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Thursday, March 12, 2015

Who's the Villain?

Update 1.  Innovation has posted their response to Bell's response.
Update 2.  A nice piece at MiBiz covering the fracas (h/t Alan).  More here, here, here, and here.

Let's spend a few paragraphs considering events of the past 24 hours.  It illuminates a few things about business, trademark law, and the folly of over-personalizing the two.  First, the local paper in Asheville, NC put out a sloppy report accusing big, bad 'ol Bell's of bullying local concern Innovation Brewing.
Bell's has filed a federal action against Innovation over the use of its name. Bell's says its unregistered advertising slogan "bottling innovation since 1985" could lead to confusion with customers. While the slogan is used on bumper stickers, it's not present on any of the brewery's beer packaging....

"We are very disappointed," said Nicole Dexter, who founded Innovation in 2013 with her partner Chip Owen. The two came up with the Innovation name after finding creative means of assembling their brewing system.  "Innovation is what we had to do to make everything work," Owen said. (h/t All About Beer)

 This appears to follow a familiar script: a small brewery is just trying to make their way in the world, when along comes a corporate behemoth to crush their dreams with a trademark lawsuit.  If you read further in the article, though, you get more of the picture (though obliquely).  It's actually the small guys who are trying to trademark the word "innovation," not Bell's.  After initially fumbling the response (Citizen-Times: "Bell's founder Larry Bell would not discuss the issue"), Bell's today clarified their position.  Go read the whole thing, which radically alters the story.  This is the key point, though:
We have not, and are not asking them to change their name or their logo. There is no lawsuit. We are not suing them. We have not asked them for money. We have not asked them to stop selling their beer. We are asking them to withdraw their federal trademark application.
There are a few lessons to be learned here.

Trademark Law Creates Conflict By Design
Trademark law is brutal.  The way it works is that anyone can apply for a mark on anything.  One of the stopgaps is that during the registration process, other parties have a right to contest the mark.  There are a lot of marks that, if granted, would substantially damage existing brands.  This is where we are in the "innovation" situation.  Think for a minute what trademarking "innovation" might do to other US breweries--for whom innovation is not only an article of faith, but a regular part of publicity, branding, and labeling material.

That leads to the second important part of trademark law: owners must defend their marks.  So, if Innovation does get the mark for that word, they must protect the mark.  Trademark Office: "the owner of a registration is responsible for bringing any legal action to stop a party from using an infringing mark."  This sets up a case where Innovation could easily look at Bell's use of the word innovation and slap them with a cease-and-desist letter and lawsuit threat.  If a company fails to do this, it can lose its mark if other companies can make the argument it has lapsed into the public domain.  

Trademark Disputes Are Not Personal
There are 3,000+ breweries in the United States making, conservatively, 50,000 brands of beer.  In order to protect their names and brand identities, these breweries register trademarks.  Because of the way the law is structured, this means tons and tons of disputes.  These disputes are not personal--they are the result of the way the law is written.   It creates a catch-22 for breweries on the publicity side: if you don't register your names as trademarks, someone else will, so you risk losing your entire brand identity (which is, obviously, super bad for business).  If you do register your mark, then you have to go out and police it or risk losing the mark.  When beer geeks read into this a kind of malevolence, they misunderstand the logistics of what breweries are forced to do.  Yes, there are times breweries are overly litigious and sue people needlessly--a justified cause for irritation--but mostly beer fans should not be over-personalizing disputes over trademarks. That's just how it works. It's time to let this outrage machine run out of gas.  (Not that I have even the slightest hope that will actually happen.)

Make Sure You Tell Your Story First
One amazing part of this is that Bell's did not tell their story immediately when a newspaper came calling.  I fault the paper for writing an overheated, largely misleading piece, but Larry Bell should have gotten in front of it.  Elysian made a similar blunder after deciding to sell to Anheuser-Busch.  They waited days to put out their own explanation for the story, long after they'd been torched on social media.  There's no way to fully control a story, but man, you have no chance if you don't get your version out there.  Even now, after the clarification, Bell's is still getting hammered. People are still charging Bell's with crimes they have not committed.  This is the problem when you find yourself behind a story--the "narrative" gets established, calcified, and becomes reality.  Bell's may still pull out of this, but they must now spend days or weeks in damage control mode.  


For those who think Bell's is absolutely in the wrong, let's use an analogous case: the trademark to "Beervana."  It is currently owned by Texas-based Gambrinus and used to hawk BridgePort.  There is nothing horribly sinister about that, but I think most Oregonians would agree that the word should never have been trademarked.  It should have stayed in the public domain where it was of use to all--like "innovation."  I really wish someone had intervened at the time and stopped Gambrinus the way Larry Bell is trying to stop Innovation.


  1. Thanks for the thoughtful essay, Jeff. It certainly helped me understand another side of this issue that wasn't clear before. I'm not sure I agree 100% with either party in this issue, but I'm able to see Bell's side of the argument now.

  2. geez Jeff, this piece should be mandatory reading for all new (and existing) breweries. The cost we've paid in legal fees for trademark issues alone would have gone a long way. FYI, this is just tip of the iceberg of what's to come in my opinion.

  3. I'm going to North Carolina to visit Bell's. That's what they'd have you believe if Innovation doesn't change their name. I know I and millions of others hear the word innovation and immediately think Bell's. On a 1-10 douche scale I put Bell's at an 8.8.

  4. Of course, maybe you should have posted Innovation Brewings response to Bells post. Just as informative, and would only be fair. Journalists do that sometimes

  5. Anon, thanks for the (unnecessarily snarky) tip. Their response came after I posted this. But I do like the implication--probably wrong--that I bear some resemblance to a journalist.

  6. You may have posted this before their reply, but you chose to share it just as one-sidedly on their actual reply.

  7. Anon, enough with the oblique, passive-aggressive comments. If you have something to say, say it. I did not write a balanced post because I don't believe this is a balanced situation. I think Innovation has made a common mistake for a new company and tried to trademark a common name. (Willamette Brewing did the same thing, got into so much trouble that they changed the name to Oakshire. It happens.) They're finding that business is sharp-elbowed. I know they think they're being treated harshly, but I am not obliged to agree just because they're a smaller company.

    You obviously have an opinion, and cloaked as you are behind anonymity, go ahead and put it out there. Make your case.

  8. I love Bell's, but this move seems inappropriate & mean-spirited. Protecting your "unregistered advertising slogan"? ...give me a fucking break. Please, Larry, inject some common sense & humanity into this situation & end it now!

  9. Hey, you appear to have some idiots reading your journalistic efforts, such as they are. Very impressive. I read you before I watch the FOX News every damn day.

  10. Jeff,

    They're trying to trademark Innovation Brewing, not "innovation".

    I don't think anyone who is using the word already (or even in the future) is going to have a problem.

    That's as silly as bell's suing someone else for using the word "bottling"... If anyone comes up with "Anon bottling" or says "bottling ____ Since 1985". Both of those would be ridiculous... just as ridiculous as Bell's case.

    We will see what the feds have to say about it...


  11. Other industries can, and do, trademark similarly common words and phrases. "Windows" or "Apple," anyone? The disputes can and do cross industry and is not really necessary for people to reasonably mistake the two marks.

    If you don't like it, I suggest taking it up with an organization devoted to fixing patent/copyright/tm law. Bell's did nothing wrong here. Don't hate the player, hate the game.

  12. LMAO at the gofundme already. That's the real story, here: the wildfire of social media hate mobs and the concomitant crowd sourced begging.

    I think we all need to accept at this point that the world wide web was a really bad idea.

  13. Social media "democracy" is nothing more than mob rule. I'll side with the grown up brewery over the tantrum throwing hippies.

  14. Does anyone remember that Bell's Oberon was once called Sol-Sun. A big deal at the time for Sol-Sun fans, I bet less than 5% of oberon drinkers have ever even heard about this. Take your medicine Innovation, move on, and make a name with quality beer like Larry did. Business is business and that is that.

  15. Not everyone who is sticking up for Innovation is a hippie. I just really disagree that them trademarking "Innovation Brewing" (not "innovation" as the author writes it) would have any harm on Bell's. It also would be very easy for them to simply agree that Bell's can continue to use the 2 slogans "Inspired Brewing" and "Bottling Innovation since 1985" and Innovation cannot object. The thing is, I think someone is lying to the public. And we don't know which one it is. With the current information out there, I disagree with Bell's. I don't think this is worth it for them.

  16. We are not going to be able to adjudicate this case with the information we have available. But for those of you who think that your ability to eyeball this and make a judgment is good enough, I say: you're probably wrong. Trademark law has a lot of wrinkles, and getting a trademark is not as easy as just applying for it first. The Trademark Office is a regulatory body that has to weigh multiple considerations when it's considering granting marks. Getting marks on invented words is a lot easier because it has fewer downstream effects on other people's business. Getting marks on very common words is inversely difficult.

    For what it's worth, I actually hold a trademark and have gone through this process. (The less said about that venture the better, but it was educational.)