The Tasmanian Devil does not Approve of Beer

 

The Tasmanian Devil cartoon character has been described as a "ferocious albeit dim-witted omnivore with a notoriously short temper and little patience". See: http://en.wikipedia.org/wiki/Tasmanian_Devil_%28Looney_Tunes%29. I'm sure that Steinbeck Brewing Company would agree with this assessment after Warner Brothers filed an opposition proceeding against its application to register the mark TASMANIAN DEVIL. 

Steinbeck Brewing Company is a California company which does business as Buffalo Bill's Brewery. See: http://www.buffalobillsbrewery.com/. Steinbeck filed applications for the marks TASMANIAN DEVIL and TASMANIAN DEVIL BARLEY TASMANIAN HOPS WATER YEAST BUFFALO BILL'S BREWERY & Design in January 2012.  The application for the design mark received an objection based on a third party application for the mark BUFFALO BILL CODY, but the application for the TASMANIAN DEVIL word mark was allowed and published for opposition in January 2013. After obtaining an extension, Warner Bros filed the opposition in July 2013.

The Opposition:

Warner Bros. did not pull any punches in its Notice of Opposition, attacking both the quality and reputation of Buffalo Bill's as well as Steinbeck's motivation in choosing the TASMANIAN DEVIL mark. For example, Warner Bros. alleged that:

• "Applicant operates "Buffalo Bill's Brew Pub, a disreputable bar and restaurant in Hayward, California that often receives customer complaints about the poor quality of its operations."
• "[I]t is because of Applicant's obvious inability to build a good reputation on its own that Applicant decided to boost its sales by misappropriating Opposer's TASMANIAN DEVIL and TAZ marks, with the added ulterior motive of inducing children or minors familiar with these marks to consumer alcohol sold by Applicant."

See: http://ttabvue.uspto.gov/ttabvue/v?pno=91211605&pty=OPP

While Warner Bros.'s hard-hitting allegations make for an interesting read on their own, there are also a few intriguing legal issues raised in the Opposition.  For example, in addition to the usual likelihood of confusion and dilution claims, Warner Bros. also alleged that Steinbeck should be precluded from registering the TASMANIAN DEVIL mark pursuant to the doctrine of res judicata or collateral estoppel. It turns out that Warner Bros.' predecessor in interest, Time Warner, prevailed in an opposition proceeding against Steinbeck over 10 years ago. In that case, the Board sustained Time Warner's opposition against Steinbeck's application for the mark TASMANIAN DEVIL GOOD FOR DRINKIN' 'N DOG BITES & Design on the ground that Steinbeck did not own the mark, and therefore, the application was void ab initio. So should the fact that Steinbeck was not the owner of the previous mark in 1999 preclude it from obtaining a registration for the TASMANIAN DEVIL mark today?

Res Judicata:

The doctrine of res judicata encompasses two related concepts: "issue preclusion" and "claim preclusion". "Issue preclusion refers to the effect of a judgment in foreclosing relitigation of a matter that has been litigated and decided. This effect also is referred to as direct or collateral estoppel." See: Migra v. Warren City Sch. Dist. Bd. of Educ. (465 U.S. 75).  In other words, if a specific issue has been litigated and a decision issued on the merits, a party cannot seek to raise that issue again in a different proceeding. "Claim preclusion refers to the effect of a judgment in foreclosing litigation of a matter that never has been litigated, because of a determination that it should have been advanced in an earlier suit." Id. In other words, a party may be precluded from raising a claim in a second proceeding, even if that particular claim was not raised in the first proceeding.

In the previous proceeding, Steinbeck stipulated to entry of summary judgment, without prejudice, because it was merely a licensee of the mark at issue. It explained that it mistakenly believed that its status as a licensee provided it with authority to seek registration of the mark.  In its stipulation filing, Steinbeck expressly noted that it continued to oppose the other grounds for Time Warner's opposition.

In its decision granting Time Warner's motion for summary judgment, the Board noted that "Applicant has indicated that it was not the owner of the mark when it filed the application. Thus, as a matter of law, the application is void."  Therefore, the Board found that "opposer's motion for summary judgment on the pleaded issue of ownership is granted; the remaining pleaded issues upon which opposer's motion is based, as well as the remaining pleaded issues in the notice of opposition, are moot."See: http://ttabvue.uspto.gov/ttabvue/v?pno=91119790&pty=OPP&eno=29.

It appears that Warner Bros. is arguing that the issue of ownership of the mark was already decided, and therefore issue preclusion should apply to this question. One would have to assume that Steinbeck would not make the same mistake twice, and that it is now the owner of the applied-for mark. If that is the case, Steinbeck will likely counter that there have been changed circumstances sufficient to prevent the application of issue preclusion.

On the claim preclusion issue, Warner Bros. will likely argue that there was a previous final decision on the merits involving a substantially similar mark, and therefore, Steinbeck should be precluded from taking a second bite at the apple.

In order to prevail on the issue of claim preclusion, Warner Bros. must show:

(1) identity of the parties or those in privity with the parties

(2) a final judgment on the merits of the prior claim; and

(3) that the second claim is based on the same transactional facts as the first and should have been litigated in the prior case. 

See: Sharp Kabushiki Kaisha v. Thinksharp, Inc., 448 F.3d 1368 (Fed. Cir. 2006).

There likely won't be any dispute about the first and second factors, but presumably Buffalo Bill's will argue that the claims at issue here are based on a different set of transactional facts than those in the prior case, and that res judicata would also be inappropriate because the judgment in the previous case was entered without consideration of the merits of the likelihood of confusion and dilution claims.

The TTAB has previously applied claim preclusion to situations where an applicant sought to register a mark that was only a slight variation of an earlier mark that had been the subject of a successful opposition proceeding (even where the prior proceeding ended in a default judgment). See: http://thettablog.blogspot.com/2007/04/ttab-applies-res-judicata-sustains.html. On the other hand the TTAB has rejected a claim preclusion argument where parties have chosen to default in one proceeding, but defend against another proceeding for a substantially similar mark. See: http://thettablog.blogspot.com/2006/05/cafc-affirms-ttab-rejection-of-res.html. Steinbeck will be able to point to certain language in the Sharp decision to support its position that claim preclusion is inappropriate here, such as: "[t]he Supreme Court has cautioned that the offensive use of res judicata should be examined carefully to determine whether it would be unfair to the defendant."

It will be interesting to see how the Board comes out on this issue if the case proceeds to a decision.

[An interesting sidenote: this isn't the first time that a brewery has encountered an opposition based on the TASMANIAN DEVIL mark--Boston Beer Company's application for the mark DEVIL MOUNTAIN TASMANIAN PALE ALE was opposed by Time Warner in 1998. The matter was resolved by Boston Beer Company withdrawing the application, and Time Warner withdrawing the opposition. See: http://ttabvue.uspto.gov/ttabvue/v?qs=75285428]

Anchor Steam vs City Steam: Can a Generic Term be Captured from the Public Domain?

It is black letter law that a term which describes a class or category of goods is considered generic and cannot be protected as a trademark. A recent example of this concept can be found in the TTAB's refusal of one brewery's attempt to register the phrase CHRISTMAS ALE for beer. (See http://thettablog.blogspot.com/2012/01/ttab-affirms-genericness-refusal-of.html)  But does the law allow for the possibility that a term that is generic today may gain trademark significance in the future?  In other words, can a term that was once considered generic be captured from the public domain by a single company as a result of the company's long and exclusive use of the term and/or because of changed circumstances?  This will likely be one of the primary issues in dispute in the recent lawsuit filed by Anchor Brewing against City Steam Brewery.

The Parties:

Anchor Brewing:

Anchor Brewing is the San Francisco based brewery best known for its Anchor Steam Beer. It has a long and storied history, beginning in the California gold rush, continuing through two rebuilding efforts after fires, and then flourishing under the ownership of Fritz Maytag during a period when the craft beer industry as a whole was in a serious decline. While Anchor Brewing has been lauded for its many contributions to the American craft brewing industry, it has drawn the ire of some for its aggressive approach toward claiming exclusive rights in the phrase "steam beer".

Steam beer is (or was) a type of beer that originated in the western US in the 1800s. It is a lager, but during the brewing process, the yeast ferments at higher temperatures than those typically used for lagers. This was necessary due to the lack of refrigeration at the time and the warmer temperatures in the western US. See: http://beeradvocate.com/beer/style/132/. Different explanations have been offered for the origin of the term "steam beer", including that it was a reference to the steam that was produced while the fermenting beer cooled in open pans, or to the escaping gas when a keg of the beer was tapped (due to the high amount of pressure in the keg).  Numerous breweries were producing steam beer by the early 1900s, but after Prohibition, according to Anchor, it was the only brewery that continued to use the "steam beer" term.

In 1978, Anchor filed a trademark application for a stylized version of the "steam beer" term:

The application was initially refused on the ground that the term "steam beer" merely describes a type of beer. Anchor responded by arguing that this term may have been descriptive in the past, but that it now functions as a trademark and that it should be allowed to register based on a claim of acquired distinctiveness. Anchor also directed the Examiner's attention to a lawsuit it had recently filed against a company that was using the term "California Steam Beer". The Examiner was not persuaded by Anchor's arguments, stating that ""steam beer" denotes a type of beer and thus cannot be exclusively appropriated by one brewer".  However, the Examiner requested that Anchor provide an update on the status of the lawsuit.  Anchor then submitted another round of arguments along with a copy of the court's decision in which it was granted an injunction (though the court based its decision on the defendant's intent to cause consumer confusion by copying Anchor's trade dress, and expressly noted that it could not decide on the record before it whether Anchor possessed trademark rights in the term "steam beer").  The Examiner then removed the objection and allowed the application to proceed to publication.  The application was opposed by a company that was importing beers from the UK which were labeled as "steam brewed". However, the opposition was dismissed a few months later. (Interestingly, Anheuser-Busch had filed an extension of time to oppose the application, but did not end up filing an opposition.)

In 1988, Anchor filed another trademark application for the term "Steam Beer"-- this one without any stylization.  Anchor again encountered an objection from the Trademark Office, but this Examiner could not be persuaded to remove the objection, and Anchor abandoned the application. (Copies of the documents associated with this application are not available on the Trademark Office's website, so it is unknown what the grounds for objection were.)

Anchor was apparently not discouraged by the Trademark Office's tepid reaction to its claim of exclusive rights in the "steam beer" term, as it has continued to seek to prevent others from using this term.  According to The Oxford Companion to Beer, "letters have appeared on the doorsteps of more than a few brewers, requesting them to cease and desist the use of even oblique and playful reference to "steam beer"."  The Oxford Companion further notes that "[a]n outgrowth of this assertion of right...has been the designation of the once-ubiquitous American steam beer style by various US judging entities as "California Common Beer"." See: Garret Oliver, The Oxford Companion to Beer (Oxford University Press, 2012).

City Steam Brewery:



City Steam Brewery has been operating in Hartford, CT since 1997. [Full disclosure: I am from Connecticut and have been to City Steam Brewery a number of times.] According to its website, the "City Steam" name was inspired by the steam brewing process it employs at its brewery:
"The Hartford Steam Company supplies economical steam-heating and chilled water for cooling to many buildings in Hartford through a district heating and cooling system. Hartford Steam has engineered a way to run steam pipes into our brewery cafe. Enabling us to power our 23-barrel brewery with “city steam”. You can see the steam firsthand when we blow our antique steam-whistles. And ask our brew master about the technology ... he’ll tell you brewing with steam is a dream come true!"
See: http://www.citysteam.biz/history.html#

Steam brewing has its own place in brewing history, which is unrelated to that of "steam beer". See: One Hundred Years of Brewing: A Complete History of the Progress Made in the Art, Science and Industry of Brewing, (H.S. Rich and Co., 1903)("the introduction of steam brewing caused a complete revolution.").

The Opposition and Lawsuit:

In May 2012, City Steam filed an application to register the CITY STEAM mark. The application was approved and published for opposition in November 2012. Anchor Brewing then initiated an Opposition proceeding in March 2013. As grounds for opposition it alleged that the CITY STEAM mark is likely to cause confusion with, and dilution of, Anchor's registered mark STEAM BEER (stylized) and its common law rights in the mark ANCHOR STEAM BEER.  The opposition was suspended in September so the parties could engage in settlement discussions, but apparently the discussions were unsuccessful because Anchor filed a lawsuit in Connecticut Federal Court in January. In its complaint, Anchor sets forth essentially the same allegations as those contained in the notice of opposition. Though one factual distinction is that the common law mark cited in the complaint is ANCHOR STEAM (rather than ANCHOR STEAM BEER).

It is too early in the proceedings to  analyze the parties' arguments, but presumably one of City Steam's defenses will be that the term "steam beer" is generic and therefore Anchor's attempt to claim trademark rights in it is fatally flawed. Anchor would surely disagree, and argue that it has successfully captured the term from the public domain. In the few decisions that have touched on the issue, the courts have come out in different ways. Some courts have held that a generic term can never be transformed into a valid trademark, reasoning that even if there is evidence which demonstrates that a generic term is identified with one producer, this only proves that there exists "de facto" secondary meaning. See, e.g., Abercrombie & Fitch Co. v. Hunting World, Inc., 537 F.2d 4 (2d Cir. 1976); and A.J. Canfield Co. v. Honickman, 808 F.2d 291 (3d Cir. 1986). However, a few other courts (and the Trademark Office) have at least recognized the possibility that a formerly generic term could be "captured" by a single company. See, e.g., Miller's Ale House v. Boynton Carolina Ale House, LLC, 702 F.3d 1312 (11th Cir.2012)("Were changed perception sufficient to warrant the elevation of a non-coined, generic term to trademark status, such change would have to be radical."); Miller Brewing Co. v. Falstaff Brewing Corp., 503 F. Supp. 896 (U.S.R.I. 1980), reversed, 655 F.2d5 (1st Cir.1981); Harley Davidson, Inc. v. Grottanelli, 164 F.3d 806 (2d Cir.1999)("The public has no more right than a manufacturer to withdraw from the language a generic term, already applicable to the relevant category of products, and accord it trademark significance, at least as long as the term retains some generic meaning.")[emphasis added]; and In re Holmstead, No. 75/183,278 (T.T.A.B., April 4, 2000). And at least one court has found that a term that was once a trademark, which then became generic, could be "recaptured" by the original owner. See: Singer Manufacturing Co. v. Briley, 207 F.2d 519 (5th Cir. 1953).


Of course, even if the court finds that Anchor possesses trademark rights in the "steam" term, City Steam will be able to assert all of the usual defenses, including that Anchor's marks are weak and that there are sufficient differences between the respective marks to prevent any consumer confusion.  City Steam will also be able to point third party use of the term "steam" in connection with beer to support its argument that Anchor's marks are weak. A review of the USPTO database uncovered the following registrations that may serve useful for this purpose:

• STEAMWORKS: Registration covering beer, ale, lager, malt liquor, stout, porter, and lambic.
• FULLSTEAM: Registration covering beer, ale and lager.
• STEAM WHISTLE & Design: Registration covering: alcoholic beverages, namely, beer.
• STEAM ENGINE LAGER ARGUABLY THE BEST AMERICAN STYLE AMBER LAGER IN THE WORLD & Design: Registration covering: beer.
• NASHVILLE STEAMER: Registration covering beer.

One final observation: it is interesting that on Anchor's website, it is using the "R" symbol next to the word "Steam" in the phrase "Anchor Steam Beer" despite the fact that neither "Steam" nor "Anchor Steam" is a registered trademark in the US. See: http://www.anchorbrewing.com/beer/anchor_steam [Though Anchor does have a CTM registration (which covers the EU) for "Anchor Steam", and it potentially has registrations in other jurisdictions as well.]

SCHLAFLY Trademark Dispute: A Family Affair

 
It's rare to see a trademark opposition proceeding where the opposing party is a family member of the applicant. And it is unlikely that there had ever been one where the opposer was the applicant's 89 year-old aunt. Until recently, that is, when The Saint Louis Brewery's application for the mark SCHLAFLY was opposed by Phyllis Schlafly, the aunt of the brewery's co-founder, Tom Schlafly.  For good measure, two of Phyllis Schlafly's sons opposed the application as well.


The Parties:

Tom Schlafly is the co-founder and Chairman of The Saint Louis Brewery. He is also an attorney and holds various civic leadership positions in St. Louis, including serving on the Board of Directors of the St. Louis Public Library. But perhaps his most interesting position is the chief lyricist of a troupe of singing lawyers called The Courthouse Steps. (See: http://www.thompsoncoburn.com/people/find-a-professional/thomas-schlafly.aspx)

Phyllis Schlafly is a well-known conservative activist, author, and founder of the Eagle Forum. She is known for, among other things, her best-selling book published in 1964, A Choice Not an Echo, and her campaign against the Equal Rights Amendment in the 70s. (See: http://en.wikipedia.org/wiki/Phyllis_Schlafly)

Phyllis' son, Bruce Schlafly, is an orthopedic surgeon in St. Louis. (See: http://health.usnews.com/doctors/bruce-schlafly-165519)

Phyllis' son, Andrew Schlafly, is an attorney and conservative activist. He graduated from Harvard Law School, and was an associate at Wachtell, Lipton, Rosen & Katz before founding Conservapedia. (See: http://en.wikipedia.org/wiki/Andrew_Schlafly)


The Application:

The St. Louis Brewery has been distributing beer under the SCHLAFLY name since 1991. [The Brewery's website helpfully instructs that "laf" in "Schlafly" is pronounced like "laugh" and "ly" is pronounced like "lee".]
 
The Brewery already owns two trademark registrations for design marks featuring the SCHLAFLY term along with other words. But it did not seek registration for the SCHLAFLY mark on its own until 2011. This application was approved by the Trademark Office and published in July 2012. In September 2012, Notices of Opposition were filed by Phyllis Schlafly, Bruce Schlafly, and Andrew Schlafly. [Andrew Schlafly's opposition was subsequently dismissed after he failed to respond to the Brewery's motion to dismiss.]

The Oppositions:

The Notices of Opposition all list as the sole ground for opposition that the SCHLAFLY mark is primarily merely a surname.  U.S. trademark law prohibits the registration of any mark that is "primarily merely a surname" unless the mark has acquired distinctiveness as a source indicator (e.g., McDonald's for fast food, Ford for cars, and Miller for beer). The Trademark Office uses a 4-part test to determine whether a term is "primarily merely a surname":

• (1) whether the surname is rare; 
• (2) whether the term is the surname of anyone connected with the applicant; 
• (3) whether the term has any recognized meaning other than as a surname; and 
• (4) whether it has the “look and feel” of a surname.

In most cases, the rareness of the name plays a dominant role in the Trademark Office's decision. The Trademark Office looks at evidence such as census records and telephone book listings to gauge the rareness of a name; however, there is no bright line rule as to how many results are sufficient to take the name outside of the "rare" (or "extremely rare") category. (See: http://thettablog.blogspot.com/2012/12/two-surname-refusals-for-your-perusal.html)

The parties have yet to submit evidence in this case, so it is unknown where the "Schlafly" name may fall in terms of rareness. However, even if the "Schlafly" name was found to be primarily merely a surname, the Brewery would still be able to register the mark if it could show that the term has acquired distinctiveness as a result of its longstanding use. Perhaps anticipating the "surname" objection, the Brewery included a claim of acquired distinctiveness when it filed the application.  Because the Examiner accepted the claim of acquired distinctiveness, the Brewery would enjoy a presumption that this determination was correct during the opposition proceeding.  As a result, the Opposers would have the burden of presenting a prima facie case challenging the sufficiency of the Brewery’s proof of acquired distinctiveness.  If they were successful in doing so, the Brewery would then have an opportunity to present additional evidence and argument to rebut or overcome the Opposers' showing. (See: http://thettablog.blogspot.com/2012/05/finding-cokes-zero-has-secondary.html)


Interestingly, the Notices of Opposition also raised other arguments seemingly unrelated to the surname issue. For example, Phyliss Schlafly's Notice of Opposition included the following allegations:

-The Schlafly surname "has the connotation of conservative values, which to millions of Americans (such as Baptists and Mormons) means abstinence from alcohol."

-The "consumption of alcohol is considered immoral by millions of Americans, including many of the subscribers to my...monthly newsletter and consumers of my radio shows, books, and other products, including Baptists and Mormons."

-Registration of the SCHLAFLY mark "would falsely suggest a connection between me and alcoholic beverages", and "could be harmful to my conservative values."

(See: http://ttabvue.uspto.gov/ttabvue/v?pno=91207225&pty=OPP&eno=1)


Therefore, it appears that the Opposers may be attempting to introduce other potential grounds for opposition into the proceeding, including that the mark:

• falsely suggests a connection with a person, institution, belief or national symbol;
• disparages a person, institution, belief, or national symbol, or bring them into contempt, or disrepute; and
• consists of or comprises a name identifying a particular living individual without her written consent.

However, they would likely have an uphill battle to prevail on any of these claims. For example, in order to succeed on a "false connection" claim, they would need to show, among other things, that the mark points "uniquely and unmistakably" to the opposer (e.g. "BO BALL" as a reference to Bo Jackson, and BASEBALLS EVIL EMPIRE as a reference to the New York Yankees).

Similarly, in order to prevail on a "name of a living individual" claim, the opposer would need to show, among other things, that she will be associated with the mark as used on the goods, either because she is so well known that the public would reasonably assume the connection (e.g. OBAMA PAJAMA, and PRINCE CHARLES), or because she is publicly connected with the business in which the mark is used.

Finally, to prevail on a "disparagement" claim, the opposer would need to show:
(1) that the meaning of the mark, as used in connection with the goods described in the application, refers to an identifiable person, institution, belief or national symbol; and
(2) that this meaning is disparaging to a substantial composite of the referenced group. \
Examples of marks that have been found to be disparaging include: HEEB for clothing and entertainment services (See: http://thettablog.blogspot.com/2008/12/precedential-no-52-ttab-affirms-2a.html); and KHORAN for wine (See: http://thettablog.blogspot.com/2010/03/precedential-no-9-divided-ttab-panel.html).


It will be interesting to see how this one turns out. Perhaps the parties will be able to hash it out at the next family gathering.

[On a personal note, I can confirm that the Schlafly Dry Hopped APA is really good--I picked up a 6-pack a few months ago (without having any idea about this trademark dispute). I'm looking forward to trying some of their other beers, especially the Tasmanian IPA.]