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Learning from Recent Trademark Cases

Recent cases offer lessons for brewers navigating the often-tricky obstacles surrounding the selection, use and enforcement of trademarks. Whether a brewery is choosing a logo or naming a new beer, the latest decisions highlighted in this article underscore the importance of doing due diligence when it comes to trademarks.

Access the full article.

Originally published in The New Brewer, September/October 2019.




Five Issues That Impact Craft Brewers

In an article published by The New Brewer, Marc Sorini discusses five issues most likely to have a meaningful impact on craft brewers in the coming years, including:

  1. The Craft Beverage Modernization and Tax Reform Act’s (CBMTRA) new tiered excise tax rate structure, its extending benefits to foreign producers, and its authorization for brewers to transfer beer in bond between breweries of different ownership.
  2. The Sixth Circuit’s published opinion in Byrd v. Tennessee Wine and Spirits Retailers Association, affirming a decision finding that the “durational-residency” requirements imposed by Tennessee law for alcohol beverage retail licensees are unconstitutional under the “dormant” Commerce Clause.
  3. The TTB’s creation of a new unit within its Trade Investigations Division to focus on trade practice enforcement.
  4. The opinion in Mission Beverage Co. v. Pabst Brewing Co. from the California Court of Appeals, which found that “an existing distributor’s receipt of the ‘fair market value of the affected distribution rights’ under [the California statute] does not necessarily make that distributor whole.”
  5. The US District Court for the Northern District of California’s decision in a putative class action alleging that the labeling and marketing of a successful California-based craft brewery was false and deceptive.

Access the full article.

Originally published in The New Brewer, May/June 2018.




District Court Issues Opinion in Old Charter Bourbon False Advertising Class Action

On February 5, 2018, the US District Court for the Eastern District of Missouri issued an opinion in one of the many false advertising class actions brought against the industry in the past five years.

Penrose v. Buffalo Trace Distillery, E.D. Mo. 4:17-cv-00294-HEA, involves the labeling of Old Charter bourbon. For years, Old Charter sold an 8-year-old version and a 12-year-old version, with their labels very prominently displaying “8” and “12” (respectively) in several places. According to the complaint, in January 2014 Old Charter “8” was re-formulated to use less-aged bourbon, described by the court as “non-age stated” or “NAS” bourbon. The labels, however, continue to prominently display the number “8” in the same manner as the prior label. In addition, while the label previously stated “aged 8 years,” the NAS bourbon’s label states “gently matured for eight seasons.” The court’s opinion catalogues a number of alleged complaints by consumers that they were deceived into purchasing the NAS product on the mistaken belief that the bourbon was still aged for eight years. Significantly, the complaint alleges that the price for Old Charter “8” remained the same after the reformulation. (more…)




Ruling in the Asahi Beer Class Action

Last month the US District Court for the Central District of California issued an order in the Shalikar v. Asahi Beer U.S.A., Inc. false advertising class action case. Like many similar cases, Shalikar alleges that the plaintiffs, as representatives of a purported class of consumers, were deceived into paying more for Asahi beer because they believed the beer was made in Japan when, in fact, the beer sold in the United States was produced in Canada. In the recent order, the court denied Asahi’s motion to dismiss for failure to state a claim (a 12(b)(6) motion).

The Shalikar plaintiffs brought their case under California’s Consumer Legal Remedies Act, Unfair Competition Law, and False Advertising Law, and also pled common-law claims for breach of implied warranty, fraud, intentional misrepresentation and unjust enrichment. Asahi beer that is sold in the United States is brewed in Canada, and each label states “Brewed and Bottled under Asahi’s Supervision by Molson Canada, Toronto, Canada.” Each label also states “Product of Canada” as required by US customs regulations. Plaintiffs alleged, however, they were deceived into paying more for the product because the labels and packaging use the word “Asahi,” which means “morning sun” in Japanese, and the label and packaging employs Japanese characters in several places. Plaintiffs also produced a survey purporting to show that the beer’s packaging led 86 percent of the respondents to believe that the product was brewed in Japan. (more…)




Latest Decision in Kona Beer Branding False Advertising Case

The US District Court for the Northern District of California’s recent opinion in Broomfield v. Craft Brew Alliance, Inc., No. 17-cv-01027-BLF (Sept. 1, 2017) represents the latest decision in the now long-line of false advertising cases alleging that beer brands misrepresent their geographic origins.

The Broomfield case involves the marketing of Kona beers, allegedly in a manner that deceptively suggests that the beers are brewed in Hawaii. In fact, all packaged Kona beer and all draft Kona beer sold outside of Hawaii is brewed in Oregon, Washington, New Hampshire and Tennessee. The Kona brands bear names (e.g., Big Wave, Fire Rock) and images (e.g., volcanoes, palm trees, surfers and hula dancers) that evoke Hawaii. The beers’ outer packaging shows a map of Hawaii and the location of the Kona brewery, and encourages purchasers to “visit our brewery and pubs whenever you are in Hawaii.”

(more…)




Summary Judgment Granted in Tito’s “Handmade” Vodka Case

On September 27, 2016, the Northern District of Florida issued a decision in Pye v. Fifth Generation, Inc., N.D. Fla. No. 4:14cv493-RH/CAS, one of many false advertising class actions brought against the makers of Tito’s “Handmade” Vodka.

Although Tito’s has lost a number of decisions on motions to dismiss and summary judgment motions in other jurisdictions, Pye delivers a win. Having already dismissed claims related to the generic “handmade” claim, the recent Pye decision grants summary judgment on the final challenged claim – that Tito’s is made in “an old fashioned pot still.” According to the court, any pot still can be described as “old fashioned” when compared to a column still, and no reasonable consumer could read the claim to represent that all Tito’s comes from the same still.




Join McDermott Partners Marc Sorini and Andrew B. Kratenstein at the 21st Annual CLE International Wine, Beer & Spirits Law Conference

The annual Wine, Beer & Spirits Law Conference will be held on September 22-23, 2016 in Colorado Springs, CO to discuss the latest developments in alcohol policy and practice.  Co-Chair and McDermott partner Marc Sorini has again lined up a great program of speakers on legal topics of interest to the industry.  In addition, Marc and McDermott Partner Andrew B. Kratenstein will give the following presentations:

  • Thursday, September 22, 9:30-10:15 am: Marc will help kick off the conference by discussing the intersection of the First Amendment and tied-house law.
  • Thursday, September 22, 3:15-4:30 pm: Andrew will join three other lawyers to explore the strategies and tactics of supplier-distributor disputes, touching on venue, injunctions and other topics.

For more information or to register, please visit http://www.cle.com/Broadmoor.




Join McDermott Partner Marc Sorini at the Annual Craft Brewers’ Conference

The annual Craft Brewers’ Conference will be held on May 3-6, 2016 in Philadelphia, PA. McDermott partner, Marc Sorini will give two presentations:

  • Wednesday, May 4, 1:20-2:20 pm: Marc will kick off his annual government affairs presentation by summarizing the results of recent research to be published in The New Brewer proving that no legally-mandated three-tier system existed immediately following the repeal of Prohibition. He then will provide an update on the biggest legal issues facing the industry during the past year, including recent tied-house/trade practice activities, the false advertising class actions and a distribution update.
  • Friday, May 6, 1:55-2:55 pm: Marc will join two other lawyers and moderator Bill Covaleski of Victory Brewing to explore the issue of beer “franchise law” reform.

For more information or to register, please visit http://www.craftbrewersconference.com/.




Red Stripe Prevails in Alcohol Beverage Labeling Class Action

The latest merits decision in the ongoing false advertising/labeling class actions appears here.  This case involves allegations that the labeling and marketing of Red Stripe Beer misleads consumers into thinking they are purchasing beer made in Jamaica from Jamaican ingredients.  In fact, production of Red Stripe for the US market moved to the US in 2012.  The Southern District of California’s Dumas v. Diageo PLC decision to dismiss the plaintiffs’ case gives hope that companies with alcohol beverage brands originating overseas can produce those brands in the US without facing significant litigation risk.

The plaintiffs brought their case under several California statues and also alleged negligent and intentional misrepresentation.  Central to the plaintiffs’ allegations were statements on Red Stripe’s secondary packaging and labeling that the beer was a “Jamaican Style Lager” and contained “The Taste of Jamaica.”  The plaintiffs also pointed to the labeling and packaging’s continued display of the original Jamaican brewer’s logo as evidence of deception.  Finally, the plaintiffs pointed to the label’s statement that the beer “embodied the spirit, rhythm and pulse of Jamaica and its people.”  Of course, the labels and secondary packaging did disclose that the US market beer was brewed and bottled in Latrobe, Pennsylvania.

Looking only at the complaint and before any discovery, the court dismissed the case, concluding that “no reasonable consumer would be misled into thinking that Red Stripe is made in Jamaica with Jamaican ingredients based on the wording of the packaging and labeling.”  More specifically:

  • The mere fact that the words “Jamaica” and Jamaican” appear on the packaging does not support a conclusion that consumers would be confused about the origin and ingredients of the beer.
  • The statements on Red Stripe were similar to those made with respect to a “Swiss Army knife” – just as “Swiss” modified “Army,” in this case “Jamaican” modifies “Style” and does not connote the actual place of production.
  • Red Stripe’s display of “Jamaican Style” and similar claims are similar to Blue Moon making a “Belgian-Style Wheat Ale” and Harpoon making a “Belgian Style Pale Ale.”
  • “Taste of Jamaica” is too vague and meaningless to form the basis of a false advertising claim.
  • Red Stripe presents different facts from the facts that give rise to the false advertising case involving Beck’s Beer, where the labeling and packaging stated “Originating in Germany,” “brewed under the German Purity Law of 1516,” and “German quality.”
  • Even though consumers may have already held an expectation that Red Stripe is brewed in Jamaica based on past production on the island, no legal authority places a duty on marketers to counter such pre-conceived notions.

On the basis of this reasoning, the court dismissed the plaintiffs’ complaint as a matter of law.  It did, however, dismiss the case “without prejudice,” which will give the plaintiffs 15 days (until April 21, 2016) to assert new claims that might survive dismissal.

The Dumas opinion represents merely one battle won (at least temporarily) in what will no doubt [...]

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False Advertising Claims

Industry members should take note of several false advertising lawsuits against brewers and distillers. Several industry members are grappling with class action lawsuits, including at least three craft distillers. Compared to national ad campaigns from larger competitors, most small producer advertising is limited. But do not make the mistake of believing that modest advertising efforts eliminate the risk of enforcement actions or other liability. Thousands of industry websites and social media pages make tens of thousands of advertising claims. As companies achieve success, its brands gain visibility and the company will draw more scrutiny from class action plaintiffs’ lawyers, competitors and regulatory bodies.

Read the full article, originally published in the May/June 2015 issue of The New Brewer.




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