As most brewery owners already know, your brand is a crucial business asset that takes a great deal of time, energy and money to establish. There are many things to consider when developing a brand strategy for your brewery. Below are six key legal issues you should keep in mind.
1. Recognize the value of federal trademark registration
A strong trademark or portfolio of trademarks can be extremely valuable to your business. Despite this well-known fact, one of the most common misconceptions among startups is that registering for a domain name or applying for entity status or a “d/b/a” through the Office of the Secretary of State in a given state will create trademark rights. This is not true. Although trademark rights can accrue from consistent use of a mark or logo, in order to obtain a federal trademark registration you must file and successfully pursue an application with the United States Patent & Trademark Office (USPTO).
An unregistered trademark (or “common law” trademark) provides some benefits, but a federally registered mark has many advantages. Federal trademark registration is essentially an insurance policy for your brand. It puts others on notice of your established rights and reduces the likelihood someone will unintentionally select a confusingly similar name. Failure to obtain a federal trademark registration may lower the value of your brand and even harm your overall business, since it opens the door to competition and reduces your ability to enforce your trademark rights against others. If disputes arise with other registered or unregistered trademark owners, determining the exact territory of the unregistered trademark or the parties’ respective priority dates can be difficult.
2: Look before you leap
Thoroughly vet your brand in advance of officially launching it or applying to register a trademark. Vetting helps ensure that you won’t be spending precious time and money promoting a name and logo, only to discover that it’s already taken by someone else and you have to start from scratch.
So before applying for a registration or officially choosing your name, always first engage in clearance searching. Clearance searching is the process of analyzing whether a given trademark is “available” for use and registration. To be most effective, a clearance search should include a thorough review of:
- Existing federal and state trademark applications and registrations;
- Applications for labels submitted to the Alcohol and Tobacco Tax and Trade Bureau through its Certification/Exception of Label/Bottle Approval (COLA) online;
- Unregistered trademarks and brand names being used across the U.S. and in social media (i.e., Facebook, LinkedIn, Twitter, etc.).
The process of evaluating whether a given trademark is available can be tricky, especially given the large number of breweries, wineries and distilleries operating with unregistered trademarks across the United States. Therefore, you should seek the counsel of an experienced trademark attorney to spearhead this process and assist with the evaluation of risk in using a particular trademark.
3. File trademark applications early and often to avoid disputes
Most startup breweries have limited funds to invest in their new businesses and track every dollar. As a result, securing a federal trademark registration often falls to the bottom of a very long list of expenses and priorities. As any one of the dozens of breweries embroiled in trademark disputes recently can attest, however, this is a mistake. Failure to proactively secure a trademark registration can lead to costly and protracted disputes or forced rebranding, which will ultimately distract you from running your business and may lead to negative publicity for your brewery. Most trademark disputes can be mitigated or avoided by promoting a business culture of “early and often” trademark searches and registration — not only for the name of your brewery, but also for the names of each beer you produce.
So, when should you begin thinking about protecting your brands? Yesterday.
The reason the brewing industry is struggling with so many trademark disputes is twofold:
- The explosion in the number of craft breweries in the United States in recent years.
- The failure of many of these breweries to follow sound brand protection strategies.
In general, brewery culture is relatively informal, and a great deal of business is conducted via “handshake deals.” When it comes to protecting your brand, however, this type of informal dealing can lead to complicated and messy disputes among breweries. Given the ever-growing number of breweries in the United States, the single most helpful thing the brewing industry can do today to minimize brewery-to-brewery disputes is to encourage trademark education among its members.