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Beer Cops, Another Side

I normally like The Wall Street Journal but wow a recent editorial about “The Craft Beer Cops” was a letdown. I am not sure it is even worthy of a college newspaper, or one of the Journal’s interns. I don’t see any new points and I certainly don’t see any ideas for how to more properly regulate the industry. It has the feel of Trumpism; a few guys said it’s bad, and that becomes sufficient evidence that it’s a yuge disaster. I don’t want to paste the whole editorial because it’s behind a paywall, so I tried to repeat only the worst half, as below within the block quotes.

You might think of a microbrewery as a home for free spirits who grow long beards, take their dogs to work, and make their own rules. But Washington won’t let them. …

This seems a dumb place to start. Does anyone really think each brewer should do entirely as they wish? I doubt it. So it’s really a question of which rules are good, not whether. Not to mention that there is plenty of evidence that many of the brewers like the rules and helped shape them.

Mr. Bush had recently bumped into Erik Olsen of New Hampshire’s Kelsen Brewing Company, who told him that competing in this industry requires a license from the U.S. Treasury that Mr. Bush says goes back to Prohibition days. …

Fantastic. One data point, based on bumping into one person. Is the licensing scheme bad just because it goes back a few generations?

[TTB] says its application process is …” You know, in case they might be Al Capone.

This seems particularly lazy and suggests that just because the bearded gents might not tote machine guns, that they are all angels. Also, I thought Al Capone was a spirits guy (not a Chardonnay or Dunkel guy). Then again, maybe he did dabble in Dunkel.

Brewers have to go back to the feds to get approval for each new label. … He adds that the agency “has to approve our plans before we can start using the new expansion space for brewing.” This can take six months or more.

This I agree with more. If the government wants to have at least one hand on the steering wheel, they should put up the resources to do so properly.

Ohio Gov. John Kasich got an earful on the same subject when he recently visited New Hampshire’s Henniker Brewing. The [rules] even covers font sizes. [Henniker] was forced to stop calling its old-fashioned porter “soothing” because regulators claimed it suggested a medical benefit.

Are font rules really so onerous, especially in that TTB more or less made this a low priority a few years back? What’s the point of mandatory labeling if it’s smaller than readable? Even if you think “soothing” should be allowed, if you think all words should be allowed, you probably just have a bad imagination.

This kind of nonsensical regulation could drive anyone to drink, and it’s one more reason we have a 2% growth economy.

This is the dumbest point of all. Despite all the rules, the Journal may have picked the single worst industry in the land, to make its point about stunted growth. Is any industry growing faster than craft beer?

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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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Nut Sack

nut

Dan’s Mom will be very proud. Or mortified. He won a big trademark victory today, to make the world safe for nut sacks everywhere.

The US trademark office preliminarily determined that NUT SACK was “immoral” and “scandalous,” as a brand name for beer. Dan went to the mat to protect Engine 15 Brewing Co. and their NUT SACK. The opinion is here (and, ironically, it is much more NSFW than the label itself). In its nether regions it says:

Given the mental images the term “Nut Sack” will likely raise, the weight of the dictionary entries suggests that using this indelicate term may well raise eyebrows at a formal dinner party. On the other hand, in seeking to apply the extremely broad “vulgarity” standard to a slang term, we think it wise to bear foremost in our minds the governing language of the statute (“immoral,” “scandalous”) … . We observe that many slang terms come into the lexicon because the formally correct, clinical word for the thing itself is deemed uncomfortably potent. This seems to be particularly true with respect to parts of the human body, in which case speakers adopt the slang terms precisely because they seem less intense, less indelicate, than the formally correct or technical terminology. Cases of alleged scandalous matter under Section 2(a) of the Lanham Act are rarely simple binary decisions, but involve various shades of grey. With this background, we find that some terms, such as “Nut Sack” appearing within “Nut Sack Double Brown Ale” may seem somewhat taboo in polite company, but are not so shocking or offensive as to be found scandalous within the meaning of the statute.

The TTAB summed up, saying the earlier decision is reversed, and:

We conclude that beer drinkers can cope with Applicant’s mark without suffering meaningful offense. Moreover, the consumer of this product who conjures up body parts or insults is nonetheless still likely to see the mark as an attempt at humor.

I’d better get Dan a t-shirt, at the very least, to commemorate his big victory. I hereby agree to buy up to two t-shirts for Dan, and one for the person who comes up with the best slogan, for the t-shirt and for this defender of the nut sack.

11/3/2015 Update:  many thanks to Doug Fairall, beer writer at the New Times Broward-Palm Beach, and TheBeerTaster.com, for letting us use the above photo from this article.

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Safe Harbor Defense Works, Once In a Blue Moon

Last week, a federal judge in California tentatively dismissed a class action suit against MillerCoors. Yesterday, the judge made that dismissal final.

bmooThe case, Parent v. MillerCoors LLC, began in March when plaintiffs—a class of Blue Moon purchasers—alleged that Miller misled consumers into believing that Blue Moon is a craft beer. Plaintiffs argued that Miller’s reference to “Blue Moon Brewing Co.” on the beer’s label and use of the phrase “artfully crafted” in the beer’s advertising led consumers to purchase Blue Moon believing it was craft. Miller defended that the practice of listing its assumed name, “Blue Moon Brewing Co.,” on its label instead of its full business name is specifically permitted by state and federal law, and that consumers could not reasonably rely on the phrase “artfully crafted” as a guarantee that Blue Moon is craft beer.

Judge Gonzalo P. Curiel of the United States District Court for the Southern District of California tentatively agreed with Miller on both points last week, pending a hearing on the matter last Friday. Apparently, plaintiffs’ oral argument at the hearing failed to change Judge Curiel’s mind, as he issued an order yesterday dismissing the case.

Regarding TTB’s approval, Judge Curiel noted that TTB regulations “specifically permit a beer bottle and outer packaging to show, by label or otherwise, the name or trade name of the brewer.” Because California allows the name of a manufacturer to include a duly filed fictitious business name, Judge Curiel held that Miller’s use of “Blue Moon Brewing Co.”—a name properly registered as a fictitious business name in California—is specifically authorized by federal and state regulations. Accordingly, TTB approval provided Miller with a safe harbor.

Regarding the issue of whether Blue Moon fits within the definition of “craft beer” (a point of contention between the parties), Judge Curiel sidestepped the issue, stating, “… even assuming that there is such a definition, Plaintiff cannot rely on it for their argument” since plaintiffs are not pointing to Miller’s use of the phrase “craft beer,” but instead to their use of the different phrase “artfully crafted.” Regarding Miller’s “artfully crafted” claim, Judge Curiel held that the phrase is mere puffery, as it is not capable of being reasonably interpreted as a statement of objective fact. Unlike objective statements of fact, puffery refers to generalized, vague terms that cannot serve as the basis of a lawsuit.

Plaintiffs did secure one small victory, mentioned in the final order but absent from the tentative ruling: Judge Curiel found that their complaint met the heightened pleading requirements required of complaints that allege fraud. Unfortunately for the plaintiffs, this point is moot, as their allegations (well-pled though they may be) still fail to state a valid claim for relief.

Importantly, Judge Curiel distinguishes TTB approval in this case from TTB approval in Hofmann v. Fifth Generation, Inc., a case involving Tito’s “Handmade” Vodka. In Hofmann, the court found that there is no federal regulation that specifically authorizes the use of “handmade” on the label, and so the safe harbor did not apply. Regarding Blue Moon, Judge Curiel says, “Here, the conduct challenged by plaintiff is the same as the conduct authorized by law: Miller’s listing of ‘Blue Moon Brewing Co.,’ rather than MillerCoors, as the manufacturer on Blue Moon’s bottle and packaging.” Judge Curiel’s opinion suggests that in cases where TTB has duly applied specific regulations, courts will defer to TTB approval and will apply the safe harbor. On the contrary, where TTB does not have specific regulations in place, courts will be skeptical of TTB approval and may require the defendants to show that TTB actually reviewed and approved the statements at issue. The forthcoming decision in Hofmann should shed more light on this particular issue.

Parent was dismissed without prejudice, which means that plaintiffs have 30 days to submit an amended complaint against Miller. The judge directed the plaintiffs not allege claims regarding Miller’s use of “Blue Moon Brewing Co.” or the “artfully crafted” trademark.

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