Prelude To Disaster: Craft Beer Trademark Applications Have Doubled In Ten Years

from the litigation-to-follow dept

We’ve been sounding the warning bells on this for some time now, but the craft beer industry has a trademark problem. As the industry continues its explosive growth, bringing with that growth all of the benefits to the economy and to the public along with it, so too has grown the industry’s use of trademarks on all of these new brands. What once was a relatively small cottage industry filled with congenial small players has morphed into very big business. Morphing with it has been that congenial attitude in the industry, with craft breweries now far more protective of their brands and far more willing to send out legal threats and engage in court battles over intellectual property than ever before. It’s gotten to the point that even intellectual property attorneys are beginning to warn everyone that the lawsuits and threats are going to inevitably increase. This represents a roadblock to an otherwise thriving industry and it’s only going to get worse.

That’s because, in the last ten years alone, trademark registrations for craft brews have doubled in number, while just this past year at least one market has seen a twenty-percent increase in registrations.

Registrations for UK beer brands increased by 19 per cent in the last year, according to London-based law firm RPC. The number of new trade marks rose from 968 in 2007 to 1,983 in 2016. The firm said the wave of trademarking came in the wake of craft beer’s increased popularity.

For anyone paying attention to the effect stringent trademark laws and our protectionist culture can have on an industry, the craft beer market is going to provide a wonderful lesson. If proponents of strict trademark law are to be believed, if trademark laws are generally benign or to the public benefit in other words, then the growth will continue. If those of us who have foreseen the coming disaster for some time are correct, however, growth will slow and trademark disputes will explode.

It’s almost a perfect storm for this kind of thing. Craft brewing has elements both of skill and creativity to it. The industry long operated on the fringes of trademark law, with brewers rarely going to battle over creatively named beers and companies. While we’ve already stated that this practice has begun to change over to protectionism, the doubling of trademark registrations in only a decade’s time within a rapidly growing industry, is the kind of outlier that will give us an answer to how trademark laws impact the industry.

Jeremy Drew, a commercial partner at RPC, said the craft beer sector has been “booming”.

“With more players in the market it’s becoming more important that companies protect their intellectual property,” he said, adding that an increase in trademarks could lead to more legal disputes between brands.

It seems obvious to this writer that an increase in disputes will slow growth and scare off potential entries to the market. It may also result in breweries closing due to legal costs and disputes. If that indeed happens, it seems clear that the public is not benefiting from a craft beer market that isn’t maximized, either in consumer options or in benefits to the wider economy. After a decade of explosive trademark registrations, the coming decade in the craft brewing industry is going to be very instructive.

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Comments on “Prelude To Disaster: Craft Beer Trademark Applications Have Doubled In Ten Years”

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11 Comments
Anonymous Anonymous Cowardsays:

Beer Market

This made me curious about the state of the beer market overall. With the growth of craft beers, there must be some impact on the whole beer market. This is a bit over a year old, and from USA Today no less:

Craft beer sales in the U.S. continue to grow, as overall beer sales have remained flat in recent years. Craft brewers command about 19% of the $100 billion U.S. beer market ? up from 10% in 2012, according to the Brewers Association.

I can imagine the big breweries imagining the big consolidation they expect to engineer, as that is the only way they are going to satisfy their stock holders. The questions they will have to answer is will they buy a bunch of small brewers and try to market them all, or will they buy a few small brewers and try to make them all national brands?

Either way, that fight over trademarks will just get worse in the ensuing dogfight over big brewer trying to recapture the market share being taken over by quality and diversity, rather than quantity and consistency.

Annonymousesays:

The conglomerates have already been gobbling up smaller brewers here in Canada.
Unfortunately their nationalisation results in the loss of jobs as small brewers are closed and the products homogenized intro the same bland product that everybody was running away from.
This cycle will continue until they effectively block new players from entering the industry when they have all tge names.

SirWiredsays:

I don't think it's exactly an industry crisis

Yes, the proliferation of trademarks and increases in trademark disputes are a problem, but hardly the industry-defining issue the article makes it out to be.

In typical TechDirt fashion a large and complex issue is presented as a false dichotomy: “If proponents of strict trademark law are to be believed, if trademark laws are generally benign or to the public benefit in other words, then the growth will continue. If those of us who have foreseen the coming disaster for some time are correct, however, growth will slow and trademark disputes will explode.”

Or, C: The question of craft beer industry growth (or lack thereof) won’t hinge on trademark law at all, and instead will be subject to market forces completely unrelated to trademark law.

As a side-note, articles about the health of “craft” brewing are widely inconsistent because nobody can agree on a definition of what a “craft” brew/brewery is. Definitions range from “Any brewery not owned by the major international beer conglomerates” (but does a brewery become inherently uncrafty because it’s ownership has changed if the beer remains the same?) to “Any brewery that produces no more than X barrels per year.” (Is there any less craft involved just because a particular brewery figures out a winning formula and expands?)

Dismembered3posays:

To be fair...

To be fair, craft brewers have spent the last few years getting the shit sued out of them by other people who make beer; people who make alcoholic beverages other than beer; people who make beverages, but not alcoholic ones; people who make food, but not beverages; people who make stuff that isn’t food-related at all; people who don’t even make stuff; sports teams; geopolitical subdivisions; and my uncle Joe.

Can we blame them?

NeghVarsays:

Trademark of full name

One of the big problems with the craft beer trademark wars is that they seem to think that each separate word or number in their name is trademarked. It needs to be exclusively the full name. For instance, Company A’s Velvet Hammer should not claim trademark infringement over company B’s Sledge Hammer and Company C’s Velvet Ale.

NeghVarsays:

Re: Re: Re: Re: Trademark of full name

I meant that it should be full name in all trademarks. “Monster Cable” “Apple Computers” “Candy Crush” “Edge Games”

Formal name of Apple
Apple Computer Company
(1976?1977)
Apple Computer, Inc.
(1977?2007)

Formal name of Monster
“Monster Cable Products Inc.”
yet they sue anyone or anything with the word “Monster” in it. Perfect example of a TM troll. The think that we are so stupid you’ll think they’re part of a car transmission shop, or a used clothing store, or a bunch of minigolf courses, or a Pixar movie, or a job search website.

So market players realizing that they have a valuable asset to protect is a prelude to disaster?

Are you suggesting that the craft beer industry can only succeed if craft beers of various breweries can be so similar as to cause confusion on the marketplace? I’m not buying that argument. Just because several (ok, many) smaller breweries wouldn’t bother to check if their brand is available doesn’t signal that the industry is broken. What is demonstrates is that many business owners are being duped by the media (this article being a good example) into believing that intellectual property is some kind of anachronistic hurdle that must be overcome.

Andrei Mincov
Founder and CEO of Trademark Factory? / https://trademarkfactory.com, the only firm in the world that offers trademarking services with a predictable, guaranteed result, for a predictable, guaranteed budget. We can help you register your trademarks with a free comprehensive trademark search, for a single all-inclusive flat fee, with a 100% money-back guarantee.

Denosays:

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