In part 1 of our mini-series on IP issues for companies selling “sin” products Toronto intellectual property lawyer John Simpsonexplores the burgeoning microbrewery industry.
Startup microbreweries should be thinking about trademarks before they run into problems with them, says Toronto intellectual property lawyer John Simpson.
Simpson, principal of IP and new media law boutique Shift Law, says companies in the field have a focus on originality and fun, making it an “exciting” area to work in. And while demand for craft beer is booming across the country, competition is stiff, he tells AdvocateDaily.com.
“They’re all trying to do clever things to stand out in a crowded marketplace,” Simpson says. “In many cases, it becomes a race to get a good brand.”
Indeed, there is no shortage of disputes involving microbreweries fighting with fellow startups or more established alcohol brands.
In the search for catchy slogans and memorable brands, Simpson says it’s not unusual for a startup microbrewery to work with a branding consultant before going to market with its product.
That can cause issues with trademark registration, Simpson explains, because the law is primarily geared towards protecting rights acquired through the use of a mark.
“You develop a bunch of goodwill attached to a particular trademark, and you’re entitled to protection through registration,” he says.
However, Simpson says the federal Trademarks Act has a mechanism for companies that are concentrating on getting themselves off the ground, and haven’t yet managed to start selling their product: by registering a “proposed trademark,” they don’t have to immediately demonstrate use.
“It’s like planting a flag in the Trademarks Office, to establish some priority over the mark ahead of other brands,” Simpson says.
When the application goes in, he says companies should also be thinking ahead to other potential uses of their trademark, rather than focusing on protecting their core business alone.
“Your application should cover a wider scope than just beer,” Simpson says. “For a microbrewery, you might want to use it in connection with glasses or other merchandise. In a few years, you might want to have a brewpub or restaurant associated with the brand. You don’t want someone stepping in and acquiring a similar or identical mark that may affect your rights to use it.
Stay tuned for Part 2 of the series, when Simpson looks at the IP challenges faced by new players in the emerging cannabis sector.