Trademark bill would help companies like Vermont's Rock Art Brewery
The Senate Thursday night unanimously passed legislation introduced this week by Vermont Senator Patrick Leahy (D-Vt.) to assist trademark owners in maintaining the protection of their brands. Last year, Vermont’s Rock Art Brewery, a small micro-brewery in Morrisville, Vermont, was the subject of such a threat. The Trademark Law Technical and Conforming Amendments Act makes necessary adjustments to the nation’s trademark laws, improving efficiency in the trademark system. Many small Vermont businesses that hold trademarks will benefit from improving the efficiency of the system.
The Vermonster wins in battle with Monster
The Rock Art Brewery in Morrisville is a modest operation by brewing standards. The company, what is known in the business as a craft brewery, does about 3,500 barrels (125,000 gallons) of beer annually. There are nine employees and a plant of 10,000 square feet. Owner Matt Nadeau has been brewing his ales and lagers for a dozen years. Last September, the company was forced into battle with giant beverage company Hansen Natural of California, valued at over a billion dollars in sales. The brouhaha was over the name of one of Rock Art’s products: The Vermonster.
As Nadeau tells it, he decided to brew a special beer for the company’s 10th annual celebration in 2007. He described it as “an American style barley wine with a big, hoppy, fully flavored complex that was 10 percent alcohol, or 100 IBUs,” in brew terminology.
He called this beer “The Vermonster,” an appropriately named big beer, which has become one of the company’s better selling products.
Nadeau said he followed the law and trademarked the name with the state of Vermont, and in the spring of 2009 decided to trademark the name on the federal level. So far, so good.
However, said Nadeau, on September 14, 2009 he received an email from lawyers representing Hansen Natural, and a cease and desist order followed. Hansen argued that The Vermonster name would infringe on its own Monster Energy Drink.
“My lawyer said the name was fine, the feds said the name was valid,” said Nadeau.
However, his lawyer did explain that with a huge company like Hansen, “If I fight, Hansen Natural would drag it out and the cost to me in legal fees and other costs would bankrupt me.” He was advised that in the end he would have to change the beer’s name. “My lawyer recommended I change the name and move on.”
Nadeau is a fighter, so instead of caving in to Hansen, he decided to contact his client base of loyal customers via email. Soon, the Beverage Warehouse in Winooski, one of the state’s biggest beverage centers, responded by pulling all Hansen products as a form of protest to their actions. With the power of online networking taking hold, a fan on the Beer Advocate Web site began spreading the word about the problem. Soon, 10,000 members of that site started repeating Rock Art’s problem and pleas across the Internet. A UVM graduate added a Facebook page called “Vermonters and Craft Beer Drinkers against Monster Energy,” which gained over 18,000 friends.
“There was a huge ground swelling of support, and stores in Vermont are pulling (Hansen’s) product,” said Nadeau. Stores from Connecticut, Long Island and Maine followed suit.
The result was that in 21 days, the public support for Rock Art turned the tide and Hansen accepted Nadeau’s counteroffer that his company would not produce any energy drink. He gets to keep the name “Vermonster”.
Nadeau said the business he had built up was not going to play dead to threats from a corporate bully. He became a brewer because he “loves to brew and started out a home brewer. I love to cook and like a little bit of science, and those combine well with machines into something I wanted to do.”
Rock Art beers are sold in bottles and kegs mostly in Vermont but with some out of state sales to city markets in Boston, Connecticut, New Jersey, and as far as Arizona, where a UVM graduate familiar with the Ridge Runner beer started a distribution company that does beer, cider and other products.
Operating a brewery, said Nadeau “is a business and can be tough.” Problems include access to distribution, state laws, and rising costs. There are 18 breweries and a brew pub in the state but little direct competition between them. “What sells is the brand name,” he said. He works hard to maintain consistent quality beer and has built a loyal following. The biggest competition may come from the fact that there is a growing market for craft beer and more companies have been founded. “There are leaps and bounds for craft brewers. As the major breweries lose a fraction of a percent of sales, we see huge growth.” His biggest problem is that he can’t produce enough beer. Five distributors in other states would like to carry Rock Art if production was higher.
“I don’t know if I want to be bigger,” said Nadeau of the future. “I’m having fun doing what I do, when do you draw the line? I’m extremely happy the way things are going, it wasn’t easy getting to this point. We are looking at building a new brewery in next two years, hope to stay local.”
Bolstered by the outcome of the fight with Hansen Natural, Nadeau said he will use the experience to try and reform trademark law at the federal level. He hopes to work with many companies across the US and individuals “to change laws that don’t help small business and favor large corporations. We are gaining a lot of support for this change. We will change the law, it is unjust."
The trademark bill must still work its way through Congress before going to the president's desk for signing.
“This bill will harmonize the system for submitting maintenance filings to the United States Patent and Trademark Office,” said Leahy. “Many Vermont businesses depend on the strength of their trademarked products. The Senate has quickly acted to make these necessary improvements to our intellectual property laws, and I hope the House of Representatives will soon follow.”
Maintenance filings are required for continuing the protection of a trademark. The Leahy-backed legislation will also permit the Director of the USPTO to permit applicants to correct good faith and harmless errors and will make several technical amendments within our trademark laws.
The bill also includes a requirement for the Department of Commerce to study whether large corporations are misusing the trademark laws to harass small businesses by exaggerating the scope of their trademark protection. Leahy has been a longtime advocate for protecting intellectual property, including patents and trademarks.
Story and photos by Art Edelstein, Vermont Business Magazine. Additional information, Senator Leahy's office, 1.29.2010.