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WHY CRAFT DISTILLERS NEED TO TRADEMARK THEIR LIQUOR BRANDS




April 8, 2015


Too often, it's because distilleries are so excited about getting their product to market that they don't take enough time to review their brand names to make sure that they are not infringing on another distiller's trademark.

Trademarks and Craft Distilling

A trademark is a brand name — a word, phrase or symbol that identifies goods or services for consumers and indicates the source of those goods or services. The law allows the owners of a brand to protect the components of a brand — a product name and the logos, symbols and slogans associated with the brand. To claim ownership of a brand, you must file with the U.S. Patent and Trademark Office (USPTO). This process is called trademark registration. If you successfully register a trademark, you are the presumed owner of the trademark on a nationwide basis.

The USPTO goes through an examination process during which it can object to your registration as can members of the public. Among other things, the objection can be based on an assertion that you are not the first person to use the mark or that your mark too closely resembles other registered marks. You have the right to respond to any objection, and then the USPTO will make a decision.

Why Go through the Hassle?

You opened a distillery because of your passion for the craft of distilling, not to do a lot of tedious paperwork. Here are the two big reasons why distillers should think seriously about trademark registration:

(1) Registering trademarks makes your distillery far more valuable as a business. When you think about it, a brand identity might be the most important thing a distillery owns. A distillery owns recipes, but recipes are very hard to protect under intellectual property laws. It also owns equipment, and maybe real estate, but stills and real estate are widely available in the marketplace. A successful liquor brand, however, is hard to duplicate. It's one of the most valuable assets a distillery can own, and the only effective way to nail down ownership of the brand is to go through the trademark registration process. If I were representing a client who was thinking about buying an existing distillery, one of the first things I'd ask the client to explore is whether the distillery had clear ownership of its brands; this would mean exploring the status of their trademark registrations. If the distillery hadn't secured trademark registrations for its brands, I'd tell a potential buyer to be very cautious about the deal. At a minimum, the risk surrounding this issue would definitely drive down the purchase price.

(2) Building a brand represents a big investment of time and money. Before you spend money on graphic designers, on labels, on advertising, on hats and t-shirts and on other merchandise, you better make sure you have the right to use the name and logos. The process of "clearing" a trademark can avoid big problems down the road. Clearing a trademark involves searching USPTO data and other commercial data to see if anyone is using a product name or logos that are identical or similar to yours, and then analyzing those other trademarks to see if there are arguments for why your use would not infringe on their use. This process can avoid the terrible result of spending money to develop a brand for your whisky or vodka, only to see it all go to waste because someone else beat you to the punch by using or registering a mark before you.

This scenario happens with distressing frequency.

The distillers I know and work with put their hearts and souls into their products; it's hard to care as much about the legal status of what's on the label as what's in the bottle. But taking the right steps to create and then protect the brand is good business. It can help your distillery flourish economically, so that you can put those products into the hands of a lot of happy drinkers.






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