Craft beer and trade-marks: 5 essential questions

Picture this: you are a craft brewery owner. Business is great – your sales are growing and you are increasing production. Without warning, the unthinkable occurs: you get a letter from the lawyers for Mega Brewing Corp. The lawyers claim that the name of your flagship beer infringes Mega’s intellectual property rights, and you must cease and desist immediately or face an expensive lawsuit and a court order that you must change the name of your beer. You have put your heart, soul, and countless dollars into building your brand, and now all your hard work is in jeopardy.

Unfortunately, this is not an uncommon event. A quick Google search will reveal many instances of trade-mark litigation between brewers of all sizes, and these are the ones which are made public. In my practice, it is a common occurrence.

How can you best protect yourself against this possibility? The answer lies in understanding trade-marks.

The following five questions are among the most common I hear from business owners, including brewers who are seeking introductory advice on trade-marks:

  1. What is a trade-mark?
  2. Do I have a trade-mark?
  3. Do I need to register my trade-mark?
  4. What are the benefits of registration?
  5. What does registration cost?

While trade-marks are a very important and powerful tool for any business owner who offers his or her goods and services for sale in the marketplace, they are of particular importance in highly-competitive markets in which consumer attention and dollars are limited, and where identifying and distinguishing one’s goods or services from those of one’s competitors is necessary to achieve success.

The craft beer market is such a market. The explosive growth of craft brewing throughout North America has created competition amongst brewers for unique names and designs to set their products apart from others. It has also led to an explosion in trade-mark litigation amongst large, medium, and small brewers.

Let’s turn to consider the questions above.

1. What is a trade-mark? A trade-mark is exactly what the name suggests – a mark which distinguishes the goods and services of one trader from those of other traders in the mind of an average consumer. A trade-mark can be a word, a logo design, or even a colour, shape, or sound which serves this purpose. Most often, trade-marks are words or designs.

2. Do I have a trade-mark? If you sell beer, odds are you already have a trade-mark. For example, if I sell beer with a label bearing my initials “DAF” – even one bottle – I have a trade-mark. Likewise, if I have developed a logo for my “DAF” beer and have sold beer bearing the logo, I have a trade-mark. I don’t need to register my trade-mark with the government or do anything else, as long as I have sold goods bearing the trade-mark. These are known as unregistered or “common law” trade-marks.

If I have a trade-mark already, what is registration?

3. Do I need to register my trade-mark? The short answer is “no”, but if you choose not to register, you won’t enjoy the full bundle of rights that come with a registered trade-mark.

In Canada, a registered trade-mark is one that is registered with the Canadian Intellectual Property Office (the “Office”). The Office is the federal government body tasked with overseeing trade-marks and other intellectual property throughout Canada. Registration involves filing an application and other documents with the Office in order to establish a valid claim to the trade-mark. The process usually takes at least eight months, and can be longer depending on the application.

In order to sell craft beer, I don’t need to register a trade-mark. The process is optional. So why would I register?

4. What are the benefits of registration? The primary benefit offered by a registered trade-mark is the right to exclusive use of the trade-mark throughout Canada in association with the goods listed in the registration.

Imagine a trade-mark as both a sword and a shield. A trade-mark can be used as a sword if another party uses a trade-mark that is the same or similar to yours and you want to stop them. A trade-mark can also be used as a shield if another party is seeking to stop you from using your trade-mark and you want to defend yourself. There are important differences in how registered and common law trade-marks can be used in these ways. The concept of exclusivity is central to this difference.

If I use my “DAF” trade-mark as a common law trade-mark, my rights will be restricted to the geographical area(s) in which I have sold beer bearing the trade-mark. If I’m selling in Vancouver, my rights will be restricted to Vancouver. If I’m selling in Vancouver and on Vancouver Island, my rights are restricted to these regions, and so on.

If I want to use my trade-mark as a sword to stop a Newfoundland brewer from using a confusingly similar trade-mark, it will be very difficult for me to do unless I have sold beer bearing my trade-mark in Newfoundland, or the other brewer enters my region. If the Newfoundland brewer has a registered trade-mark and wants to stop me from using my trade-mark in my region, I might not be able to use my common law trade-mark as a shield to protect my rights.

A registered trade-mark provides an exclusive right to use of the trade-mark throughout Canada in association with the goods in the registration. This is true even if a trade-mark is not used in every region of the country. If I have a registered trade-mark for “DAF” in association with beer, my ability to use the trade-mark as a sword or a shield against others anywhere in Canada is greatly enhanced when compared with a common law trade-mark.

I can also more easily establish my rights to my trade-mark: instead of having to rely on evidence of use (business records, invoices, advertisements) to prove I have brewed and sold X amount of beer in X number of places, I can simply rely on my registration as proof that I am entitled to the exclusive use of the trade-mark throughout Canada in association with beer. This will assist me with establishing my rights, whether I am trying to use the trade-mark as a sword or as a shield.

There are many other benefits to having a registered trade-mark, and many other interesting aspects of trade-mark law which are beyond the scope of this article. However, the concepts of the sword, shield, and the exclusive right to use of a registered trade-mark throughout Canada are among the key concepts one should understand when considering their trade-marks and whether or not to register.

5. What does registration cost? Alexander Holburn Beaudin + Lang LLP offers competitive rates for trade-mark registrations, other intellectual property matters, and any legal needs a craft brewer may have. If you are a craft brewer who needs legal advice on trade-marks or other matters, we are also pleased to offer packages and alternative fee arrangements to meet your business needs through our SmartStart and SmartPeople Programs. We are pleased to work with you to design solutions for your legal needs that work for you and your business so that if Mega Brewing Corp. comes knocking, you’ll be prepared.

If you require legal advice, contact Derek Frenette at dfrenette@ahbl.ca or 604.484.1780, who would be pleased to discuss matters with you in the context of your particular circumstances.