Co-existence agreement ends Coles trademark feud

A co-existence agreement has ended the conflict between independent beer retailer The Beer Drop and Coles Liquor after a trademark dispute last year.

The Beer Drop, founded by Evan Reitano, faced a major battle with Coles after the bottleshop owner declared The Beer Drop’s trademark was too close to one it had officially trademarked in 2012, despite it appearing not to have been used since.

Eighteen months ago, Coles officially opposed the trademark, saying that it was already similar to a trade mark for its Wine Drop brand, “which has acquired a reputation in Australia” and that the application was made in bad faith.

Now, however, the major retailer appears to have done a U-turn on its hardline response and has entered into a co-existence agreement with The Beer Drop.

“The process was a little drawn out. Right when COVID was happening, things were taking longer to get done,” explained Reitano.

“But to their credit Coles Liquor were really good to deal with and we had some open discussions and we came to a co-existence agreement.”

The dispute caused uproar across the industry and made the mainstream media, which may have had some impact on the outcome.

“We had some advice from our barrister than the agreement was very favourable, which they hadn’t seen before.

“But the support we got was ridiculous. That David and Goliath thing is real and people get really fired up. We had barristers offering pro bono work, a marketing fellow reached out and offered to rebrand free of charge, people were speaking and supporting with their wallets too.

“I wanted to say a special thanks to Jess McFadden in Victoria, I have never met him, yet after a few chats on the phone, he took it upon himself to rally support for our cause, setting up a petition that received 25,000 signatures.”

As part of the agreement, The Beer Drop withdrew its trademark application, and Coles Liquor has not trademarked it either.

“I can’t go into details about the ins and outs but we’re allowed to trade with our name, but we just aren’t allowed to trademark the words The Beer Drop,” Reitano said.

Being faced with a dispute from a major, well-financed company can be daunting, but Reitano said that along with Coles being amenable to discussions, bringing in experts and finding out more about how the trademark process worked helped.

“[One thing to do is] check out your Brews News trademark list that is sent out in your emails – I find myself referring to this regularly at the moment and it gives you a good snapshot of what is happening or coming up in the industry. [Then] definitely get an IP specialist involved when you are first involved or thinking of trademarking anything,” Reitano said.

“I went through steps [on the IP Australia platform] myself that didn’t bring up any issues on the trademark initially.

“It’s worth spending the money so you can cross it off. Even though we’ve had a good result here, there’s a lot of stress that comes with dealing with this and it makes you hesitant to try and grow because you have it hanging over your head. Doing it right from the beginning is the most important thing.”

Co-existence agreements

James Omond, IP and trademark lawyer at Omond & Co. said that co-existence agreements are a lot more common that people might think.

“The owner of an existing registered trademark will generally only sign a co-existence agreement with an applicant for a new trademark if the existing mark is vulnerable to a removal action, for example if it hasn’t been used on the relevant goods in the last three years, or if there is some relationship between the parties. For example the applicant might be a valuable customer of the owner of the prior mark.

“[This also might be the case] if the applicant for the new trademark is prepared to pay some form of fee to the owner of the existing trademark.”

A co-existence agreement can contain a number of different terms covering different areas, such as whether an applicant will withdraw their application.

“The co-existence agreement should also address a few other things, including what territory the agreement covers – is it just Australia, or even just one State? Or an agreement by each party not to oppose, challenge or contest the other party’s trademark applications and registrations, and what happens if you want to change your trademark in some way and thus need to file a new application.

“Generally it will be very difficult to get the agreement changed once it has been signed off, so it is important to try to foresee everything that might happen in future, and document in the agreement what will happen in such circumstances.”

Find out more about IP and trademarking on the Beer is a Conversation podcast with James Omond.

Onwards and upwards

The Beer Drop saw sales grow during the dispute and throughout COVID, and Reitano has ongoing growth plans for the business.

“Now this is done and dusted, I have a couple of things in the works.

“We’ve been doing large corporate gifting pieces with companies wanting to show appreciation for staff while working through lockdown and I’m just about to do an online Zoom tasting for 160 people, and we’ve bought a lot of stock off brewery partners. We’re seeing some really good growth which is exciting.”

The Beer Drop has been working on new packaging for its gifting and packaging options, and has continued to grow even after the end of the long-term lockdowns which boosted growth last year.

“The beer community is so spread across the country but we can help keep people in touch who are in other states, and for breweries in Melbourne and so on, reaching a national audience without having to hit the pavement is even better.

“We’ve seen really big growth, even in the last 3-4 weeks. It’s not slowed. We’re all about organic growth at the moment, growing the customer and fan base and reinvesting as we go.”

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