Time to get crafty about brand names?

Craft brewing and craft distilling is becoming big business.  A recent report by UHY Hacker Young claimed the sector was going through a period of “explosive creativity” and a quick look around the region shows Tayside is not immune to this booming market.  Across the UK, craft breweries have hit a record high with 520 opening in 2016 alone.  The craft distilling sector follows a similar path, more than doubling since 2010, with 45 of the current 273 distilleries established in the last year. These figures make clear there is a growing demand for locally brewed beers and locally distilled spirits, and with that growing demand comes an increased risk of intellectual property infringement due to the sheer number of brand names already in use.

What’s in a Name?

In short, a lot.

As with all businesses, there is substantial value to craft brewing/distilling businesses in creating a good brand name and/or logo and suitably protecting that brand once created.  If you have spent a lot of time and money in creating a brand, the last thing you want to do is to either (i) change it due to overlap with an existing brand or (ii) lose out on sales or profits if a new rival starts encroaching on your brand.

Creating your Brand or Logo

Effective branding ensures products are readily identifiable in a competitive and ever expanding market (and of course enables consumers to recommend your brand to fellow craft beer or spirit enthusiasts).  While the craft brewing and distillery sector is known for being friendly, it is still important not to inadvertently infringe into another business’ brand (whether in the craft sector or not).  To avoid this, it is vital to carry out thorough searches before settling on a brand for your business.  A little bit of time at the start (and a proper planning process) should ensure that you select a brand that is unique and distinctive, helps distinguish your products from the crowd and saves any headaches from infringement claims down the line.

Protecting your Brand

Brands within the craft beer and distillery sector are increasingly valuable commodities worth protecting – you want to make sure that rivals do not establish a competing brand that might confuse your loyal consumers.  Trademark registration makes clear that you own the brand and enables you to protect the value of your brand and goodwill in that name or logo by taking legal action to prevent unauthorised use of your brand or a similar brand.  Enforcement of registered rights is normally less expensive and more straight forward than relying on unregistered rights.  You also get the additional benefit of being able to object to any future trademark application that is the same or similar to your own trademark.

Trademarks can cover (amongst other things) words or a logo or a combination of the two.  They are also territorial so should be registered in the relevant areas you intend to sell your products.  It takes about 4 months to register a trademark in the UK (providing there are no objections) and a registered trade mark lasts 10 years.

The benefit of trademark protection would apply to individual product names/logos as well as your brand name or logo.  If you have a distinctive product name, you might consider registering this separately.  It is not likely to be cost effective to register every product name, but if you identify key products or “best sellers”, they may benefit from the additional protection.

Won’t it cost a lot?

There is a common misconception that it is expensive to register trademarks and not worthwhile for a new business or a small business.  However, with prices for the application starting at £200 via the Right Start process for 10 years of protection (based on registration in one class), it is not as expensive as most people think.  The benefits provided by trademark registration mean it can be worthwhile to all business, not just the larger multinationals.

Do I need to register a brand?

You do not need to register a brand, and can look to rely on unregistered rights like “passing off”.  The difficulty with unregistered rights is they are less clear-cut and can be more difficult (and more expensive) to enforce.  Additionally, unregistered rights rely on goodwill which may be localised for craft brewers or distillers, meaning you could struggle to show passing off by a competitor based in another region.

Final Message (In a Bottle)

If you have made the decision to get involved in the craft brewing/distilling sector, do not lose valuable rights in the brand you are creating. Make sure your branding is distinguished from others in the sector and registered with a relevant registry to enable you to efficiently protect your brand and your hard earned space in the market.

Ruth Weir
Senior Solicitor – Corporate & Commercial
@CorpLawyerRuth
www.blackadders.co.uk

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