Under the Reinheitsgebot, Germany’s 500-plus-year-old beer purity law, a brew including anything other than hops, barley and water is verboten. The strict brewing rule is world-famous, but arguably also limits experimentation. In Oregon, however, a beer knows no bounds, and new beers, as well as new breweries, continue to pop up.
Although brewing is a collegial industry, brewery competition does grow tighter, and there’s a growing interest in protecting brands — and even innovative beer recipes and processes — as intellectual property. After all, a brewery’s unique approach to beer and consumer experience distinguishes it in a crowded marketplace — and that uniqueness can be a key factor in attracting more consumers and helping the brewery grow.
Unfortunately, some brewery owners do not take steps to protect their intellectual property, and that often means heartache when competitors release beers with suspiciously similar labels or key employees take recipes or secret brewing methods with them when they leave. The first step to knowing what should be protected in the beer business is to understand the four basic ways that intellectual property is protected:
A brewery’s name, its logo, the names of its beers and in some cases bottle designs can all be protected by trademark law. The U.S. Patent and Trademark Office (USPTO) defines “trademark” as a “word, phrase, symbol and/or design that identifies and distinguishes the source of the goods of one party from those of others.”
Label designs, marketing materials and a brewery’s website fall under copyright law, which protects “original works of authorship, including literary, dramatic, musical and artistic works, such as poetry, novels, movies, songs, computer software and architecture.” Copyright protection lasts a long time — 70 years after the author’s death for individuals and as long as 120 years after creation for copyrights owned by businesses.
Recipes, customer and vendor lists, and brewing methods can be protected as trade secrets, which the USPTO defines as any information used in a business that gives the owner an economic advantage over competitors who do not know or use the information.
The USPTO explains that a patent is a “limited duration property right relating to an invention,” granted by the USPTO “in exchange for public disclosure of the invention. Patentable materials include machines, manufactured articles, industrial processes and chemical compositions.” While often difficult and expensive to get, aspects of the brewing industry, such as innovative devices and methods for brewing beer, are patentable. For example, patent number US8584665 was issued to Krones AG, a German packaging machine manufacturer, for a brewery plant and method that utilizes solar energy.
To adequately protect intellectual property, you as a brewery owner or manager should know what intellectual property you have and understand its value in the same way you understand the value of tangible property such as furniture, equipment and buildings. In fact, a brewery’s intellectual property — a compelling brand or popular original beers — is frequently that brewery’s most valuable asset. You don’t have to protect everything, and doing so can certainly be costly and time-intensive. But taking stock of what makes your brewery valuable and what sets it apart from competitors can help you prioritize the intangible property that is worth protecting.
Just as important as protecting your own intellectual property is ensuring that you don’t infringe on the intellectual property of others and put your business (or yourself) in legal or financial peril. For example, if you’re looking to name your new brewery or design a new label for your latest brew, you may want to stay away from the moose. Moosehead Breweries has been actively trying to prevent any other beer, even root beer, from having a moose logo or the term “moose” in its name. In total, Moosehead has initiated 93 opposition or cancellation proceedings at the USPTO, filed a handful of trademark-infringement lawsuits in federal court, and doubtless sent hundreds of cease-and-desist letters to businesses large and small throughout the U.S.
And who can forget the town crier in medieval garb sent by AB InBev to read a cease-and-desist scroll to Modist Brewing Co. in Minneapolis? AB InBev objected to the name of Modist’s newly released “Dilly Dilly” Mosaic Double IPA, which used a catchphrase recently popularized by its Bud Light campaign ad.
This type of aggressive trademark enforcement, with the money to back it up, can be very successful in scaring off competitors. Though it’s costly to be forced into a name change on every branded item, it can be even more expensive to fight an allegation of trademark infringement, leading many a business to believe, as does Scott Falke, owner of the formerly named “Ninja Moose Brewery” in Hamilton, Mo., that “[t]here’s nothing a small guy can do.” When a brewery is just starting out or releasing a new beer, doing some initial research to see whether your desired name is already being used by someone else can help prevent costly disputes or undesired (and hurried) rebranding down the road.
Intellectual property disputes often result from disagreements between people — for example, between co-owners or partners in a brewery, or former employees. Thinking through how intellectual property might be treated if a business partnership dissolves is important. A good partnership agreement will outline in advance how intellectual property might be fairly handled. It’s also critical that agreements with anyone creating intangible property for the brewery ensure that the brewery owns the resulting intellectual property. Confidentiality agreements for key employees who handle intellectual property such as recipes and proprietary brewing methods are also important, and those key employees should sign these agreements as a condition of employment. Noncompete agreements can also be helpful, but they are not always binding, so check before you ask employees or partners to sign them.
While protecting your intellectual property may seem like just another overwhelming task in a busy operation, much of this protection can be obtained relatively easily with help from a lawyer who understands the issues inherent in the beer industry. The first step is identifying what you should protect. Once you’ve determined what’s unique and desired about your brewery or business, creating a system to protect it can be fairly straightforward. Protecting and maximizing the business’s value is at the top of every business owner’s list. And in the case of intellectual property, taking small steps now can pay off in a big way. •
Alicia Bell is an attorney at Miller Nash Graham & Dunn where she helps clients develop and implement intellectual property strategies that are consistent with their industry, business priorities and corporate culture, including the acquisition, protection and licensing of copyrights, trademarks and other assets. Alicia can be reached at email@example.com.
Carla Quisenberry is an attorney at Miller Nash Graham & Dunn where she focuses on intellectual property law, including the preparation and prosecution of patent applications and evaluating patentability and freedom to operate. Her practice also includes preparing and prosecuting trademark applications and evaluating trademark availability for use and/or registration. Carla can be reached at firstname.lastname@example.org.