Let Me Emphasize the IP in IPA: Intellectual Property & Craft Brewing
By: Jordan Meggison-Decker
There has never been a better time than now for craft brewers to protect their intellectual property. The craft brewing industry is bigger than ever and growing every single day. In 2021, the craft beer retail market was 13% of the entire retail market for beer, cracking $26 billion in total sales. This represented an 8% growth over 2020. In 2021, over 9,000 craft breweries were in business. 5 years ago in 2016, this number was just over 5,700. In an increasingly crowded marketplace, intellectual property protection can go a long way.
This blog post will walk through the basics of each category of intellectual property and explain how the category is applicable to the craft brewing industry. Let’s hop(s) right in!
Patents are an intellectual property right that grant an inventor the exclusive right to exclude others from making, using, offering for sale, or selling their invention in the United States for a number of years. Patents grant what is considered a “negative right” because they allow an inventor to exclude others from making their invention. There are three types of patents: utility patents, design patents, and plant patents. Utility patents are granted for the invention of new and useful processes, machines, manufactures, or compositions of matter, or a new and useful improvement thereof. Design patents are granted for new, original, and ornamental designs embodied in an article of manufacture. Finally, plant patents are granted for new and distinct varieties of plants.
To obtain a patent on an invention, an inventor must meet certain requirements. The invention must be patentable subject matter, it must be new, it must be useful, and it must be non-obvious. Additionally, the patent application filed for the invention must enable subsequent producers to make the product. That is, the patent application must “teach” how to build, create, make, or grow the invention.
Patent protection may be relevant in a few areas of craft brewing. First, any new and useful improvement on the brewing process can be protected by a utility patent. Generally, process related patents are not frequently granted for brewing. This is because brewing processes have been around for centuries and are well-known to those who brew. Second, new varieties and strains of hop plants can be protected by plant patents. Many popular types of hops used by brewers are patented: Citra, Mosaic, Amarillo, and others.
A trademark is a word, name, symbol, device, etc. that is used in trade with goods/services to both indicate the source of the goods/services to the consumer and to distinguish the goods/services from competitor goods/services. Many unexpected things can serve as trademarks – sounds (NBC jingle), smells (PlayDoh), product packaging, etc. As long as the mark indicates to the consumer the source of the goods/services, it could be eligible for trademark protection. For a mark to fully qualify for trademark protection it must be used in commerce, it must be distinct, and it must be non-functional.
There are varying types of trademark protection available. A trademark owner could receive federal trademark protection by registering their trademark with the United States Patent and Trademark Office. An owner could have common law trademark rights through continued use of the trademark in commerce without a registration. Or an owner could receive state trademark protection by registering their trademark with the Secretary of State in the state where they do business. Of the different options, federal trademark protection will give the trademark owner the strongest and most thorough protection. A federally registered trademark will provide the owner with various benefits: nationwide priority of use (i.e. the potential to expand their business across the country), the ability to use the registration symbol (®), publication of their mark in a national trademark registry, thereby warning potential users of the owner’s prior use of the mark, and prima facie evidence of validity, ownership, and the exclusive right to use the mark. If you are interested, you can learn more about the benefits of federal trademark registration here.
Trademarks are of growing importance in the craft brewing industry. Product names, brewery names, and marketing materials serve not only as source identifiers for breweries, but as artwork, as their “cool factor”, and as the thing that sets one brewery apart from all 9,000 others. Craft brewing is about storytelling almost as much as it is about brewing really good beer. Beer names and labels represent the heart and soul of the industry. With product names becoming scarcer and breweries in different geographic areas increasingly and inadvertently utilizing similar or the same names, trademark protection could be the start, or the end, of many product lines. Not to mention, printed cans, beer labels, and commissioned artwork can represent a large portion of a brewery’s budget. It would be a terrible feeling to invest time, energy, and money into a product line only to realize someone else has already been or begins to use the same name. Hard work should not be for nothing!
A trade secret can be any information, including a formula, pattern, compilation, program, device, method, technique, or process that derives independent economic value from not being generally known to, and not being readily ascertainable by, other persons who can obtain economic value from it. To remain a trade secret, the owner must make reasonable efforts to keep the information a secret. There is no registration requirement to obtain trade secret protection and protection will extend as long as the secret remains a secret.
Many types of information could constitute a trade secret for a craft brewer: recipes, bottling processes, canning processes, distributor information, pricing information, customer lists, etc. In order to retain trade secret protection over this information, a brewer must take reasonable steps to ensure the secrecy of the information. This could mean limiting who has access to information, creating employment agreements that contain confidentiality provisions, having employees sign non-disclosure agreements, and much more.
Copyright law provides protection for original works of authorship fixed in a tangible medium of expression. Original works of authorship include things such as literary works, sound recordings, motion pictures, sculptural works, and more. In order to receive copyright protection, a work must be original and it must be fixed in tangible form. Originality in this sense means that the work was independently created and it reflects a “modicum” of creativity. Fixation in a tangible form means that a work is stable enough to permit it to be perceived, reproduced, or otherwise communicated for a period of more than transitory duration. Copyrightable material held by breweries may be things like marketing material, product labels, merchandise, and website content.
Two areas of copyright law that may be of particular interest for breweries are the right of publicity under copyright law and commissioned artwork or photographs. The right of publicity prevents the use of another's name, image, likeness, or other recognizable aspects of his or her persona for commercial gain without permission. Breweries may encounter right of publicity issues when they use promotional materials that feature customers, employees, or others without signed consent forms. Similarly, if products are named after a person’s likeness, signed consent is necessary. Commissioned artwork/photographs for product labels or other materials may implicate copyright law for breweries as well. Without proper intellectual property assignment clauses in contracts with artists, breweries may face repercussions when attempting to reproduce commissioned artwork.
If you have any questions regarding your intellectual property, please reach out to Jordan Meggison-Decker or another attorney on our BrownWinick Intellectual Property team. We are here to offer trusted legal advice and add value to any transaction, including those with complex and novel issues.
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