Tree Goes Hop Head to Hop Head with Green Flash

In yet another case of lupulin litigation — or the threat thereof — Kelowna’s Tree Brewing served notice on San Diego’s Green Flash Brewing Co. to cease using the name “Hop Head” in BC.  Since August 2008, Green Flash has been selling its Hop Head Red Ale in select private liquor stores, mostly in the Lower Mainland. Tree brews Hop Head India Pale Ale.

This is the fourth case in two years in which BC craft breweries have been involved in legal disputes over trademarks. In 2007, Vancouver’s Mark James Group demanded Victoria’s Phillips Brewing stop using the name Blue Truck because it was too similar to its Red Truck brand. Last year, England’s Wychwood Brewery threatened punitive action against Vancouver’s R&B Brewing as they felt the market would be confused between the latter’s Hop Goblin’ India Pale Ale and their Hobgoblin Ale. (Memo to Wychwood: we aren’t confused and are pissed off you think us to be that stupid.) Also last year, Sleeman took Aldergrove’s Dead Frog to task over use of clear bottles. Dead Frog isn’t backing down and will battle it out in the courts.

Lawyers Win, Drinkers Lose

Tree President, Tod Melnyk, said Tree was obligated to protect its trademark, otherwise they could lose it. He felt the onus was on Green Flash and its agents to perform due diligence before entering a market. Since he received no telephone call from anyone representing Green Flash, he instructed Tree’s lawyer to send notice to Green Flash. Green Flash, being a small brewery, will not contest this in court. British Columbia is a small market for them, therefore, they will discontinue shipping Hop Head Red Ale here.

While Melnyk is correct in wanting to protect his trademark and that Green Flash ought to have done their due diligence and contacted him, it doesn’t necessarily indicate any hostile intent on the part of Green Flash. A phone call might have straightened out any misunderstanding or oversight, and an agreement reached so that consumers could continue purchasing both beers. Unfortunately, we won’t know if this could have happened. Tree’s decision was to initiate communication through their lawyer, which is rarely conducive to friendly dialogue. Now we have one less award-winning craft beer to purchase in BC.

Craft Brewers’ Code

While one expects corporations to speak to small businesses through their lawyers, the cases of Mark James/Phillips and Tree/Green Flash are different. All four are craft brewers. And whenever they employ corporate tactics without attempting to speak directly to each other, we all lose.

In the case of the Red Truck/Blue Truck tiff, Phillips conceded to avoid costly legal expenses. However, this raised the ire of craft beer drinkers in southern Vancouver Island, spawning “Better Dead than Red” t-shirts. In the process, the publicity of the case raised the profile of Phillips and the experience prompted them to release a new beer, their Accusation Ale, to emphasize the pettiness of it all. Had Mark James employed a more co-operative approach with Phillips, they could have worked together to improve craft beer’s market share vis-a-vis industrial lager, but the opportunity is probably lost. Red Truck will likely face a higher barrier to entry across the strait if they ever decide to make a go of it.

One reason why craft beer has grown considerably in the US is because they have craft brewing guilds where the brewpubs and breweries support each other in the fight against the beer behemoths. Case in point: Collaboration not Litigation Ale. Avery Brewing and Russian River Brewing both brew Belgian-style ales called Salvation. Rather than square off against each other in the so-called halls of justice, their respective brewers sat down together and decided to collaborate by blending their two Salvations for a special annual seasonal release, CNLA. So instead of one company forcing both to contribute to the lawyers’ welfare fund, they profit from each other’s good will.

This is much less the case in BC. Some microbreweries are not above poaching another’s taps because it’s the low-hanging fruit. All this does is cannibalize the beachhead craft beer clings to in the province. From the perspective of the big boys, the divided will remain conquered and the multitude will continue to swig soulless swill. Guess who the winner is. Hint: it isn’t you.

Market Mayhem

As in the Mark James/Phillips case, being legally right doesn’t always mean coming out ahead. One needs to consider the market’s dynamics before going such a route.

With the current state of beer in BC, it’s the conglomerates that have a huge advantage. Their deep pockets mean they can afford to deliver a constant stream of brainwashing to the uninitiated and the oblivious, never mind being able to buy shelf space and tap handles. It’s impossible to compete head to head, therefore, a different approach is required.

For the craft brewing underdog, a more fruitful avenue is to focus on early adopters. If they enthusiastically embrace your product, they will evangelize it for free. It will then influence those around them because the message comes from a more objective authority, not a self-interested business entity. The more the message is verified and accepted, the wider the circle radiates from friend to friend. With today’s technology and the power of social media, this process can proceed very rapidly.

It also works the same for negative news, but even faster. The average BC beer drinker who doesn’t care for craft beer isn’t affected by the legal manoeuvres of matroyshka multinationals. The conglomerates will fight it out in court with their legal legions and their products will still be around at the end of the day. In the case of craft brewers, however, a legal loss may mean the demise of a beer or even the brewery. Deprive early adopters of a quality product, prepare to incur their displeasure and have that spread through their network. This is similar to what spawned CAMRA in the UK.

Another potential cost to Tree is if they ever intend to enter the US market. As part of the craft-brewing fraternity, they may have been able to count on the support of their American brethren to establish a foothold across the 49th parallel. Given the choice that was made, however, they may be treated as a hostile competitor and find the going much tougher.

I hope Canadian craft breweries will give more serious consideration to how they relate to each other and their neighbours in the future. We still have a long ways to go before we gain a share of the market for craft beer comparable to Oregon and Washington. We can only hope we’ll get there.