Source: https://libationlawblog.com/2017/01/04/court-issues-instructive-trademark-decision-as-brooklyn-brewery-wins-injunction-against-black-ops-brewing-over-black-ops-trademark-row/
Timestamp: 2019-04-24 22:31:39+00:00

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Not every beverage you make will become a brand in itself. Often, nothing you make will become more famous than your company name. But for some reason stouts aged in bourbon barrels are notorious for having their names get the shorthand treatment and become famous – Bourbon County, Dark Lord, Dragon’s Milk, even to initials like KBS. The fame garnered by enthusiasts for these dark, high ABV brews that are cellarable and change over time is an exception to the rule. And this creates a seminal issue for breweries in trademark matters as the shorthand and fame created by a certain beer becomes a brand worth protecting in itself. In fact, it’s one of the few areas where it makes sense as a struggling brewery to spend money for federal registration that you might otherwise use for growth or improvement while funds are tight with your startup.
There were a series of instructive opinions from 2016 about trademarks and beer, wine, and liquor, that we’ll be reviewing some of them in the upcoming months. One of particular note was decided almost a year ago when Brooklyn Brewery brought a request for an injunction to stop Block Ops Brewing in California from using “black ops” when Brookly already had a mark since 2007 for “Brooklyn Black Ops.” The injunction came as Brooklyn was preparing to enter the California market with Black Ops and had already sent a cease and desist to the California brewery using the name. After the California brewery didn’t stop, Brookly file a lawsuit asking for enforcement of the rights its federal trademark registration affords it – to stop someone from using its mark on competing goods. You can find the opinion here. You can read the motion filed requesting the injunction here. Here is the complaint as well.
One thing the opinion does well; address common trademark concerns and arguments I hear from business owners who find themselves in one of these disputes. Generally, before someone seeks the help of learned counsel in this sort of thing, they’ve done enough internet research to be dangerous to themselves and feel armed with a few typical points that they believe should allow them to continue making their “Dark Gogol Stout” even after they’ve received a kind letter from trademark owner “Gogol Beer” or “Gogol Whiskey”.
I make a beer by that name, it’s not my brewery name.
The “proximity of the goods” factor concerns the relatedness of goods. “For related goods, the danger presented is that the public will mistakenly assume there is an association between the producers of the related goods, though no such association exists.” Sleekcraft, 599 F.2d at 350. “The more likely the public is to make such an association, the less similarity in the marks is requisite to a finding of likelihood of confusion.” Id.; see also CytoSport, Inc., 617 F.Supp.2d at 1066, aff’d, 348 Fed.Appx. 288 (9th Cir.2009) (“It is well established that the greater the similarity between the products or services, the greater the likelihood of confusion.”) “Thus, less similarity between the marks will suffice when the goods are complementary, the products are sold to the same class of purchasers, or the goods are similar in use and function.” Id. (internal citations omitted).
The Plaintiff’s “Brooklyn Black Ops” is a highly specialized product (a Russian Imperial Stout beer that is “aged for four months in bourbon barrels, bottled flat, and re-fermented with Champagne yeast”) that sells for $29.99 a bottle. See, e.g., Pom Wonderful, LLC v. Robert G. Hubbard, 775 F.3d 1118, 1127 (9th Cir.2014)(purchasers of more expensive goods are expected to be more discerning and less likely to be confused). On the other hand, Defendant Black Ops Brewing, Inc. does not make any aged beers or Russian Imperial Stouts. Instead, its beers retail for less than $7.00 a bottle and consist of far less exotic fare; such as IPAs, browns, and reds. Significant differences in price decreases the likelihood of confusion. L.A. Gear, Inc. v. Thom McAn Shoe Co., 988 F.2d 1117, 1134 (Fed.Cir.1993).
Both Plaintiff and Defendant use the mark in connection with the sale of beer. Therefore, this factor ‘weighs heavily’ in favor of finding a likelihood of confusion. See Sweetwater Brewing Co., LLC v. Great Am. Rests., Inc., 266 F.Supp.2d 457, 463 (E.D.Va.2003)(finding infringement as a matter of law because each party sold microbrews); see also Anheuser–Busch, Inc. v. Caught–on–Bleu, Inc., 288 F.Supp.2d 105, 118 (D.N.H.2003), aff’d, 105 Fed.Appx. 285 (1st Cir.2004)(finding no distinction between ale and lager for likelihood of confusion purposes because they are both “beers”).
I sell in bottle shops and don’t keg, so I’m not in a tap room or bar.
“We examine the relatedness of the parties’ goods because the more closely related the goods are, the more likely consumers will be confused by similar marks…Related goods are those products which would be reasonably thought by the buying public to come from the same source if sold under the same mark. In practice, this definition does not necessarily require a close proximity before goods will be found related.” Entrepreneur Media, Inc. v. Smith, 279 F.3d 1135, 1147 (9th Cir.2002)(citations and quotations omitted).
In assessing the likelihood of confusion to the public, the standard used by the courts is the typical buyer exercising ordinary caution. Although the wholly indifferent may be excluded, the standard includes the ignorant and the credulous. When the buyer has expertise in the field, a higher standard is proper though it will not preclude a finding that confusion is likely. Similarly, when the goods are expensive, the buyer can be expected to exercise greater care in his purchases; again though confusion may still be likely.
Sleekcraft, 599 F.2d at 353 (internal citations omitted).
Beer is a “common consumer[ ] item[ ] and [is] often purchased several times a year[;] [a] reasonable consumer…is [therefore] unlikely to exercise a high degree of care in selecting” beer. K–Swiss, Inc. v. USA AISIQI Shoes Inc., 291 F.Supp.2d 1116, 1125 (C.D.Cal.2003); see also Guinness United Distillers & Vintners B.V. v. Anheuser–Busch, Inc., No. 02 CIV.0861(LMM), 2002 WL 1543817, at *6 (S.D.N.Y. July 12, 2002) (“[High end] [b]eer and scotch are relatively low cost products, and the average consumer is not likely to seek to identify the true manufacturer of these products.”). Therefore, due to the relatively inexpensive nature of the parties’ beer products and the “chaotic” environment in which the parties’ products are likely to be purchased this factor weighs in favor of finding a likelihood of confusion.
Note the little jibe about price as well as the one about the “chaotic and impulsive” beer market. While they’re not so spot on when BCS can reach $69.00, they certainly pegged any initiate without a guide at the local bottle shop… have fun experimenting and trying new things.
I’m only in [insert state] and they’re not even selling here so they can’t come after me.
I call this one the Mr. Donut Defense. You’ll see why. This is an argument about marketing channels and the case does a good job of putting this one to rest. The whole point to a federal registration is that it should encompass the Republic, not just certain states where you happen to be at the time you register your trademark.
“Convergent marketing channels increase the likelihood of confusion.” Sleekcraft, 599 F.2d at 353. “In assessing marketing channel convergence, courts consider whether the parties’ customer bases overlap and how the parties advertise and market their products.” Pom Wonderful LLC v. Hubbard, 775 F.3d 1118, 1130 (9th Cir.2014). “Marketing channels can converge even when different submarkets are involved so long as ‘the general class of… purchasers exposed to the products overlap.’ ” Id.
Defendant’s beer is promoted and sold in the same trade channels where Plaintiff’s beer is sold, and in some of the same stores where Plaintiff’s beer is likely to be sold. Further, the parties use similar promotional methods, including their respective websites and Facebook, to promote their beers. Finally, the parties’ products are craft beer which is marketed to the same class of consumers. Thus, the parties’ trade channels are nearly identical.
[T]he parties do not share the same marketing channels. The Plaintiff uses distributors and sells its products east of the Mississippi. It has not sold its goods on the West Coast, including California. On the other hand, the Defendant’s goods are sold only in Fresno County, California. It has no sales force or distributors. Approximately three (3) restaurants (in Fresno and Clovis, California) carry its beer on tap and two stores (both in Fresno) sell bottles of its beer. The Defendant has never sold any of its products outside of Fresno County, California and thus, it has never sold any beer in any location where “Brooklyn Black Ops” aged Russian Imperial Stout, or any other of the Plaintiff’s products are available.
Both parties utilize online social media to promote their beer, and distribute their alcohol through retail stores and restaurants. Moreover, Plaintiff is in the process of negotiating with distributors for its product in California and identifying potential retailers so that it could expand sales of its “Brooklyn Black Ops” Russian Imperial Stout to California. Where a federal registrant evinces a “present likelihood that the federal registrant will expand [its product’s] use into the area of use of the intrastate user” the registrant is “entitled under the authority of the Lanham act to injunctive relief.” Mister Donut of America, Inc. v. Mr. Donut, Inc., 418 F.2d 838, 844 (9th Cir.1969). Therefore the marketing channels converge factor weighs in favor of finding a likelihood of confusion.
My logo doesn’t look anything like they’re logo. Who cares about the words?
“Similarity of the marks is tested on three levels: sight, sound, and meaning. Each must be considered as they are encountered in the marketplace. Although similarity is measured by the marks as entities, similarities weigh more heavily than differences.” Sleekcraft, 599 F.2d at 351.
On beer bottles, Plaintiff’s mark “Black Ops” is displayed in all-capitalized, large-block, white letters, with “Brooklyn” in smaller, deemphasized letters and coloring. (See, eg., Ottaway Decl. ¶ 10 & Ex. 1.) On beer bottles, Defendant’s mark “Black Ops” is displayed in all-capitalized, large-block, white letters, with “Brewing, Inc.” in smaller letters. (See, e.g., Dabney ex. 2 at p. 11.) “Black Ops” is spelled and pronounced identically in the parties’ marks. The size and the color of the parties’ bottles themselves are substantially similar, as both bottles are over-sized and appear black while on sale at retail with liquid in them. (Ottaway Decl. ¶¶ 10, 15 & Ex. 1; Dabney Ex. 2 at p. 11.) The parties’ beer bottles are sold at retail as singles. (Id.)…Thus the parties’ marks are substantially identical in sight, sound and meaning.
The Plaintiff utilizes a large circular logo featuring a prominently displayed white “B” on a green circle backdrop, with “Brooklyn” in large capitalized letters over it, and “Brewery” capitalized on the bottom. It does not utilize “Black” or “Ops” in its trade name. Its “Brooklyn Black Ops” aged Russian Imperial Stout product uses a completely black 750 ml bottle and a champagne style cork closing device. The bottle features a large silver circle logo with a stylized “B” in the center and a prominent label bearing the name “Brooklyn Black Ops.” It also features a second stylized “B” in raised relief using a circle emblem.
In contrast, the Defendant’s beers have identifying names like the “Blonde Bomber,” “Recon Red,” “Bayonet Brown,” and “Shrapnel.” …Its emblem is red, white and blue and reminiscent of aviator wings. The Defendant’s bottles are standard 22 oz. amber bottles, topped with a standard bottle cap; that prominently feature the individual product names and labels. It uses the term “Black Ops” only in conjunction with the name of the brewery.
“[I]n the case of alcoholic beverages, the degree of similarity need not be as high as usual since the likelihood of confusion is greater because drinks are frequently purchased at bars and clubs without the purchaser seeing any bottles or labels.” A. Smith Bowman Distillery, Inc. v. Schenley Distillers, Inc., 198 F.Supp. 822, 827–28 (D.Del.1961). Defendant points to differences between the labels. However, the sounds and meanings of the two marks are identical. Further, alcoholic beverages are often consumed in environments in which similarity in sound and meaning are likely to factor heavily in building consumer brand recognition and trademark association. Id. Therefore, this factor weighs in favor of finding a likelihood of confusion.
I didn’t know they were out there.
Tough. No really, tough. While it may be a reason for a Court to forestall from assessing damages against you (e.g. having you disgorge all the money you’ve made while you’ve operated under the infringing mark) it is not a justification in any sense to allow continued use of someone else’s trademark. Whether you did a proper search for similar marks and just didn’t come up with it, or whether you refused to do a search and were just blissfully unawares, this is only a factor for assessing your culpability and damages and not whether you’re going to lose.
“When the alleged infringer knowingly adopts a mark similar to another’s, reviewing courts presume that the defendant can accomplish his purpose: that is, that the public will be deceived.” Sleekcraft, 599 F.2d at 354.
Defendant argues that “[a]t the time of the selection of the name, the Defendant was not aware of the existence of Plaintiff[’s mark]….” (Opp’n. 17:11-12.) “[T]he Defendant selected ‘Black Ops Brewing, Inc.’ for its name to honor the owners family members’ military service and because their friends and neighbors serve in the local military installations.” (Id. 17:8-10.) Even though the injunctive record supports Defendant’s assertion that it selected its mark in good faith, Defendant continued using its mark after it became aware of Plaintiff’s registered mark. Although “[g]ood faith is less probative of the likelihood of confusion, [and] may be given considerable weight in fashioning a remedy,” the good faith Defendant has shown in its initial selection of the mark does not cause this factor weighs in Defendant’s favor. Sleekcraft, 599 F.2d at 354.
In the end, the Court granted the injunction in favor of Brooklyn Brewery and the case was ultimately then dismissed. It looks like Black Ops changed its name to Tactical Ops Brewing – which will be worth checking out if you’re in Fresno.
The takeaway here is really in the explanation the Court gave for each of those issues. Trademark disputes can run up costs and heartache in an exponential fashion and while internet research may give you a theoretical basis to hope for a win, the practical application of the law to the facts is generally not a good one for the later-similar mark user. Unless you can get the parties to agree to some amicable coexistence – it will likely save you time, effort, and money to take a tactical approach.
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