Beer Brand Battles: David Takes on City Hall (with Goliath on the sidelines)

The City of Portland is known as a hub for craft beer, and its local government couldn’t be prouder. The Travel Portland website proudly proclaims that Portland is “home to more breweries than any other city on earth.” Yet the city’s relationship with the local craft beer scene is not so bubbly at the moment, as trademark dispute between the city and local Old Town Brewing has gone public.

The dispute revolves around Old Town Brewing’s logo and a large lighted sign owned by the city, both shown below.

 

This isn’t the first time the city hasn’t gotten into a dispute with a brewery over the sign. The city previously objected to Pabst’s use of a logo derived from the sign back in 2015.  Our 2015 article contains a good back story as to the city’s purchase of the sign as well as the city’s claimed trademark rights in the sign (and for our regular readers, the investigation into Portland’s unicorn burial ground is ongoing). However, for our purposes, a TLDR history will suffice. The sign is known as the “White Stag” sign and was built in 1940. The text has changed numerous times along with the ownership. The City of Portland purchased the sign in 2010 and has since begun licensing reproductions of the sign to third-parties.

Most recently, Portland sought to license production of the sign to AB InBev, the parent company to Budweiser and a whole host of other big and small names in the alcohol business. Jeff Alworth at the Beervana Blog has a great write up regarding the dispute that is worth a read. As you might expect, the small, local craft brewery is not pleased with Portland’s attempt to permit a direct competitor to use a similar logo. The fact that the competitor is Budweiser certainly can’t help.

Luckily for Old Town, they recognized the benefits of obtaining a registration for their design logo at the U.S. Trademark Office. Even better, the registration is now more than 5 years old and can no longer be challenged on a number of grounds, like confusion with a senior user’s mark.

The City of Portland also recognized the importance of registrations and applied to register the image of the sign for a wide variety of goods and services, including alcoholic products. The Trademark Office has refused registration based on a likelihood of confusion with Old Town’s prior registration.

The situation is a twist on the more common David versus Goliath of Big Beer versus Craft Beer, and not simply because the City of Portland is involved. In fact, the city is claiming that David, aka, Old Town Brewing, is the bad guy. The City is arguing that “it is Old Town Brewing that is trying to prevent the City from using its own logo.”

The city isn’t entirely off base. It’s true that the City isn’t telling Old Town to stop using the logo. But the City’s argument makes a lot of assumptions that may not hold water (or other beverages, for that matter).

The city seems to assume that because the City bought the sign, they own the right to use the component images of that sign for any and all purposes. That’s wrong. For a lot of reasons. Owning a sign doesn’t create trademark rights, use does. And if Old Town began using a portion of that sign as a trademark before any other third-party, then Old Town is the senior user. Also, even if the City owns some trademark rights, the law is clear that a trademark does not provide a right in gross. Trademark rights are defined by the goods or services sold under the mark, with protection against goods and services that are sufficiently related to owner’s goods or services.

Also, the City’s white hat isn’t so white. I’m not even sure it’s a hat. Old Town isn’t the bad guy here. The brewery isn’t telling the City not to use the logo derived from the sign design.  I’m not a politician or a mayor, but I can’t think of any reason why a city needs to be able to use its logo to sell beer. If Minneapolis were doing this, I’d kindly ask that they fix the potholes or finish construction on the bridges over 35W first.

At the moment, it seems that public opinion seems to be in Old Town’s favor, at least based on the limited (and biased) sampling of Old Town’s Facebook Page.  From the legal standpoint, it seems that Old Town has an upper hand, but from all public statements it seems that Portland is committed to moving forward with its own applications and a license. But is a deal with Budweiser important enough to risk the bad press and the alienation of the craft beer industry? The City has until March 15 to appeal the Trademark Office’s last Office Action. By then, we’ll at least know whether Portland wants to continue the fight. In the meantime, I’ll be looking to see how far Old Town distributes its products. Their SHANGHAI’D IPA sounds delicious, not to mention, it has an excellent name.

 

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