By Richard Stobbe

In 2015, an Ontario craft brewer, Beau’s All Natural Brewing Company (Beau’s) applied for a trademark for B-SIDE BREWING LABEL, for use in association with Ontario craft beers.  In its application, Beau’s claimed that it had used this mark since July 2013.

A California wine producer, Steelbird Ghetto, was using a similar mark, B SIDE, in association with wine. In May, 2016 (about 15 months after Beau’s application was filed), Steelbird eventually filed its own trademark application for B SIDE, for use in association with wine.

Steelbird did not oppose the registration of Beau’s mark, but wrote a letter to Beau’s in July 2016, raising the question of whether Beau’s had actually used the B-SIDE BREWING LABEL mark since 2013, and providing a copy of its own newly filed trademark application for B SIDE .

Beau’s wrote back, asserting that it had used its B-SIDE mark in association with its Kissmeyer Nordic Pale Ale since 2013. Steelbird challenged this claim, pointing to Beau’s listings with the Liquor Control Board of Ontario (LCBO), which showed a release date of November 2014 for the Kissmeyer Nordic Pale Ale. Steelbird alleged that the Kissmeyer Nordic Pale Ale label did not contain any reference to B-SIDE BREWING LABEL, the mark in question.  When Steelbird asked Beau’s to withdraw its trademark application, Beau’s ignored this request and took registration in September 2016.

At that point, B-SIDE BREWING LABEL was a registered trademark for beer, based on use in Canada since July, 2013.  B SIDE for wine was an unregistered trademark, still pending in the trademarks office, claiming use in Canada since October 2011.

If a new brand is used, and even registered, claiming use since 2013, can it be defeated by a confusingly similar unregistered mark which has been used since 2011? In Canada, trademark rights are based on use, not registration.  So on these facts, where the unregistered mark can claim earlier use, it wins over the mark which is used later, even if that later mark is registered.

This is the conclusion in the recent decision Steelbird Ghetto Properties LLC v. Beau’s All Natural Brewing Company Ltd., 2018 FC 630 (CanLII).. In that lawsuit, Steelbird applied to strike out Beau’s registration, and filed documentary evidence to support its claim. Beau’s elected not to respond.  Based on the evidence, the court allowed Steelbird’s application on the basis that Beau’s registered trademark was confusingly similar to the unregistered trademark previously used by Steelbird.

What are the lessons for brand owners?

• This case raises a couple of interesting points. First, it’s a great illustration that trademark rights are based on use, not registration. All other things being equal, an earlier used mark will generally win over a later mark. This holds true even if that later mark is registered, and the pre-existing mark is unregistered.
• When assessing the products in question (wine vs. beer) the court tool the view that “both products are alcoholic beverages and, therefore fall within the same class of goods”. Technically speaking, beer falls into Nice International Class 32, and wine falls into Class 33, which covers alcoholic beverages other than beer. But that doesn’t matter much when the court points out that both are sold on shelves in the local beer and wine store.
• This case also illustrates the value of clear documentary evidence to prove the dates of first use of a trademark. If a trademark is ever subject to a challenge, this evidence can be crucial to support claims made in the trademark application. Clear evidence may help defeat a challenger or may support an attack against a competitor’s mark.
• Lastly, this story shows the value of seeking early protection. The wine producer used its B SIDE mark since 2011 but did not seek protection until 2016, presumably after it noticed that Beau’s had filed an application. If they had obtained their own registration before 2015, then Beau’s may have avoided the use of a similar B-SIDE mark, knowing it would conflict with an existing registered mark for wine. An early trademark registration is much more efficient and much cheaper than a court application for expungement.

To obtain advice on trademarks and brand protection, contact trademark counsel.

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