California ABC Reverses Position on Third-Party Providers Following Industry Input

The California Department of Alcohol Beverage Control has reevaluated and reversed its position on third-party providers conducting marketing of alcohol beverage products over the Internet, as well as the propriety of licensing a trademark for use on alcohol beverage products without being a producer with an ABC license. This has come after a stakeholder committee, which was formed at the request of ABC, presented its findings to the Department last month.
ABC now feels “that licensees and Third Party Providers can form business relationships that facilitate lawful transactions for sales of alcoholic beverages over the Internet”
Mike Mann of Dickenson, Peatman & Fogarty was one of the industry members selected by ABC to be on this special committee.  According to Mann, this was a process of numerous conference call meetings with participants on the committee from throughout the state.  As a participant on the committee, Mann believes that “a lot of time and energy went into this by all of those involved and the outcome is a great step forward.” Mann points out, however, that there are also limitations outlined in the advisory of which everyone should be aware.
The advisory is also of particular interest to trademark owners that license their trademarks for use on alcohol beverage products.  Following the Department’s earlier advisory, it appeared that ABC was of the belief that a trademark owner could not license its trademark for use on alcohol beverage products made in California without also having some type of ABC license for the production or sale of such alcohol beverage.  This position ran contrary to all concepts of trademark licensing as is traditional for most goods outside of the alcohol beverage industry.
However, with the input of the committee, ABC has now taken a much more balanced approach in allowing trademark owners to license their marks on alcohol beverage products without requiring that the trademark owners also own an ABC license to produce or sell the product.  According to Scott Gerien, head of Dickenson, Peatman & Fogarty’s intellectual property department, “the ABC’s new position allows trademark owners to license their marks on alcohol beverage products in the same way they would any other product without having to worry they are violating the laws of the State of California.”
The full text of the new ABC Advisory may be found HERE.
For more information or assistance on California ABC matters contact Dickenson, Peatman & Fogarty at [email protected].  For more information or assistance on trademark or intellectual property matters contact Scott Gerien at [email protected].
Copyright Dickenson Peatman & Fogarty at www.lexvini.com