Brewhaha

Some lawsuits end in court. But an ongoing dispute between two breweries appears to have been resolved at a recently convened "beer summit."

The two breweries are New Mexico's Marble Brewery, which has a brew pub in Albuquerque and a tap room in Santa Fe, and Marble City Brewing Company, a Knoxville brewery that hasn't yet opened its doors.

New Mexico's Marble trademarked its name in 2007. The Knoxville company is located in the Marble City, a nickname for Knoxville.

Amidst clinking pint glasses at a March 8 beer summit in Knoxville, MB President Jeff Jinnett and MCBC Presidents Adam Palmer and Johnathan Borsodi tried to mellow the bitterness in the battle that's been brewing between the two companies since late last year.

Palmer says he received a call last November from Jinnett, warning him there was a problem with his proposed use of "Marble City Brewing Company" for a new Knoxville brewery. Jinnett has a federal trademark on the name "Marble Brewery."

"Basically, their terms were, 'Change the name; that's it,'" Palmer says. "We said, 'No, let's try to figure this out amicably,' and Jeff said, 'Let me get back to my board members and talk about it,' and before we even got a call back from them, we had a lawsuit."

Jinnett filed a complaint in US District Court in Eastern Tennessee last November, enjoining MCBC against using that name. Neither of two settlement offers MCBC made garnered a response from Jinnett, Palmer says.

As a result, MCBC held off on plans to open, and tossed new product they feared would go stale before the delayed opening.

Meanwhile, anticipation was building for the new brewery among Knoxville's local craft beer fans.

"People were getting more and more excited about it when the word broke out about the lawsuit and all the negative posts started going up on the Marble Brewery [Facebook page]," Don Kline Jr., editor of a blog called Knoxville Beer Snobs, explains. "That was basically due to the excitement of having our own little brewery; that's how people perceive Marble City brewery… it was like our little brother was getting picked on by a bully out in New Mexico."

Jinnett's civil complaint states that, as the trademark holder, he has the responsibility to challenge infringers or risk losing his own right to it, should the two products ever be sold in the same geographic market. Albuquerque intellectual property lawyer Dennis Armijo, who is not handling Jinnett's case, tells SFR that argument is correct. However, when Jinnett explained the legal reasoning for his actions in statements published on Knoxville Beer Snobs, only some Knoxville beer fans were mollified.

Knoxville beer aficionado Stuart Anderson writes SFR that, "having witnessed the myriad obstacles that always await a new business…I was greatly distressed and angered by news on the street that a brewery from New Mexico was seeking to basically shut down the operations of Marble City through legal action, right at the very minute that MBC was about to finally make their product publicly available…"

As for whether the names Marble Brewery and Marble City Brewing Company should legally be considered too similar, Mike Morgan of Rodey Law Firm, who also doesn't represent any of the parties, says it's basically a common-sense, gut reaction kind of determination.

"If you just look at it in the abstract, Marble Brewery and Marble City Brewing, my gut feeling is they're confusingly similar," Morgan says. "If your gut reaction is there is infringement or likelihood of confusion, [a lawsuit] is probably worth doing."

Palmer tells SFR he researched the trademark before deciding on the name, but felt the New Mexico brewery didn't present a problem because it distributed only in New Mexico and Arizona, and its design is based on a toy marble, not the natural stone.

The idea of a New Mexico brewery laying claim to all things "Marble" seemed particularly unfair because of Knoxville's "Marble City" moniker, which derives from the area's pink marble quarries.

"Believe it or not, we have a big following with the name Marble City Brewing Company because of how well it ties into Knoxville," Palmer says.

The dispute came to a head in early March, when bottles of MB beer started showing up on Knoxville liquor store shelves. Marble Brewery previously distributed only in New Mexico and Arizona.

"We thought it was rather odd that [MB] came into Knoxville at the time they did," Palmer says. "We felt it was too coincidental—they were not distributing anywhere [else] east of New Mexico, and there's a lawsuit with Marble City brewery."

Jinnett tells SFR that Knoxville is his hometown, and he discovered that MCBC was in the works during one of his visits.

"We were already looking at Tennessee as a potential expansion state because of my background there," Jinnett says. "I don't know; did we go in faster? Maybe, but we were already looking at Tennessee expansion."

In a precedent-setting case from the 1950s, a New York company distributing donuts under the name Dawn Donut successfully argued there was no confusion between it and another product with the same name because their geographic markets didn't quite overlap. So even though MB holds a federal patent, a lack of geographic overlap in distribution between it and MCBC's product could still have been used to argue there was no potential for product confusion.

Morgan tells SFR that a company in MB's position could make one shipment to the similarly named business' market to show they were competitors without really intending to expand permanently.

Jinnett, however, says he intends to continue distributing in Knoxville.

Marble Brewery's Tennessee distributor, Molo-Tenn, did not return SFR's call; SFR also contacted a smattering of Knoxville liquor stores, none of which carry the New Mexico beer.

Rest assured, though, Knoxville beer drinkers have tasted the New Mexico brew. Shortly after news of the lawsuit became public, Kline held a blind taste test of bottled beers at Bearden Beer Market, a Knoxville liquor store.

"[The owner] poured me this one beer and said, 'This is an [India Pale Ale]; check this out,' and I took a taste of it and I was like, 'Wow.' He was like, 'Well, that's Marble Brewery's.' And I was like, 'It's delicious, but I'm not going to buy it," Kline says.

The taste test was before the beer summit held earlier this month also at Bearden. Jinnett tried MCBC's test brew; he tells SFR it's "OK." Palmer says he "really likes" MB's IPA.

Afterward, Jinnett told SFR that it was all settled for MCBC to license the name in Tennessee only, "so they could use it in their little brewery there."

Palmer tells SFR that, although he hopes to have the agreement on paper soon, it isn't yet finalized.

"I guess we came to an agreement in principle," Palmer says. "We found ways that we think that we can work with that makes Marble Beer feel good about the trademark issue and makes us feel good about it."

Knoxville beer aficionado Jason Smith, who has lent his support to MCBC's cause via its Facebook page, tells SFR that the beer summit assured him MB is "committed to the craft brewing scene." Like Kline, Smith says he now welcomes Knoxville distribution of the New Mexico brew, as does Palmer.

"They have good beer," Palmer concedes. "I wish I would feel differently about how they came into the market, but we have no problem with them having their beer in this market, except for the bad feeling about why it's in the market."

Santa Fe Reporter