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28 October 2021Trademarks

Federal Circuit serves cold judgment to Brooklyn Brewery

The US Court of Appeals for the Federal Circuit yesterday  mostly affirmed the Trademark Trial and Appeal Board’s (TTAB) determination in a dispute centring on trademarks for beer-making kits.

Brooklyn Brewery brews and sells craft beer. It has used ‘Brooklyn’ and ‘Brooklyn Brewery’ in connection with the advertising and sale of its beer and merchandise for more than 30 years. In 2006, ‘Brooklyn Brewery’ was registered (trademark number 3,186,503) to cover beer in class 32.

Meanwhile,  Brooklyn Brew Shop was founded in 2009. The shop sells beer making kits which contain brewing equipment, cleaning sanitiser, and ingredients.

Both beer companies sell their products across the US, through a range of retailers. Between 2011 and 2015 they partnered on a number of projects, including the sale of co-branded beer making kits.

In 2011, Brooklyn Brew Shop registered ‘Brooklyn Brew Shop’ as a trademark covering beer making kits in class 32 (trademark number 4,034,439).

In 2014, the shop sought to register the same mark in stylised font in class 32, for a range of beer, beer-related beverages, and beer kits. The applied-for mark was also to cover international class 5 for sanitising preparations.

The following year, Brooklyn Brewery petitioned the TTAB and asked that the ‘429 mark be cancelled. The brewery also opposed Brooklyn Brew Shop’s application to register the stylised version of the mark.

The brewery said that the marks were likely to cause confusion with Brooklyn Brew Shop’s own existing marks, that the marks were merely descriptive, and that the marks lacked distinctiveness.

Brooklyn Brew Shop relied on the defences of laches and acquiescence in relation to the ‘429 mark, claiming that Brooklyn Brewery had unduly delayed asserting its rights.

The shop also moved to amend its application for the stylised version of the mark, removing everything but beer making kits in class 32. Brooklyn Brew Shop consented to the TTAB entering judgment in Brooklyn Brewery’s favour in respect of the deleted goods, in the opposition.

In 2020, the TTAB disagreed that Brooklyn Brew Shop’s existing or applied-for mark would be confused with Brooklyn Brewery’s trademarks. The board also said the brewery had failed to show that the shop’s marks were merely descriptive.

In its decision, the TTAB granted Brooklyn Brew Shop’s motion to amend its application and limit the class 32 goods to beer making kits only, but the board did not reflect this by entering judgment for Brooklyn Brewery in relation to the removed products.

Brooklyn Brewery appealed.

The Federal Circuit found that the brewery lacked standing to appeal in relation to the class 5 goods to be covered by the applied-for mark; the brewery did not distribute products within the same trade channels as that of sanitising preparations, and so could not show that it would suffer injury by the mark’s registration.

As to the other aspects of the appeal, Brooklyn Brewery argued that the TTAB had abused its discretion by applying the defence of laches and, regardless, the brewery had established “inevitable confusion” and this argument overcame the defence.

The Federal Circuit did not agree. It found that the TTAB’s application of laches was not an abuse, and that there was “substantial evidence” to support the finding that the similarities between the two brewing companies’ respective marks do not cause actual confusion between consumers.

Although the marks are substantially similar, “they are not nearly identical and neither are the goods”, the Federal Circuit said. In fact, most of the evidence produced to demonstrate the alleged confusion was actually from the period when the parties were actively collaborating on co-branded beer kits.

The Federal Circuit also affirmed the TTAB’s rejection of Brooklyn Brewery’s argument that Brooklyn Brew Shop’s existing and applied-for mark were descriptive.

Stephen Valand, co-owner and founder of Brooklyn Brew Shop told WIPR: “We are very pleased with the decision confirming our federal trademark rights in the name that we’ve used on beer making kits for over a decade."

In a small win for Brooklyn Brewery, the Federal Circuit did agree that the TTAB should have entered judgment in its favour in respect of the goods that Brooklyn Brew Shop removed from class 32 in its trademark application.

Brooklyn Brew Shop consented to this judgment being entered and doing so offers the brewery protection from the shop seeking to register the mark for these additional goods at a later point, the Federal Circuit said. It remanded this aspect of the matter back to the TTAB for judgment.

Overall, the Federal Circuit dismissed in part, affirmed in part, vacated in part, and remanded the matter back to the TTAB in part. Each party was directed to bear its own costs in respect of the appeal.

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