The Craft Beer industry is taking
off; sales are rising, approaching 10% of overall beer sales, which interestingly have dropped. Craft
Beer is growing, even through Recession. No doubt this is time for rejoicing
for craft beer, craft beer geeks and tap rooms. But there are fractures in the
foundation that are coming to light. How these are managed can either fix the cracks, or
expound them.
It is important to note that craft brewing is a business and
must take on certain business responsibilities. One is establishing and
protecting a brand. For the most part a brand is a name. To differentiate beers
consumers (for the most part) identify with names: Sam Adams (by Boston Beer
Company), Budweiser (AB-InBev), Coors (MillerCoors). If Boston Beer Company labeled one of their
beers "Bud", AB-InBev would see this as trademark infringement (and
so, too, would a judge). This blatant
example illustrates why trademark laws are in place.
However, in the business world of trademark infringement the
devil is in the details. While "Bud" is an obvious example, Righteous
is not, nor is Seven
Seas. In these cases the breweries involved are geographically separate, their
markets do not overlap. Ostensibly the struggle is to keep other craft
breweries from copying each other, stealing names and taking advantage of
others' successes.
While some of this might be true, we must look at the
business side: protecting trademark. For
if a company does not protect its trademark, then it could lose it, if not now
then later. So a brewery on the west coast must keep an eye out for similar
beer names/labels emerging on the east coast, not for fear of theft of
customers, but of losing trademark. If that happens, then larger companies that
are closer can start using that same name/label, and no infringement of
trademark can be claimed.
So, to take "Bud" as an example (which
was actually contested in court), if Boston Beer Company started using
"Bud" to label a product, and AB-InBev did not claim infringement,
then anybody could start using "Bud"…even MillerCoors. Brand
recognition would be out the window as would fair competition.
While this may sound easy to avoid, it certainly is not.
Trademark infringement disputes are going to happen. In a growing industry full
of small companies, it is inevitable that names/labels will fly under the
radar, only to appear in the form of cease and desist (CD) letters.
And this is how management of these disputes can either fix
the cracks, or widen them. Sometimes the business decision is not best for the
business, especially in a personal industry like Craft Beer, and with the
explosion of social media. Trademark protection
is necessary, but it's not as black and white as a CD letter.
