The Trouble With Brewin’

The Trouble With Brewin’

The fierce competition for trademarks in the beer industry

 

Disclaimer: In order to access most of the hyperlinks in the article, you will need to be 21 or older. Sorry, folks. Those damn lawyers really screw everything up.

 

As a trademark attorney, I deal with a lot of interesting situations (at least, I think they’re interesting) surrounding brand names. Many times business owners will come to me with what they believe is a simple question: Can I use this brand name? Unfortunately it’s rarely that simple, especially in industries that have seen a recent surge in popularity such as the craft beer industry.

 

You see, trademarks operate by industries, which means the exclusivity an owner holds over a brand name only extends to the industry they use it in. To use the beer industry for example, there is a Somerville-based company called “Pretty Things”*, but there are also registered trademarks for “Pretty Fun Things,” (art prints) and “Pretty Yum Things” (perfume and lotion). In different industries, similar or even marks that are exactly the same can co-exist just fine. But when one particular market starts to get crowded, things get sticky; especially in a field like craft beer, where creativity and branding are highly valued. Having a creative name for your brewery isn’t enough anymore – each brew now has its own name, and each brewery has gone to great lengths to meld recognizable features of a beer with a pun or a back story that will get consumers interested and motivated to spend that extra dollar. Some examples of the more light-hearted names include 21st Amendment’s “Hell or High Watermelon,” Dogfish Head’s “ApriHop,” and, one of my personal favorites, Legacy Brewery’s “Hoptimus Prime”. For a valued backstory as part of a brand name, check out Dogfish Head’s “Midas Touch”, Night Shift’s “Art Series,” and Boston’s own Backlash Beer Company’s Apocalypse Series, consisting of Conquest, War, and Famine.** Intrigued? Of course you are. This is what good branding is all about, and why its value is extremely high in the industry right now.

 

*the registered trademark is technically “Pretty Things Beer and Ale Project, but for the ease of the example bear with me.

 

**there was meant to be a fourth, titled “Death,” that never came to market. It’s sad, but it makes one hell of a good story. But you’ll just have to go to their site to find out what happened.

 

Inevitably, this emphasis on branding leads to “disagreements” about which companies can use which names, and how close brand names can be. So I thought instead of boring you with the intricacies of trademark law, I would highlight some of the more interesting examples of some trademark debates that have come out in the last year or two.

 

In early 2012, this response letter from Freetail Brewing Company surfaced after they received a cease and desist from Steelhead Brewing Company over the term “Hopasaurus Rex.” In brief, to make a lawyer joke (actually, I already made one. Brief?? Get it!?) — I call that getting served. I printed it out and taped it above my desk for over a year as inspiration. Seriously though. It went viral because of the snark but it is actually a very well written response, and gets straight to the heart of the nuances of trademark use. In the CEO’s brief one and a half page letter, he points out that Steelhead’s claim is erroneous because they are claiming to use the term as the name for a beer, while Freetail is using it to identify a beer-making process. Totally different things, Freetail claims. And while the CEO later went on to explain the matter further in a blog, this letter is a great example of why these small nuances matter, and why lawyers can’t always answer the question “Can I use this brand name?” with an affirmative yes or no.

 

Another example was in March 2013 with a messy dispute between Ska Brewing in Colorado and DuClaw Brewing in Maryland, which highlights the necessity of early trademark registration (this is different from merely using it in the marketplace). Ska had apparently been making a pale ale under the name “Euphoria” since ’05, whereas DuClaw claimed use back to ’06 in their trademark application. But after DuClaw applied for a trademark with the USPTO, they sent a cease & desist to Ska. In response, Ska slapped a big ol’ trademark suit on DuClaw, claiming earlier rights — and won. See, when you file a trademark, you’re presumed to have superior rights – and if you’re defending with an unregistered mark, you have to prove those rights. Now Ska holds that registration in beer for “Euphoria,” DuClaw has a dead trademark, and both racked up a pretty penny in expenses. This is an example not only of the importance of early registration of trademarks (which, if Ska had done this, they would have largely avoided this entire dispute), but also a lesson for DuClaw in enforcement strategies when you don’t have superior rights to a trademark. (Interestingly enough, the article linked above notes that DuClaw had a history of naming their brews rather similarly to others and had received prior cease and desist letters themselves in the past.)

 

Finally, in May 2013, there were some rumblings between Oregon Brewing – brewers of Rogue Dead Guy Ale – and Rogue 24, a Washington-based restaurant. In this situation, Oregon not only has a brewery and a line of beer, but also has a public house and a USPTO registration for beer, restaurants and brewpubs. Rogue 24 cried foul and bullying, and it does seem that Oregon’s strategy was pretty aggressive, even calling for the transfer of the domain name. However, in trademark law the motto is often “use it or lose it,” which basically mandates that trademark owners defend their turf.

 

So, what do you think? I would love to hear your thoughts, entrepreneurs, brewers and beer drinkers alike:

 

  • In the case of “Hopasaurus Rex,” is there enough market separation between using the same name for a beer and a brewing process?
  • With “Euphoria,” should the first to register have superior rights? Did Ska misstep by failing to register first and then having to prove their rightful claim?
  • And with “Rogue,” is one brick and mortar modernist restaurant close enough to derail a brewpub’s trademark?

 

Shannon is an attorney and co-founder of New Leaf Legal, a law firm serving entrepreneurs, socially-minded businesses, and artists. She lives in Watertown with her husband, 3 cats, and their shiba inu, Raiden.

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The Food Waste Ban

The Food Waste Ban: Another Bold step in Massachusetts Innovation.

Once again leading the nation by example, Massachusetts is the first state in the US to ban businesses from putting organics (generally food and plant waste) in the trash.  With a staggering food waste problem just starting to be addressed in the US, eyes are on Mass as we change a problem into a job creating, energy producing, and money saving opportunity.

20 to 25% of the state landfill waste is made up of food waste and organics, with tens of millions metric tons of food waste being produced annually across the nation.  Organic waste produces methane, which is about 25 times more potent than carbon dioxide and a big factor in climate change.  Massachusetts has implemented the ban as a means to help reach the Commonwealth’s waste stream reduction goals, of 30% by 2020 and 80% by 2050.  It is estimated that compliance with the regulations will divert several hundred thousand tons of waste from entering our landfills (about the same environmental effect as taking 41,000 cars off the road)*.

The Ban, which goes into effect July 2014, currently applies to those businesses that dispose of one ton or more organic waste per week, mainly large food operations, venues, grocery stores, schools/colleges, hospitals, large restaurants, etc.  Those businesses must donate, re-purpose, or compost as much waste as they can and the remainder must be sent to an Anaerobic Digester facility.  Along with this ban, the state is making $4million in funding available to innovate in the creation of sustainable energy via Anaerobic Digesters, which are facilities that use microbes to break down food waste, yard waste, and other organics and convert them to heat and electricity.   AD facilities in Massachusetts are a growing market with a shown history of job creation in the past few years and a way to make our waste work for us.

Eliminating food and organic waste is not a new thing in Massachusetts.  Several notable businesses had already been exercising these measures and reaping rewards for their efforts.  Big Y supermarkets have been implementing food waste reduction measures since the 1990s.  Fenway Park began commercial composting in 2011 and several innovative businesses and non-profits in the state have popped up to start addressing food waste issues.*

While only the largest venues are subject to the law, the regulations are a good guideline for any business and the Red Sox have shown us that you can bolster your bottom line in the process.   Businesses get a tax deduction for donations to non-profits while at the same time reducing their waste costs.  Many farms and other organizations will haul the waste away for free and if any remains, the cost for composting or hauling waste to an AD is usually equivalent to the cost companies are already paying to haul away their trash.  Plus, don’t forget the good will you get from customers!  The current law, if successful, will likely expand to include smaller food producers, so at the risk of being hipster….Get on board before it is cool.

The state has published a guide to reducing food waste that gives great action steps and resources for any size business to implement these changes, including:

  1. Conduct a food waste audit for your business, so that you have a baseline to start with.
  2. Change your ordering/purchasing process to prevent a food surplus.
  3. Donate food to organizations such as Lovin’ Spoonfuls, which picks up and delivers food to shelters and soup kitchens, or donate directly to the shelter.
  4. Donate to farmers or zoos for animal feed. Myrtle the Turtle eats a lot of greens.  Help a turtle out.
  5. Check into composting companies, like Bootstrap Compost and Save that Stuff (serving both commercial and residential customers). They can haul the waste for you and match (or be less than) your cost to haul trash to the landfill.

Save Money, Save the Planet, but most importantly, let’s show other states how it’s done.

Jessica R. Manganello, Esq. is a business attorney with New Leaf Legal, LLC.  Her focus is on sustainable and social minded businesses, with a passion for food and building a local economy.

 

*Sourced from Greenbiz.com, Dana Gunders

 

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Cottage Food Act and Massachusetts: How can you start an artisan food business in your home kitchen?

Most of us either have that one secret recipe, or know a master home chef that has that amazing recipe, that everyone covets.  They are constantly being asked to bring that cake, guacamole, or in my case, grits to the parties and barbecues.  “This is so good, you should sell this!” is the frequent refrain until one day, you just have to take the plunge and try out your food passion as a business.  Massachusetts has a growing artisan community on all fronts, but especially food.  Our numerous farmer’s markets, specialty shops (both brick and mortar and online), and incubators are paving the way for local entrepreneurs to take their products to market and connect with consumers in new ways.

The idea of starting a food based business can seem a bit daunting, given all of the rules and regulations around food production, but Massachusetts has some great laws that allow you to start in your home kitchen and get a foothold in the marketplace.    Often referred to as Cottage Food Acts most states have legislation that allow for home cooking to be sold to consumers.

In Massachusetts, you can have a retail residential kitchen if you are selling your product directly to the consumer, for instance farmer’s markets, direct orders, consignment, etc.  If you are selling to retail stores and restaurants, you may qualify as a “Wholesale Operation”, which has a different set of rules.  Residential kitchens need to be inspected and you need to secure a permit.  The inspection and permitting process is conducted by your local town or city board of health and the permitting costs and inspection procedures vary from town to town, but are usually low cost and don’t require expensive alterations to your kitchen.  Things to think about are having a separate shelf or portion of a shelf in your refrigerator for storage of your business supplies.  Keep your cooking equipment clean (you can use your dishwasher).  Keep your pets out of the area while you are preparing foods for the business.  If your washer and dryer are in or near the kitchen, then don’t run them while you are preparing foods.  Be sure to contact your local board of health to get a full list of requirements.

The determining factor for whether you can use your home kitchen is whether you are producing non-potentially hazardous foods (non-PHFs) or potentially hazardous foods (PHF).  Non-PHFs are items such as jams and jellies, most baked goods, and confectioneries.  If your finished product does not require temperature control, then you are probably working with non-PHFs.

PHFs include products with meat, dairy, baked goods with cream, custard or puddings, cooked pasta, rice, or beans, eggs, fruits and veggies, and pickled products, sauces, and relishes that need refrigeration.   If your baked good uses dairy or fruits, but doesn’t require refrigeration once cooked, then it is likely going to be classified as a non-PHF.

So, we have a licensed residential kitchen creating non-PHFs for sale directly to the consumer.  There are still a few more requirements: 1. You have to comply with the state labeling requirements (see link below); 2. Only household members can be employees of the business; 3. You can’t use brokers, wholesalers, or a warehouse to store, sell, or distribute your product; and 4. You can’t sell your product out of state.  (For a full explanation of the rules, see the link below).

If you are creating a product that is considered to be a PHF or growing out of your home kitchen, you have options.  There are several communal commercial kitchens available in Massachusetts and more getting started each year.  These kitchens allow you to time-share the space, so that you get all the benefits of a commercial kitchen at a price that works for the entrepreneur.  Check out Crop Circle Kitchen.

Now you have an entity (always important), a license, and a permitted kitchen.  You are ready to sell.  Be sure to get acquainted with your local famer’s markets.  Pay special attention to Undiscovered Kitchen, a local business that is launching soon, creating a market place for artisan food products.  Be sure to review the additional information provided below.

Resources:

Residential Kitchen FAQs

Food Labeling FAQs

Starting a Wholesale Food Biz

Sam Adam’s Brewing the American Dream (great opportunity for education, support, and financing)

Jessica R. Manganello, Esq. is a business attorney with New Leaf Legal, LLC.  Her focus is on sustainable and social minded businesses, with a passion for food and building a local economy.

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Truly Green Beers for St. Patrick’s Day

Truly Green Beers for St. Patrick’s Day

For those of you who actually needed a reason to drink beer, it has arrived.

Given the rise in consumer awareness when it comes to organic foods and the environment generally, there has been a surge in innovation from food and beverage producers to meet that demand.  Beer crafters have actually been somewhat ahead of the curve.  Microbreweries have been particularly active espousing both the “buy organic” and “buy local” movements.

By now, most people know about Peak Organic, a great organic brewery born here in Massachusetts in 1998 (now in Portland Maine).  The founder, Jon Codoux had a passion for beer brewing and a sustainability ethic, realizing that if you combine both, you can make some kick ass beer and support your local economy.  There are a range of organic and fair trade beers to suit just about everyone’s taste, featured on a fun website that shows just how local and funky this brewery gets.   The Espresso Amber Ale for instance, is made with organic fair trade coffee beans from an indie coffee shop located down the street from Peak.  The Maple Oat Ale is made through a collaboration of organic farmers located in Maine and Vermont.   The Pomegranate Wheat Ale with a touch of organic coriander….well I am just bringing that one up because it sounds really good.

Wolaver’s Certified Organic Ales since 1997 is located in Vermont.  Wolaver’s was one of the first USDA certified organic breweries and they don’t stop at just organic ingredients.  They bring a four prong philosophy to their entire brewing and distribution process.  1. They have four different organic certifications for their brews; 2. They employ energy reduction techniques to their brewing process including, a biodiesel  boiler, heat recovery, an energy efficient lighting system, and using local ingredients to minimize green house gases in transportation; 3. Depleted ingredients like hops, grains, and petals are sold to local farmers as cattle feed, they have an in-house waste water treatment system, and they use all recycled and bleach free materials for their packaging; 4. Finally they try to source everything the brewery needs locally to support their community.  With Ales, Stouts, and a nice collection of Seasonals, Wolaver’s beer is definitely something you can feel good about drinking.

Kona Brewing Company in Hawaii has also been sustainably focused since its founding in 1994.  Besides, organic beer, selling depleted ingredients to local farmers (and pizza/bread dough makers, hmm), recycling programs, and heat reclamation use, they are going solar.  Kona received quite a bit of press recently when they announced their plans to install a 229kW solar energy generating system at their brewery and pub location.   The PV system is estimated to produce an average of 900 KWh of electricity each day, allowing Kona to offset nearly 60 percent of its current electricity usage and save around $100,000 per year.  When guests visit the brewery they will get to view a real-time monitor showing how much energy is being generated while they sip on their beer.  So everyone, next time you are in Hawaii…..

Of course, Kona is not the first, nor the only brewery to go down the solar path.  Other locally and sustainably focused crafters are moving in the same direction, including: Anderson Valley Brewing Company and Sierra Nevada in California, Lucky Labrador Brewing Company in Portland; and New Belgium Brewing in Colorado.

So there you have it! Reasons or more reasons to drink beer and support small producing craft breweries as well as your local economy.

As always kids, DRINK RESPONSIBLY!

Side note: If you are not familiar with Microbreweries in your area, I suggest you start looking into them or you will be missing out on some great brews.  Matt Webster from Drink A Better Brew, here in Massachusetts, has an informative blog packed with the latest beer news you should know.

Peak Organic Beer: http://www.peakbrewing.com/

Wolaver’s Organic Ales: http://www.ottercreekbrewing.com/wolavers.html

Kona Brewing Company: http://www.konabrewingco.com/

Dogfish Head in Delaware (not organic as far as I know, but they are my favorite and therefore must be included): http://www.dogfish.com/

This post was authored by Jessica R. Manganello, Esq. of New Leaf Legal, LLC. Check out more at http://www.newleaflegal.com and @Mangojess.

Tags:  Alcohol, Beer, Breweries, Green, Local, Organic, Solar, Sustainability, Sustainable Business

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What do these labels even mean?!

What do these labels even mean?!?!?!

So, I was surfing the web yesterday and I came across the most fantastic invention to date: bacon stuffed hot dogs. (http://www.4505meats.com/shop/#)  Oh. My. God. Yumm!

I know, I know.  As a total, annoying, scold your friends for being wasteful, Greenie, my love of meat is a bit of a contradiction.  We all have our vices.  I have several Michael Pollan books sitting on top of my “too read” pile and the greenness of a meat vs. vegetarian diet debate will have to wait until another day.  On the plus side, the 4505 hot dogs are made with all natural ingredients, uncured, and hormone & antibiotic free.  So, that is sustainable and healthy right?

This got me thinking.  How “natural” and healthy can you make a hotdog stuffed with bacon? What does “all natural” even mean?  Is this just the completed product? Does it include all the ingredients? Is this a representation of the entire life cycle of the product from birth of the animal until it ends up in my mouth?  I obviously need more hobbies.

This is a big issue, however, and there is a lot of confusion among consumers in the market place.  The big labels that exist are “certified organic,” “organic”, “100% organic”, “Made with organic ingredients”, “contains organic ingredients”, “all natural”, “natural”, “free range”, “sustainably harvested”, “no drugs or growth hormones”, etc.  Phew…….no wonder there is confusion.  So what do all these labels mean?

The USDA (United States Department of Agriculture) set up the National Organic Program (NOP) in 2002, which has put regulations and third party auditing systems in place.  The labeling requirements of the NOP apply to agricultural products, or rather raw, fresh products, and processed products that contain organic agricultural ingredients.   The terms a producer is allowed to use depend on the percentage of organic ingredients in the product.

“100 percent organic”—means that only organically produced ingredients* and processing aids are used.  So essentially, this is the best option.  Green through and through.

“Organic”—most of what we see is either labeled ‘organic’ or ‘certified organic.’ This means that at least 95% of the ingredients* must be organic.  Any remaining ingredients must be nonagricultural substances on the National List.

*excluding water and salt

For both of these it is good to know that while a producer may use the USDA Organic logo, they aren’t required to.  Good fact to be aware of while shopping.  Organic products must identify each organically produced ingredient in the ingredient list and they must identify their certifying agent. Organic foods must also be the product of organic farming practices, which are practices that recycle resources and promote biodiversity.  Crops must be grown without using synthetic pesticides, GMO’s, petroleum-based fertilizers, and sewage sludge-based fertilizers.  If it is meat that we are talking about, Organic livestock must have access to the outdoors and be given no antibiotics or growth hormones.

Also, any products labeled “100 percent organic” or “organic” cannot be produced using methods such as sewage sludge or ionizing radiation.

Wait, what??? Does that mean that non-organic products can be made using sewage sludge? Next time you come across someone who argues against organic, throw out that nice little tidbit.  Discussion over.

“made with organic ingredients”—these products must contain at least 70% organic ingredients and list up to three of the organic ingredients or food groups prominently.  i.e. “soup made with organic peas, potatoes, and carrots” or “soup made with organic vegetables.” Here again, no sewage and no radiation.

If a processed product contains less than 70% organic ingredients, they can’t use the term “organic”, but they can identify any organic ingredients in the ingredients section of the label.  So if you have time to read every can, jar, box, and or bag in the store, have fun with that!

“Natural”—this term is only regulated by the USDA when it is applied to meat and poultry (nothing else).  This term means that the foods are minimally processed and free of synthetic preservatives; artificial sweeteners, colors, flavors, or other artificial additives; hydrogenated oils; stabilizers; and emulsifies.   They are required to be minimally processed, meaning that the processing method does not fundamentally change them.  The labeling must also explain how the producer is using the term ‘natural.’ Using the term “natural” in line with the USDA regs, does not have anything to do with how the sources of those foods were raised.  Meaning, it has nothing to do with whether the animals were fed grass or corn, organic or not, hormones or not, etc.

Why do we go to all this trouble as a country to regulate Organic and why do we as consumers care you ask?  Good Question!

Well there are a lot of arguments stating that organic foods are not any healthier than non-organic.  Of course the food marketing institute in their 2007 report made that statement and then immediately followed it with the research showing that children who eat organic foods are exposed to “significantly lower” levels of organophosphorus pesticides.  I can’t pronounce that; it must be bad.  Organics also have significantly higher levels of cancer fighting antioxidants, generally 30% more.  Organically produced food also has lower levels of unsafe fungi than conventional samples, and less risk of e. coli contamination (in the case of livestock).  Every year more research comes out showing us that organic farming results in better nutrition for us and better environmental practices.  So that leads into why we nitpick and regulate.  We want to make sure that consumers are protected and know (and receive) exactly what they are buying.

There are penalties for misusing any of the USDA labels, or using them when not certified.  If a producer knowingly sells or labels any product as organic that is not produced and handled in line with the NPO’s regulations, they can be liable for a civil penalty of up to $11,000 per violation.  This also applies to retailers.  They are subject to regulatory requirements concerning their handling of organic products and are subject to fines of up to $10,000 per violation.  So they can’t knowingly sell a non-organic product that is labeled as organic (hear that Wal-Mart? tsk tsk), allow unpackaged organic products to contact unpackaged conventional ones, or permit organic products to contact prohibited substances like fungicides, preservatives, or fumigants.  This is a pretty tall order.

Again, Organic is the only regulated term.  So what about the rest?  “all natural”, “free range”, “sustainably harvested”……they can mean whatever the producer wants them to mean.  Generally speaking, when a producer uses the term “natural” or “all natural” when not referring to meat, they are expected to follow the USDA meat guidelines discussed above.  Since there are no regulations or oversight, however, it is pretty much up to the producer to define for themselves what “natural” means.

This is pretty dangerous, given that marketing studies have shown that American consumers mistakenly  believe that “natural” is actually greener than “organic,” that “organic” is a fancy way of saying expensive, and that “natural” is a regulated term.  “All natural” was the second-most common claim on food products available in 2008 and has increased in popularity.  If we go by the USDA meat requirement of minimally processed, then all natural products will not contain any ingredients not readily available to the average cook, aka nothing requiring a high tech lab.

If we go by this definition however, some of our most loved brands would no longer be able to label themselves as “natural” including Ben & Jerry’s, Kashi, and Gorton’s.  So for now we have to give ourselves an extra 30 minutes at the store to look at the ingredients list. Obviously, the term “natural” needs to be expanded and better regulated.  As does “free range” which is often used now to mean that there is access to the outdoors, not that the animals actually make it outside.  Think one doggie door for 30,000 chickens type of scenario.

So how do we protect consumers from all of these possibly misleading labels?  Do we have other regulations that can be applied?  Wow, these questions are so insightful; it is like I am asking them myself. Yes we do!

Tune in next month for my fascinating (and non-boring) post on FCC regulations against Green Washing.  J

 

 

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