Microbreweries Increasingly Battle Over Beer Names as Trademarks

After a long lull following the Prohibition era during which mega-breweries dominated the American beer market for decades, local microbreweries have steadily grown in popularity recently, with thousands of newly operating breweries joining the ranks each year.

However, such microbreweries still only satisfy a modest portion of the American appetite for beer.  Consequently, thousands of struggling microbrewers are trying to capture this highly competitive segment of the aggregate marketplace.

The increasing pressure on this marketplace has made brand differentiation a key concern.  Some commentators have called this conundrum "standing out in a sea of beer."

Consequently, publicized legal conflicts over brands in the microbrewery marketplace have recently arisen.

 

For example, in April 2013, a Grand Rapids, Michigan-based brewery called Brewery Vivant sent a legal cease and desist letter to Tired Hands Brewing Company of Ardmore, Pennsylvania, demanding that the small brewery cease using the name "FARMHANDS" for one of its Belgian ales.

"FARMHAND" is an as-yet unregistered trademark claimed by Brewery Vivant for a French farmhouse-style ale that is very popular in Michigan.  Brewery Vivant owners claims to have experienced an instance of actual confusion at a trade show, leading to the need for legal threats.

The FARMHAND brand has been used by a British Columbia-based microbrewer called Driftwood Brewery, leading to the possibility of international trademark issues down the line.

But the conflict over FARMHAND is not an isolated incident.

In June 2013, West Sixth Brewing of Kentucky and Magic Hat Brewing of Vermont settled a trademark-related dispute that quickly got ugly when it was described as "frivolous," and which escalated to a full-blown federal lawsuit until it was settled by the parties after mediation.

Similarly, Sierra Nevada Brewing Company had a trademark dispute over the "NARWHAL" trademark when it launched "Narwhal Imperial Stout," a move that the Narwhal Brewery apparently opposed.

And when Mother Earth Brewing Co., a craft beer maker in Vista, California, discovered another company in North Carolina with virtually the same name, Mother Earth Brewing Co., LLC, it was forced into filing trademark litigation in the Trademark Office.

Those with long ties to the microbrewery industry lament the need for ongoing legal conflicts over trademarks, citing comparisons to the less collegial tech industry.

According to one attorney who specializes in the alcohol and brewery industries, the craft beer industry "has become swollen," leading to a need for market participants to be more proactive with a coherent and aggressive branding and trademark strategy.

The King of Beers' Fitting Legacy: Brawling Over Budweiser

Budweis Today / Wikimedia Commons / Norbert Aepli

This fascinating trademark dispute finds its roots nearly 800 years ago in the Middle Ages, and it never seems to have ended.

In the quaint European town of Budweis (or Böhmisch Budweis, today's České Budějovice), a certain form of beer has been brewed since it was dubbed "Budiwoyz" by King Ottokar II of Bohemia in 1245.

King Ottokar was originally educated for the role of an ecclesiastical administrator. However, after the death in 1247 of Ottokar's older brother and the heir of Bohemia, Ottokar himself became the heir.

Statue of King Ottokar II

According to popular oral tradition, Ottokar was profoundly shocked by his brother's death and did not involve himself in politics, instead becoming focused on hunting and drinking heavily. Ottokar also founded the town of Königsberg, the namesake of yet another beer.  He became, so to speak, the original King of Beers.

Centuries later, in 1876, Adolphus Busch and his friend Carl Conrad, a liquor importer, developed a "Bohemian-style" lager, inspired after a trip to the region, including the now-famous Budweiser.  The name Budweiser is genitive, meaning "of Budweis."

By the end of the 20th Century, American company Anheuser-Busch and Czech company Budejovicky Budvar Narodni, had both sold beer in the United Kingdom under the name "Budweiser" for decades.

In 2000, the UK Court of Appeals held that both Anheuser-Busch and Budvar were permitted to register "Budweiser" as a trademark in the UK because there was "honest concurrent use" of the mark by both companies.  That is, both companies had been simultaneously using the name for a long period of time without any significant adverse effects on the marketplace.

However in 2005, Anheuser-Busch applied for an order under Article 4(1)(a) of EU Directive 89/104 that Budvar's existing registration be rendered invalid and that it be declared the only legitimate source of Budweiser in the United Kingdom. Budvar also apparently declared itself the "original" Budweiser.


The UK Court of Appeals referred a number of questions to the Court of Justice of the European Union, including:

  "Does Article 4(1)(a) apply so as to enable the proprietor of an earlier mark to prevail even where there has been a long period of honest concurrent use of two identical trade marks for identical goods?" The Court of Justice of the European Union found that the circumstances of this dispute were so exceptional as to justify concurrent usage by both companies.

The European Court of Justice said that the proper interpretation of the relevant law means that the owner of an older trademark cannot obtain a declaration that an identical later trademark designating identical goods is invalid in circumstances where there has been a "long period of honest concurrent use of those two trademarks" and that situation has not had (nor is likely to have) an adverse effect on the essential function of the trademark, which is to guarantee the origin of the goods. The Court of Justice dismissed the existence of some documented cases of actual consumer confusion as too marginal to overcome its conclusion.

In the end, it would seem that the original King of Beers' legacy was to encourage a bit of brawling nearly eight centuries after his death.

Can Anheuser-Busch Trademark 3-Letter Airport Codes Such as LGA?

Last year, beer conglomerate Anheuser-Busch/InBev filed multiple "intent to use" trademark applications for 14 U.S. telephone area codes. Now Anheuser-Busch has applied for trademark registrations for 42 U.S. airports, including New York's LaGuardia and JFK airports; Los Angeles International Airport; and San Francisco International Airport. Not surprisingly, the class of goods listed in each filing is "beer."  


The International Air Association Transport Association already owns trademarks on all the airport codes, but trademark law permits the use and filing for trademark registrations for codes if used in connection with a bona fide offering of goods or services that are not likely to cause confusion with those preexisting registrations/uses.  Anheuser-Busch's area code trademark applications had previously led to speculation that the company was trying to mimic the success of 312 Urban Wheat Ale, the popular beer by Chicago's Goose Island Beer Company—which Anheuser-Busch bought last year—in cities including New York and Los Angeles.  One can only wonder what type of local beer would be associated with LaGuardia airport, "Overpriced LGA Yellow Cab Ale"?