Patent Office chills Labatt

Labatt Breweries of Canada's bid for exclusive ownership of the 'ice beer' and 'ice brewing' labels has received a frosty reception at the u.s. Patent and Trademark Office.Both trademark applications have been rejected by the u.s. Department of Commerce's Trademark Office...

Labatt Breweries of Canada’s bid for exclusive ownership of the ‘ice beer’ and ‘ice brewing’ labels has received a frosty reception at the u.s. Patent and Trademark Office.

Both trademark applications have been rejected by the u.s. Department of Commerce’s Trademark Office because they were deemed to be merely ‘descriptive’ of the goods.

The trademark applications – together with Labatt’s claims in its advertising to be the inventor of the only true ice brewing process – have precipitated an increasingly nasty dispute between Labatt and other brewers of ice beer products.

Clearly, the rejection of the applications, announced Nov. 30, represent a setback for Labatt, which wants to block other companies from using ice brewing terminology in their marketing unless they sign trademark licensing agreements.

But Paul Smith, Labatt’s director of public relations, contends the brewer, which is appealing the decision, is not discouraged.

In fact, Smith says Labatt is not only appealing the decision, it is pushing ahead with another 17 ice beer-related trademark applications in the u.s. and 59 in Canada.

‘This is a normal part of the trademark process itself,’ Smith says.

‘It takes years to get a trademark, and it’s our job to respond to the objections made by the examining attorney,’ he says.

‘We are very confident we are going to win.’

Labatt’s opponents in the ice-beer wars, however, see things differently.

Freda Colbourn, Molson Breweries’ director of corporate communication, says ‘we knew that they would probably be turned down.

‘This decision adds credibility to what we’ve been saying all along – that this process can’t be owned by one brewery,’ Colbourn says.

Steve Carlson, assistant general counsel at u.s.-based G. Heileman Brewing, concurs with Colbourn.

Carlson says that while, admittedly, the process of obtaining a trademark generally requires multiple submissions to the u.s. Trademark Office, the examining attorney’s objection, in this case, is a serious one.

‘It’s going to be very difficult to convince them otherwise because this is a very important objection,’ Carlson says.

Lager

He likens the attempt to trademark ‘ice beer’ and ‘ice brewing’ to an attempt to trademark terms such as ‘lager’ and ‘pilsner’ which, he says, cannot be trademarked because they refer to categories of beer.

Carlson would like nothing more than to see Labatt fail because Heileman – along with Molson Breweries, Miller Brewing, which owns Molson Breweries U.S.A. and Anheuser-Busch, which, ironically, has product licensing agreements with Labatt – is currently engaged in a take-no-prisoners litigation battle with the Canadian brewer.

The ice beer wars moved from the media to the courts in August of 1993 when Labatt sought an injunction in the Federal Court to stop Molson Breweries from using the term ice brewing in the marketing of four ice beer products.

Labatt is also asking the court to award it all of the profits Molson has made as a result of claiming its beer is ice brewed and $10 million in punitive damages.

Molson dismisses Labatt’s claims saying the term ‘ice brewing’ is a generic description of a brewing process that originated in the last century and has for years been used in Germany as well as Canada.

But Labatt did not stop there.

U.S. court

Subsequently, its lawyers traveled south and filed a similar suit in a u.s. court against Miller and Molson Breweries U.S.A.

Miller retaliated with a suit of its own, accusing Labatt of false advertising and unfair competition.

Susan Henderson, Miller’s marketing communications manager, says Miller’s position is that Labatt’s advertising has been misleading consumers to believe that ‘Labatt invented ice beer, or has the exclusive right to use the terminology associated with it.’

Henderson says Miller is seeking ‘compensatory and punitive damages’ to make up for lost sales of Miller and Molson ice beer products in the u.s.

Molson’s trademark lawyer, John Macera, says it is difficult to say what impact the recent u.s. trademark decision will have on the current litigation surrounding use of the ‘ice beer’ and ‘ice brewing’ terms.

‘The fact that the application was rejected won’t win the case for Molson, nor will it lose the case for Labatt’s,’ Macera says.

‘But it is one of those things, among others, that we feel is going to strengthen our case significantly,’ he says.

Labatt does have reason to be more optimistic here at home.

Some of its ice beer-related trademark applications have made it past the first stumbling block with the Canadian Intellectual Properties Office.

Several have now been advertised in the Canadian trademark journal, the first step after receiving initial approval by trademark officials.

But other companies have objected to trademarking the terms and are in the process of submitting their reasons why they should not be registered.

Macera says a hearing with the Federal Trademark Opposition Board will follow once all of the evidence is in.

Unique process

At stake for Labatt is its ability to license what it says is a unique brewing process, costing as much as $26 million to develop, to other beer manufacturers world-wide.

Such license agreements would mean millions of dollars in revenues for Labatt, according to Smith.

So far, it appears only one brewer has recognized Labatt’s claims that it ought to be accorded ownership of the ice brewing and ice beer trademarks.

That was Coors Brewing, which signed a licensing agreement with Labatt earlier this year.

Ice beer brands account for about 10% of the overall Canadian beer market, with Labatt claiming about 60% of ice beer sales and Molson the remainder.

u.s. brewers, led by Miller, are racing to launch ice beers of their own.

There are about 10 brands on the market and counting.