In 2015, an Ontario craft brewer, Beau’s All Natural Brewing Company (Beau’s) applied for a trademark for B-SIDE BREWING LABEL, for use in association with Ontario craft beers. The “B-Side Brewing Label” is an innovative promotional venture that, in the words of Beau’s, was a music-industry inspired distribution model for craft beer.

In its application, Beau’s claimed that it had used this mark since July 2013.

A California wine producer, Steelbird Ghetto, was using a similar mark, B SIDE, for wine.  In May 2016, about 15 months after Beau’s application was filed, Steelbird eventually filed its own trademark application for B SIDE, for use with wine.

Steelbird did not oppose the registration of Beau’s mark, but wrote a letter to Beau’s in July 2016, raising the question of whether Beau’s had actually used the B-SIDE BREWING LABEL mark since 2013, and providing a copy of its own newly filed trademark application for B SIDE .

Beau’s wrote back, asserting that it had used its B-SIDE mark in association with its Kissmeyer Nordic Pale Ale since 2013. Steelbird challenged this claim, pointing to Beau’s listings with the Liquor Control Board of Ontario (LCBO), which showed a release date of November 2014 for the Kissmeyer Nordic Pale Ale.

A quick search shows a Beer Advocate review dating from July 2013 (“…Bitter pine, juicy tangerines, prickly carbonation dancing on the tongue…”), so presumably the Kissmeyer product was available commercially from July 2013 even though it may not have been listed through the LCBO until 2014. In any event, Steelbird alleged that the Kissmeyer Nordic Pale Ale label did not contain any reference to
B-SIDE BREWING LABEL, the mark in question. When Steelbird asked Beau’s to withdraw its trademark application, Beau’s ignored this request and took registration in September 2016.

At that point, B-SIDE BREWING LABEL was a registered trademark for beer, based on use in Canada since July 2013. B SIDE for wine was an unregistered trademark, claiming use in Canada since October 2011.

If a new brand is used, and even registered, claiming use since 2013, can it be defeated by a confusingly similar unregistered mark which has been used since 2011? In Canada, trademark rights are based on use, not registration. So on these facts, where the unregistered mark can claim earlier use, it wins over the mark which is used later, even if that later mark is registered.

This is the conclusion in the recent decision Steelbird Ghetto Properties LLC v. Beau’s All Natural Brewing Company Ltd., 2018 FC 630 (CanLII). In that lawsuit, Steelbird applied to strike out Beau’s registration, and filed a bunch of documentary evidence. Beau’s elected not to respond. Based on the evidence, the court allowed Steelbird’s application on the basis that Beau’s registered trademark was confusingly similar to the unregistered trademark previously used by Steelbird.

What are the lessons for craft brewers and distillers?

• This case raises a couple of interesting points. First, it’s a great illustration that trademark rights are based on use, not registration. All other things being equal, an earlier used mark will generally win over a later mark. This holds true even if that later mark is registered, and the pre-existing mark is unregistered.
• Wine and beer are different. “Slightly hazy, lemon juice coloured pour… Light body, high carbonation…” Let’s face it. No winery wants their product described in such terms, but it sounds pretty good for a pale ale. However, in the Court’s view “both products are alcoholic beverages and, therefore fall within the same class of goods”. Well…actually, technically speaking, beer falls into Nice International Class 32, and wine falls into Class 33, which covers alcoholic beverages other than beer. But who gets technical when it comes to the law, right?
• This case also illustrates the value of clear documentary evidence to prove the dates of first use of a trademark. If a trademark is ever subject to a challenge, this evidence can be crucial to support claims made in the trademark application. Clear evidence may help defeat a challenger or may support an attack against a competitor’s mark.
• Lastly, this story shows the value of seeking early protection. The wine producer used its B SIDE mark since 2011 but did not seek protection until 2016, presumably after it noticed that Beau’s had filed an application. If they had obtained their own registration before 2015, then Beau’s may have avoided the use of a similar B-SIDE mark, knowing it would conflict with an existing registered mark for wine. An early trademark registration is much more efficient and much cheaper than a court application for expungement.

To obtain advice on trademarks and brand protection, contact craftlawyer.ca