Trademark Disputes: Vermonster v. Monster Energy Drinks; Smuttynose v. Bass Ale, &tc.

A few days ago, I received multiple copies of a YouTube clip in which Matt Nadeau, owner of the tiny Rock Art Brewing in Vermont, describes the dispute he finds himself entangled in with a corporate behemoth over the use of a trade name. In short, Rock Art produces a barleywine called Vermonster, which Hansen Natural Corp. claims infringes on its Monster Energy Drink line.

Watching Matt, whom I know to be a genuinely good guy who works hard and makes great beer, grimly describe his plight and the very real threat he faces, it is easy to see his justifiable hurt and outrage. Frankly, I hope the masters of Monster Energy drinks can be shamed into backing off, but I am not optimistic. I suspect that once a big corporation has loosed its lawyerly dogs of war, there is no turning back.

Still, in the age of YouTube and social networks, Matt and the good folks at Rock Art have a lot more leverage than they might have even a few years ago. If they succeed in giving Hansen Natural Corp a big enough black eye, perhaps the little guy will prevail after all.

As you might guess, disputes over trademarks are very common in the world of consumer products, where brand identity is everything. Trademarks are the most valuable assets producers of such products own. In fact, when one company is purchased by another, those assets are often the only ones of any value whatsoever. Sometimes a dispute results from a new company unknowingly infringing on an established mark. There are other cases where the infringement is deliberate, where one firm attempts to steal another's hard-earned brand identity. Other times, they arise from one party's overly broad interpretation of the protection their trademark is entitled to. Occasionally, I believe, trademark disputes are a form of corporate bullying, where a large firm with deep pockets threatens a smaller company with endless litigation, even if the claim has little merit.

Where does the case of Monster Energy Drinks v. Vermonster Barleywine fit in? I don't know enough details of the matter to say, but I am reminded of the various trademark disputes my companies have been party to over the years, especially the first one, in which the nascent Smuttynose Brewing Company found itself squared off against another corporate behemoth - Bass Ale.

The year was 1995. We had formed our company the year before and were busy bringing our first two products to market - Shoals Pale Ale and Old Brown Dog. In between more pressing daily matters I attended to various pieces of legal housekeeping, including registering our trademarks with the United States Trademark and Patent Office. I had been referred by our local attorney to a firm in DC that specialized in trademarks and patents, who promptly filed trademark applications for our logo, our trade names, as well as our catchy slogan (which we no longer use): "Make Mine a Smutty!" All this seemed like a fairly straightforward process, and I did not anticipate any problems.

When a new trademark application is filed, it is published for a period of time allowing it to be reviewed by other trademark holders for possible conflicts or infringements. Much to our surprise, during this review period, we received word that Bass Ale was challenging our application with the claim that it infringed on their well-established trademark.

My immediate reaction was "no fucking way!" According to the paperwork that Bass filed, their trademark consisted of a red triangle. It even stated that the color red was an "integral" part of their mark. Our logo depicted the head of a harbor seal framed by a yellow triangle in the background, over letters spelling Smuttynose (in Caslon Antique) Brewing Co. (in Bauer Bodoni and Kuenstler Script). In my view, there was little chance that any reasonable person would confuse Bass's elegant red triangle with our little pinniped.

I am by no means an expert, so take everything I'm about to say with caution, but, like most people in highly regulated businesses, I've become a bit of a jailhouse lawyer by necessity. And here's what I've learned over the years about trademark disputes. The crux of trademark law hinges on confusion. Does an offending mark create confusion in the eye of the consumer to the point where the offending mark benefits from the equity and good will in an already established mark? Or, to put it in the quaint phrase used by a trademark lawyer I once spoke to, "Is someone trying to reap where they have not sown?"

At the end of the day, that is the basic test that the successful defense of a trademark must meet. In some cases, this is pretty straightforward, a matter of common sense. For instance, if I manufactured a new line of baby food, and I selected the distinctive script used by Coca Cola for my branding, I'd certainly be challenged by Coca Cola, and they would have a compelling case because the likelihood that a consumer would associate that style of lettering, and thus my baby food, with Coca Cola is very high. At the same time, Coca Cola would probably not pursue a firm that used that script to market an MP3 player.

A real-life example is the clothing company that blatantly rips off the typeface used for decades by a large airline. Is American Apparel infringing on American Airlines trademark? Evidently not, because the are in completely different categories, which is an important distinction in trademark law. Clothing and airlines are entirely differently animals and are not likely to be confused. Another interesting aspect of trademark law that I learned is that color schemes can not be trademarked. That is why virtually every box or aspirin you see is yellow and brown, a direct imitation of the package of the original branded aspirin, Bayer.

Is there any chance that a reasonable person, when confronted with Rock Art's Vermonster Barleywine, might infer from that name that it is somehow connected to Monster Energy Drinks? I think most people would say the same thing I did when I heard about Bass Ale's challenge to our trademark application: "No fucking way!"

Sadly, however, being right does not always win the day. When I head about Bass Ale's challenge to our trademark application, I wanted to fight them because I felt we were right. But our lawyers gave me what I still consider to be some of the best legal advice I've ever gotten. They asked me, "What's more important to you, being right, or staying in businesses?" They explained that even though Bass Ale had, in their opinion, a weak case against our application, they had the resources to bankrupt us in the process. We could go to the mat over this issue, and we might well win, but it would be a Pyrrhic victory in the end, and it would snuff our little company out before it had even left the cradle.

I thought long and hard about it. Somehow it seemed so wrong to give in. At the same time, as I discussed it with my partner Joanne, who designed the original logo (and all Smuttynose images and packaging since), we decided that we could reconfigure the logo to satisfy Bass's complaint and at the same time come up with an improvement on the original.

Once we became open-minded to this approach, it was fairly easy to convert the original triangle that framed our little seal with a triangular-shaped rock. Bass's lawyers were satisfied with the change, and our trademark application was approved without further challenge.

I've never regretted making this decision. Frankly, I do think the amended version of our logo is an improvement over the original. I like to tell people that Bass might have inadvertently done us a favor by forcing us into this position. It's not a position I would have chosen, and certainly not one I'd wish on anyone else. It feels awful to have your dream and livelihood threatened by a huge, heartless corporation. Sometimes it is important to fight because you are right; other times it is not. You have to pick your battles carefully.

As I said, though, that was only the first of many trademark disputes that we've been party to. Interestingly, over the years, I've become more sympathetic to Bass Ale's position, as I've had to send several letter off myself to companies that I felt had trespassed on our intellectual property. Here are a few examples of other trademark disputes we've had to contend with:

RED NECK BEER v. CHUCK WHEAT ALE

Back in the mid 90's, we introduced a wheat ale that we called Chuck Wheat. Although it's been many years since we discontinued it, the label Joanne designed is still one of my favorites of all our labels. After Chuck Wheat had been on the market for about a year, we received a threatening letter from a law firm representing the putative manufacturers of a product called Red Neck Beer, claiming that our Chuck Wheat label violated their trademark. Accompanying the letter was a set of (unintentionally) hilarious point of sale items, promoting this beer.

Red Neck Beer had not yet gone into production (they were still looking for investors), but according to their literature, they had big plans to market to a Dukes of Hazzard demographic - microbrew for the NASCAR set. Their graphics consisted primarily of an illustration of a red bandana poking out of a blue denim pocket. The letter we received claimed that Red Neck Beer owned the exclusive right to use blue denim in any context related to beer. Leaving aside the audacious stupidity of the entire concept of Red Neck Beer, it was easy to see that this was merely a fishing expedition. We didn't bother responding to the letter, and we never heard back from our friends at Red Neck Beer. Thankfully, the American beerdrinking public never heard from them either.

THE SENSITIVE LOBSTERMAN v. PORTSMOUTH LAGER

A few months after the 1998 release of our Portsmouth Lager we received a letter from an attorney representing a lobsterman who claimed that because we had not sought his permission to photograph his buoy, we had violated his "registered trademark." Furthermore, the letter said, this lobsterman had experienced "pain and suffering" at the hands of his fellow lobstermen who had been ruthlessly teasing him about his buoy being depicted on a beer label. and suggested that he was entitled to some sort of compensation

Where do we start? I started by calling my attorney and asking if I could please, please, please write back to this lobsterman's attorney and tell him to go piss up a rope. My attorney, a wise and affable man, said no, I couldn't - he'd take care of the matter himself, and he did. Here's the deal. The photo on the label depicts a barn door located on a well-traveled road in York, Maine. The door is festooned with colorful buoys. Like many people in this region, the barn's owner had decorated it with lobster trap buoys that wash up on the beach after storms. We did get written permission from the property owner before taking our photograph, and that is all the permission we needed. And while it is true that holders of Maine lobstering licenses must register their color patters with the state, this is merely for the purpose if identifying submerged traps and has nothing to do with trademarks.

As far as the pain and suffering goes, I can't shake the image of this big, tough lobsterman, decked out in his bright orange bib, being brought to tears by the merciless taunting of his mates. Poor man! It truly breaks my heart. We never did hear back from him or his attorney, so I guess he got over it.

SMUTTYNOSE v. NUTFIELD (AS FRANK JONES PORTSMOUTH ALE)

In 2000, our now-defunct cross-state competitor, Nutfield Brewing, formed a partnership with Don Jones, the former owner of Frank Jones Brewing, where Smuttynose is now located, to revive the Frank Jones name. Frank Jones Brewing has a long history here on the seacoast going back to the 19th century; its final chapter ended with their bankruptcy auction in December, 1993, at which I purchased the equipment we used to start Smuttynose Brewing Company. To be honest, I wasn't that concerned when I first read about this new partnership in the Portsmouth Herald - Nutfield's sales were rapidly heading south, and the Frank Jones brand had never gained any traction before, and there was no reason to think it would be different this time.

I changed my tune, however, when I learned that they were planning to market this product as Portsmouth Ale, an historic Frank Jones brand name. There were several problems with this, in my view. First of all, we had registered the name Portsmouth Ale with the state of New Hampshire, though we had not used it in commerce. More importantly, we had been selling a product called Portsmouth Lager for several years at this point, and I was concerned that consumer confusion was a real danger. In addition, this product was explicitly affiliated with Portsmouth: the slogan on the label deceptively stated "First Brewed in Portsmouth - 1899." Brewed in Derry, it was clearly a carpetbagger's attempt to horn into our own home market. It was my opinion that Nutfield was trying to ride Smuttynose's coattails in an attempt to break into a market that they had never had much success in, namely the Seacoast.

But most of all, I was concerned about the potential this product had to damage to my company's reputation. I never held Nutfield's beers in particularly high regard, and the thought that people might think Smuttynose was making Portsmouth Ale made shudder. Nutfield was already beginning the slow, downward spiral that would lead first to its shuttering its plant and moving production to Shipyard in Portland, and later to its disappearance altogether. The Frank Jones partnership was one of the many straws that Nutfield grasped at on its way down the drain.

Over a period of several months I fired several letters off to the president of Nutfield, each worded more strongly than the last. I felt I had a good case against him. Predictably, he responded defiantly, disputing my claims. Just as I was preparing to initiate legal action, Nutfield abandoned its Frank Jones project, and it was never heard of again, so fortunately I was able to avoid suing a fellow craft brewer.

I do hope we never stumble into another trademark dispute. We've been fortunate so far in that we've avoided the courtroom and unpleasant public spectacles. Realistically, though, we've probably not seen the last one. It is part of the business we are in.

Why we’ve retired Portsmouth Lager

Yesterday, Tyler Jones, assistant brewer at the Portsmouth Brewery, made entry in the Portsmouth Brewery Brewers Blog announcing that the very last keg of Smuttynose Portsmouth Lager had been tapped. Several readers asked what will replace that beer when that final keg runs dry, and they surmised, correctly, that it would be the newest Smuttynose offering, Star Island Single. I’m writing today to briefly introduce this new beer, but first I’d like to say a few words about Portsmouth Lager, the circumstances in which we introduced it back in 1998, and why we made the decision to retire it eleven years later.

1998 was a watershed year at Smuttynose. The craft/micro segment of the beer industry was entering the third year of a brutal shakeout phase, and we were taking a beating along with everyone else, having seen close to a third of our sales volume dry up during the previous two years. Small breweries left and right were falling by the wayside, and at the rate we were going, I feared our turn would come soon. Consumers, retailers and wholesalers had lost confidence in the craft segment, which in the early nineties had become flooded with shitty beer and phony knock-off products. Some of the wholesalers in our network had already dropped our brand from their portfolios; others were threatening to do so any day; and most of the rest wouldn’t answer our phone calls. It was a very bad time to be a small brewer.

In retrospect, it was also a time of great opportunity. 1998 was the year we introduced our Big Beer Series, a move that was universally hailed by our wholesalers (the ones that would still talk to us, at least) as one of the stupidest ideas they’d heard in a long, long time. Why were we proposing to make a series of big, exotic-sounding beers, they asked, when the market was moving towards light beers? Any why, they further asked, would we put those beers in a package - 22-ounce bottles - that no one - no one - wanted to buy? I like to tell people that, in the position we were in, we were a little like the mountain climber in the excellent book and film Touching the Void who had fallen down a crevasse and was clinging, broken and bloody, to a narrow ledge. Climbing up out of the crevasse was not an option; the only choices were to die on the ledge or go down, deeper into the darkness. (You really need to read this book or see the movie, at the very least, to see how that decision worked out for the stranded climber.) So, like the climber, down deeper we went, and the Big Beer Series was born. Ten years later, with the extreme beer movement in full bloom, it looks like a prescient decision. At the time, it was folly, an act of desperation.

At the same time, we also hedged our bets and introduced Portsmouth Lager. One of the strategic decisions we made at the time was to pull out of several outlying markets and refocus on our home turf. Portsmouth was due to celebrate its 375th anniversary that year, and I thought honoring our home city with an eponymous beer would be a smart move, in a pandering sort of way. Looking at our portfolio of brands, we believed that it would be a good idea to offer an accessible, user-friendly product that would be a nice counterpoint to our hoppier, heavier and darker ales. We further reasoned that a continental style lager would fit that bill nicely, since it was a style that was under-represented in the world of craft beers (with the notable exception of Samuel Adams Boston Lager).

I believed, naively as it turns out, that the name Portsmouth Lager would enjoy some of the same romance that Sam Adams benefitted from, and that it would be embraced by visitors and locals to our Seacoast region as the definitive “local” beer. This was not to be the case. New Hampshire, despite its puny size (ranked 46th out of 50 in land mass), is one of the most Balkanized states in the country. For reasons that have always eluded me, one of the dinkiest states in the Union defiantly parses itself into “seven distinct cultural and geographical regions.” The result? Well, to quote Gertrude Stein, “there is no there there.” The Granite State is sandwiched between two neighbors - Maine and Vermont - that have done a fantastic job of cultivating their brand identity, yet in between, our own New Hampshire “brand” remains a mystery. Try a word association test: I’ll bet you can rattle off a list of features and products that you associate with the states to our east and west - blueberries, lobsters, rocky coastline, maple syrup, dairy farms, covered bridges, fall foliage and so on. Here in New Hampshire? Velcro, Pitco fryolators, the Old Man in the Mountain (whoops), Segways & tax free shopping (and don’t get me started about that First in the Nation bit). We’ve got our own blueberries and lobsters and dairy farms - tons of ’em - but no one seems to know it. I have come to believe that there is a good reason that New Hampshire, despite all its incredible natural advantages (and there are many), has launched very few successful comsumer products. It’s not an accident that a company that got its start at the Portsmouth farmers’ market - Stonewall Kitchen - moved its operations across the river to York, Maine, so it could benefit from the “made in Maine” cachet. And one of the most widely known consumer products manufacturers in the Granite State, Stonyfield Farms, doesn't mention New Hampshire on its website’s homepage or “about us” page. Back to 1998, when we proudly presented our new Portsmouth Lager to the sales staff at one of our local wholesalers, one of the salesmen said derisively “nobody in Manchester is ever going to buy a beer named after Portsmouth.” Mind you, Manchester is located exactly 46 miles from Portsmouth, but as it turns out, he knew what he was talking about. We had to learn it the hard way, though.

After a slow launch in a down market, and encountering indifference from our local wholesalers and retailers, Portsmouth Lager never gained traction in the market. Cut out of the sets in the supermarket chains, where 80% of the beer is sold in New Hampshire, it became nearly impossible to find in our home state, except on draught at the Portsmouth Brewery, where it has been consistently one of our most popular offerings. People would discover it in a Variety Pack and write to us asking where they could buy it, and we’d shrug helplessly. So while all of our other brands were growing, Portsmouth Lager numbers remained static, buoyed up artificially by the significant volumes that were served at the Portsmouth Brewery and placed in Variety Packs. And the warm embrace we anticipated from Portsmouth's bars and restaurants never happened; most of them remained perfectly content to offer up Boston Lager as their local beer.

Truth be told, we started to discuss phasing Portsmouth Lager out of the lineup several years ago. Our brewers felt that, given our limited capacity, we could not afford to tie up valuable tank space with an underperforming brand that took twice as long to brew. They were correct, of course. So what held up that decision? Me. I was having a very hard time letting go of an old friend. Of the beers we’ve made at Smuttynose, Portsmouth Lager has always been one of my favorites. It’s unpretentious, easy to drink and flavorful - stuff I like in a beer. When David Yarrington took over as Executive Brewer in 2001, one of the first things he did was tweak the recipe, making it more authentically European in its hopping and malt, which, in my opinion, made a good beer better. Finally, though, arithmetic and common sense prevailed over sentimentality.

Joanne and I have speculated that perhaps a different package design or name might have yielded different results. I tend to think that’s true, up to a point, but I also believe that our timing was poor for this particular product. With a few notable exceptions (Victory’s Prima Pils comes to mind), the number craft breweries producing successful lager beers, especially light continental lagers, is relatively small. It’s been a tough nut to crack for all of us, though I believe that this is changing.

At the end of the day, our decision to retire our Portsmouth Lager was based on our belief that we could replace it in our lineup with a beer that will serve a similar role, namely an accessible, user-friendly beer that will complement to the rest of our lineup. For over a year, we’ve been playing around with draft versions of what has finally evolved into our Star Island Single. Some of you may have tried an early iteration, the lamely named TBD Blonde, at festivals and bars that like to play with us. We're very happy with the final product, which we’ll be bottling for the first time on Monday. Let us know what you think.

By the way, since I know people will ask, the spice referred to in the Statement of Composition (“Session ale brewed with spice”) at the bottom of the label is coriander, which we add in a tiny amount, just above the detection threshold, to give the beer a little je ne sais quoi.

Some time when I've got a few minutes, I’ll write about creating our Star Island Single label. In the meantime, you can check out our lovely model, Dixie von Trixie, on her Myspace page.

Cheers,

Peter