Bitter Disputes for Brewers

Britain is experiencing a Beer Boom. The growing popularity of craft beer and ales has spurred a tripling of applications to start breweries in the UK in the past five years. Amazing when you consider the general decline in drinking and that CAMRA are reporting that 29 pubs are closing each week.

But is the UK about to experience what has already happened in the US? According to an article by Alistair Bland US Craft Brewers are running out of names and into legal spats where "virtually every large city, notable landscape feature, creature and weather pattern of North America...has been snapped up and trademarked as the name of either a brewery or a beer." 

When Camden Town Brewery decided to take Redwell Brewery to the High Court in an action centred around the right to use the word "Hells" for a beer they brew, did the UK Craft Brewing industry cross the Rubicon and pave the way for a raft of similar IP related High Court battles?

We asked Intellectual Property expert Matthew Lingard of Chambers rated Legal 500 boutique Virtuoso Legal to take a view and at the same time offer some advice for anyone with aspirations of being the next Brew Dog; the Scottish craft beer brewer that has recently posted £18m of sales and seen its net profits rise to more than £2.3m.

“The recent upsurge and popularity of craft beer will no doubt lead to an increased number of legal disputes.

A few years ago craft beer occupied a very specific niche. The popularity of a beer was all down to its taste. Its branding or packaging did little to persuade the average consumer. A good beer would sell on its own merits.

Fast forward to the present day and we are in a situation where for many people taste is simply not the only consideration. They just want to be seen drinking the “in-thing” and are attracted like magpies to the new shiny beer being offered with cool names and sharp branding. This means that instead of taste being the primary factor when choosing a beer, its branding is now key. A beer with a cool name and engaging packaging will sell like hotcakes.

Breweries are now focusing far more on their image. The best breweries are using an engaging marketing style to support their already really good stock of beers. However much larger breweries have now been given an opportunity to enter this highly competitive market and are now producing beers with highly engaging packaging backed up with an extensive marketing campaign. Both approaches are succeeding in this current climate.

Due to the importance of branding it is to be expected that disputes are going to arise involving trading names and trade dress. With hundreds if not thousands of different beers being produced each year it is getting harder and harder to come up with an innovative and engaging brand. This is being exacerbated by the fact that regional beers can now be cheaply stocked throughout the country thanks to an ever growing number of supply networks. In times gone by if a brewer got word that someone was brewing another beer with the same name a simple phone call would settle the matter. Often both would agree to stay out of each other’s locality or would simply decide who had priority first.

However those days in many respects are gone. Craft beer is now an international business for some and it now makes commercial sense to ensure that the many products being sold are legally protected. An increasing number of trade mark disputes are arising as local brewers to their horror discover that the name of their champion beer is already being used in the market. Some breweries have always protected themselves against such discoveries by trade marking the name of each beer they produce. For example Marstons PLC has a vast trade mark portfolio protecting its many beers. This approach is difficult for small breweries due to the commercial outlay required. The brewing industry is one that operates on small margins with money only being made in abundance by the successful few.

A further problem that affects the ability of breweries to create commercially unique brands is the fact that many beers are named in a far too descriptive manner. Beers such as “Leeds Pale” and “Barnsley Bitter” are simply far too descriptive to be registered as trademarks. This would hamstring any attempt to seek any registered protection. Breweries therefore have to rely upon un-registered rights and the remedies offered under this branch of law.

This leads to expensive legal wrangles as the cost to pursue a claim under this branch of law is complicated with a high level of evidentiary proof.

A pair of craft beer brewers who have become locked in a bitter battle over the name of their lagers have failed to resolve their differences and are set to fight it out in what could be a £100,000 do-or-die High Court brawl. A Camden brewery is seeking to stop a Norwich brewery from using the “Hells” mark on their beer. Neither has a registered trade mark and the claim has been brought under the law of passing-off.

I will not seek to evaluate the merits of the claim in this article. However the decision by Camden Town Brewery to begin costly litigation against a much smaller brewery does seem perplexing. It is difficult to understand why a compromise could not be reached in this matter, especially with both facing the prospect of sky high legal bills. We can only hope that common sense will prevail in this manner. Perhaps both parties could meet for a sampling of their respective products, I have come across very few problems that a large amount of craft beer cannot solve.”

In order to avoid any costly mistakes I would advise brewers to consider the following points:

1. Stay away from overly descriptive names if you want maximum legal protection.

2. Do a search on websites like www.ratebeer.com or www.beeradvocate.com before deciding to print 1000 labels with the cool name you have just come up with.

3. If you do find someone using the name, or find someone using your well established name, don’t take it personally. Though I can appreciate the pride involved in the brewing of beer it simply does not make commercial sense in many circumstances to simply start a dispute. Work with the other party and try to arrange a compromise.

4. If a compromise is not forthcoming, speak to an Intellectual property specialist such as Virtuoso Legal. They will be able to advise you on the best course of action going forward.

5. Be different. In this current climate the market is being swamped with a tranche of very similar offerings. To be truly successful you must position yourself as unique. I am well aware that this is far easier said than done.

6. Don’t pass up on opportunities due to pride or short sightedness. Many breweries have now signed exclusive license agreements with major retailers to have their beer rebadged or have licensed the specifics of their recipes. This has provided many breweries with an excellent source of income for minimal effort. A license is something that you must get a specialist to draft.

For more information on this subject please contact:

Matthew Lingard

Virtuoso Legal

www.virtuosolegal.com

0844 800 8871