MATAL v. TAM, Greater Freedom for Trademarks and Beer Labels

 

            On June 19, 2017, the Supreme Court of the United States issued a landmark trademark ruling in the case of Matal v. Tam.  The case dealt with whether or not the US Patent & Trademark Office (PTO), could deny a trademark registration on the basis that the mark in question was deemed derogatory or insulting. While the case has implications for First Amendment jurisprudence generally, it is of specific importance to the craft beer community.

Image credit: blog.eckraus.com

Image credit: blog.eckraus.com

             Matal v. Tam, involved an all-Asian rock brand that wanted to register a trademark for their band name, “The Slants.” They were denied the registration by the PTO, on the basis that the mark “the Slants,” violated the disparagement clause of the Lanham (Trademark) Act, 15 U. S. C. §1052(a), as the word slants is a commonly used racial epithet for people of East Asian ancestry. The clause states, in relevant part, that:

                  No trademark...shall be refused...on account of its nature unless it, consists of or comprises immoral, deceptive, or scandalous matter; or matter which may disparage or falsely suggest a connection with persons, living or dead, institutions, beliefs, or national symbols, or bring them into contempt, or disrepute.

Following the initial denial, Simon Tam appealed the ruling of the PTO agent, and the case eventually found its way up to the Supreme Court. Upon review, the Court reached two relevant conclusions.

             First, the Court ruled that a trademark registration is not government speech, and therefore First Amendment free speech protections still extend to companies or people who apply for registration.  Specifically, the majority explained that, “[i]f private speech could be passed off as government speech by simply affixing a government seal of approval, government could silence or muffle the expression of disfavored viewpoints. For this reason, we must exercise great caution before extending our government-speech precedents.”

             Second, the Court explained that even if a trademark is considered commercial speech, which generally has a lower level of protection than political or artistic expression, the government still could not deny a trademark for The Slants on the basis that the name is considered derogatory because that would constitute viewpoint discrimination. The Court noted that, “the public expression of ideas may not be prohibited merely because the ideas are themselves offensive to some of their hearers.”  For these and other reasons, the Court struck down the disparagement clause as unconstitutional.

             This decision has immediate implications for those who seek to register a trademark that would have, in the past, been denied because they were deemed derogatory under Section 2(a). For example, in March 2014, the PTO rejected under section 2(a) an application for the mark “Functioning Retard,” which the applicant had sought to register in class 025 for clothing. The applicant refiled for the mark in view of the Tam case.  Now that the Supreme Court has struck down the disparagement clause, the “Functioning Retard” mark will likely proceed to registration. 

             One unanswered question from the Tam case is the scope of the 2(a) language that has been struck down. Following Matal v. Tam, marks that are disparaging can now be registered. However, article 2(a) also prohibits the registration of marks that are ‘immoral” or “scandalous.” There is a pending case before the Federal Circuit,In re Brunetti,that will determine the constitutionality of the “scandalous” clause.  Given the broad scope of how the Supreme Court discussed free speech issues in Tam, particularly its comment that “the proudest boast of our free speech jurisprudence is that we protect the freedom to express ‘the thought that we hate’,” it is likely that the Federal Circuit will either strike down or severely limit registration denials on the basis that the mark is scandalous.

Image credit: Aleheads.com

Image credit: Aleheads.com

In the past, registrations for beer names and logos that were vulgar or offensive were refused under this provision.  For example, Swedish import/export company Berax was denied a registration for the beer mark “The Real Shit.”  Engine 15 Brewing Company was denied registration for its beer mark, “Nut Sack Double Brown Ale (though they later won their appeal and the mark registered).  Wauldron Corporation was denied registration of their “Bad Frog Beer” logo depicting a frog with its middle finger extended.  If the Federal Circuit extends the Tam decision and rules that the scandalous and immoral provisions are also unconstitutional, then these and other vulgar or offensive marks would likely be approved for trademark registration.

             Beyond its impact on trademark registration, the Tam decision (and potentially the In re Brunetti decision) could have an impact on regulations governing label approval by the Alcohol and Tobacco Tax and Trade Bureau (TTB). The decision states that,

Holding that the registration of a trademark converts the mark into government speech would constitute a huge and dangerous extension of the government-speech doctrine.  For if the registration of trademarks constituted government speech, other systems of government registration could easily be characterized in the same way.

The Court is implying here that free speech protections would also extend to content that has to be registered under other systems of government regulation. Under TTB regulations, any malt beverages sold in interstate commerce[KR6] [KR7]  must bear a label that has been registered with, and received prior approval from, the agency (27 C.F.R. § 7.20). In addition to the many other requirements and restrictions for beer labels, applicants are prohibited from using “any statement, design, device, or representation which is obscene or indecent” (27 C.F.R. § 7.29).  While the language does not track exactly with the Lanham Act prohibitions on marks that disparage, or are immoral or scandalous, there is a likelihood any free speech protections that extend to commercial speech which is “immoral...scandalous” would also encompass that speech which is “obscene or indecent.”  Through the incorporation process of the 14th amendment, the free speech protections outlined in Tam (and any subsequent federal decisions that result from the case), would most likely also extend to the state level.  So, for example, Flying Dog’s famous decade long legal battle against the Michigan Alcohol Control Board regarding their “Raging Bitch” beer would nowadays be impacted by the expanded free speech standard outlined in Tam.

             All this, of course, doesn't mean that just because a brewery may now have greater freedom to use disparaging or insulting/scandalous language in its branding, it should necessarily use that freedom. There is a growing sentiment in the craft beer community that breweries who use disparaging language should be called out and admonished for doing so. Recall that under new Brewers Association standards, any breweries who use what the BA considers to be derogatory or vulgar language for a beer name, will no longer be allowed to reference any BA-related awards on the advertising or labeling for that beer.  With this added freedom for breweries, exercising good judgment will be more important than ever.

             Because the scope of the Tam decision is somewhat unclear and the In re Brunetti case is still ongoing, it would be advisable for any brewery using a beer name that might be considered derogatory, scandalous, immoral, obscene, or indecent to contact their trademark attorney for advice particular to their case. 

About the authors:  Gregory Parnas is a contributing writer for DCBeer.com and a local brewery attorney. Brian Kaider is the principle of KaiderLaw, an intellectual property law firm with extensive experience in the craft beverage industry.  Brian can be reached at (240) 308-8032 or bkaider@kaiderlaw.com.

Brewing in Solidarity

by April Anderson

The DC Brewers Guild proudly presents the 9th Annual DC Beer Week, taking place August 20th - 27th 2017. The eight day festival celebrates the Capital region's craft beer community… and throughout the week, local breweries, restaurants, bars & community partners bring the area's best craft beer tastings, educational seminars, and events to the people!

Since 2012 breweries from across the DMV region have joined together to celebrate DC Beer Week with a collaborative brew they call Solidarity Beer, a style which changes from year to year. This beer is exclusively featured during DC Beer Week, creating a celebration of community, and lending to its limited availability. That said, in years past “Solidarity” has only been available on draft. However, that is all about to change, as this year for the first time ever it will be packaged and available for purchase!

 As part of the DC Beer Week tradition… D.C., Maryland, and Virginia craft breweries come together to collaborate on the Solidarity Brew. Each year a different brewery is awarded the opportunity to play host and craft the “Solidarity” beer at their respective facility. Recipe construction of course is a collective effort, lending the opportunity for input from each of the regions talented brewers. This year’s Solidarity Beer style is a Brett IPA, a beer reflective of the unity and vibrant nature within the local community.

Hosted this year by Right Proper Brewing Company, the brew day for “Solidarity” took place Thursday, July 20th at the Brookland Production House on Girard St. The breweries in attendance were Atlas Brew Works,Bluejacket, DC Brau, District ChopHouse,Denizens Brewing Company, Gordon Biersch – Downtown, Gordon Biersch –Navy Yard, Hellbender Brewing Company,The Public Option, 3 Stars Brewing Company, and Port City. Aside from the humidity and sweltering heat (not to mention the brew kettle) the atmosphere was lively and full of industry humor, as the brewers took the opportunity to catch up with each other and talk “shop”.

Those who donated time, materials, and ingredients to help make this beer happen include United Bottles & Packaging, Blue Label Digital Printing,Andy Sides Designs, YCH HOPS, and Country Malt Group. And just in case that wasn’t enough… Holly Haliniewski, the Operations Manager for theD.C. Brewers Guild, facilitated a media segment with The World of Beer – Drink It interns to document the day and interview a few of the brewers. Nathan Zeender, Head Brewer of Right Proper Brookland Production House & Tasting Room remarked “I was glad everyone was on board with a beer fermented with our house mixed culture that would play to the strengths of our brewery by offering something funky, unfiltered, and juicy for the August heat. The fact that it is the first bottled beer we've ever released is meaningful, and more so that it happened with the help of so many friends and partners.”

Additional comments were made in reference to the significance behind the brew and the meaning for which it stands. Barrett Lauer, Head Brewer for The District ChopHouse & Brewery, stated, “"Solidarity" is a celebration of quality beer. It embodies the idea that not only local breweries, but local bars, businesses, retailers, distributors, artists, and suppliers, are all in this together. Working together we are all much stronger than when we work alone. Beer culture exemplifies this and "Solidarity" celebrates our healthy and thriving culture. There is a lot of time, labor, and love in beer. At the end of it all it is awesome to sit back, enjoy it, and celebrate it together.”

As such, “collaboration” is a term which many of us in the beer industry are quite familiar with… whether it be the formulation, participation, or (my personal favorite) consumption of. We are joined together by the notion of creativity, innovation, and passion to craft such a brew. Coming at a time where we may find ourselves divided through mergers, buy-outs, and difference in opinions… it is important to remember community and a genuine love for the craft.

Lastly, “Solidarity” stands for harmony, unity, and fellowship… reason’s for which the beer community has thrived amongst the world. That said, if you get the chance to participate in the week’s festivities throughout the DMV region, be sure to take a moment to reflect on what is in your pint glass… and its ability to connect us! 

- April Anderson

History's Mysteries: First Female Brewer in D.C.?

By Michael Stein, Educator, Author, Historian

Who was the first recorded female brewer in the District of Columbia? A tricky question to answer.

Who was the first female brewer in Washington, D.C., after prohibition? This one proves even trickier.

According to Garret Peck's Capital Beer: A Heady History of Brewing in Washington, D.C., the first female brewer in D.C. history appears one year after the end of the Civil War. Peck writes that Catherine Baumann is listed "as the first woman brewer in Washington" in Boyd's Directory. He goes on to write "whether she actually brewed is questionable, given that she soon put the brewery up for auction." Baumann had inherited the brewery from her late husband, as she was the executor of his will.

Over 150 years ago, D.C. had its first recorded brewster. Whether Catherine Baumann brewed or not, she was listed as one. We know thanks to the research of Daniel Tana, Program Manager at the Center for Design & Cultural Heritage, that the 1860s was a time when even the spelling of the Baumann name varied.

According to Tana's The Last Call: Preserving Washington's Lost Historic Breweries, Paul Baumann was also written as "Paul Bowman" in the years after his brewery was first listed in 1858. Baumann's brewery stood at 21 East Capitol Street, near today's 1st St. NE just blocks from the Capitol building.

Perhaps then it is no surprise that his wife, Catherine, as both Tana and Peck refer to her, is listed as "Katharina" in the 1867 Boyd's Directory. By 1860 Baumann had another brewery at 504 D Street SE. That location is now a modern residence between 5th and 6th Streets SE, about a block from Hank's Oyster Bar Capitol Hill, 633 Pennsylvania Ave. SE, where you can enjoy beers from Guild members Atlas Brew Works, DC Brau, and Right Proper.

So it's been a century and a half since D.C.'s first recorded female brewer, but what of D.C.'s first brewster post-prohibition?

I reached out to some of the most knowledgeable, historically-interested brewers in the area. My request was simple, who was the first female brewer in D.C. since 1933?

Barret Lauer, Head Brewer of the District Chophouse, replied, "So was Kristi technically a D.C. Head Brewer since they are brewing in VA? I think we would have to give that honor to Megan Parisi?"

Gordon Biersch Navy Yard Head Brewer Travis Tedrow followed up with "Barrett you are correct, no actual Cap[itol] City brewing in D.C. proper when Kristi took over." So this ruled out beloved brewster Kristi Mathews Griner on the technicality that when she was Head Brewer for Capitol City her work took place in Virginia. So was the title holder Megan Parisi, Bluejacket's first brewer?

Mad Fox Brewing Company CEO, Bill Madden, set the record straight, though he could not remember the last name of the mystery woman, and simply remembered her as Daria. "I last saw her at the Craft Brewers Conference in Boston in 1996 I believe. Yes, she did brew and everything else we did on that 10 HL system at the original Cap City."

Madden was unable to remember her name but thanks to an earlier D.C. brewster in Parisi, we were able to identify D.C.'s first female brewer since prohibition:

"Through a bit of sleuthing I managed to get her name, Darrah Bryans. I asked Megan Parisi at Sam Adams about her, she contacted Jodi Andrews who was brewing at Boston Beer Works in the mid 90's time-frame. Darrah Bryans went from Capitol City in 1995 to Doemans Academy in Germany to Brew Moon on Harvard Square. That is as far as I can go on finding more about her, not much written on the individual brewers back then and she may have gotten married and changed her name."

And so it is solved: Darrah Bryans was D.C.'s first female brewer since prohibition. Catherine, or Katharina, Baumann, was D.C.'s first documented female brewer pre-prohibition. At least until an enterprising beer historian turns up another document from the Civil War era!

Darrah Bryans (photo credit Restaurant-Hospitality.com)

Darrah Bryans (photo credit Restaurant-Hospitality.com)

CFATS & the Brewing Industry: Don’t Let Your Chemicals Be a Terrorist’s Next Weapon

By Andrea Fellows, Department of Homeland Security

Did you know that the chemicals you use every day might be regulated under a Department of Homeland Security anti-terrorism program?  While their benign uses may be as cleaners, disinfectants, or refrigerants, in the hands of a terrorist they could be cause an explosion, create a cloud of toxic gas, or be stolen and used to cause mass casualties offsite.     

The Department of Homeland Security has a list of 322 chemicals, known as Appendix A, that trigger reporting requirements. Anyone who has these chemicals at DHS’s screening threshold quantity (STQ) must complete a Top-Screen assessment, which DHS uses to determine whether a facility is at high-risk of terrorist attack.  High-risk facilities develop security plan tailored to their chemicals and business processes.

Currently regulated facilities within the brewing industry have mainly reported chemicals related to refrigeration, pasteurization, cleaning, sanitizing, and disinfecting.

COI

SECURITY ISSUES

COMMON USEAGE

Ammonia (anhydrous)

Release- Toxic

Refrigeration

Bromine Chloride

Theft-Weapon of Mass Effect (WME)

Sanitizer/ Disinfectant

Chlorine

Release-Toxic; Theft-WME

Cleaning

Chlorine Dioxide

Release-Toxic; Sabotage/ Contamination

Sanitizer/ Disinfectant

Ethylene Diamine

Release-Toxic

Cleaning

Hydrogen Chloride (anhydrous)

Release-Toxic; Theft-WME

Sanitizer/ Disinfectant

What if a facility does not report?

While the Department’s strong inclination is to work with facilities to assist with compliance, DHS has the authority to fine a facility that is not complying with the regulation up to $33,333 a day per violation. 

Interested in learning more?

Email CFATS@hq.dhs.gov, or visit www.dhs.gov/chemicalsecurity for more information about the CFATS program and chemical security. The list of chemicals of interest is available at: www.dhs.gov/appendix-a-chemicals-interest-list.

MEGABREW: The AB InBev and MillerCoors merger and what D.C. breweries can do about it

By: Gregory Parnas

Almost a year and a half ago, on November 11, 2015, AB InBev (ABI) announced that it had reached a $107 billion deal to acquire its chief global rival SAB-Miller. This announcement touched off a lot of very justifiable anxiety over what the merger would mean for the craft brewing community, and more importantly to the beer distribution networks that are dominated by AB and Miller. The announcement also began a nine-month long review process by the Department of Justice (DOJ) Antitrust Division. That process led to a challenge from the DOJ of the merger, with a subsequent D.C. federal court complaint and (due to a somewhat archaic legal procedure) simultaneous consent decree, or settlement agreement, being filed between the U.S. government and the defendants, ABI and SABMiller.

The proposed consent decree, issued on July 20, 2016, set out certain terms of approval for the AB-Miller merger and was subject to a public notice and comment period. During that comment period a number of stakeholders, among them, the Brewers Association, the State of North Carolina, two national beer wholesalers associations, the Virginia Beer Wholesalers Association, Ninkasi, Yeungling, the Teamsters Union and a number of other parties, wrote in to address various aspects of the proposed decree and explain why the merger may harm the American beer industry and more specifically beer consumers. In any antitrust review, the key question is not whether a particular merger will harm competitors or industry members, but whether consumers in the “relevant” market will be harmed by the acquisition. On January 13, 2017, the DOJ issued their response to the public comments along with publishing said comments.

In their response, the DOJ essentially said, thank you very much for all your comments and concerns, but we believe the proposed consent order is just fine as it is. Specifically, the DOJ cited relevant case law which explains that, “A ‘proposed decree must be approved even if it falls short of the remedy the court would impose on its own, as long as it falls within the range of acceptability or is within the reaches of the public interest.”

The proposed consent decree has now cleared most of the relevant procedural hurdles and is likely to be shortly finalized by order of the D.C. District Court. Here is where the members of the DC Brewers’ Guild come in. Among other provisions, the consent decree provides for the appointment of a Monitoring Trustee whose job it is to oversee the conduct of ABI during the ten-year period of the Court Order. That trustee’s name is William E. Berlin; he is a local D.C. attorney whose office is located at 1425 K Street NW. His email address is wberlin@hallrender.com and his phone number 202-370-9582. Bill Berlin’s job over the next decade is to field any and all complaints from beer industry members regarding the conduct of ABI, particularly as it concerns violations of the consent decree with the DOJ. While Bill is given authority to investigate such complaints, and issue recommendations to the Antitrust Division, it is ultimately in the sole discretion of the DOJ to accept, modify, or reject the Trustee’s recommendations for action against ABI. According to Bob Pease, President of the Brewers Association, keeping Mega Brew in check will require the vigilant eye of the brewing community.  DC Brewers’ Guild members should make note if they hear of any of the following prohibited practices in the consent decree:

(1)    ABI acquiring more than 50% ownership of equity or assets in a distributor, if acquiring that distributor would mean that more than 10% of ABI’s beer in the geographic territory would be sold through distributors that they own. Unfortunately, ABI is still permitted by the plain wording of the decree to acquire more than 50% of the voting shares in a distributor business, or anything up to 49% of the ownership shares, without any violation of the Court Order.

(2)    ABI cannot condition its relationship with an Independent Distributor (defined as any distributor where ABI doesn’t have a 50% plus ownership stake), or provide any reward or penalty to the Distributor, based upon its sale of third party brewers’ beer or the promotional/account services the Distributor provides to those independent brands. There are a number of specific examples provided in the consent decree, which can be found here. However, ABI is permitted to condition its relationship with a Distributor, and provide all sorts of rewards and penalties, based upon that Distributor’s efforts to promote and sell ABI brands, as long as such conduct doesn’t require or encourage the Distributor to provide less than best efforts for its independent brands. For example, if 40% of a distributor’s revenue in the previous year came from selling ABI products, the Consent Decree explicitly states that the Independent Distributor can be required to spend up to 40% of their promotional and incentives budget for the subsequent year on ABI products.

(3)     ABI cannot object to the placement of an Independent Distributor’s general manager based on that Distributor’s sale, retail placement, or promotion of a Third Party Brewer’s beer. How one would establish that this was the actual reason for ABI’s objection is not discussed in the Consent Decree.

(4)    If ABI exercises its right to intervene in the case of a change in the transfer of control, ownership, or equity from one Distributor to another Distributor, when ABI intervenes it cannot take into account the business that the Distributor has with a Third Party Brewery or the retail placement of that brewery’s beer.

(5)    ABI cannot request that an Independent Distributor provide them financial information regarding anything related to a Third Party Brewery, or require that an Independent Distributor provide them general financial data about the Distributor or ABI related information, if by doing so ABI would be able to ascertain any financial information regarding the Third Party Brewer.

If any DC Brewers’ Guild Brewery Members are harmed, or are likely to be harmed, by the conduct of ABI regarding one of their distribution partners, or otherwise hears through the beer community of any inappropriate conduct that would fall within the scope of the consent decree with the DOJ, they should contact the Monitor Trustee, Mr. Bill Berlin. Even if the Antitrust Division decides not to proceed forward with any action against ABI, publicity of the conduct could impact the conglomerate’s actions. Furthermore, records of the complaints to the Monitor Trustee and subsequent investigation, can provide evidence for a future civil suit against ABI.

Across the Bar

A series of interviews of brewers, brew staff, and customers of D.C. breweries
By Jeff Duby

Interview with Ben Evans of Hellbender Brewing Company

Jeff Duby: Ok, so for the readers out there who might not know you, can you tell us a little about yourself?

Ben Evans: Sure, I was born in D.C. and grew up in Philadelphia, went to undergrad in rural Pennsylvania, and came back and went to grad school at the university of Maryland, and I’ve been back ever since. I majored in biology and worked in neuroscience during my graduate program. I guess it’s the science background that led to the transition to brewing in a lot of ways.

JD: Now how did you get into brewing? Was it homebrewing? Formal training?

BE: Yeah, it was one of those Homer Simpson presents that my brother and I got my dad when we were in college.  It was a homebrewing kit and we got it because we figured we’d get to drink the beer when we got back from school, but we all liked it and really ended up being a family thing for a while. We ended up doing some really awful kits for a while [laughs] it really tasted off-putting, kind of like a nasty cider.  So it wasn’t long after that we started getting more advanced, getting into all grain and being more selective with our hops.  We really got the bug, our beer quality improved greatly from there. 

JD: At one point from being a homebrewer did you want to get into brewing as a professional thing?

BE: It wasn’t an overnight thing, but during the summer between undergrad and grad school I was playing rugby and one of my teammates was the head brewer at a local brewpub. He invited me to brew with him and started showing me how to brew on a 15 barrel system. I would travel up there during grad school whenever I could up in Delaware and over the course of grad school and research, I started thinking maybe I could make a run at going into brewing.

After coming back to D.C. I noticed there was a real shortage of breweries in the area. It really sparked my interest because there didn’t seem to be anyone doing what I wanted to do here. My business partner and I started kicking around the idea of opening up a brewery. This is going back six or seven years.

JD: In terms of your brewery, your system, you’ve gone for a very modern very high efficiency system. What went into that decision?

BE: At the end of the day we really wanted to focus on being as sustainable as possible. It was a little more expensive as a system, but with the savings on water and grain we knew we could pay it off faster over time.  It starts to pay for itself pretty quickly, so going for modern equipment to us was a no-brainer.

JD: What’s your brewing philosophy? What are you trying to accomplish?

BE: We brew some traditional beers, but we really like to do our own things, we like to brew our own way and try to come up with some innovative beers.  Some of my favorite things don’t fit a lot of traditional styles.  Our Redline Ale for example is probably a little hoppier than a traditional American Amber, I like our seasonals as well.  Our Grampus which is on right now is something I’ve been brewing for about ten years, and it’s something between a nut brown and a porter.  It’s kind of got its own thing going on.  We try to keep things fresh, mix things up using different hops, different barley, and different yeast strains.  Of course we want to make beers which are great, but we also want to make each one distinct as well.

JD: And for everyone out there who may not know, what is a hellbender?

BE: A hellbender is a giant salamander which is indigenous to this area and a lot of the northeastern United States. It’s a local endangered species; we went with that name because it goes along with our philosophy of sustainability and locality.  Sustainability has always been key to our philosophy and it’s given us a lot of pleasure to partner with a lot of amazing institutions like the National Zoo, the U.S. Forestry Service and Freshwaters Illustrated.  Recently we’ve been able to help by raising money through fundraisers which have contributed to the creation of an Appalachian salamander exhibit at the National Zoo.  We’ve also offered screenings of a film called The Last Dragons which is about hellbenders.  On top of that, it looks cool and sounds cool and makes a cool logo.

Jeff Duby is a homebrewer and a beer nut.