Cease and Desist letters (“C&Ds”) are getting a lot of attention in the craft brewing industry lately. This isn’t surprising given the abundance of breweries (2,347 active as of 2012) that are opening across the country and the approximately 15,000 beer labels that were approved by TTB in 2013 alone. This is the first article about C&Ds, dealing with what you should (and should not) put in a C&D. Part two (coming shortly) discusses what (and what not) to do when you receive a C&D.
Why send a C&D at all?
Most people in the craft beer world are fairly non-litigious and try to avoid in-fighting. Sending C&Ds can bring with it bad PR (see Coronado Brewing v. Elysian). So, why shouldn’t a brewery just adopt a live and let live strategy? Without getting too much into the philosophy behind trademarks in general, it is immensely important for breweries to be able to differentiate themselves from one another at stores and in bars. Trademarks are akin to a beer’s identity and trademark registration can help protect against copiers (and potentially against other C&Ds). Further, trademark ownership requires that a trademark owner police its marks and, when necessary, reach out to users of confusingly similar marks (i.e., send C&Ds). As the USPTO says, “Without proper policing over time, the original owner of a mark could lose any trademark rights it has in the mark.”
C&D Drafting Tips
Now that we have established that sending an occasional C&D letter is not only appropriate but also can be necessary, there are some important pitfalls to avoid in writing and sending C&Ds.
1. Don’t be overly aggressive
Try to be reasonable in policing your marks. If you see someone else using a name that is only somewhat similar, it may not be worth asking them to stop their use. If, on the other hand, they are using the exact same (or a very close) name/logo, you should probably send the letter. You may also be able to negotiate a change of the name that both parties will be happy with and will be less likely to be confusing.
2. Try not to create an “actual controversy.”
If your C&D letter is overly threatening, then the other party may be able to gain a tactical advantage and file a “Declaratory Judgment” proceeding, forcing you to defend yourself on their home turf. The Supreme Court, in the case MedImmune, Inc. v. Genentech, held that a declaratory judgment proceeding is proper where the facts alleged, under the totality of the circumstances, show there is a substantial enough controversy between the parties to warrant a declaratory judgment. A carefully drafted C&D letter should help to avoid this situation.
3. Keep it Friendly
What is important in drafting and sending a C&D is to maintain a friendly tone while making it clear that you are concerned that the other party’s use of a brand similar to your mark might be confusing to the public. Keeping it friendly will (hopefully) avoid a struggle with the other party that could cost your business a lot of time and money and keep you up at night. While it might sometimes be effective to take a heavy-handed approach and bully the other side into submission, in my experience this is the wrong way to go.
A good example of a “friendly” C&D is one from at attorney at Jack Daniels sent in 2012.
4. Show some empathy
Most brewery owners are in the same boat in that they brainstormed beer/brewery names, were probably very excited to settle on a name that fits their personal philosophy and style, and have invested a lot time, money, and emotional energy into developing their brand. Receiving your letter is going to be bad news for them. Showing some empathy may make the difference between spending all of your money on lawyers vs. buying a new fermentor and/or being black-listed by beer nerds (term used affectionately).
5. Make a reasonable request
Typically, try to avoid demanding that the other company “immediately cease and desist” using the name. Most new craft breweries (or any startup company really) have fairly tight budgets and can’t afford to waste a whole batch of beer and thousands of already-printed labels. A more reasonable request is that the other brewery stop using the name on future batches of their product, allowing them to sell through what they already have. Making a reasonable request early on is more likely to receive a positive reaction from the other side, and may look better than the alternative (fighting over it and having to immediately stop and/or pay damages).
Keeping these tips in mind should help you develop and maintain your reputation as a kinder, gentler beer brand owner and avoid having to defend yourself in a declaratory judgment proceeding 2,000 miles away.