The City of Portland Versus Old Town Brewing
Note: Post has been updated below with the USPTO ruling on the City of Portland's application.
Have you heard the one about the big brewery that sends the little brewery a cease-and-desist letter for trademark infringement? Of course you have—it happens every month or two. It’s usually not great press for the big brewery, and sometimes it even metastasizes into a David-and-Goliath morality tale. Last Wednesday, Portlanders learned of a through-the-looking-glass variation on the story. A little brewery owned a valid, long-standing trademark, but a deep-pocketed large city refused to acknowledge it and told the little guys they planned to license the disputed image to AB InBev. And despite having no clear legal avenue to securing these rights, the city keeps dumping thousands of dollars into their effort to defeat Old Town.
Here's the backstory. Five years ago, Adam Milne put in a trademark application on an iconic image hanging over Old Town—the leaping stag that looks east over the Burnside Bridge. He wanted to use it as the central logo for his brewery, Old Town Brewing, an extension of the Old Town Pizza business that was founded in 1974. The US Patent and Trademark Office (USPTO) granted Old Town the trademark in 2012, and it recently became “incontestable,” a legal status for marks that have been active and protected for five years. Pretty cut and dried.
Trademarks exist so that companies can build up brand recognition in the marketplace and protect that brand. It's a powerful tool for companies looking to establish their brand in consumers' minds. As such, trademarks have some limits; companies don't have absolute control over a name or logo--only in areas where it might plausibly confuse customers. If you make an alcoholic beverage, you could protect your mark against other companies in that realm. We’ve seen examples of breweries and wineries suing each other over contested marks, for example. But if a paper-clip manufacturer came along and wanted to use a similar mark, they would be allowed to do so since customers are not going to confuse the two companies.
The government grants trademarks provisionally—companies must maintain and protect their marks in order to keep them active. To do this, companies like Old Town sign up for services that monitor new applications so they can defend their trademarks. About two and a half years ago, Milne found out that the City of Portland had applied for a mark using the leaping stag for a wide range of products, including beer, crowlers, and other alcohol-related items--along with many products that weren't related at all to beer. When Old Town Brewing contested the city’s blanke application the USPTO had no choice but to reject it.
Here’s where the story gets weird. Milne recognized that a lot of the products listed in the application wouldn’t violate his alcohol-related use of the mark, and so he went to the city to try to come to a compromise—he would happily support their application for non-beer stuff. Since the city didn’t have a leg to stand on, you’d think this would be where things ended. They'd remove the alcohol-related items from the list and re-apply, with Old Town's blessing. Instead, the city told Milne that they weren’t interested in compromise. Indeed, they wanted the mark specifically for alcohol because they had been in discussion with Maker’s Mark, the bourbon distillery, and Anheuser-Busch InBev for licensing deals. (This was confirmed by Bryant Enge of the Bureau of Internal Business Services in an interview by KOIN on Thursday.)
The impasse led to a protracted battle in which Old Town Brewing tried to work with the city and the city effectively told Old Town to take a short hike off a tall building. Lawyers exchanged letters, and lawyers’ fees went up and up. I met with Adam Milne last week at the brewery and he showed me some of the correspondence. He hasn’t sat down to calculate the precise figure he's spent on lawyers’ fees, but it's “in the tens of thousands.” In all, the city has applied three times to the USPTO and been rejected three times. The city can now—and is apparently still planning to—appeal. The point to all of this is to bleed Milne until he gives up—a fact confirmed during one of their meetings. “They told us they would spend whatever it takes,” he told me. Hey, if you can’t beat ‘em in court, beat ‘em with your bank account.
The reason all of this is coming out now has to do with that “incontestable” designation. Milne has reached the point where he can’t afford an endless legal battle—and now that the mark is incontestable his case is even stronger. Even though Old Town Brewing must continue to work with the city, he felt like his only recourse was to make the battle public. Such a course carries a fair amount of future risk for the business, which is after all a Portland business in the city's jurisdiction (beyond permitting and oversight, it turns out the city is even the prime lender to Milne). Over the course of years, Milne has had multiple meetings with the city, met once with Mayor Wheeler, and had exchanged legal requests—all to no effect. Finally, two weeks ago, Milne reached out one more time to the city to resolve the matter, but they refused to respond to his requests.
The city's position is legally untenable. They argue that the whole logo on the iconic sign--the stag, the outline of the state, and the city's name--constitute an entirely separate and trademarkable logo. Yet not only has the USPTO disagreed three times, but when Anheuser-Busch used a very similar version of that logo in the past, they were forced to discontinue using it once Old Town sent them a cease-and-desist letter. If this seems like even a marginal close call in your mind, imagine substituting the white stag with a Nike swoosh. How well do you think that would go down? The city is offering a public-relations answer to a legal question, and even on that score it doesn't pass the smell test.
All of this is outrageous. From a beer perspective, it seems especially insane. Why would the City of Portland—Beervana!—be attempting to undermine a local brewery’s business in order to engage in a licensing agreement with ABI? If Milne and his five-person brewery have spent tens of thousands of dollars fighting this, how much of the taxpayers’ dollars has the city spent? And why is "the city that works" tormenting a local business owner? If you follow that KOIN video link and watch Enge and deputy city attorney Simon Whang, you won’t find a sympathetic pair trying to work with a local business. They seem imperious, irritated, and, frankly, arrogant.
I reached out to Mayor Ted Wheeler’s office to find out what his reaction was. The Mayor oversees the Office of Management and Finance—the agency locked in the battle with Old Town. After some back and forth, Michael Cox, Director of Communications, was able to send me this statement.
“We wholeheartedly support small business and local craft brewers. Old Town Brewing has a logo that includes a white stag. That’s their logo and no one is suggesting they do not have a right to use it. To the contrary, it is Old Town Brewing that is trying to prevent the City from using its own logo. The City of Portland has a logo, based on the iconic Portland Oregon sign, that includes a white stag. The City believes it has the legal right to use this iconic logo to promote our brand, including promoting Portland’s brand around local craft beer, food, and wine.”
For now, Mayor Wheeler is standing behind his staff. But, while they don't have to face an electorate in three years, Wheeler does. If you want to let him know what you think about this, give his office a call at the opinion line: 503-823-4127.
If there’s any silver lining here, it’s that Old Town has gotten a ton of support, particularly from the beer community. Milne told me, “In the past 24 hours, we’ve had such a great response from breweries.” Both Laurelwood and Great Notion have said they plan to draft letters of support to send to the city and many other breweries and pubs offered support on social media. “When we see a brewery on social media say ‘We’re with you!’, it gives us such a charge. It means more to us than they probably realize.”
A “win” at this point would be for the city to finally accede to the law. It wouldn’t help pay the attorney’s tab, but at least it wouldn’t make it grow. "All we are asking for from the City," read a statement from Old Town on Facebook, "is to respect the rights we have established in that narrow product category, and to refrain from licensing the sign image for alcoholic products, especially to large multinational beer conglomerates." It might not hurt if a few more people find their way to the brewery, but Old Town would rather have never gone through it in the first place. I asked Adam if he sometimes regrets he ever got the trademark in the first place, and he said, “Now’s not the best time to answer that. Ask me again in a year.”
UPDATE. Thanks to the sleuthing of a clever redditor (skis4hire), we now have the USPTO rejection on the City of Portland's trademark application. "Registered mark" refers to Old Town Brewing's existing trademark. In the ruling, USPTO points out that the only distinctive, trademark-applicable element of the city's mark is the stag. You can't trademark the outline of a state or city names. This is a comprehensive dismantling of the city's case. It is very hard to read this and see anything in the city's actions other than an effort to bury Old Town Brewing in legal fees. They have absolutely no legal case.
Although marks are compared in their entireties, one feature of a mark may be more significant or dominant in creating a commercial impression. In the present case, the prominent feature of applicant’s mark is the design of a stag in right profile. This stag design that appears in applicant’s mark is virtually identical to the stag design in the registered mark, which also appears in a right profile silhouette that depicts a leaping stag. While applicant’s mark also contains the design of the outline of the state of Oregon and stylized word “PORTLAND OREGON OLD TOWN,” this additional matter is less significant to the overall commercial impression of the mark because it is geographically descriptive and has been disclaimed. Disclaimed matter that is descriptive of or generic for a party’s goods and/or services is typically less significant or less dominant when comparing marks. Thus, the only inherently distinctive matter that appears in applicant’s mark is the design of the stag. The stag design that appears in applicant’s mark and registrant’s mark are virtually identical, such that consumers would mistakenly believe the designs are both logos of a stag that emanate from the same source.
Applicant’s beer and ale is identical to the registered beer and ale. Applicant’s remaining alcoholic beverages are highly similar to and sold in the same channels of trade as the registered beer and ale. Specifically, the evidence of record establishes that beer, wine, lager, and ale are sold in the same channels of trade. Further, case law has repeatedly supported the contention that various alcoholic beverages are related goods for purposes of a Trademark Act Section 2(d) analysis.
In conclusion, applicant’s mark and the registered mark are highly similar because they share a virtually identical design element. Applicant’s goods are encompassed by and virtually identical to the registered goods and sold in the same channels of trade as the registered goods. As such, it is likely that consumers will be confused as to the source of the goods and services. Accordingly, registration of the goods in International Class 25 is refused pursuant to Section 2(d) of the Trademark Act.