Cider Corner: Pros and Cons of Coexistence

Trademarks have traditionally been important for businesses — including cider companies — that are trying to protect their intellectual property.

But while they’re relatively easy to obtain, simply having one in place isn’t the end of a company’s worries. Attorneys Dorien Clark and Malaika Tyson recently gave a presentation at CiderCon 2023 in Chicago where they talked about trademarks and trademark coexistence agreements and the pros and cons of each.

“Why are trademarks relevant to the cider industry?” Clark asked rhetorically. “They’re going to help your customers find your products and protect them from other similar marks in the marketplace that could damage your reputation.”

Trademark types include common law and registered trademarks. The difference between a common law, or unregistered trademark and a federally registered trademark lies in the amount and geographic reach of your protection.

Common law trademark rights go to the business that uses the trademark first. You can only enforce a common law trademark in the geographic area where the trademark is used.

To obtain federal trademark registration, a business must file an application with the US Patent and Trade Office and have it approved. Registering a trademark with the USPTO gives a business the legal presumption that you have the right to use the trademark nationwide and prevent others from using a similar mark for the same types of goods or services.

Clark said there were downsides to choosing the common law trademark path.

“As soon as you use a mark, your business gets automatic protection under common law,” he said. “It’s free, but it offers protection based on geographic location only and doesn’t give you protection of ownership or validity. You’re not able to enforce a common law trademark in federal courts.”

Tyson said that in the world of beverage alcohol, it was likely going to become harder to trademark as more and more companies enter the marketplace. Some companies with similar trademarks will avoid litigation by forming coexistence agreements.

“If you don’t want to sue each other, you can go into a coexistence agreement,” she said. “If you’re both selling in Illinois, you can decide that you’re going to handle everything east of the Mississippi and the other company can sell west of the Mississippi. Or you can decide you’ll use these colors and fonts and they’ll use different colors and fonts.”

While it seems friendly (and doesn’t have to be registered with the USPTO) she said there were downsides to such an agreement, making them a potentially less palatable option over a legal battle in some circumstances.

One is expansion, and change of ownership can be another hurdle to clear.

“You may want to sell in California now, but you signed this agreement, and now you can’t,” Tyson said. “Agreements are also non-transferable when there’s a change in ownership. You may need to completely stop or renegotiate before you can continue. So while coexistence may seem like a good, easy solution, you’ll want to think about how it may affect your business downstream.”

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