The Negatives and Overlooked Positives of Trademarks [e154]

February 20, 2015

Nasir and Matt close out the week by diving into the topic of trademarks to go over unintended negatives and overlooked positives related to trademark filings. Also, the Katy Perry dancing sharks!

Full Podcast Transcript

NASIR: All right. Welcome to our business podcast where we cover business in the news and add our legal twist. My name is Nasir Pasha.

MATT: And I’m Matt Staub.

NASIR: And that’s the show.

MATT: Happy Wednesday!

NASIR: Wait. This is Friday episode.

MATT: Oh, yeah. Sorry, I screwed that up.

NASIR: It’s okay.

MATT: I guess I’m just confused as some of these trademarks we’re going to talk about are leading to confusion.

NASIR: What’s the likelihood that you’re confused?

MATT: Very likely. Yeah, there you go. There’s a couple of recent stories dealing with trademarks that are, I think, some areas we haven’t talked about in the past so I was just going to kind of discuss them and the first being this beer dispute. So, there’s Lagunitas in Sierra Nevada, both in Northern California, and Lagunitas had filed a trademark for “IPA” which is a type of beer – it’s an India Pale Ale – very popular at this stage, in 2015, very well-known. If you drink beer, everybody knows what that means. It’s a term that is very, very prevalent. And so, they had trademarked the acronym IPA and I guess they had tried to enforce it against Sierra Nevada. Like I said, these are two heavy-hitters in the craft beer industry in the US. I think they are both top ten – maybe even top five – in terms of beer produced for craft breweries in the US. These are two big names that are going at it.
So, Lagunitas tried to enforce or protect its trademark of “IPA” against Sierra Nevada. They tried to resolve it, it didn’t work, so they filed a lawsuit and it just completely backfired on Lagunitas. They got all this negative feedback. All these people were saying they’re never going to drink Lagunitas beer ever again which is not true. I hate when people say that, “Oh, I’m never going to do this again!” Like, the next day, you forget about it.

NASIR: I say that whenever I have Yelp and Uber which are on my hitlist.

MATT: Yeah. For you, it actually holds true. For most people, I don’t think it does. I don’t know if I’ve ever said that.

NASIR: I’ll tell you this; I’m never drinking IPA, that’s for sure.

MATT: You even said it awkwardly.

NASIR: I guess it’s not as funny if people don’t know that I don’t drink at all.

MATT: Yeah.

NASIR: How do you say it? IPA? What do you say? IPA?

MATT: You’re saying, “I’m never drinking IPA.” I think the correct way would be to say “a” – you’re never drinking a IPA.

NASIR: Well, I agree. I’m not going to drink an IPA or drink any more IPA types of alcoholic beverages – IPA.

MATT: Well, then you would be isolating the IPAs in general. And so, that was what the whole dispute was about. Lagunitas tried to protect this trademark that it had against Sierra Nevada who, I’m sure, produces a bunch of IPAs as well. It’s had a public backlash and now Lagunitas has since pulled its lawsuit and is no longer going to go through that route. So, I guess the moral of the story here is, even when you have some protection over your intellectual property – in this case, being the trademark’s probably going to be where it makes the most sense – it can have negative consequences to have that trademark and sometimes it can even be more of a hassle and a burden than you even want it because, in this case, Lagunitas tried to protect what it owned and it obviously got the negative PR but it’s also just a hassle having to deal with and they dropped the lawsuit. So, whatever money they, in time, dumped into it went all for nothing.

NASIR: Yeah, we’ve seen these kinds of public blowbacks in different situations. The one thing that I can remember with any sort of detail, there was a Kitchen Nightmares episode with Gordon Ramsay, they did one restaurant where the local restaurant tried to trademark one local phrase that is very common in the area and the local public kind of fought back against that. I think what’s common is that there’s no one that disagrees that companies should have intellectual property protections – whether it’s trademark, copyright, et cetera – but, when it goes against the spirit of it, then the general public are going to have the difficulties accepting it and it may actually backfire.
Now, let’s also accept the fact that just because the public did have somewhat of an outcry, that doesn’t mean that outcry wasn’t sparked or inflated by the competition either. But, still, I think the lesson is still the same. One thing that I think would have made more sense is if they did it earlier. If they established IPA as a mark early enough, then it wouldn’t have been an issue. I mean, I guess Sriracha sauce fell into the same boat with that, right?

MATT: Yeah, and before I get into that – you’re exactly right – I think that’s the perfect way to describe it. If it’s against the spirit of kind of what’s going on, because the people that like craft beer are very pro-craft beer.

NASIR: Passionate and…

MATT: Yeah. I don’t know if you saw the Budweiser commercial. It might have aired on the Superbowl – I can’t remember – but it was this big commercial.

NASIR: I don’t drink and I don’t watch alcohol commercials either.

MATT: You’ve heard of the company Anheuser-Busch?

NASIR: I think so.

MATT: They just blasted these, like, you know, “Our beer is the real beer for Americans. None of this “foo foo” stuff. The backlash against that was obviously big, but it’s funny because they bought some smaller craft breweries. They were essentially poking fun at themselves.

NASIR: But I feel like there is that impression. I mean, like I said, I’m kind of distant from that kind of culture, but it seems as though the people that do like craft beer tend to be a little bit, you know, just the stereotype – the more kind of hipster kind of culture – so I can see what they’re trying to do with that, I suppose.

MATT: Yeah, it’s shifting a little bit just because it’s getting so…

NASIR: So common, yeah.

MATT: Yeah, so common. But, yeah, that’s what they were poking fun at and – I don’t know – it was pretty funny, but I liked both sides of it.
You mentioned the Sriracha thing, too.

NASIR: I think everyone has seen it. It’s like that red bottle with the green top and it’s a hot Vietnamese sauce, I think. You’ve seen there everywhere and it has a bunch of white writing. I guess you just have to look it up to see it, but I think everyone has seen it, you know?

MATT: You weren’t familiar with the name before?

NASIR: No. I mean, first of all, when it comes to branding, sometimes I miss the point. I had no idea that that was called Sriracha. I just thought, “That hot sauce that has a green top.”

MATT: If they weren’t the ones that created it, they were at least the ones that put Sriracha, the name, on the map. And so, I think, at first, people knew Sriracha as, “Yeah, it’s this bottle with the red-colored hot sauce with the green top,” and I think it has a rooster – I want to say – on the side of it. I can’t remember.

NASIR: Yeah.

MATT: I think that’s what it was known for and then it became a huge popularity thing. It was kind of like IPA so just popularity. And then, all these people, all these other companies started coming up with their own kinds of Sriracha which, instead of the name of this brand, it just became, like, “This is what it is.” Kind of like Kleenex – I think that’s a good way to describe it. They’re face tissues or whatever they’re called, but then Kleenex, the brand name, became so popular that people call it Kleenex or I think Coke is another example of that. It’s kind of what happened here is the “Sriracha” name, it was a brand and now it’s this thing. It’s this hot sauce and now all these companies that are having their own Sriracha and the owner of the original Sriracha is saying, “You know what, this is just good, it’s free marketing for us.”

NASIR: That’s true.

MATT: I don’t know if I fully agree with that because, you know, people aren’t buying his product as much, but it still is free advertising where he wasn’t doing it before.

NASIR: Yeah, and this sauce, I honestly thought it was so prominent that I thought Sriracha was a type of pepper or something like that. But I’m trying to look it up because I thought maybe it was some dictionary word or whatever but, apparently, there is a definition – “a spicy sauce made with red chili and garlic, especially in Vietnamese and Thai cuisine.” So, you would think at least you would be able to trademark something – even the bottle. Again, to me, the bottle is everything and this particular article shows some other copycats or so forth which, you know, they have a much different marketing and so forth, but they use the word “Sriracha” but, frankly, just the particular one that they’re showing, I wouldn’t compare. It would be apples and oranges to me. I’d want the original and, to me, the marketing and the brand is not only just the taste but also the actual bottle itself which is trademarkable, by the way, if it’s unique enough. I don’t know if that is, but that’s one aspect that he could still pursue.

MATT: This is so different than what the culture of intellectual property has become. It seems to be secure before anyone, sue later. And now, it’s this guy saying, “Hey, you know, I like our product, I welcome competition, it is what it is.” I guess he’s turned down lawyers who just show up to his office and say, “I can sue for you,” and he’s like, “No, I’m okay. I don’t want to do that.”

NASIR: “That’s all right.”

MATT: I think there are some rules against solicitation of clients.

NASIR: Well, I can relate to that. I mean, there is a subculture going on right now that is a little bit against this overprotection, especially, for example, in the patent world where we have a stream of patent trolls going around that aren’t really inventing anything and there’s a sense of lack of innovation in the United States in the sense that, “Yeah, we’re innovating, but are we really striving and making dramatic ventures to innovate?” and it goes back to the inventor of penicillin. When he discovered penicillin and developed it, he did not patent the process or patent it. Jumpstart to today, Tesla – just last year, I believe – announced that they are releasing or going to be entering into a policy where they’re not going to be enforcing any of their patents. This is a pretty dramatic change to the current culture of, like you just said, you know, literally protecting every single thing. Before, they were even successful for that matter, you know, that you’re going to trademark a name that maybe no one’s ever going to hear of in the next, you know, fifty years.

MATT: Yeah. To me, the only people that really suffer from this are the smaller businesses. If it’s two equal players, I think that’s fair, in my opinion. But, when it’s a smaller business that’s done something really well and then this big business with tons of money comes in and just can do it for much cheaper, that’s when they really suffer. If it’s two businesses on equal playing grounds then, you know, let the product or service speak for itself.

NASIR: Yeah, I agree. I’m looking more at these bottles and one thing that is for sure is that none of these other hot sauces actually copied the actual design of the bottle. And so, it looks pretty unique in the sense that there’s one that looks slightly similar but the difference is it’s a red top and, instead of white printed ink on the bottle, this one has a traditional label wrapping around it like a paper label. So, those are some big differences that at least gives them some unique branding.

MATT: That’s the one I have in my fridge right now.

NASIR: The copy? Oh, my gosh.

MATT: So, I didn’t really look into this at all till we were talking about it today. The store that I bought it at only had the one – it wasn’t like I was competing with the original versus this copycat – they only had the copycat one so that’s what I bought and I was wondering why that was the case and it was like, “Well, maybe this is the same thing.” I just kind of wondered. I guess it’s like ketchup now, basically.

NASIR: Wait a minute. I’m looking at this picture. There’s a registered mark next to the rooster. So, apparently, they trademarked some of this stuff – maybe not “Sriracha” and I guess the point of this story is that “Sriracha” hasn’t been trademarked. Whether that’s trademarkable or not, to me, it sounds a little bit like a descriptive term to me, but perhaps it’s not. They have trademarked other aspects to it so I guess that kind of clears that up.
All right. So, okay, bottom-line is I did want to talk about it but I don’t think we have time and it’s not even related to trademark but, as I was researching this, I caught that Katy Perry’s lawyers sent some kind of cease and desist letter to this 3D printer because they printed something called the Left Shark which, I guess, is a reference to the Superbowl which I think is funny because the letter says Katy Perry owns the intellectual property associated with the shark image and has the exclusive right to display the copyrighted images. Also, Gigaom, CNBC, and the Los Angeles Times also covered the letter. I thought that was funny.

MATT: All right. Well, we definitely have to link that. That’s just so stupid.

NASIR: Well, I mean, it goes to the concept, right? It goes to the concept of, “Okay, is it really worth it to kind of crack down on this kind of thing?” It kind of goes against the spirit of it, right? I mean, who cares if this 3D printer and it depends – are they selling it in mass market or not? But the problem is too is the law has it so that, if you don’t enforce it, then there may be abandonment issues or waiver issues.

MATT: Yeah, and people had a big problem at the Grammys because the guy who won Song of the Year or – what do they call it? – Record of the Year, they say he essentially lifted his song from Tom Petty and so they resolved something because it sounded familiar enough where he’s paying royalties to Tom Petty.

NASIR: It is what it is. So, thank you for joining us, everyone, on this Friday episode where, as a routine and as a courtesy to us and as a payment for listening to this podcast episode, you are contractually obligated to leave a five-star review on iTunes. If you refuse to, then you will be sued for monetary damages and liquidated damages of – let’s see – we should make it a $500 per day that you do not leave the review. Thank you so much.

MATT: That would be pretty interesting but, in the meantime, keep it sound and keep it smart.

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Legally Sound Smart Business

A business podcast with a legal twist

Legally Sound Smart Business is a podcast by Pasha Law PC covering different topics in business advice and news with a legal twist with attorneys Nasir Pasha and Matt Staub.
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