ETH 321 Week 5 Intellectual Property Example

A Beer Name, a Recipe and a Label: Protecting a Craft Brewery's Intellectual Property

[Student Name]

University of Phoenix

ETH/321: Ethical and Legal Topics in Business

Week 5 Assignment

[Instructor Name]

[Date]

Blue Flint Brewing, its products, people and all figures are composites written for a model paper; this is not legal advice.

Blue Flint Brewing, the fictional Kansas City brewer used throughout the course, depends on assets it cannot see on its balance sheet: its beer names and logo, its recipes and brewing methods and its distinctive label art. This year all three came under threat. This paper explains the forms of intellectual property and applies them to Blue Flint's problems.

Forms of Intellectual Property

Mallor et al. (2019) describe four main forms. Trademarks protect words, names, symbols and designs that identify the source of goods, and they last as long as they are used and maintained; federal registration adds nationwide rights. Copyrights protect original works of authorship, such as art and text, from the moment they are fixed in a tangible form, for the author's life plus 70 years or a fixed term for works made for hire. Patents give inventors of something new, useful and not obvious to experts a 20-year exclusive right, measured from filing, in return for publishing how it works. Trade secrets protect valuable information kept confidential through reasonable measures, for as long as secrecy lasts.

Problem 1: The Beer Name

Blue Flint launched a hazy IPA called Night Heron in Missouri and Kansas. A month later it received a cease-and-desist letter from a Colorado brewery that holds a federal registration for Nite Heron Ale, sold in six states, not including Missouri or Kansas, but online and through a national beer club.

Courts decide trademark infringement by asking whether the use is likely to confuse consumers about the source of goods, weighing factors such as similarity of the marks in sound, sight and meaning, relatedness of the goods, strength of the mark, evidence of actual confusion and the junior user's intent. Beebe (2006) studied hundreds of federal trademark opinions and found that a few factors, especially similarity of the marks and the defendant's intent, drove most outcomes, while courts often reasoned their way to a conclusion and then weighed the other factors to match it.

Here the marks sound identical, the goods are identical and the senior mark is federally registered, which gives nationwide priority. Blue Flint did not search the federal register before launching. Its position is weak.

Night Heron and Nite Heron sound the same at a crowded bar, and that is the test that matters.

Problem 2: The Departing Brewer

Blue Flint's head brewer resigned to join a competitor. She developed many of Blue Flint's recipes and process notes, including a proprietary dry-hopping schedule that the brewery believes gives its flagship beer a distinctive aroma. Recipes themselves are hard to protect: they are rarely patentable and copyright does not protect a list of ingredients. Trade secret law can protect them if they are valuable because they are not generally known and if the owner takes reasonable steps to keep them secret.

Blue Flint's steps were weak. The brewer never signed a confidentiality agreement, recipes are kept in a shared online folder accessible to all staff and the dry-hopping schedule is posted on the brewhouse wall. A court might find that Blue Flint did not take reasonable measures, ending trade secret protection. If the brewer took files or used the specific schedule at her new job, Blue Flint could still argue misappropriation, but its case is weaker than it should be.

Png (2017) studied changes in state trade secret laws and found that stronger protection was associated with increased research and development in some industries, suggesting that trade secret law matters to how firms invest in innovation. For a small brewery, recipe development is its research, and protecting it encourages continued investment.

Problem 3: The Label Art

Blue Flint's labels were designed by a freelance illustrator, paid $1,500 per label under an email agreement. No written assignment of copyright was signed. Because she is an independent contractor and labels do not fall within the limited categories of commissioned work that can be made for hire by written agreement, she likely owns the copyright. Blue Flint may have an implied license to use the art on the beers it was created for, but not necessarily to use it on merchandise or new products. If the relationship sours, she could object.

Could Anything Be Patented?

Patents rarely fit small breweries. A recipe is usually not new enough or is too easily varied to justify the cost of a patent, often $15,000 or more, and patenting would require publishing the method. Blue Flint did develop a modified hop-dosing device for its fermenters, which might be patentable if it is truly novel. Before spending money on an application, the owners should ask a patent attorney to search for similar devices. In most cases, trade secret protection for methods and trademark protection for names offer better value for a company of Blue Flint's size.

International Concerns

Blue Flint sells only in two states today, but a Canadian importer has asked about carrying its beers. Trademark rights are territorial: a US registration does not protect the Blue Flint name in Canada. If export is likely, the company should consider registering its main marks there before entering the market, so that another firm cannot register them first.

Ethical Dimension

Respecting others' intellectual property is also an ethical matter. Blue Flint expects others to respect its names and recipes; it should search before naming beers and pay creators fairly for rights it needs.

Recommendations

Rename the beer: negotiate a short sell-off period with the Colorado brewery and rename the beer. Search the federal register and state registrations before naming future beers.

Register key trademarks: file federal applications for Blue Flint's name and logo and its flagship beer names.

Protect recipes: confidentiality agreements for all brewing staff, restricted access to recipe files and removal of process notes from public walls.

Secure the art: negotiate a written assignment of copyright for existing labels and use a written agreement for future work.

Annual review: a yearly check of intellectual property with a lawyer, about $2,500.

Conclusion

Blue Flint's names, recipes and labels are intellectual property, but the brewery had not taken the basic steps to protect them. Trademark law, trade secret law and copyright law each apply, and research shows how courts decide trademark cases and how trade secret protection affects investment. Renaming, registering, securing secrets and obtaining written assignments would protect the assets that make the brewery distinctive.

References

Beebe, B. (2006). An empirical study of the multifactor tests for trademark infringement. California Law Review, 94(6), 1581-1654. https://doi.org/10.2307/20439078

Mallor, J. P., Barnes, A. J., Bowers, L. T., & Langvardt, A. W. (2019). Business law: The ethical, global, and e-commerce environment (17th ed.). McGraw-Hill Education.

Png, I. P. L. (2017). Law and innovation: Evidence from state trade secrets laws. Review of Economics and Statistics, 99(1), 167-179. https://doi.org/10.1162/REST_a_00532