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Analysis

Has BrewDog bitten the hand that feeds?

By Daniel Woolfson , 30-Mar-2017
Last updated on 31-Mar-2017 at 11:40 GMT2017-03-31T11:40:10Z

Fiery: BrewDog's James Watt:
Fiery: BrewDog's James Watt:

BrewDog’s trademark dispute with an independent pub is likely to have upset many beer aficionados. But experts say James Watt’s craft beer behemoth acted the way many companies of its size do to protect intellectual property. Was BrewDog really out of line? 

BrewDog’s spat with Birmingham pub the Lone Wolf could have been a complete PR disaster for the self-styled punks, had founder James Watt not issued a typically candid apology and offered to cover the cost of the pub’s rebrand. 

  • Read BrewDog's full response here .

Looking past the emotionally-driven narrative of a big brewer picking on a small business, the Scottish brewer and pubco acted completely within the law to protect its intellectual property, according to legal and marketing experts.

The Lone Wolf pub may have registered its trademark first, but owners Sallie and Joshua McFadyen said they were put off fighting a legal battle by the idea of going up against BrewDog's financial clout. 

Regardless, the saga has dragged the company’s status as an underdog and a champion of small, independent businesses into question.

How long can a multinational company with more than 500 employees and production in the hundreds of thousands of hectolitres really hang on to its independent credentials?

'Muddy the waters'

“From BrewDog’s perspective, allowing others to register or use names or insignia in the drinks industry, that consumers identify so strongly with BrewDog’s brand, could muddy the waters and dilute its registered trademark,” says Sharon Daboul, trademark attorney at EIP Europe.

“The risk is that consumers mistakenly believe that such pubs or bars are somehow endorsed by, sponsored by, or affiliated with BrewDog, when no such endorsement exists.”

This may seem unlikely to those within the hospitality industry, but it’s not wholly unreasonable to think that customers unfamiliar with the trade and its machinations might assume the Lone Wolf was linked to BrewDog.

“Even if the goods and services are not that similar, BrewDog could succeed if it is able to show that it has established such a reputation in the name ‘Punk’ that a bar with a similar name could take advantage of BrewDog’s reputation, or cause damage to it,” says Daboul.

“There is no requirement that consumers actually believe BrewDog has opened up its own drinks establishments. Having a strict trademark enforcement policy helps BrewDog to stand out in the beverages sector.”

'David vs Goliath'

“David vs Goliath trademark battles make for popular stories in the press as the public tends to favour the plucky underdog against the muscle-flexing brand owner,” she adds.

“Many small businesses now take to the internet to vent their frustration, hoping a trial by social media will force the big brand into retreat to avoid a negative PR nightmare.”

So, putting David and Goliath aside for a moment, BrewDog was doing something that companies do all the time to ensure their intellectual property. It may seem malicious or sinister, but in the corporate world, it’s an every-day occurrence.

It may not have helped that BrewDog has publicly mocked attempts by other companies – namely the estate of Elvis Presley and football club Wolverhampton Wonders – when they claimed BrewDog had misappropriated their trademarks. It’s easy to see why it was so swiftly accused of hypocrisy.

‘Detrimental to our business’

Watt wrote on BrewDog’s blog : “Hands up, we made a mistake here in how we acted. Almost all companies always look to enforce trademarks, whereas at BrewDog we should take the view to only enforce if something really detrimental to our business is happening.”

This had not been the case with the Lone Wolf, he said, adding: “As soon as I found out, I reversed the decision and offered to cover all the costs of the bar… this is a mistake that hurt a lot, but, like all mistakes, it made us better.”

However, The Morning Advertiser (MA)'s sister title MCA approached BrewDog over three weeks ago (1 March) for comment on the Lone Wolf dispute, before the Guardian story broke. At the time, BrewDog refused to comment.

Warm reception

Reception to Watt's apology has been warm amongst the company’s existing fans, although the wider beer community may not be so easily won over. 

Watt also took the opportunity to hit back at allegations BrewDog had taken legal action against a Leeds business that tried to register the trademark ‘Draft Punk’.

He said: “There was no bar here, and no ‘cease and desist’ from our side. The other party tried to register ‘Draft Punk’ as a trademark for bars and for beer, but we own the ‘Punk’ trademark for beer, so naturally we objected as that is one of our trademarks.

“If we did not object they could have registered Punk and sold it to AB InBev the next day, and then we could have been driven out of business.”

Success stories

BrewDog is, without a doubt, one of the biggest success stories of the craft beer movement, having gone from a tiny outfit to one of the leading brewers in the UK with a far-reaching pub estate and international expansion underway.

Is it really fair to accuse them of becoming overly corporate in their actions towards the Lone Wolf? They could have stayed silent and waited for the issue to blow over, rather than tackling it head on – which has likely brought the story to the attention of customers who would have otherwise remained in the dark.

“They’ve done the right thing,” says Mark McCulloch, founder of marketing agency We Are Spectacular.

“And they’ve done it in a very ‘BrewDog’ way. If they have apologised and said they will support [the McFadyens] but also used it as an opportunity to give a warning not to steal their trademarks, I don’t think they are being overly corporate.”

It stands to reason that BrewDog could have reached out informally or offered to help with rebranding costs for the Lone Wolf, which, although time-consuming, would have been more in line with its brand values.

But, says McCulloch: “They need to protect their brand and this tells people very clearly to do their homework.”

Strong values have made BrewDog the behemoth it is today. But if those values are as important to it as the quality of its beer, it will have to move proactively as it grows to avoid similar disputes in future and prove it deserves to still be considered ‘independent’, lest drinkers vote with their feet.  

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