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Archive for December, 2015

Foster’s then Guinness

guinness

Another lawsuit. On Tuesday, a Massachusetts consumer filed suit against Guinness, alleging deceptive labeling and marketing. This is yet another in the long series of nationwide class action lawsuits stalking the alcohol beverage industry in the past 15 months, since the initial Tito’s suits. The case is O’Hara v. Diageo-Guinness, filed in federal court. Just four days earlier, a New York City man filed suit against Foster’s Beer similarly.

The Guinness complaint says the company “represents that all Extra Stout sold in the North America is brewed in Ireland at the historic St. James’s Gate Brewery in Dublin.”

This, however, would seem to be an extra stout assertion, because new lawyer Frank and I walked over to a beer store today. The store had Guinness in various sizes and shapes, but all of the packaging seemed to show the origin clearly. Most clearly said brewed in Ireland; some (such as above) clearly said BREWED IN CANADA. We did not see any packages that made the origin hard to divine. Things may be different up in Massachusetts but nonetheless, this would seem to drastically limit the size of any class and any damages. With all the Guinness on display at the local store, clearly showing product of Ireland, and labels like this, we don’t see how the plaintiff could possibly be right in asserting “Extra Stout is not manufactured, brewed, bottled and/or imported from Ireland.” Does anyone else see a conflict between the photo above and this?:  “Extra Stout’s outer packaging does not mention, reference and/or indicate that Extra Stout is manufactured, brewed, bottled and/or imported from Canada. … Extra Stout’s label only contains one small print disclosure on the back label of the bottle acknowledging that Extra Stout is actually brewed and bottled in New Brunswick, Canada.”

The plaintiff fares better when challenging the second of these assertions, from the Guinness website (click to enlarge):

faq

Even if the second FAQ is wrong, it looks to be simply a mistake. It would be tough to avoid any such mistake in view of the other FAQ, showing that the product is made in almost 50 countries and needs to comply with the laws of “well over 100.” It looks like the plaintiffs are in for some tough sledding.

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Two Craft Beer Lawyers

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I am pleased to report that Dan Christopherson is featured in the current issue of Landslide. This is the magazine of the American Bar Association’s Intellectual Property Section. The article is entitled “Trademarks in the Golden Age of Craft Beer.” Dan is a hardcore craft beer lawyer at Lehrman Beverage Law, and he has more than eight years of highly relevant trademark experience. He wrote the article with Michael Kanach, Senior Counsel and craft beer lawyer at Gordon & Rees in San Francisco. Here is an excerpt from the article:

Even the most devout craft beer fan may not be aware of the volume of trademark disputes in craft beer today. The number of disputes is likely to increase with thousands of existing and planned breweries (not to mention other beverage producers) fighting for an increasingly small pool of quality names. While many of these “disputes” are quickly handled over a beer, opposition and cancellation proceedings and federal trademark lawsuits are becoming more common.

Below are six important lessons in branding for the craft beer industry, including the interactions between its competitors (or collaborators), the personalities of its customers, and the countless legal restrictions and requirements at the state and federal levels. Each of these elements is important to branding because each of these constraints on creativity can be costly if they are not taken into consideration.

The article goes deeper than the run of the mill platitudes about being careful, or calling a lawyer. For example, the article says you should not be overzealous in filing trademark applications:

Sometimes the best advice a trademark attorney can give a client is that it should not file a trademark application. Trying to lay claim to a name that is either (a) already being used by a competitor, or (b) a common beer term can, at best, make your client look bad in the public eye or, at worst, land your client on the wrong end of a trademark dispute. Craft … beer fans can be passionate, loyal, and outspoken about their allegiances, particularly when the defendant is a small, local brewery.

Filing a trademark application may provoke a competitor to take action against you. Innovation Brewing in Sylva, North Carolina, recently found itself involved in such a dispute after it filed a trademark application for the mark INNOVATION BREWING for “beer.” Unfortunately for [Innovation, Bell’s Brewery] owns two trademark registrations for INSPIRED BREWING, and claims common-law rights to the phrase BOTTLING INNOVATION SINCE 1985 in connection with beer. Bell’s might not have taken any action against Innovation Brewing, or even noticed it, if Innovation Brewing had not tried to register its name as a trademark. Now, instead of dedicating its undoubtedly limited startup funds to developing its new business, it is now entrenched in an expensive fight over its name.

For anyone involved with beer, wine, spirits or other food branding, it is well worth reading the entire article, continued here.

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Tito’s Scorecard

scoreI don’t mean to keep harping on the Tito’s Vodka cases — but there sure are a lot of them — and they are important. Because there are so many, it is not easy to keep track of how it’s going, hence this handy Scorecard. Most of the cases are slowly grinding along, with no clear winner or loser (as shown with the ⇔ symbol). At one extreme, the Aliano case went especially well for Tito (⇑). At the other extreme is the Hofmann case (⇓). In late November Judge Miller allowed Hofmann, the first-filed case, to go forward, past the defendant’s motion for summary judgment. It got even worse, five days later, when the court gave the plaintiffs permission to go into the plant and see exactly how Tito’s Vodka is made, despite the company’s strong objections.


 

Plaintiff (State)Status (Filed Date)Notes
Aliano (IL)Closed. Dismissed 9/24/2015. (11/7/2014)⇑⇑ Big win for Tito.
Cabrera (CA)Open. On 11/20/2015 Judge Miller denied Tito's motion for summary judgment. (12/22/2014)⇓ This case is not going well for the defendant.
ConsolidationClosed. The Hofmann lawyers withdrew their motion to consolidate the cases listed on this table on 5/15/2015. (4/6/2015)
Emanuello (MA)Open. (4/3/2015)
Grayson (NV)Open. (1/26/2015)
Hofmann (CA)Open. On 11/20/2015 Judge Miller denied Tito's motion for summary judgment , and on 11/25/2015 the court ok'd a site visit. (9/15/2014)⇓⇓ This case is not going well for the defendant.
McBrearty (NJ)Open. (10/24/2014)
Pye (FL)Open. On 9/23/2015 the federal court dismissed the statutory deception-type claims but let stand the warranty-type claims. (9/25/2014)
Singleton (NY)Open. (4/7/2015)
Terlesky (OH)Open. 11/17/2015 the court dismissed the statutory deception-type claims but let stand the warranty-type claims. (6/4/2015)
Wilson (AL)Closed. Dismissed 9/30/2015. (8/4/2015)⇑ Win for Tito.

 

We reached out to Tito and his lead lawyer to make sure we are not missing anything important, and to ask a few questions, as follows. From early on, Tito said he knew it was going to be a long haul.

How’s it going? Business has continued to be good. The lawsuits have been a distraction. But our consumer base is growing, and they have been extremely loyal. They appreciate Tito’s Handmade Vodka for what it is:  a premium quality vodka at a price they can afford. That’s what we set out to make, and the fact that our fans appreciate it makes it all worthwhile.

Do you still think you are going to win? Yes, we do believe we will win. So far, the cases that have been decided on the merits have gone our way. The others are still in the early stages.

Anything you want to say and can say that has not already been in the media? As the courts get more into the issues, they are starting to understand that the regulatory process we have to go through to get label approval means something. And when the federal government issues an approval for our labels, it means they have found them to be in compliance and not misleading to consumers. Everyone in the industry should be able to rely on their approved labels to do business.

Why not just settle or compromise? Settling cases like these simply invites more people to bring more cases. Some principles are worth fighting for.

Biggest surprises about our legal system, so far? Things move slowly in the court system. And in the early stages, people can make a lot of baseless accusations and get the benefit of the doubt for a long time, with no real skin in the game and no downside when those accusations are disproven.

How if at all have the cases affected sales? I haven’t had anyone tell me they won’t buy the product because we’ve been sued. To the contrary, I’ve had people tell me that this means I’ve arrived. All I know is we keep doing the same thing we’ve been doing for years; we just do more of it.

What else? On the Florida case … continued here.

With so many cases pending, and so much at stake, it won’t be long until this scorecard needs a major update.

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