Social media puts West Sixth, Magic Hat lawsuit in court of public opinion

gkocher1@herald-leader.comvhoneycutt@herald-leader.comMay 25, 2013 

Last week's fight over beer logos between Lexington's West Sixth Brewing Co. and Vermont brewer Magic Hat is the latest example of how companies use social media to wage trademark battles in the court of public opinion, experts say.

Before the rise of social media, small companies such as West Sixth facing a trademark challenge from a big company like Magic Hat could either submit to their demands or hire high-priced lawyers, stick it out for a long court battle, and probably lose anyway.

But with the increased use of Facebook, Twitter, Reddit and other digital-sharing websites, little companies have a new weapon. They enlist Facebook and Twitter to let others know about their trademark plight and to shame the larger companies going after them. They also use online petitions to gain public support.

"That's the very essence of social media: David can defeat Goliath if enough people jump into the slingshot, so to speak," said Kakie Urch, an assistant professor of multimedia in the University of Kentucky's School of Journalism and Telecommunications.

In a suit filed May 16 in U.S. District Court in Lexington, Magic Hat charges that West Sixth sold beer using color, trademarks and designs "that closely resemble and are confusingly similar" to the designs used by Magic Hat for several years.

Within minutes of the story first being reported Tuesday, West Sixth co-owner Ben Self had galvanized support by launching a social media campaign that included an online petition to ask Magic Hat to drop the lawsuit and stop "corporate bullying." The petition had more than 5,100 signatures by 9 p.m. Tuesday. By Friday afternoon, nearly 16,600 supporters had signed.

Self also answered questions Thursday about the dispute on the news-sharing site Reddit.

Self is savvy in the ways of social media. Before getting into the beer business, he helped Barack Obama and other Democrats in 2008 use the Internet to raise hundreds of millions of dollars in small contributions and to connect with their supporters. As technology director for the Democratic National Committee, Self's work helped propel Obama into the presidency.

So to hear Self tell it, it was only natural to enlist social media in this matter against Magic Hat.

"It was clear from the beginning that they are a much bigger company than we are, and so we had to use any available option at our disposal," Self told the Herald-Leader. "And so, for us that meant the court of public opinion as a key piece of it."

(At least one person in Self's chat on Reddit expressed resentment at being used as a stone in either company's slingshot. The person wrote: "Take it off social media. You both sound like freakin' children. You both have lawyers; get them both in a room and leave us out of it. We're not your or their army.")

Brewing battles

The lawsuit said the appearance of Magic Hat's #9-branded products is characterized by its distinctive orange, the predominant color on its labels, the presence of the "dingbat" star and the circular motif of the #9 design.

West Sixth recently introduced its Amber Ale, which is offered with an orange label that includes the numeral 6. The lawsuit said West Sixth has used a "dingbat" star to "confuse consumers and trade on Magic Hat's good will."

Magic Hat has used the #9 mark on beer and ale since at least 1995 in the United States and since at least 2009 in Kentucky, the suit said.

West Sixth has sold beer, ale and brewpub services using the 6 in its logo in portions of Kentucky and Ohio since April 1, 2012, the suit said.

The West Sixth logo was designed by Cricket Press, a Lexington firm. Cricket co-owner Brian Turner said in an email Friday that he and his wife, Sarah, came up with the design by collaborating with West Sixth's partners.

Magic Hat initially said it was "blindsided" by West Sixth's social media campaign. By Wednesday, both companies issued statements saying they were willing to negotiate.

It's unclear whether the social-media campaign caused the two companies to turn down the rhetoric. But they're not the only ones to enlist social media in such conflicts.

Vermont folk artist Bo Muller-Moore was sued by Chik-fil-A in 2011 because his T-shirt business built around the phrase "Eat more kale" allegedly infringed on the restaurant chain's "Eat more chikin" slogan.

Muller-Moore took to Facebook to update followers about the disagreement, and more than 29,000 people signed an online petition asking Chik-fil-A not to block his application for a trademark application.

In April, the U.S. Patent and Trademark Office preliminarily rejected Muller-Moore's trademark application.

Social media also entered the fray in another dispute involving a brewery, Jeff Rice, a UK professor of digital media who is writing a book about craft beers, said in an email.

In September 2009, Hansen Natural brand Monster Energy sent a "cease and desist" letter to Rock Art Brewery about its Vermonster series of microbrew beers. Hansen Beverage Co. sought reimbursement for legal expenses and asked Rock Art to abandon a trademark application. Hansen had trademarks for "Monster" and "Monster Energy."

Matt Nadeau, co-owner of Rock Art Brewery, spread word about the issue through email. A Facebook support page soon filled with negative comments about Monster, and Nadeau appeared in an online video that gave details about the issue.

Rock Art and Monster settled the dispute in October 2009. According to a story in USA Today, the deal allowed Nadeau to keep the Vermonster brand if he didn't enter the energy-drink genre. He also agreed not to block Hansen if it entered the beer market, USA Today reported.

"In some ways, West Sixth is following Rock Art's response to Hansen," Rice said in the email. "Rock Art mounted a major social media campaign that worked to its advantage."

The fact that the West Sixth-Magic Hat brouhaha spread like wildfire across the country speaks to the character of the "craft beer population," which Urch, the UK assistant professor of multimedia, described as passionate, well-educated, and engaged and conversant in social media.

"Many of the craft beer organizations and groups have very lively discussions on Reddit, or they have blogs or all sorts of community functions online for their craft beer," Urch said.

In addition, the craft beer generation is "interested in sourcing what it consumes, whether that is food, whether that is beer, or whether that is apparel that has their university's logo on it," Urch said. "They want to know where it came from, and they tend to prefer things that are smaller and less corporate-owned."

According to news reports, North American Breweries Inc., which sells Genesee and Labatt beer in the United States, bought Vermont-based Magic Hat in 2010. North American's website said it owns and operates five U.S. breweries and six retail locations in New York, Vermont, California, Oregon and Washington.

In October, there were news reports that Cerveceria Costa Rica struck a deal to buy the privately held North American Breweries for $388 million in cash. Cerveceria Costa Rica is a unit of Florida Ice and Farm Co. S.A.

Court of law vs. public opinion

Some observers question the wisdom of companies taking their legal wranglings to Facebook and Twitter.

West Sixth and Magic Hat "are fighting a publicity battle and a PR battle, not a trademark battle," said Ralph E. Hanson, a professor of communication at the University of Nebraska at Kearney, who writes a blog called "Living in a Media World." He wrote a blog post about the West Sixth and Magic Hat issue after a Herald-Leader reporter called him for comment.

"The trademark battle will be resolved in court," Hanson said.

On the other hand, Hanson likened the dispute to one where Progressive Insurance reached an out-of-court financial settlement with a family who had detailed in a Tumblr post how their claim was handled. The settlement was for "tens of thousands of dollars" more than the $75,000 claim balance that the family was seeking, according to CNN.

David Fleenor, a Lexington lawyer who represents clients in cases involving intellectual property, said he found it "fascinating" that West Sixth and Magic Hat aired their dispute on Facebook and Twitter.

But he questioned the wisdom of duking it out on social media.

"I'm wondering, what is your goal here?" Fleenor said. "I'm not sure that ultimately that's going to help them in winning or losing a lawsuit. But it may, frankly, help them in getting their name out there and increasing market share.

"There are going to be specific issues in a trademark infringement lawsuit," Fleenor added. "And I don't know whether the public opinion one way or another is going to have an effect on that at all."

Companies also risk other litigation, such as a defamation complaint, by using social media in such instances.

"There is a risk there, but it would be a defamation case like any other defamation case. Truth would be a defense," Fleenor said. "That strikes me as a little more blustering by both sides if they were to up the ante by saying, 'We're going to sue you for that,' or if they were to bring an unfair practices claim."

Self, the West Sixth co-owner, said airing the issue on Facebook, Twitter and Reddit "is not about tactics" or gaining new customers.

"This is about the real core issue here, which is a company bullying a much smaller company," Self said. "I think it's all about getting the correct information out. And we are really asking for people to come support us in this. And so we are trying to get exposure in as many ways as we can."

Ken Sagan, the attorney for West Sixth, wouldn't discuss private conversations he has had with his client. But he said Friday, "I admire what they've done and admire the fact that they feel a sense of outrage and they feel like they're being bullied, and I admire that they're standing up for themselves."

Sagan couldn't say whether the case is any closer to a resolution, but both companies issued statements last week saying they were willing to negotiate.

West Sixth said it was "willing to phase out the current design of our compass (design) and replace it with something that is more clearly a compass and not a star, a symbol Magic Hat has taken issue with."

West Sixth publicly asked Magic Hat in the statement if that company would drop the lawsuit and trademark protest if West Sixth got a new trademark.

"So what do you say, let's bury the hatchet and down a beer together?" West Sixth said.

Ryan Daley, brand manager for Magic Hat, responded in a statement: "We have always been ready to talk and will reach out to West Sixth to make sure that happens."

Daley added: "As for Magic Hat, in order to prevent the spread of misinformation that has occurred this week, we do not believe this matter should play out publicly any further and invite West Sixth to make the same commitment."

On Friday, Daley said Magic Hat remains "committed to not playing this out in public."

Greg Kocher: (859) 231-3305.Twitter: @heraldleader

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