As the growth of the craft beer industry continues it is becoming harder to conceive an attractive brand which is distinctive from those of competitors. Growth in beer trade marks may lead to increased brand disputes and the benefits of legally protecting a brand are becoming more obvious.
This article was origianlly published in The Pursuit of Hoppiness Magazine (October 2017) and was co-authored by Paul Johns, Head of Dispute Resolution, at Baldwins Intellectual Property and Jeremy Dew, Partner, at Reynolds Porter Chamberlain LLP.
As any established brewer will tell you, and as any new entrant to the craft beer market soon learns, branding is key to the success of a new beer in an increasingly crowded market. As beer fans, we might wish that beer was judged solely on its quality but the reality is that unless a name, label or tap badge stands out from the crowd, many consumers may never even experience the quality of a new product.
As the growth of craft beer continues, it is becoming harder to conceive an attractive brand which is distinctive from those of competitors. The benefits of legally protecting a brand are also becoming more obvious. There have been a number of beer brand conflicts in New Zealand including between local brewers, between New Zealand and overseas brand owners, and arising from brewers’ attempts to claim ownership of common descriptive terms. Although some of these issues have been publicised through the press or social media, many remain under the radar. In the past, the small size and community nature of the New Zealand craft beer industry has often allowed branding issues to be resolved amicably and informally. As the industry and competition grows, this may become less likely with formal legal disputes becoming more common.
In the past 12 months, 166 trade marks have been newly registered for beer in New Zealand. This is a 49.5% increase from the 111 beer trade marks registered in the previous 12 months and a whopping 388% increase from the 34 registrations over the same period in 2006/07 (see graph below). This growth is not limited to New Zealand. UK law firm RPC has recently noted that beer trade mark registrations in that country have risen by 104% since 2007 as more brewers capitalise on the craft beer revolution in that country. UK registrations have increased 19% from 1,666 in 2015 to 1,983 in 2016.
RPC partner Jeremy Drew says that in the UK one of the key drivers behind this surge in new trade marked beers has been the move by supermarkets and larger drinks companies to introduce their own “craft beer” style products. UK supermarkets are both throwing open their shelves to new small scale beer brands and creating their own craft beer which is often white labelled products from independent breweries. For example, in May 2017 Aldi announced that it was adding 16 new bottles to its craft beer range, whilst supermarket chain Marks and Spencer works with craft beer retailer Real Ale to source a range of beer from smaller brewers nationally for its stores.
As noted in a previous edition of Pursuit, in New Zealand it appears that similar “faux craft” brands introduced by the larger breweries may have largely run their course. Their focus has instead moved to acquiring formerly independent breweries for their stables, such as Emersons, Panhead and Tuatara. This strategy is not confined to New Zealand; Camden Town Brewery was recently acquired for £85m by global drinks company Ab InBev.
Regardless of the strategy employed to expand their offering, branding remains important to the larger breweries. The main value in the acquisition of a contract brewing business without significant hard assets, for example, is the value in the brand and reputation of the brewery.
In both New Zealand and Britain, the proliferation of new brands has been driven by the increase in the number of independent breweries. In New Zealand, the number of small breweries has increased by an average of 15% each year since 2013 . In the UK, growth is even higher with 520 new breweries opening in the last year, jumping by 33% from the previous year where the number of new breweries opening was 336 . Established craft beer breweries also regularly release new products (some it seems on a nearly weekly basis ).
In both the UK and New Zealand, with the number of trade marks rising, copycat/brand conflict disputes are likely to increase. It is important for brewers to develop a proper brand protection strategy, identifying and protecting key brands without causing avoidable and potentially costly disputes themselves.
Recent high profile trade mark issues within the sector include:
- Tuatara rebranding its APA as “Kapai,” despite that name already being in use by Mata brewery;
- Tuatara applying to register proprietary US hop variety “Amarillo” as a trade mark (the application was later withdrawn);
- Birkenhead Brewing Company apologising for beer branding that inappropriately used Maori imagery;
- Brewdog, the Scottish craft beer company issuing a legal warning against a pub in Birmingham to prevent the pub being named ‘Lone Wolf’, the same name as one of the company’s products (Brewdog has since apparently rescinded the warning);
- Scottish Brewery, Tempest Brewing Co, announcing that it would be renaming its popular Bomber IPA beer following a trade mark dispute with a larger English brewery;
- Brewdog has also been in dispute with Elvis Presley’s Estate after filing a trade mark for its ‘Elvis Juice’ and subsequent ‘Brewdog Elvis Juice’ products.