Nitro Battle Bursts Craft Beer's Bubble

PORTLAND, Ore. (TheStreet) -- In the beer world, "nitro" typically refers to using nitrogen -- or, more specifically, a combination of nitrogen and carbon dioxide -- to both soften the bitterness of certain beers and build a foamy, creamy head atop a pint of it.

You see nitrogenation in action whenever a bartender pours a pint of Guinness or whenever he or she is pouring the stout, porter, red ale, IPA or whatever their bar chooses to put on tap at the time. It's a fairly common term brewers have long considered simply a description of the nitrogenation process.

Which is why several brewers -- including Guinness importer Diageo -- freaked out when Longmont, Colo.-based Left Hand was granted exclusive trademark rights to the term "nitro" and "milk stout nitro." It's an argument that the craft beer industry is just going to keep having as more brewers push their way onto the scene and names are protected through legal channels to preserve a brewer's competitive advantage.

In Left Hand's case, it's trying to protect the method it's using to put nitrogenated beer into glass bottles without using the same nitrogen "widget" that Guinness and other brewers have used to jettison nitrogen into their own bottled and canned brews. The brewery spent hundreds of thousands of dollars on research and development before releasing the bottled "nitro" version of its milk stout in 2011 and following up with Nitro versions of its Sawtooth Ale and Wake Up Dead Imperial Stout. Left Hand insists that its filing intends only to dislodge the "nitro" trademark from a brewery in British Columbia that held it until January and to protect the names of its "nitro" line -- not to discourage nitrogenated beer in general.

A lengthy response letter from Left Hand insists the brewery's "motivation is not to hinder competition but to protect the future of our brand, our employees and the integrity of products." It also notes that it is not pursuing legal action against fellow brewer and Longmont neighbor Oskar Blues, which is releasing Old Chub Nitro -- a nitrogenated version of its Scotch ale -- in cans in the near future.

That wasn't good enough for Anheuser-Busch InBev, which produces several nitrogenated versions of its Goose Island brands. That brewer was granted an extension until June 18 to oppose Left Hand's trademark application, while spokeswoman Terri Vogt issued the following statement to The Denver Post:

As a brewer, we have produced our own nitrogenated beers and, like many other brewers, large and small, we need to maintain the ability to identify them to consumers. We have not formally opposed the trademark application, but the extension lengthens our window to do so.

Not only is A-B giving Left Hand some time to mull this over, but Diageo and Boston Beer -- makers of the Samuel Adams brand -- filed motions with the U.S. Patent and Trademark Office protesting Left Hand's trademark claim. Meanwhile, Oskar Blues may well be making its own claim to the "nitro" term through its latest release and trademark application.

Regardless of Left Hand's intentions, this is likely headed to court for the federal government to sort out and is just another gaudy float in the legal parade that craft beer has been marching in recent years. Listing and explaining all of the beer naming disputes of the past five years would crash this site's servers and be an unending task, especially with the Brewers Association craft beer group tallying 2,833 craft brewers in the U.S. alone last year. The Washington-based Beer Institute industry lobbying group, meanwhile, notes that there are 3,699 permitted breweries in the U.S. Just seven years ago, there were only 1,500 breweries, which was still up from 500 back in 1994.

It isn't a beer bubble until drinkers say it is, so for now it's a crowded room full of roommates who are getting less polite and a lot more real with each passing year. In the past year alone, we've seen brewers and brewing institutions issue legal threats and lawsuits over naming rights, branding, colors, commercials and even the term "craft beer" itself. Brewers are producing cease-and-desist letters in nearly as high volume as they're producing IPA, with novice brewers getting lessons in legal self-preservation even before they sell their first batches.

That's just the mess within the brewing world itself. During that same span, brewers have been called out by Starbucks for using the term Frappucino and by the family of conservative pundit and Equal Rights Amendment killer Phyllis Schlafly for trying to trademark the last name she shares with her nephew, the co-founder of St. Louis-based Schlafly Beer.

There isn't a specific dollar amount attached to all of this notice-serving and lawyer hiring, but it's certainly rubbing against the grain of a craft beer industry that's been pushing ahead at full speed for much of the past two decades. When something as seemingly simple as the term "nitro" gets held up by a dispute such as this, it has an effect on other breweries including the Utah Brewers Collective, which is planning to release a bottled, nitrogenated version of its Wasatch Brewing Polygamy Porter later this year. Though its labeling has already been approved, a win by Left Hand could force the Colorado brewer to come down hard on its cross-border neighbors.

Craft beer has long subsisted on its sense of community, its culture of cooperation and its "us against the big guys" attitude. Its recent adventures in trademark law have been a not-so-friendly reminder that it's still a business environment out there, with investments to be protected. No matter how Left Hand's nitro battle concludes, everybody's going to be feeling a lot less bubbly about it afterward.

-- Written by Jason Notte in Portland, Ore.

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Jason Notte is a reporter for TheStreet. His writing has appeared in The New York Times, The Huffington Post, Esquire.com, Time Out New York, the Boston Herald, the Boston Phoenix, the Metro newspaper and the Colorado Springs Independent. He previously served as the political and global affairs editor for Metro U.S., layout editor for Boston Now, assistant news editor for the Herald News of West Paterson, N.J., editor of Go Out! Magazine in Hoboken, N.J., and copy editor and lifestyle editor at the Jersey Journal in Jersey City, N.J.

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