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.
I 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.|
|Consolidation||Closed. 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.
There is big news out of a federal court in San Diego. On Friday, the judge in two of the Tito’s labeling cases said it, loud and clear. Words matter — on labels. This is important because it was starting to get very confusing, what with all the label cases floating around, and many dismissals. There are at least eight separate Tito’s cases scattered around the country, and a couple dozen alcohol beverage litigations pending in recent months. Along the way, Judge Miller made it clear he is not too impressed with the rigor of TTB’s label review system, or the fact that the Tito’s “Handmade” Vodka labels have been approved on many occasions.
On Friday, November 20, 2015, in the U.S. District Court for the Southern District of California, Judge Jeffrey Miller issued two very similar Orders in two separate cases against Tito’s Vodka. The cases are:
– Hofmann v. Fifth Generation
– Cabrera v. Fifth Generation
In hindsight, Judge Miller’s November 20th Orders seem obvious. If the claim meant little to nothing, why would Tito spend zillions of dollars to make sure everyone knows his vodka is “handmade”? Why else would it be the main word on the main label, and throughout his marketing? Why else would it work so well, to shoot this brand to the top of a tall and slippery pole? In recent months Tito has argued that the term is mere puff. But I can’t think of any puff term that has a prayer of moving the bottles as well as a term, such as the one at issue, with a little more grit and traction. I don’t see the terms “premium,” “finest,” “smooth,” or any other agreed-upon puff terms getting anyone far, as compared to a term that is much more likely to actually mean something.
In a 17 page Order, Judge Miller denied Tito’s motion for summary judgment in Hofmann v. Fifth Generation, the first of many such cases. The Judge did likewise in a 14 page Order, in the Cabrera case. This means both cases have much greater odds of ending up at trial someday, even though most such cases are settled well before that. This also means the odds are much higher, that a judge or jury might actually tell us, someday in our lifetimes, what this inscrutable term actually means, and whether Tito’s is made thusly. Without having a strong opinion on whether Tito should win or lose, I do have a strong opinion that it is a huge copout to say, the term is simply too hard to define, or, as so many people on the internet like to say about it, “who cares.” For better or worse, my job is more or less about what words do, don’t, should, or shouldn’t mean, hence my deep interest in this case. A term like “bourbon” or “straight” means a lot, and that is good.
The Orders tend to say that TTB approval of the label and term at issue are determinative only to the extent TTB conducted a rigorous review. It is hard to say TTB’s review is other than non-rigorous, inasmuch as TTB quite clearly said they don’t even have any standards or rules around such a term. The plaintiffs argued, and the Judge agreed (in the Hofmann and Cabrera Orders), that “a federal regulator’s actions create a safe harbor only … where the agency’s actions ‘were the result of a formal, deliberative process akin to notice and comment rulemaking or an adjudicative enforcement action,’ and are therefore sufficiently formal to merit Chevron deference.” I have been interacting with TTB’s label review system on a daily basis for more than 25 years now. It would be preposterous to claim that the system has been anything close to formal, deliberative, or similar to an adjudication. Most of the time, no lawyers or neutrals are involved. Most of the time there is no evidence, and there are no evidentiary rules. Many times the system has all the rigor of a bouncer, at the trendiest nightclub, deciding whether you are cool enough to enter the club. Far less often, the system involves knowledgeable people, on opposing sides of an issue, with a plausibly neutral decisionmaker.
It is quite easy to illustrate this. Take a competing vodka; let’s call it Pedro’s. Pretend Pedro’s Vodka is demonstrably distilled in a humongous vodka plant, outside Texas, and shipped to Dallas in railroad …
We have been following various cocktail controversies in recent months, and we again thought of this one today because it appears that it got settled in recent days. Regardless of the exact, current, status, the main point remains — it really is possible to get into a full-blown trademark dispute over cocktail names, as this situation shows.
This tempest in a mug is all about … What do you need to make a real Dark ‘N Stormy®? According to Gosling Brothers Ltd.—the owner of several registered trademarks over DARK ‘N STORMY—any brand of ginger beer will do, but you better use Gosling’s Black Seal® Rum. Those planning to do otherwise may want to garnish their cocktail with a large wedge of trademark-infringement-defense.
By Frank Knizner, J.D. and Michael Volz, Attorney
A Dark ‘N Stormy®, like a Painkiller®, or a Sazerac™, is one of a handful of trademarked cocktails. On September 15, 2015, Gosling sued Pernod Ricard USA, LLC alleging that Pernod’s use of “Dark N’ Stormy” and “Black Stormy” in recipes and advertising containing Pernod’s Malibu line of rums infringed several of Gosling’s DARK ‘N STORMY registered trademarks. The case—Gosling Brothers Ltd. et. al. v. Pernod Ricard USA, LLC.—was filed in federal district court in Massachusetts.
The alleged trademark infringement stemmed from Pernod including cocktail recipes on its website for a “Dark N’ Stormy” containing Malibu Island Spiced Rum, and a “Black Stormy” containing Malibu Black Rum. Further, Pernod released a YouTube video demonstrating how to make a “Dark N’ Stormy” using Malibu Island Spiced Rum. (A lot of the links seem to be now removed.)
As with all trademark infringement claims, the issue here boils down to whether the allegedly infringing marks are likely to confuse consumers. While “Black Stormy” is similar to Gosling’s mark, “Dark N’ Stormy” is nearly identical to “Dark ‘N Stormy®”—the only difference being the location of the apostrophe. According to Gosling, the subtle differences between the marks were not enough to avoid consumer confusion. Specifically, Gosling contended that Pernod’s use of “Dark N’ Stormy” and “Black Stormy” was likely to confuse customers as to the source of Pernod’s goods, and as to whether Gosling approves, sponsors, or endorses Pernod’s goods. Gosling claimed that Pernod’s use of these phrases was “knowing, willful, [and] deliberate” and was “performed with the intent to trade off of Gosling’s goodwill and reputation tied to the iconic … [m]arks.” Gosling was seeking treble damages (i.e., three times any actual damages suffered by Gosling), preliminary and permanent injunctions barring Pernod from using the marks, and for Pernod to relinquish any materials bearing the marks.
Pernod’s decision to use “Dark N’ Stormy” and “Black Stormy” is particularly interesting because Gosling is known to police their trademarks relatively vigorously. Back in 2009, Gosling went after rum producer Zaya for an advertisement suggesting that Zaya Rum could be substituted for Gosling’s Black Seal® Rum in a Dark ‘N Stormy®. That same year, Gosling sent a cease and desist letter to the blog Inu Ā Kena after it asked readers “what’s the best rum for a Dark and Stormy?”
The “cocktail trademark enforcers”—Gosling, Sazerac, and Pusser’s—have typically gone after smaller producers, bars, and blogs for trademark infringement. So far, all of these disputes have been resolved well before reaching court. Until this week, this dispute seemed to be headed in a different direction. What’s more, unlike its prior enforcement measures, Gosling’s Complaint gives no indication that Gosling sent Pernod a cease and desist letter before filing suit.
Until the next sign of a dispute about cocktail names, this controversy should serve as a reminder that it’s not just brand names that can cause so many intellectual property disputes in the crowded beer, wine and spirits fields. It is also every part of your website, advertising and yes — indeed — even those cute and witty cocktail names.
This webinar is today. I should have put this up a long time ago to give you all a chance to sign up. Anyway, it should be great because where else can you get some Tom Cunningham and Simon Fleischmann for less than the cost of a few rounds of fancy cocktails? The signup link is here and it’s not too late to sign up. The topic is all the recent lawsuits like Tito’s, Maker’s Mark, Beam, etc. Tom and Simon are seasoned trial lawyers on the defense side, and I will cover the regulatory issues.