery names that pose a low risk of causing a costly collision.

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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Left Hand Answers Complaint in Lawsuit Over “Black Jack” and “Sawtooth”

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.

Brewery trademark dispute aside, years ago, Left Hand could  have initiated a copyright action against DuClaw due to substantial similarities between these designs. Copyright claims, however, must be brought within three years of the claim's accrual and it's hard to imagine that Left Hand hasn't known about DuClaw's design for at least that long.
Brewery trademark dispute aside, years ago, Left Hand could have initiated a copyright action against DuClaw due to substantial similarities between these designs. Copyright claims, however, must be brought within three years of the claim’s accrual and it’s hard to imagine that Left Hand hasn’t known about DuClaw’s design for at least that long. Nevertheless, if this is a new design from DuClaw, arguably LH must bring the claim now else lose it per FRCP Rule 13.

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.

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State of Texas Replies in Support of Its Motion to Intervene in Alamo Beer Brewery Trademark Dispute

The Alamo
The current trademark dispute involves rights to use “Alamo” as a trademark, including the silhouette of the historic building.

 

 

 

Texas is insistent about wanting to be in the Alamo Beer v. Texian trademark lawsuit going down in the Western District of Texas, San Antonio right now. As we’ve been reporting, the pendent dispute involves rights to use the mark on beer, and Texas believes it has superior rights to both the plaintiff and the defendant in the lawsuit.

Alamo Beer responded to Texas’s motion to intervene as we reported here, and this past Friday, May 9, 2014, Texas filed a reply. As we expected, Texas chides Alamo Beer for arguing the merits of the case, reminding Alamo Beer of the court’s posture in deciding a motion to intervene. Although Texas insists intervention as of right is appropriate here, we are not persuaded. Indeed, the weakest part in Texas’s argument also receives the least amount of treatment in Texas’s brief. That is, intervention of right is only appropriate if disposition of the current matter between Alamo Beer and Texian would impair Texas’s ability to protect its interests. We don’t necessarily think it does. Inclinations aside, Texas cites no case law for the proposition that a trademark owner should be afforded intervention as of right in a trademark dispute involving the same or a confusingly similar mark, or one that is dilutive of its famous mark. Texas cites back only to its brief and proposed complaint, observing that: “As Applicant’s Motion and Complaint make clear, should the court determine that either party has enforceable rights in marks depicting the Alamo, future attempts by Applicant to assert ownership of THE ALAMO Marks would be impaired.” Motion at 4.

Permissive intervention is another story, and if the court feels inclined to let Texas in, we think it has good grounds to do so. This is an interesting case, and we’ll let you know how this step in this increasingly-complicated brewery trademark lawsuit comes out.

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Alamo Beer Company Fires Back in Response to State of Texas’s Motion to Intervene

800px-Flag_of_TexasLast week, we reported on the interesting development in the Alamo Beer Company v. Texian Brewing Co. brewery trademark dispute going down in the Lone Star State. For those out of the loop, the dispute concerns trademark rights to the Alamo mark and the Alamo’s silhouette in conjunction with beer products. The notable development was the State of Texas’s motion to intervene, asserting that the State is the one with superior rights to use the Alamo mark. Interesting stuff.

As predicted, Alamo Beer has fired back in its reply, filed Monday, May 6, 2014. Alamo Beer leans on its 17 years of use of the Alamo mark in commerce on beer products, trading primarily in none other than than San Antonio, where the historic Alamo resides and where Texas’s alleged superior use of the mark was occurring. In contesting whether Texas even has a cognizable right at stake, Alamo Beer asserts that confusion isn’t likely and addresses Texas’s dilution claims as well, contending that Texas failed to prove the Alamo mark is famous or otherwise worthy of the sort of protection trademark law was built to deal with: “Simply because the State owns the physical Alamo building does not mean the State has a monopolistic trademark for goods and services they do not provide under the Alamo Marks.” Brief at 6. Alamo Beer closes with what amounts to a laches argument, while chiding Texas for the adequacy of its motion (“The State waited 17 years and submitted a complaint without sufficient facts in reliance on self-serving conclusory statements.” Brief at 8). Importantly, Alamo Beer steps outside the merits of Texas’s potential claim and reminds the Court what the underlying dispute is about, contending that permitting intervention under the present facts would be inappropriate. Brief at 8–9. We agree with Alamo Beer that any sort of intervention as of right from the court would be inappropriate, but think there’s good reason for the district court to let Texas in under Permissive Intervention, Rule 24(b), if it decides it wants to handle the dispute that way. Let’s journey back to Civ Pro for a minute and try to sort this one out.

First, the claim as of right. The court would be required to allow Texas to intervene if a statute says it must (we can’t think of a statute that does) or if Texas is so situated with a property right that resolving the underlying action would impede Texas’s ability to protect its interest. See FRCP Rule 24(a). Texas thinks it can intervene as of right in its motion, but we don’t tend to agree. Whether Alamo Beer has superior rights to Texian’s doesn’t change Texas’s ability to successfully sue either company, saying Texas actually has superior rights to use the Alamo mark. Ultimately, the present dispute is about who wins between Alamo Beer and Texian based on their set of facts, not whether one or the other may ultimately lose to someone else. Even if Alamo Beer wins its case against Texian, it still may be vulnerable to a claim by someone else—and that would not be fun, but the outcome of that lawsuit down the line would not be in conflict with the outcome of this case. We don’t think this is the scenario that intervention as of right is intended to handle.

Turning to permissive intervention, Rule 24(b), the court can let Texas in if a statute says it can (we can’t think of a statute that does) or Texas’s claim or defense shares with the main action a common question of law or fact. If you conceive of the legal question generally (Who has superior rights to the Alamo mark?), we suppose you can get there. Better yet, Texas might also be able to get there by observing that in order to dispense with the Alamo/Texian dispute, the district court must examine factual questions about when either company first began taking up use and on what kinds of goods. These questions would arise again in any dispute between the State of Texas and the winner of the present dispute. Still, as Alamo Beer correctly points out, under 24(b)(3), the court can consider in its discretion whether permitting intervention would unduly prejudice or delay the adjudication of the original parties’ rights. Although Alamo Beer contends it would be prejudiced, we can see how it would not be unduly prejudicial or cause undue delay to bring in Texas, in that if Texas does have the superior rights, the original parties would have to face off against Texas eventually. Arguably, it’s more efficient for everyone this way, so the court can consider who did what, on which goods, and when, and then how those uses relate to a likelihood of confusion. Then again, maybe Texas’s 17 years of inaction during Alamo Beer’s continuing use in San Antonio constitutes enough prejudice for the court to let Alamo Beer have its way and, as it seems to prefer, to dispense with Texas in a separate case.

So, to wrap it all up, permissive intervention is a possibility here, but for the reasons stated in our earlier post, we’re not convinced Texas ultimately has a strong claim in the long run, both on its proffered potential confusion and dilution grounds. All in all, maybe this case isn’t the best use of the state’s tax dollars, but who are we to mess with Texas?

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