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Intellectual Property

Craft beer boom sets stage for fresh trademark battles

Canada’s current craft brewery boom could turn out to be the precursor for a new skirmish in the ongoing beer wars, Toronto intellectual property lawyer Taras Kulish tells AdvocateDaily.com.

“The trademarking issue for beer is age-old,” says Kulish, a senior associate with Steinberg Title Hope & Israel LLP, who explains that the two have been inextricably linked since the birth of trademarks.

In 1875, the United Kingdom's Trademark Act established the first controlled central registry recognizing trademarks as exclusive property. And the company that went down in history as the very first registrant was beer manufacturer Bass, which trademarked its distinctive red triangle — a design still in use today.

More recently, Canada’s Federal Court was the forum for an epic trademark battle between Molson Canada and Anheuser-Busch (AB). In the early 1980s, Molson-predecessor Carling O’Keefe Breweries of Canada launched the action, claiming the label of AB’s Budweiser beer infringed the mark for its Standard Lager.

AB hit back with a counterclaim alleging that the Standard mark should be expunged because it was itself copied from an earlier Budweiser label. The Federal Court of Appeal called the contest a tie of sorts, ruling that both sides could keep their registration even though they were confusingly similar.

While there was evidence Standard’s label was inspired by Budweiser, the appeal court ruled the passage of time allowed Carling to rely on the equitable defence of laches and acquiescence, in spite of the “cloud” on its initial registration.

Kulish says the recent explosion in craft breweries has laid the foundation for a fresh wave of trademark disputes.

According to Beer Canada, the number of breweries in Canada more than doubled between 2013 and 2017, leaping from 380 to 817.   

“Craft breweries tend to like more interesting and original names, but there are only a limited number of trademarks out there that are going to apply,” he says.

In fact, the first blows have already landed, as Kulish points out in a recent post on a Federal Court decision that expunged a beer manufacturer’s trademark. The judge in the case found it could be confused with a similar mark already in use by a wine company.

News outlets have also reported on the case of an Ontario brewery that was forced to change its name over a trademark dispute with a local rival, as well as a battle between upstart craft beer makers with similar names in Ontario and Nova Scotia.

According to Kulish, principals of newly founded breweries should think about registering marks early in the process and getting stakes in the ground before someone else beats them to it.

He says one look at the list of brands on the Ontario Craft Brewers association's website suggests the potential for confusion is high since brewers appear to have a particular penchant for names inspired by railways, canoeing and Canadiana.

“You have to consider if you’re restricting yourself,” says Kulish, who adds that it may be worth conducting an international trademark search before settling on a name if proprietors have designs on market expansion.

“While many of these craft brewers are proudly local, you should still think about getting a unique name in case you eventually want to access the U.S. market,” he says.

However, Kulish admits it could prove a struggle for producers to find a name that works in the U.S., where the scene is even more developed. As long ago as 2015, NPR reported that legal battles were heating up over the lack of available names for newcomers among the 3,000 or so craft breweries in that country at the time.  

“Virtually every large city, notable landscape feature, creature and weather pattern of North America — as well as myriad other words, concepts and images — has been snapped up and trademarked as the name of either a brewery or a beer,” the news outlet reported.

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