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The Death of I-1100: What’s Next for Washington?

The law books will have to wait for a change. I-1100 has been defeated.


***This post was originally posted on BreweryLaw.com, a blog devoted to beer law! The blog is published by Reiser Legal, LLC, a Seattle, Washington law office. Reiser Legal’s Douglas Reiser is our regular legal blogger.***

 

Well, its over. Both of the private liquor initiatives have failed to win the hearts of Washington voters. Even though there are still some votes to count, the battle is over.

 

But why did voters not embrace this initiative?

 

This year the elections were charged by an eagerness to reduce taxes and eliminate the government stranglehold on business. Nationwide, voters made it clear that they felt that big government had failed.

 

With voters looking to reduce taxation and governmental control, you would think that an initiative to eliminate Washington’s monopoly over liquor sales would prevail, right? How about an initiative that, as both sides would argue, would reduce the costs of beer and wine sold in Washington state? Hole in one, eh?  Nay.

 

Washington voters listened to the issues and voted with their brains, and not their hearts. I firmly believe that Western Washington’s love for its communities, defeated these measures. They listened to the local businesses that they support and decided that I-1100 was not for them and their families. (Note: I-1105 was defeated roundly). The massive amount of money that was dumped into this initiative appears to have been put to good use, as public education significantly assisted the “No” campaign.

 

So, what’s next?

 

One thing is for sure, it was a close call. The I-1100 vote came down to the final votes. The dividing line is not too wide.

 

Secondly, many of the organizations that supported the “No” campaign, including the Washington Brewers Guild, are not against the concepts of liquor privatization and free markets. They simply do not want it to happen overnight.

 

The one sentiment that I believe most shared was that overnight deregulation could be disturbing for businesses in the industry. Most of these groups might have been willing to get behind a measure that built in gradual deregulation. Heather McClung, owner of Schooner Exact Brewing, stated that the Guild’s members favor “slow, steady growth in modernizing those laws.” So, its possible they would get behind some, better crafted, legislation.

 

Finally, this was a voter initiative and not a legislative measure. Public citizens drew up significant changes to Washington state law (called for the repeal of 26 state laws), and I believe that it frightened some people. If a more gradual measure was to pass through the legislature, it might have more footing.

 

In the end, I suspect that there will be a congressional push to get proposed legislation circulated in the legislature. In the next few years, the State of Washington will likely have some form of private liquor sales and a more deregulated alcohol business. I would take those betting odds.

 

Beer Law & Legis: WA Liquor Control Board Opposes Initiative 1100, Faces Citizen Opposition

September 14, 2010 Leave a comment

Could we see all 3 in one place? The LCB is out to stop that from happening

***This post was originally posted on BreweryLaw.com, perhaps the nation’s only blog devoted to beer law! The blog is published by Reiser Legal, LLC, a Seattle, Washington law office. Reiser Legal’s Douglas Reiser is our regular legal columnist.***

The Initiative 1100 battle is still running hot and heavy. The animus shown by both parties, for each other, is thick. We have discussed it a few times, here on our blog.

Recently, the Liquor Control Board (LCB) has been vocal about its disdain for the proposed Initiative.  The Washington Wine Institute hosted Washington Liquor Control Board Deputy Director, Rick Garza, at a panel meeting in Woodinville, last month. The purpose of the panel was to show the public why most of the local beverage industry opposes the Initiative. The Washington Brewers Guild was also present, echoing the Wine Institute’s call. (You can listen to Garza’s presentation by following this link over at SoundPolitics.com)

Apparently, one concerned citizen is upset about the LCB’s public presence. A local Seattle man (and writer for SoundPolitics.com) has filed a Complaint with the State of Washington Executive Ethics Board against Garza, alleging that the LCB executive is illegally using public resources and misleading the public with false information.

If you are interested in the Complaint, you can find a brief summary by clicking on this link, and you can read the entire Complaint by following this link. The LCB’s position has been laid out in a series of slides that can be read by following this link.

This blog takes no position with regard to the Complaint. Furthermore, we have no supporting information which makes us believe that the LCB is misleading the public.

It is, however, apparent that the LCB is openly involved in the “Vote No” movement. Recent materials illustrate that they believe  the passing of Initiative 1100 will cost millions, necessitating a dip into the State’s general fund to meet LCB budget requirements.

Of course, the war of words will only gain steam as we approach November. Feel free to leave comments below if you have something to add to the discussion.

Beer Law & Legis: Black Raven Brewing Loses Trademark Battle with Wine Producer

Black Raven might not have a trademark, but they don't intend to ditch the name

***This post was originally posted on BreweryLaw.com, the nation’s first, and maybe the only, blog devoted to beer law! The blog is published by Reiser Legal, LLC, a Seattle, Washington law office. Reiser Legal’s Douglas Reiser is our regular legal columnist.***

This is somewhat of a travesty – but truly the way that trademark law works. Yesterday, June 21, 2010, Black Raven Brewing Co. lost a trademark battle over its “Black Raven Brewing Company” name and mark design. The story was first reported over at Seattle Beer News.

The challenge was brought by Franciscan Vineyards, who holds trademarks for wine and related products identified by the names “Ravenswood” “Ravens” and “Ragin’ Raven.” These names are associated with its Ravenswood Winery label that produces a large volume of wine in the United States.

There are a few things that really struck me about this case. The first is that this ruling comes at a time when Black Raven Brewing Co. is flying high, gaining every recognition in the brewing world, and putting a major dent in the Seattle craft brewing market. This is the same brewery who recently took home 3 medals at each the North American Beer Awards and the World Cup of Beer. They are on a roll.

But, after taking a look at the pleadings filed in the United States Patent and Trademark Office’s Trial and Appeal Board, I noticed that the challenge came up way back in January 2008.

Secondly, this was no easy challenge for Franciscan. They moved for summary judgment back in December 2008 and claimed that wine and beer were almost interchangeable, that the channels for sale were similar, and that the mark was confusingly similar. The court rejected this analysis, stating that Franciscan had failed to meet their burden of proof.

The Court proceeded to set the matter for trial. Several motions to strike were filed in 2009 that prompted a delay in the trial of the matter. But, the matter proceeded with briefing early this year; trial was held on the briefs and the decision issued this month.

Third, the Court refuses to sever the beer and wine industry. At times in its decision, its clear that the Court believes that they are virtually interchangeable. The Court provides:

Indeed, when the proper evidence has been made of record, the Board’s precedential authority specifically holds beer and wine are related products….

In sum, the factors relating to the goods, namely the similarities between wine and beer, the identity in trade channels and prospective purchasers, and the conditions of sale weigh in favor of a finding of likelihood of confusion.

This appears to be the first time that the trademark court has had to decide on a similar mark between beer and wine. They did cite the findings of a case between beer and tequila and one pertaining to malt liquor and tequila. But, the Court did not appear to draw any inferences from a similar beer and wine showdown.

This is an important distinction. This country has a glut of wine and beer producers. Many have extremely similar names (i.e. Stone Cellars v. Stone Brewing; Fat Cat Beer v. Red Cat Wine; Sea Dog, Laughing Dog, Lazy Dog, Spotted Dog and whole mess of other dog breweries and wineries). This could open the floodgates for more challenges in between these two industries.

Fourth, the Court used a strip down technique to tear away what it perceived to be generic terms. The Court stripped off “brewing company” and focused its attention on “black raven” v. “ravens”:

In the case of applicant’s mark, BLACK RAVEN clearly dominates the BREWING COMPANY portion. The generic words BREWING COMPANY are disclaimed, and, although we have compared the marks in their entireties, these words play a subordinate role in the mark.

The most important discussion of the word “raven” was in looking to the dictionary definition, which provided that the addition of the word “black” was essentially superfluous, not differentiating the two terms:

The marks share the word RAVEN (the plural form in opposer’s mark) and, thus, look and sound similar.

As for meaning, the term “raven” is defined, in pertinent part, as “a large, black, omnivorous and occasionally predatory bird; glossy black.” The New Lexicon Webster’s Dictionary of the English Language (1987).

Applicant’s promotional materials show that its logo depicts a black bird, as does opposer’s advertising materials. We find that RAVENS and BLACK RAVEN convey substantially similar, if not virtually identical meanings. Although the addition of BREWING COMPANY in applicant’s mark informs prospective consumers that the entity is a brewery, the evidence indicates, as discussed above, that beer and wine may emanate from the same entity.

So, its a crushing blow for Black Raven Brewing Co., but they are not out of options. They are entitled to appeal this decision in the future.

Initial accounts from Beux Bowman, the owner of the brewery, are that the brewery is not going to relinquish use of the name. Who can blame them? The young brewery has sunk an incredible amount of time, money and effort into building up a successful and well-known business icon.

It is very possible that Franciscan will approach the brewery about a licensing arrangement, which would permit them to use the mark, for a price. This is a typical goal of the trademark opposition procedure.

Whatever, Black Raven decides to do, we hope they continue building an incredibly successful brewing operation here in Washington state. Hopefully, the mere fact that they were a part of this dispute only provides additional marketing opportunities.

BreweryLaw.com: Modernize WA Shoots to End Washington Liquor Monopoly

Hi Ladies: If Modernize Washington gets their way, we'll see liquor on Seattle shelves soon

***This article was originally posted on BreweryLaw.com, a beer law blog published by Reiser Legal, our legal writers***

The recent initiative to privatize liquor sales in the State of Washington is picking up steam. Though this is not about beer, there are many in the beer industry who are probably interested in a major change in alcoholic beverage regulation in our fine state.

Initiative 1100 is the proposed legislation. The group behind this initiative is Modernize Washington, a Seattle based public interest group, providing not only the spirit behind the proposed law – but the statutory language itself.

A recent press release from Costco, showing support for the bill, puts the issue at the forefront of legislation challenges in Olympia. Of course companies like Costco, who has over 400 retail locations – all selling alcohol, stand to gain significantly from having access to liquor, for sale in their stores.

The proposed initiative would enable retail outlets like Costco to obtain licenses from the state of Washington, permitting it to sell liquor and permitting it to obtain liquor from almost any source – including the producers themselves.

Modernize Washington provides the following list of items that are at the heart of Initiative 1100. Take a gander for yourself:

  • Washington State’s Liquor Control Board [LCB] will no longer sell liquor.
  • LCB will end their current contracts with contract liquor stores.
  • Current operators in good standing of contract stores will receive licenses to continue in business as a private retailer, if they wish to continue operating.
  • LCB will no longer distribute spirits. The state distribution warehouse will be sold to generate money for the state.
  • A new distributor can be licensed and may buy from any licensed distillery and sell to licensed vendors just like beer and wine sellers.
  • Any store or distributor currently licensed to sell beer or wine, and in good standing, will be able to obtain a license to sell spirits, for an additional license fee.
  • Local jurisdictions throughout the State can determine how many outlets they will allow in their city via zoning regulations.
  • The state’s ‘mark-up’ on spirits is eliminated.
  • The existing tax on liquor will remain and it will be up to the Legislature to adjust the amount of tax.
  • The initiative mentions a 10% tax on purchases of spirits by restaurants. This is not a new tax or a tax increase. This is a technical update to current law, and merely requires private sellers to collect the existing tax which is now collected only by state stores.
  • Repeals the “Three-Tier System”, a set of Prohibition-era “blue laws” which grant monopoly privileges to middlemen, at the detriment of consumers.
  • Frees the LCB from the burden of enforcing outdated and unhelpful “blue laws”. The LCB will instead focus its mission on enforcement of licensing laws and education against under age drinking and general abuse of alcohol.
  • All license fees from the new licenses to sell spirits may only be used for enforcing liquor laws and educating the public against underage drinking and other abusive alcohol consumption.

One of the points that strikes me as impressive, is their attempt to undermine the historic “Three Tier” distribution system that has followed alcohol sales from the end of Prohibition. The system demands that alcohol funnel through three sparties – the producer, the distributor and the retailer.

Over the past decade or so, states have weakened their stance on preserving this archaic system by permitting exceptions for brewpubs and even small breweries who sell and distribute their own products.

Modernize Washington has a copy of Initiative 1100 on their website. Take a gander at Section 15 on Page 9-10 of the document. This is one of the sections that directly repeals the “Three-Tier” distribution system that craft brewers, winemakers and distillers have grown to despise. This Section allows distillers to sell their alcohol to consumers and distributors on their own – without a middle man.

I welcome any comments on your views of Initiative 1100. As the document is extensive, we will continue to discuss its impact – as we learn more behind the initiative’s intent and application.

Leave your comments below.

Beer Law & Legis: Collaboration Between Stone, Firestone and 21st Amendment Raises Eyebrows

BreweryLaw.com: New beer likely raised eyebrows at TTB

***This article was originally published at BreweryLaw.com, a beer law blog published by our legal writer, Reiser Legal LLC***

Well this might not be a topic for dispute, but Stone Brewing‘s latest triangular collaboration has quite a label. The beer – El Camino (Un) Real Black Ale.

The new beer is a collaboration between Stone Brewing, 21st Amendment and Firestone Walker, three of California’s finest brewers. From a quick look at the ingredients, this new collaboration seems to be a spiced fruit basket of ale.

BevLog, one of our favorites beer law websites, ran a story about the new beer after seeing the label submission run across the TTB. As you probably know, the TTB is responsible for approving the labels of beers sold in the US. The mission is to ensure transparency and safety for the beer consumer.

Check out the label above – and be floored by the contents of this new ale. Ingredients such as chia seed, peppercorns, fennel seed and mission figs are seldom seen on your beer label. In fact, they probably remind you more of your easter lamb than your afternoon ale.

The BevLog did some brief research on the contents: (from their site)

This beer has a rather uncommon and unlikely combination of ingredients. The peppercorns are no great surprise, but the alcohol beverages with chia seeds seem to be few and far between. Wiki reports that chia is an Aztec word for oily, and these seeds contain large amounts of oil, omega-3 fatty acids, and antioxidants. (Un)Real El Camino Black Ale is also brewed with fennel seed and mission figs. It is a collaboration among several brewers and is bottled by Stone Brewing Co. in Escondido, California.

It does not appear that this beer was held up in submission to the TTB. But it is likely that it demanded a bit of research over there. Its nice to see brewers continuing to push the envelope with new and exciting formulas.

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