Wild at heart

19th Oct 2020

Can craft beer brands protect their IP as well as their independent spirit?

The craft beer market in the UK has grown exponentially in recent years and is currently providing consumers with a sensational selection of high-quality brews.

Discerning beer drinkers in the UK have their pick of some of the world’s best breweries, and the market has become extremely competitive as a result. Meanwhile, thanks to media coverage of several large-scale disputes over the past decade, we’ve seen that enforcement of IP rights in the brewing space is subject to certain peculiarities, and it has become clear that a specialised enforcement strategy and understanding of the industry are key.

In fact, the craft beer industry in the UK is an unusual beast: craft breweries must strike a balance between maintaining a desirable (and saleable) spirit of collaboration and community while enforcing IP and protecting their brands. These goals sometimes come into conflict, and breweries leaning too far in either direction will often be penalised through negative PR or commercial brand damage. Enforcement that appears heavy-handed or overly “corporate” may damage a brand beyond repair if made public, but failing to protect one’s IP may dilute or damage a brand.

At the same time, given the rise of contract brewing and the corresponding decline in openings of new physical breweries, it has never been easier to get your brand on a product. Traditionally, brewers would need to commit to expensive equipment and space, but these initial overheads can now be avoided and products can be on shelves more quickly than ever. This has made the branding of individual products vital and the clamour for consumer recognition even greater.

However, despite the growing competition, the craft beer market maintains a strong sense of community. Commenting for this article, Jaega Wise, Head Brewer at Wild Card Brewery in East London, says that “the industry is casual, friendly and ultimately relationship-based”. This results in plenty of collaborations between breweries and well-attended events aimed at the brewers themselves. With this in mind, one might wonder how to take a hard stance in protecting brands while still maintaining industry relationships – all against a backdrop of products that qualify as fast-moving consumer goods well-suited to injunctive relief.

Marketing masterclass

A recent incident involving BrewDog and ALDI is a fascinating example of enforcement and collaboration in the brewing space. BrewDog has announced (at the time of writing) that ALDI will shortly stock a new product named ALD IPA, made by BrewDog. This followed a very public back-and-forth between the two parties over social media. The exchange began with an announcement by ALDI of an “Anti-establishment IPA”, the packaging of which carried some visual similarities to BrewDog’s flagship Punk IPA – a development that met with BrewDog’s disapproval.

A few weeks on, it appears the parties have – with impressive speed – concluded that dispute in a sensationally beneficial manner for both sides. In creating a new product in collaboration, ALDI will stock another highly desirable beverage and BrewDog will benefit from a huge number of sales while maintaining its disruptive image. The involvement of the public in the lively and good-natured banter between the parties via social media has only furthered the parties’ interests. Indeed, Wise considers it a “marketing masterclass”, and it’s hard to disagree.

Often, however, the most publicised disputes have involved a party outside the brewing industry – and have not been solved so amicably. These sorts of challenges rarely follow the unwritten values of the craft beer world, and those falling short of industry standards risk being subject to a loud and public reaction. One such recent dispute involved a challenge by fashion powerhouse Hugo Boss against small Welsh brewer Boss Brewing over its beers BOSS BLACK and BOSS BOSS. The outcome was a change of name for a few of Boss Brewing’s products, but some fairly serious media fall-out for Hugo Boss.

Play it personal

So, what are the considerations for IP enforcement for brewing industry brand owners who wish to maintain their market share as well as their appealing and collegiate image?

Importantly, the first discussion about a potential issue should be in person or over the phone. Wise estimates that IP issues in the craft beer space can be resolved over the phone 95 per cent of the time. Since the industry is rife with personal relationships and friendly networks, the likelihood is high that someone within the earlier right-holding brewery will have a contact at the potentially infringing brewery. A phone call or a chat at an event will usually be enough to settle the dispute and may also reduce the risk of initial correspondence being made public.

Be aware, also, that any written correspondence may be publicised. This is a consideration in all industries, but the danger is potentially greater in the brewing space since it takes relatively little to appear heavy-handed here. If the first contact over a potential infringement is in writing, particularly if it does not come from the brewery directly, it may appear more aggressive than intended. To mitigate this, first contact ought to be made by the brand owner. Draft wording prepared by a legal adviser can be useful, but a friendly tone can pay dividends, especially where you’re trying to set the tone for a settlement.

Because a negative decision in registry or court proceedings will often be highly publicised in the industry, it is imperative that brands are cleared and registered from the outset. Negative decisions are often viewed as proof that the losing party was in the wrong. While we know that this is not always the case, the risk of negative PR means that ensuring you have the rights necessary to be successful in proceedings (if needed) is of paramount importance. Breweries are wise to this: from 2009 to 2019, the annual number of trade mark applications filed covering “beer” in class 32 increased by around 530 per cent. This leap is indicative of the growing market and the resulting importance of IP protection.

Ultimately, while 2020 has brought new and serious challenges for the craft beer sector, I have every faith that it will rally and continue to grow, bringing enormous rewards for those who employ a well thought-out IP enforcement strategy.