Q&A With Wine Country IP Attorneys Shows Just How Problematic Trademark Is Becoming

from the whining-about-wine dept

For several years now, we've put out the steady warning that the alcohol industries have a trademark problem. In some ways, it's one of those kinda sorta good problems to have in a goods industry, in that the reason there is a problem at all is because of how well the alcohol business is doing. Not just well in terms of total sales, but also in terms of being an ecosystem that encourages new businesses, startups, and expansion. Those are all signs of a healthy market, but with that comes the trademark problem. With so many new players and and a finite amount of language with which those players can brand themselves, trademark disputes in what has previously been known to be an IP congenial industry have exploded in number.

It's become bad enough that the North Bay Business Journal in Santa Rosa, California, smack dab in the middle of wine country, conducted a written Q&A with a couple of intellectual property attorneys to get their thoughts. You can practically hear the frustration at how this is all progressing dripping off of their responses.

For instance, when asked about just how many more trademark disputes there are now than there were before, one attorney stated:

Over the past 10 years, the number of trademark disputes in the alcohol beverage business, and the wine business in particular, has increased exponentially. It is a function of the number of new producers and new brands in the marketplace. It also reflects the increased awareness by producers of the value of trademarks and just how important brand strength can be to a company's bottom line and long-term success.

Put another way, you have more players in the industry and more players within that industry that realize what a bludgeoning tool trademark can be if wielded in a protectionist fashion. That's great for established businesses, and their lawyers, but not so great for growing the industry and supporting innovative new businesses. Keep in mind that there is an implied acknowledgement in that response that the industry grew in an era when trademark disputes were limited. Now that they aren't limited, that will likely impede continued growth. That's bad for consumers, who are supposed to be the net beneficiaries of trademark law to begin with. Especially given another attorney's comments on just how likely confusion is in many of these disputes, particularly within the wine industry.

Wine consumers are very sophisticated and spend a lot of time educating themselves by coming to Wine Country and learning about the wines. The wine industry is somewhat unique in that aspect, especially with these higher-priced wines. That’s part of the reason why with so many different brands that are so similar they are able to co-exist.

The big issue we face now is with beer and spirits, with dramatic increase of craft beers and spirits. The [U.S. Patent & Trademark Office] considers all alcoholic beverages comparable goods, so we have to spend a lot of time to research brands. It’s a challenge to get a wine mark through when you have thousands of brands out there.

I've been screaming this for years now, so it's nice to see the problem articulated by an attorney in the field as well. The USPTO can at least stave off some of this trademark dispute deluge by smartly differentiating between the beverage industries. Having a trademark market for alcohol probably never made sense, but it certainly doesn't make sense now and it's also getting in the way of the industries. Nobody is going to confuse wine for beer, wineries for breweries, or spirit-makers for wineries. That just isn't a thing, certainly not to any degree that would require the USPTO to maintain its non-nuanced stance on the alcohol industry.

The attorneys also had advice on sending out C&D notices, which mostly amounted to a Wheatonian mantra: don't be a dick.

My advice is to initially keep [the letters] friendly. Usually, folks aren’t infringing trademarks willingly. They just simply did not conduct a clearance search. Matters can more readily be resolved out of court if we take the attitude that people are doing the best they can do with the knowledge they have.

If there's any takeaway here, it's that the USPTO needs to get out in front of this and create sub-markets for the alcohol industries. Because they really are separate things, with separate customers and a low likelihood of confusion across them. If that doesn't happen, expect the courts to be filled with trademark cases, even more so than they already are.

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Filed Under: beer, competition, crowded market, trademark, wine

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  1. icon
    timmaguire42 (profile), 13 Apr 2017 @ 7:33am

    There's not enough recognition of the fundamental difference between Trademark and the other forms of intellectual property--whereas copyrights and patents grant protection to creations, new things that didn't exist before, trademark takes things that already exist out of the public domain and hands them over to private entities.

    So even if the public ultimately benefits from some trademarks, it is initially made poorer. That should support different balancing tests.

    Which leads us to another problem--strong protection. Trademarks are supposed to distinguish between competitors. So if you're buying a Pepsi cola, you should be getting a cola made by the Pepsi Company--it should be the only soda bearing that name. But if you made shoes, you're not in competition with Pepsi, you should be able to use that name.

    But you can't because Pepsi has strong protection--it can stop anyone from using that name no matter what they make. In today's environment, that makes some sense--trademark law being what it is, I would expect anything branded "Pepsi" to be a product of the Pepsi Company. But that expectation was created by the judges who gave Pepsi too much protection in the first place. Take away that protection and you take away the expectation that is used to justify the protection.

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