Dogfish Head fights to protect its brand

Dipak Topiwala couldn't believe what he was reading.

The owner of Namaste Brewing Co. in Austin had received an email from his hero, Dogfish Head Craft Brewery owner Sam Calagione. Instead of the congratulatory note he was hoping for, Topiwala was crushed.

"It basically said they owned the word 'namaste,'" he said. "I was shocked at first. Then I got pissed."

The 2013 email pointed out that Dogfish Head had trademarked "namaste" for its Belgian-style whitbier months before Topiwala began using it as the name of his microbrewery.

As Dogfish has grown, the 22-year-old craft brewery with a well-earned reputation for challenging the dominance of beer conglomerates is now taking on some of those traits to which it has long thumbed its nose.

Topiwala is just one of several small business owners who have received an email from Calagione threatening legal action over a trademark held by Dogfish – now the 14th largest craft brewery in the country based on beer sales volume. Dogfish Head has been embroiled in at least six other trademark disputes over the years, most known only because the small business owners on the receiving end took their quarrels public.

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But his case is the only one that involves a successful Italian-American business owner telling an entrepreneur of Indian descent that he had no legal right to use a word common in his culture. "Namaste" is a friendly greeting in India that recognizes both parties carry a divine spark.

Topiwala unleashed his fury on Facebook where he railed against "cultural imperialism" and what he described as Dogfish Head's "un-namaste" behavior.

It did little to change the outcome. Namaste Brewing eventually changed its name to Kamala Gardens, a nod to the Indian god of wealth and wisdom.

"We knew we couldn't defend ourselves in court," Topiwala said last week. "We're not made of money."

Dogfish Head's U.S. market share is about one-tenth of 1 percent. But the company dwarfs hundreds of other craft breweries with a production house in Milton, a seafood restaurant and brewpub in Rehoboth Beach and a beer-themed inn in Lewes – collectively employing more than 250 and producing more than 260,000 barrels of beer per year.

While trademark experts say the way Dogfish Head approaches smaller companies is more amicable than its competitors, most of the businesses Dogfish takes on are tiny by comparison. They typically have little money to spend on a legal fight and rebranding can be a huge setback.

Florida Keys Brewing Co., a smaller brewery launched in 2015, ended up changing the name of its popular Hogfish Amber in March after months of back-and-forth between the owners and Dogfish Head over the name's similarity to the Milton brewery. Meanwhile, a Virginia meadery that also opened in 2015 is still facing legal action after twice changing its name at Calagione's insistence.

Delaware's oldest and largest brewery is reticent to discuss efforts to protect the 100 or so names, labels and slogans it currently has registered with the U.S. Patent and Trademark Office. Calagione declined to be interviewed for this article, choosing instead to release a statement the company issued to other media outlets after the recent flare-up with Florida Keys Brewing Co.

"This is my least favorite part of our work here at Dogfish Head," the statement reads in part. "We always try to resolve these issues brewer-to-brewer first and we always try to be respectful to the companies we have to engage with on these issues."

Dogfish is not alone in seeking to protect its trademarks. The craft beer industry has become rife with lawsuits over the names of breweries and individual beers, mostly as a result of new entries in the market each produce their own lines. With so much volume, there are often clashes.

Despite the negative publicity that often comes with those fights, several industry and legal experts say it's Dogfish Head that is the real victim.

"It's a land grab out there right now," said H. Michael Drumm, a Denver-based attorney who represents about 150 craft brewers.

"The businesses that are getting hit the hardest are your bigger craft guys like Dogfish," he said. "In most cases, they got in early and have put a lot of money, sweat and tears into building these recognizable brands. And that's what they risk losing if they don't take action."

Tough to swallow

For a small brewer that may have just turned the corner to profitability, one of Calagione's emails can end up costing thousands of dollars and force them to start all over again when it comes to establishing their own brand identity.

Craig McBay is a 39-year-old engineer who convinced his wife to risk their life savings in 2015 to open Florida Keys Brewing Co. in Islamorada, Florida. One of the first beers the couple began brewing was Hogfish Amber, an American ale based on a recipe McBay developed through years of home brewing.

One of the brewery's most popular drafts, Hogfish Amber is named after a popular food fish in the Keys whose name is used by other businesses in the area.

McBay also was excited to get an email last from one of the industry's legends.

"The subject line was Hogfish Ale and my first thought was Sam had tried it and liked it," he said. "But once I started reading it, I realized it was not that. Of course, I was disappointed."

VIDEO: Florida Keys Brewing Co. on Facebook

McBay said he never considered Dogfish might take exception with the Hogfish Ale name. And at first tried to argue that a hogfish is a different animal than a dogfish, which is a type of shark.

"They didn't care about that," he said. "They just felt the words were too similar."

After several phone calls with Calagione and his lawyers, the McBays announced last month their brewery would be changing Hogfish's name to Spearfish Amber. McBay is convinced he might have had a case if the dispute went to court, but said he and his wife simply cannot afford to get into a protracted legal battle with one of the nation's biggest craft breweries.

"Changing the name and marketing materials also costs money," he said. "But the real problem for us is that we've gained a lot of momentum from the popularity of Hogfish and now we have to hope the switch to a new name doesn't hurt us just as we were starting to take off."

Jerome Snyder said he is facing the same setback following his trademark dispute with Dogfish. The 42-year-old left a career in engineering to open a small meadery in Altavista, Virginia, called Kvasir Meadworks, a nod to a figure in Norse mythology whose blood was mixed with honey to produce a beverage that gave the drinker wisdom.

Snyder began filing his business paperwork through an online legal service in 2013, two years before opening the 1,500-square-foot business. After submitting a trademark application for the name, he got an email from Calagione who had trademarked the Kvasir name for its seasonal beer/wine hybrid around the same time Snyder was getting started.

The U.S. Patent and Trademark Office rarely distinguishes between types of alcohol and later rejected Snyder's application because it was too similar to the beer made by Dogfish. He later changed the name to the alternate spelling Vahseer and hired a trademark attorney to be sure he was in the clear. He then spent about $2,500 on all new marketing materials.

Snyder insists the second name he chose is pronounced differently but Dogfish and the Patent Office disagreed. In December, Dogfish's lawyers sent Snyder a cease-and-desist order after Snyder failed to change the name in what it considered to be a timely fashion.

An attorney for McDermott Will & Emery, the high-powered Washington, D.C., law firm hired by Dogfish, declined to comment on the case. But Snyder says the two sides are finalizing an agreement and he expects to change the Vahseer name still used on his website to Skjald Meadworks in the coming weeks.

"The end result for me is twice spending money ... that I might as well have thrown out the window," he said. "And when you spend the first two years of running a business while also going through something like this, it really takes the wind out of your sails."

Cutting both ways

Dogfish Head also has suffered damage in fighting McBay and Snyder. In the Kvasir case, trademark attorneys estimate the company likely spent more than $10,000 on lawyer fees. And that doesn't count the cost of negative publicity.

Both McBay and Snyder argued their cases on social media. Snyder set up a crowdfunding page that raised $1,000 to help cover his legal fees. Fans blasted Dogfish Head on Facebook as "petty" and "greedy," with some vowing to never purchase the brewery's products again.

A handful carried their fights over to Dogfish Head's Facebook page, where links to news articles about the cases were still being posted last week.

The outrage prompted Dogfish to address the issue in a December blog post on the brewery's website.

In the post, the company lays out its case along with its distaste for having to enforce its trademarks.

"Unfortunately, in the trademark world, if you want to protect your brand names, you have to defend them," the post reads. "We are not trying to shut down a small company, and as we’ve said in all our communications, we wish them all the success in the world."

Trademarks – the names and logos most associated with a brand – can be worth far more than the actual product a company makes, according to several lawyers whose job it is to protect intellectual property.

"Let's say you go to an auction where you can only bid on one of two things: a recipe or a name," said Drumm, the Denver attorney. "I tell my clients they should choose the name because you can always look the recipe up online. What you're really selling – what has the most value – is the brand."

For companies like Dogfish Head, that brand identity has been built up over years of hard work.

When the Dogfish Head Brewings and Eats brewpub opened in Rehoboth Beach in 1995, there were only about 860 craft breweries nationwide. The concept was so new that Calagione had to lobby the Delaware General Assembly to change state law to allow him to brew and bottle his own beer.

Calagione's evangelistic promotion of craft beer over the next decade helped to position Dogfish as a pre-eminent champion of the movement.

In many ways, he helped cement the ethos of the craft beer as a grassroots effort among aficionados, amateurs and auteurs all working to reclaim flavor and encourage exploration, industry experts say.

That same spirit was exemplified during an early – and now legendary – trademark dispute between two mid-size brewers around 2004. Avery Brewing Co. in Colorado and Russian River Brewing Co. in California discovered they were each making a beer called Salvation. Rather than issue cease-and-desist letters or take the matter to court, the two young breweries opted to team up and blend their respective brews into a dark Belgian-style ale labeled Collaboration not Litigation Ale.

"That's the kind of thing that could only happen when there were a 1,000 or so breweries," Drumm said.

Today, there are more than 5,000 breweries, although annual growth in sales has slowed to 6 percent, down from the double digits a few years earlier.

With so many brewers each making their own lines, the most obvious names have been gobbled up. As a result, trademark disputes have increased.

Ronnie Price, who opened Smyrna's Blue Earl Brewing in 2015, endured two trademark disputes and two name changes before selling his first beer.

"I would certainly defend my name so I can't really blame anyone," he said. "But the idea that we're all friends and working together is no longer exactly true. Craft beer has become big business and right now we're all stepping on each other's toes."

That means companies like Dogfish Head must strike a delicate balance between protecting their brand and avoiding the public relations nightmare of being portrayed as an evil corporation. The stakes may be even higher for Dogfish, which alienated some fans in 2015 when it sold a 15-percent stake to a private equity firm in a move designed to help the brewery expand into new markets.

"It's a very fine line," said Brook Bristow, an attorney who represents about 80 craft breweries and serves as the executive director of the South Carolina Brewers Guild.

"Somebody like Sam represents the community spirit of craft beer," he said. "And you have to be very careful not to damage that brand in the process of fighting to protect it."

Court of public opinion

Taking trademark infringement cases public through social media was once a popular tactic among breweries who received cease-and-desist letters, Drumm said

"The court of public opinion is where a lot of these cases are really won or lost," he said. "A lot of times, they would throw legal defense parties and really get their fanbases involved."

One of the most infamous cases of craft beer fans influencing a trademark infringement case came in 2015 when Lagunitas Brewing Co. filed a federal lawsuit against its California neighbor Sierra Nevada Brewing over the packaging of a not-yet-released IPA called Hop Hunter. The suit claimed Sierra Nevada's logo for the beer copied Lagunitas' distinctive styling in its trademarked IPA logo.

Consumers quickly took to social media to express their outrage over the suit, resulting in Lagunitas withdrawing its filing in less than 24 hours.

Thanks to media coverage, craft beer fans quickly became familiar with the ins and outs of trademark law and are now less likely to take up the cause of a brewer who feels wronged, Drumm said.

"Nowadays, you're more likely to see the first comment on Facebook ask whether the brewery hired a trademark lawyer to clear the name first," he said. "I've seen cases where going to social media has completely backfired."

Dogfish Head's experience with trademark infringement disputes dates back at least a decade when Anheuser-Busch challenged Dogfish's ability to trademark the words "chicory" and "punkin'," claiming the terms were too generic. Calagione took that battle public in the final 10 minutes of the 2009 documentary "Beer Wars."

"It's really just a further example of just how oppressive and obnoxious they are," Calagione says in the film. "They've got the ability and I'm sure they plan to lawyer the bejesus out of us."

Dogfish ultimately won, but the experience may have helped shape Calagione's approach for defending the company's own trademarks.

His technique was evident in 2015 when Calagione emailed the central Pennsylvania restaurant Al's of Hampden about its in-house brewery called Pizza Boy. Calagione again was concerned about the word "punkin," specifically the potential for confusion between Dogfish's Punkin' Ale and Pizza Boy's Punk'in Disorderly.

Pizza Boy owner Albert Kominski posted a photo of the email on his restaurant's Facebook page. In the message, Calagione congratulates him on his success, states that he does not like sending emails about trademarks and offers to work together amicably toward a resolution "brewery-to-brewery (without lawyers)," even offering to give Pizza Boy the time it needs to use its existing labels and marketing material.

Drumm called Calagione's email a textbook example of how to handle a potential trademark infringement.

"I always recommend my clients try to resolve these issues themselves first by being polite but firm," he said. "When lawyers get involved, it costs money and, in the end, it's only the lawyers that win."

The tactful approach was lost on Kominski, who included a profanity-laden message with his now-deleted post.

"Here's the ... template letter you get when a business owner doesnt (sic) have the balls to just call you up and has someone send a letter instead," he wrote.

Kominski received pushback from his own fans, some of whom called him "unprofessional" while others tried to offer him legal advice.

Punk'in Disorderly is still listed as available on Pizza Boy's website, although it is not clear whether Kominski successfully fought back or if he struck a deal with Calagione.

When The News Journal inquired about the dispute,  Kominski responded by email: "Dogfish was very respectful," he wrote. "I acted like a child. Sam and his crew were not overstepping any boundary."

Rage to regret

As trademark infringement cases involving craft breweries continue to become more commonplace, some of the businesses targeted by Dogfish now say they appreciate Calagione's willingness to first seek an amicable resolution.

About a decade ago, Calagione contacted Terrapin Brewing Co. in Athens, Georgia, over its use of the name India Brown Ale, a name he felt conflicted with Dogfish's trademarked Indian Brown Ale. Former Terrapin CEO John Cochran could not be reached for comment, but wrote in a 2013 blog post that he appreciated the personal touch so much that he immediately agreed to switch his beer's name to Hop Karma.

Later, Cochran discovered another brewery using one of his trademarked names and followed Calagione's lead by making a polite request before calling his lawyers.

"I also told them the story of your phone call years ago and asked them to pay it forward in the future when they are having to make that call to another brewery," he wrote.

Some of the business owners whose experience with Dogfish Head are a little more fresh say they don't yet have warm feelings about Dogfish Head.

"I would have liked it more if they had just left me alone," said Snyder, the meadery owner. "I would like to think that if I were in the same situation, I would only go a similar route if someone was making the exact same product and using the exact same name."

Craig, the Flordia Keys Brewery owner, said he feels the same.

"Having gone through this, I could never see something similar and just go after them," he said. "My lawyer joked that someday we'll be big enough to sue someone, but that's not something I'm looking forward to."

Topiwala, who now owns an Austin food truck and is hoping to relaunch Kamala Gardens Brewing, has mixed feelings on the matter.

"I think the industry was a little dumber in 2012 than it is now and I clearly was one of the dumb ones," he said of failing to properly clear the "namaste" name before launching his brewery.

Topiwala is still a little bitter about what he sees as Dogfish Head's appropriation but says he understands now that Calagione's trademark is a symptom of a world that encourages people to "commodify words and monetize culture".

"I look back on it now and realize how lucky I was that it was him I had this fight with," he said. "I still love everything he does and I thank him for being cordial and not just suing everyone. I think that's important in this industry and in this world."

Contact business reporter Scott Goss at (302) 324-2281, sgoss@delawareonline.com or on Twitter @ScottGossDel.

Dogfish Head founder Sam Calagione on trademark disputes

"This is my least favorite part of our work here at Dogfish Head.  Unfortunately, our company needs to protect our intellectual property just as intentionally and methodically with smaller breweries as we do with breweries that are hundreds of times bigger than Dogfish Head.  And there are many breweries that are hundreds of times our size.  We always try to resolve these issues brewer-to-brewer first and we always try to be respectful to the companies we have to engage with on these issues.  Frustrations are understandable on all sides and that is the subjective part of all of this.  We work hard to stick to the objective points when it comes to defending our brand and the intellectual property my co-workers and I have staked our livelihoods on since 1995 when we were the smallest commercial brewery in America."