Brooklyn Brewery Corp. v. Black Ops Brewing, Inc.

Citations: 156 F. Supp. 3d 1173; 2016 WL 80632Docket: No. 1:15-cv-01656-GEB-EPG

Court: District Court, E.D. California; January 6, 2016; Federal District Court

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A preliminary injunction has been granted to The Brooklyn Brewery Corporation against Black Ops Brewing, prohibiting the latter from using the names "Black Ops," "Black Ops Brewing," and the domain "blaek-opsbrewery.com." The court acknowledged that Brooklyn Brewery has a registered trademark for "Brooklyn Black Ops," under which it has marketed a Russian Imperial Stout beer since 2007, selling it in twenty-seven states. Brooklyn Brewery asserted that Black Ops Brewing's usage of similar marks, despite knowledge of Brooklyn Brewery's superior rights, constitutes deliberate infringement and harms its goodwill, leading to irreparable harm.

Evidence presented included Brooklyn Brewery's extensive promotional efforts and sales data, indicating tens of thousands of cases sold and plans for broader distribution, including California. Black Ops Brewing, established in 2015, claims limited sales within Fresno County and argues that it uses "Black Ops" solely as part of its brewery name alongside distinct beer names. Additionally, Black Ops Brewing applied for a trademark for "Black Ops Brewing" in 2015. The court's order reflects the balance of potential harm and the likelihood of Brooklyn Brewery's success on the merits of its trademark claim.

On July 1, 2015, the PTO rejected Defendant's trademark application, stating that Defendant's mark is highly similar to the registered mark "Brooklyn Black Ops," both in sound, appearance, meaning, and commercial impression. The PTO noted that the goods (both beer) are identical, and Defendant’s taproom services are related, leading to a likelihood of consumer confusion regarding the source of the goods. The PTO emphasized the need to prevent buyer confusion and protect the Plaintiff from negative commercial impacts due to the similar mark.

Despite the PTO’s rejection, evidence indicates that Defendant continues to promote and sell beer and taproom services under the mark "Black Ops Brewing" through various retail channels and online platforms. Plaintiff asserts that both parties’ beer products are similarly presented, and on July 20, 2015, Plaintiff demanded that Defendant cease all use of the "Black Ops" marks, renewing this demand on August 27, 2015. 

To obtain a preliminary injunction, Plaintiff must demonstrate a likelihood of success on the merits, likely irreparable harm without the injunction, a favorable balance of equities, and that the injunction serves the public interest. Plaintiff’s complaint includes two claims under the Lanham Act and two California state claims related to trademark infringement, which are analyzed under the federal framework. To succeed, Plaintiff must prove ownership of a protectable mark and that Defendant’s use is likely to cause consumer confusion. Plaintiff claims ownership of an incontestable federal registration for "Brooklyn Black Ops" to support its argument.

Plaintiff holds a federal trademark registration for “Brooklyn Black Ops,” which pertains to beer and was registered in 2009. Under the Lanham Act, a trademark can achieve incontestable status if it is continuously used for five consecutive years post-registration. Plaintiff asserts continuous sales of “Brooklyn Black Ops” since its registration, thus establishing its mark as incontestable. This status provides prima facie evidence of the mark's validity, ownership, and exclusive right to its use in commerce.

Plaintiff claims that Defendant’s use of the terms ‘Black Ops’ and ‘Black Ops Brewing’ creates a likelihood of consumer confusion with Plaintiff's mark. Defendant counters this assertion, arguing that the mere presence of ‘Black Ops’ on their label does not inherently suggest confusion. The likelihood of confusion is a pivotal aspect of trademark infringement cases, guided by eight factors established in AMF Inc. v. Sleekcraft Boats, which evaluate the strength of the mark, proximity of goods, similarity of marks, actual confusion evidence, marketing channels, consumer care, Defendant’s intent, and potential product line expansion. 

The strength of a trademark is categorized on a continuum from generic to arbitrary/fanciful, with stronger marks receiving greater protection. Arbitrary marks are common words unrelated to the product, such as “Dutch Boy” paint. The evaluation of likelihood of confusion is not a simple tally of factors but requires a case-specific analysis, where some factors may carry more weight than others.

Plaintiff claims the name "Black Ops" is an arbitrary trademark, not descriptive of its beer, which it argues is a unique identifier for its product. In contrast, Defendant argues that the term contains suggestive elements, with "Black" indicating a dark beer and "Ops" hinting at hops, thus making it merely suggestive rather than arbitrary. Plaintiff maintains that the term should not be analyzed by breaking it down into components, citing legal precedent that composite trademarks must be evaluated as a whole. 

The proximity of goods is a critical factor in assessing the likelihood of confusion among consumers. The more similar the goods, the less similarity is needed in the marks for confusion to be likely. Plaintiff asserts both parties sell beer, suggesting a strong likelihood of confusion. However, Defendant counters that their products differ significantly in type, price, and complexity, with Plaintiff’s "Brooklyn Black Ops" being a premium Russian Imperial Stout versus Defendant's more basic offerings. This price disparity, along with the nature of the products, could decrease the likelihood of confusion.

Finally, similarity of the marks is evaluated on sight, sound, and meaning. Legal standards suggest that overall similarities are more significant than differences when determining the likelihood of consumer confusion.

The Plaintiff asserts that the marks on their beer bottles, "Black Ops," are identical or nearly identical to the Defendant's mark, also "Black Ops," in terms of sight, sound, and meaning. Both marks are displayed in large, all-capitalized, white letters, with the Plaintiff's version featuring "Brooklyn" in smaller letters, while the Defendant includes "Brewing, Inc." in smaller type. The bottles themselves are oversized, black, and sold as singles, further contributing to the similarity. The Plaintiff emphasizes that the word component of a mark is typically given greater weight, especially for alcoholic beverages, which are often purchased without prior visibility of the labels.

In contrast, the Defendant argues that their branding differs significantly, pointing out that the Plaintiff’s logo features a large circular design with a prominent "B" and the name "Brooklyn," while the Defendant's products include names like "Blonde Bomber" and "Recon Red," displayed on standard amber bottles. The Defendant uses "Black Ops" only in conjunction with its brewery name.

The legal precedent indicates that in the alcohol industry, a lower degree of similarity may suffice for confusion due to the purchasing context. Although the Defendant identifies differences in their labels, the phonetic and semantic similarities of the marks remain significant. The potential for actual confusion is highlighted, noting that while evidence of past confusion is compelling, its absence does not negate the likelihood of future confusion, especially in circumstances where such evidence could be expected.

Plaintiff asserts that there is currently no evidence of actual confusion between the parties as Defendant has just started selling its product with low volume, and Plaintiff does not plan to sell in California until 2016. Therefore, this factor does not contribute to a likelihood of confusion. 

Regarding marketing channels, Plaintiff claims that both parties sell their beers in overlapping trade channels and utilize similar promotional methods, including websites and social media, targeting the same consumer demographic. Plaintiff is negotiating distribution for its "Brooklyn Black Ops" beer in California, while Defendant sells exclusively in Fresno County with limited distribution. 

Defendant counters that the parties do not share marketing channels, as Plaintiff's sales are confined to the East Coast, and its products have never been available in the same areas as Defendant's. Both parties promote their products online and through local establishments. 

The analysis indicates that the marketing channels converge, supporting a likelihood of confusion under the Lanham Act, particularly because Plaintiff intends to expand sales into Defendant's market area. 

In considering the type of goods, both parties offer craft beers priced under $30, which are typically purchased without high consumer diligence. This relatedness increases the probability of consumer confusion, supporting Plaintiff's position.

Plaintiff argues that the chaotic and impulsive nature of beer purchases necessitates a lower threshold for finding likelihood of confusion between brands compared to other products. The chaotic buying environment in bars supports the request for a preliminary injunction. Defendant counters that consumers willing to pay $29.99 for a premium beer are unlikely to confuse it with other products simply because they share the phrase "Black Ops" on the label. The legal standard for assessing likelihood of confusion considers the typical buyer's ordinary caution, including the ignorant and credulous, while allowing for a higher standard where the buyer has expertise or the goods are expensive. Despite the high price of some beers, the commonality and frequency of beer purchases suggest consumers are less diligent in their selections, favoring a finding of confusion.

Regarding the defendant's intent in selecting the mark, courts presume deception if a similar mark is knowingly adopted. Although Defendant claims no prior knowledge of Plaintiff’s mark when naming their brewery to honor military service, they continued using the mark after becoming aware of Plaintiff’s registered mark. While the initial good faith may mitigate some liability, it does not negate the likelihood of confusion.

After evaluating the relevant Sleekcraft factors, the record indicates that Defendant's use of the marks "Black Ops Brewing," "Black Ops," and "black-opsbrewery.com" likely confuses consumers about the source of the products. To obtain injunctive relief, Plaintiff must also establish that it will suffer irreparable harm without the injunction, beyond merely demonstrating a likelihood of success on the merits.

Plaintiff claims it will suffer irreparable harm from Defendant’s intentional trademark infringement involving the use of “Black Ops” and similar marks, particularly as it prepares to launch its beer portfolio, including the popular “Black Ops” beer, in California. Plaintiff asserts that Defendant’s actions have undermined its control over the brand's reputation, which it has developed over eight years, jeopardizing its expansion efforts. The Plaintiff argues that California consumers may be confused by Defendant’s preemptive market presence, leading to a dilution of retailer interest in carrying Plaintiff's products due to perceived similarities between the brands. Additionally, the Plaintiff contends that its brand's cachet is at risk, as consumers dissatisfied with Defendant’s products may wrongly associate their experience with Plaintiff’s offerings, further damaging goodwill and customer loyalty.

In response, Defendant argues that Plaintiff has not provided sufficient evidence to demonstrate immediate irreparable harm necessitating a preliminary injunction. Legal precedents indicate that trademark owners face irreparable harm from loss of reputation, trade, and goodwill when another party infringes on their marks, as this undermines the owner’s control over their brand identity. Courts have established that such harm must be substantiated by evidence rather than mere allegations. Plaintiff’s evidence suggests that Defendant’s use of the contested marks threatens to compromise its ability to manage its brand’s quality and reputation. Irreparable harm, characterized by specific, unquantifiable losses, has been recognized in prior cases, establishing that potential damage to reputation alone justifies the need for a preliminary injunction.

Plaintiff asserts that any potential harm to Defendant from a preliminary injunction against trademark infringement is irrelevant due to Plaintiff's strong likelihood of success on the merits and significant irreparable harm caused by Defendant's actions. Defendant argues that Plaintiff does not sell beer in the state or county where Defendant operates, suggesting that any consumer confusion is unlikely and manageable. However, it is noted that any harm to Defendant arises from being rightfully enjoined from unlawful activities. Legal precedent supports that a party cannot claim harm when forced to cease infringing actions, indicating the balance of equities favors Plaintiff. 

The public interest, defined as the right to be free from deception or confusion, also supports Plaintiff's case, as evidence of potential consumer confusion has been presented. Consequently, the court grants Plaintiff's motion for a preliminary injunction under specific terms: Plaintiff must post an $85,000 bond within 14 days, and Defendant is prohibited from using infringing marks related to “Brooklyn Black Ops.” While Plaintiff claims common law rights to the 'Black Ops' mark for beer, Defendant contends that such rights are geographically limited, a point not resolved due to other findings. Additionally, the statute 15 U.S.C. 1065 affirms the incontestable rights of a registered mark holder under certain conditions.