Don’t Forget – Starting January 1, Eligible Licensees Can Amend TTB Permits To Eliminate Bonds
As of January 1, 2017, if you are currently licensed with TTB as a brewery, distilled spirits plant or winery and owed less than $50,000 in excise taxes in 2016, and expect to owe less than $50,000 in 2017, you will no longer be required to hold a bond. This is great news for all the small producers out there!
This change, however, does not take place automatically and requires an amendment to your existing TTB permits. As such, after January 1, 2017, if you owed less than $50,000 in excise taxes in 2016 and expect to owe less than $50,000 in excise taxes, you will be able to amend your TTB permits to request exemption from the bond requirements. This amendment can be done online for any licensees that obtained their permits through Permits Online or on paper for any licensees that originally obtained their permits with paper applications.
Note that the bond exemption is applied a bit differently with respect to new permit applicants. Any new applications to operate breweries/brewpubs, distilled spirits plants, or wineries submitted to TTB before January 1, 2017 are still required to include a bond, even if the applicant expects to be eligible for the bond exemption. TTB will review the application and return any bond-related materials if they grant the bond exemption.
Applications submitted after January 1, 2017 for eligible small producers (i.e., those who do not expect to owe less than $50,000 in excise taxes in 2017) will not require a bond.
For further information or for assistance amending your TTB permits, please contact Bahaneh Hobel.
California Court Issues Trademark Injunction Against Fresno’s Black Ops Brewery
New York based Brooklyn Brewery brought an action to enjoin the Fresno County Black Ops Brewery from any continued use of “Black Ops” on or related to beer products. The Court granted the injunction January 6, 2016. Brooklyn Brewery produces a single bottle Russian Stout (with a champagne cork) under the name “Brooklyn Black Ops,” which was issued as a federal trademark registration in 2009, and the brewery has since successfully sold tens of thousands of cases of the beer in 27 states in the past 8 years. Brooklyn Brewery is currently in negotiation to expand distribution to California. Case No. 1:15-cv-01656-JAM-EPG (E.D. Cal.) Click here for opinion.
Black Ops Brewery, Inc. in Fresno County, CA produces blondes and IPAs with specific identifying names, including “the Blonde Bomber” and “Shrapnel.” Each 22 ounce single bottle retails for less than $7.00, compared to Brooklyn Black Ops’ 22 ounce single bottle retail price of $29.99. In March 2015 Black Ops Brewery applied to the Patent and Trademark Office, and was subsequently denied, federal registration for “Black Ops Brewing” for beer and taproom services. Nonetheless, Black Ops Brewery continued its use of the name.
Brooklyn Brewery notified Black Ops Brewery of its infringement and demanded immediate cessation of use of the name; not only was Brooklyn Brewery issued federal registration for the mark, but Brooklyn Brewery’s Black Ops mark is also an incontestable mark because it has been in continuous use for 5 years since trademark issue. Brooklyn Brewery argued that continued infringing use of the name was in bad faith. Black Ops Brewery claimed it had adopted the name in good faith in memory of friends and family in military service and continued use of the term despite being on notice of Brooklyn Brewery’s alleged superior rights in the mark.
The Court found that Black Ops was a strong arbitrary mark (i.e., does not describe the product’s characteristics), and that despite some differences in beer quality, packaging and pricing of the goods, the two breweries had an identical product. These factors weighed heavily in favor of the Court’s finding that there existed a high likelihood of confusion by consumers between the two brands.
The Court determined that the two breweries shared similar marketing channels. While Black Ops Brewery does not have the same marketing teams or distributors as Brooklyn Brewery, Black Ops Brewery did use the same social media channels to promote itself as Brooklyn Brewery. The Court further found that Brooklyn Brewery would likely expand sales to Fresno County where consumer confusion would increase if both brands were available at the same location. As the Court noted, the purchasing environment of alcoholic beverages like beer is often “chaotic and impulsive,” such as when purchased at bars, thus further increasing the likelihood of confusion of the consumer when purchasing a “Black Ops” beer.
Finally, the Court held that Brooklyn Brewery would face irreparable harm if the injunction were not granted. Brooklyn Brewery has spent years of effort and financial investment to establish the goodwill of its brand. Brooklyn Brewery was concerned that if consumers drank a Black Ops Brewery beer they would be unlikely to ever purchase a Brooklyn Black Ops Beer “thinking it is connected with the “Black Ops” beer that they did not enjoy.” The Court agreed with this likelihood of consumer confusion and harm to Brooklyn Brewery, and concluded that the injunction would be effective immediately to enjoin and restrain Black Ops Brewing Inc. from using the marks “Black Ops” or “Black Ops Brewing” or any other infringing or unfairly competing mark with Brooklyn Black Ops.
This case is especially interesting because the Court issued the preliminary injunctive relief even though Brooklyn Brewery is not yet selling its Brooklyn Black Ops beer in California. Thus, the immediacy of the harm to Brooklyn Brewery could be questionable. However, the fact that Black Ops Brewery was on notice of Brooklyn Brewery’s rights and disregarded them no doubt had equitable impact on the Court’s decision.