Intellectual Property Magazine 39 www.intellectualpropertymagazine.com September 2019

Tap into craft beer trademarks

The vast number of brewery names that have already been taken are creating trademark frustrations for brewers. Oliver S Bajracharya explores some of these disputes

It will come as no surprise that craft beer is here to stay. The Brewers Association, a craft beer trade organisation, reports that the number of craft breweries has nearly doubled in five years from about 3,800 in 2014 to about 7,300 in 2018, with a majority of Americans living within 10 miles of a brewery.

The Brewers Association defines a ‘craft brewery’ as a small (fewer than 6m barrels), independent (less than 25% owned by a non-craft brewer alcohol beverage industry member) brewery (has an Alcohol and Tobacco Tax and Trade Bureau (TTB) Brewer’s notice and makes beer).

The naming of every new brewery – not to mention the naming of several to dozens of beers offered by each – presents an opportunity for creativity, but can leave brewers frustrated due to the sheer number of names already taken. Inevitably, disputes arise and lawsuits are filed.

Craft Beer v Big BeerThe popularity of craft beers has not gone unnoticed by Big Beer, the nickname bestowed by Stone Brewing on the gigantic multinational conglomerates that dominate beer sales in the US. Among other Big Beer acquisitions in recent years, the largest brewing company,

Anheuser-Busch InBev, acquired craft breweries 10 Barrel Brewing (2014) and Golden Road Brewing (2015) and, Constellation Brands (the third largest US beer producer with brands like Corona and Modelo) acquired Ballast Point for $1bn in 2015.

Beers and trademarks

“Perhaps unsurprisingly, the band Guns N’ Roses took notice that there was a new beer available called Guns

N Rosé and filed a complaint for trademark infringement.”

40 Intellectual Property Magazine September 2019 www.intellectualpropertymagazine.com

Enter Stone Brewing, one of the earliest craft breweries and owners of the mark STONE for beer since 1998. As the ninth largest US craft brewery, Stone prides itself on a “philosophy and approach that defies the watered-down orthodoxy of ‘Big Beer’.”

Big Beer member MillerCoors (a subsidiary of MolsenCoors) owns a number of ‘craft’ beer brands, including Blue Moon, Hop Valley, and Saint Archer. Miller has sold its Keystone beer since 1989 – ’Keystone’ being a popular Colorado ski town – prominently featuring the Rocky Mountains on the can and in advertising.

In 2017, Miller introduced a ‘refreshed’ can design that divided the KEY and the STONE in large letters onto separate lines and eliminated the Rockies imagery. Since then, Keystone Light has gone from the worst to the best-selling of the Keystone line while Stone has noticed a discernable drop in sales.

Stone filed suit for trademark infringement in February 2018 and later filed for a preliminary injunction. In ruling on the preliminary injunction and considering the Sleekcraft factors, the court found the STONE mark to be commercially strong, but suggestive rather than arbitrary for beer due to the can and packaging frequently incorporating a gargoyle, Stone’s mascot. Regardless, the court indicated that “STONE® is entitled to the strong protection afforded to suggestive marks.” Further, the court found “it is reasonable to consider Miller a direct competitor of Stone,” thereby tilting the “proximity of goods” factor in favour of Stone.

Despite STONE being prominently featured on the rebranded Keystone can, the court also noted that a consumer looking at the can is able to “see KEYSTONE Light (twice) as well as the bright yellow house mark of Coors,” thereby favouring Miller. The court further indicated it was not able to make a determination based on the submitted evidence as to Miller’s intent in “refreshing” its can. The court ultimately denied the preliminary injunction, but found Stone’s trademark claim to be “moderately strong”.

Beer v alcohol, not beer Another craft brewery, Surly Brewing of Minnesota, has owned SURLY for beer and bar and restaurant services since 2015. Surly opposed an individual applicant’s application for SURLY PENGUIN and design for “alcoholic beverages except beer”. Noting that surly means “unfriendly or hostile; menacingly irritable”, the Trademark Trial and Appeal Board found SURLY to be arbitrary with respect to the goods and services, and thereby inherently strong. In addition, the TTAB found the mark to be

commercially strong based on Surly’s substantial sales and advertising figures and, therefore, held the mark to be entitled to broad protection.

Further, because the marks share the term ‘surly’, the TTAB found the marks similar in sight and sound. The TTAB also noted that the applicant’s design featuring a surly-looking penguin with arms crossed was similar in connotation and commercial impression generated by the scowling man on Surly’s label.

With respect to the similarity or dissimilarity of “beer” and “alcoholic beverages except beer”, Surly introduced evidence that craft beer brewers, for example, Dogfish Head, Rogue and New Holland, are also increasingly selling distilled spirits under the same house marks. To counter, the applicant introduced evidence of marks with similar features, but owned by different entities for “beer” and “alcoholic beverages except beer”. However, the TTAB, in according such evidence little weight, noted that while these marks, for example, BLUE MOON ale and BLUE ICE vodka, may share a common term, they are not similar when considered in their entireties.

Finally, the TTAB noted the Federal Circuit’s requirement that “something more” be shown to establish the relatedness of food or beverages and restaurant services because there is no per se rule that these goods and services are related. Here, the TTAB found that because the SURLY mark is both inherently and commercially strong, the “something more” requirement was met. Therefore, the TTAB sustained the opposition and refused registration of the applicant’s mark.

Beer v rock n’ rollOskar Blues Brewery, part of the Canarchy Craft Brewery Collective, filed a trademark application in August 2018 for the mark GUNS N ROSÉ for a new beer brewed with prickly pear and hibiscus resulting in a pale pink hue, and ultimately released the beer in February 2019. Perhaps unsurprisingly, the band Guns N’ Roses took notice that there was a new beer available called Guns N’ Rosé and filed a complaint for trademark infringement in May 2019.

In correspondence before the lawsuit was filed, Oskar Blues indicated that GUNS N’ ROSÉ is a “rosé-style ale with a crisp profile” and pointed out that Guns n’ Roses did not own a trademark registration for GUNS N’ ROSES for beer or any alcoholic beverages. For its part, Guns N’ Roses alleged that its mark is famous and is thereby entitled to the greater protection afforded to famous marks based on their widespread recognition. Guns N’ Roses also points to a number of bands, including Metallica and Iron Maiden, that sell beer using their band names. For now, Oskar Blues has expressly abandoned its trademark application, but indicates that it will continue to sell Guns N’ Rosé until March 2020.

The dispute settled, according to a 12 August court filing. The terms of the settlement were not disclosed, but the lawsuit will now be dismissed, pending filings.

“Noting that surly means ‘unfriendly or hostile; menacingly irritable’, the Trademark Trial and Appeal Board found SURLY to be arbitrary with

respect to the goods and services, and thereby inherently strong.”

Author

Oliver S Bajracharya is a partner in Lewis Roca Rothgerber Christie’s IP practice group. He has helped a wide range of domestic and foreign clients obtain patent protection, including clients in the consumer electronics, medical device, and gaming industries.

Beers and trademarks