Trademark Infringement for Breweries
By Douglas R. Luther on June 29, 2017
This guide looks at how to know whether a brewery's name or the name of a beer infringes on a trademark.
I. Trademarks and the Lanham Act
A trademark means any word, name, symbol, or device or any combination thereof used by any person to identify and distinguish his goods from those manufactured or sold by others and to indicate the source of the goods. For breweries, this can mean any word, design, slogan or sound used to identify a brand, beer or brewery.
The Lanham Act is the primary federal trademark statute of law in the U.S. The Act prohibits trademark infringement, trademark dilution, and false advertising. Additional claims can often be brought under applicable state law.
II. Protectable Interest in the Marks
To establish a trademark infringement claim, a party must show that it has a protectable interest in a mark.
The standard test of ownership is priority of use. To acquire ownership the person or entity must have been the first to actually use the mark in commerce. A mark must be used in the actual sale of goods or services to enjoy trademark protection under the Act. In the case of a brewery this means that the beer is actually sold and marketed to the public.
The registration of the mark along with continuous use can show ownership. Under the Lanham Act, a mark attains incontestable status in a category if the registrant continuously uses a mark for five consecutive years after registering it in that category. So if a brewery registers a mark and proceeds to continuously use the mark for five years, this is strong evidence of the brewery's right to exclusive use of the mark.
III. Likelihood of Consumer Confusion
To establish a trademark infringement claim, a party must show that the defendant's use of the mark is likely to cause customer confusion. To determine whether this occurs involves the following factors.
1. Strength of the Mark;
The strength of a mark is determined by its placement on a continuum of marks from ‘generic,’ afforded no protection; through ‘descriptive’ or ‘suggestive,’ given moderate protection; to ‘arbitrary’ or ‘fanciful’ awarded maximum protection. Arbitrary marks are common words that have no connection with the actual product. An example of an arbitrary mark would be Brooklyn Black Ops beer, as it does not describe or suggest a particular quality regarding the beer.
2. Proximity of the Goods;
The “proximity of the goods” factor concerns the relatedness of goods. The greater the similarity between the products or services, the greater the likelihood of confusion. Where both parties are selling beer, courts generally consider this factor to weigh heavily in favor of finding a likelihood of confusion.
3. Similarity of the Marks;
Similarity of the marks is tested on three levels: sight, sound, and meaning. Each must be considered as they are encountered in the marketplace. For beer bottles, this usually involves doing a side by side comparison of the similarities. Greater weight is usually given to the name than the design. This is particularly so for alcohol beverages as they are frequently purchased at bars and clubs without the purchaser seeing any bottles or labels.
4. Evidence of Actual Confusion;
Evidence that the use of the two marks has already led to consumers being confused is persuasive proof that future confusion is likely. However, in circumstances where one party has just commenced sales or a party is moving into a different territory for the first time to start selling a beer, this factor is not considered as important.
5. Marketing Channels Used;
Convergent marketing channels increase the likelihood of confusion. In assessing marketing channel convergence, courts consider whether the parties' customer bases overlap and how the parties advertise and market their products (e.g. online social media such as Facebook, Instagram). Beer drinkers as a whole are considered a customer base. Thus, if two breweries are selling beers they will often be found to be in the same marketing channel.
6. Type of Goods and Degree of Care Likely to be Exercised by the Purchaser;
Beer is a consumer item and is often purchased many times a year. Courts conclude, fairly or not, that a reasonable consumer is therefore unlikely to exercise a high degree of care in selecting beer. This weighs in favor of finding a likelihood of confusion.
7. Defendant's Intent in Selecting the Mark; and
When the alleged infringer knowingly adopts a mark similar to another's, courts presume that the infringer intended that the public be deceived. Whereas, if the infringer did not know of the other mark this can show good faith in selecting the mark. This is often the case for breweries who may adopt a name for a brewery or a beer not knowing that another brewery or beer across the country shares the same name. While this factor will not defeat a trademark infringement claim, courts are more likely to be lenient with a good faith actor in fashioning a remedy for the infringement.
8. Likelihood of Expansion of the Product Lines
In cases dealing with noncompeting goods, courts will determine whether it is likely that the trademark owner will expand its line of products to include product types like the infringer. For example, a soda company may be more likely to start to sell beer than a company that sells furniture. So there would be a greater likelihood of confusion between marks of a brewery and a soda company than a brewery and a furniture company.
A court will apply each of these factors in their totality in determining whether there is a likelihood of consumer confusion. A party can establish trademark infringement by showing both a protectable interest in the trademark and a likelihood of consumer confusion.
This article was prepared by Douglas R. Luther (email@example.com), of the Irvine law firm of Mulcahy LLP. Mulcahy LLP is a boutique litigation firm that provides legal services to franchisors, manufacturers and other companies in the areas of antitrust, trademark, copyright, trade secret, unfair competition, franchise, and distribution laws.
Disclaimer: While every effort has been made to ensure the accuracy of this article, it is not intended to provide legal advice as individual situations will differ and should be discussed with an experienced franchise lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.