One of the ways to resolve a trademark dispute is to agree to sell a product under a different brand name in a territory where a competitor is using the same or a confusingly similar name. This can happen when companies rely on common law trademark rather than federal trademark registration.

Let’s look at an example. Red Beer is a successful regional brand in the Northwest. Red’s Brew is a successful brand sold in New York, Pennsylvania and Massachusetts.  Northwest expands its distribution nationwide and begins selling in New York and Massachusetts. Red’s Brew sends a cease and desist demand to Red Beer because there are now two products on the New York and Massachusetts store shelves with similar branding and consumers may be confused. Red’s Brew has no plans to ever expand outside its current market footprint. Looking to resolve the problem in a friendly way, the dispute is settled by Red Beer agreeing to sell its beer under a different name, Blue Beer, in the states of New York, Pennsylvania and Massachusetts. Red Beer continues to use its Red Beer brand name in the rest of the country.

This is not a common approach, but it is an available one that can be used in the right circumstances. In this case, both breweries had equal rights to their respective names since neither federally registered its mark. Each had senior rights in the market where it was the first user and its “natural zone of expansion” (to adjacent states). But when one expanded into the other’s territory, there was a problem since one did have prior and senior rights in certain states (NY, MA & PA). But there was no infringement in other geographic areas where Red’s Brew was not selling its product. The resolution did the trick.

If you have a beer or brewery name that is similar to one in a territory where you plan to expand, you can use this strategy to avoid problems with the local competitor who has senior common law trademark rights. It is cheaper to rebrand in a small market rather than entirely rebrand. Give this idea some consideration as a way to handle the situation.

And, the two big take-aways are to register your trademarks to secure nationwide rights. This is even more important over the next few years when breweries are merging or being acquired and beers may suddenly be distributed in new markets. A deal could die over a trademark infringement situation. Secondly, if you are relying on common law trademark rights for your brand protection, it is good idea to do a trademark clearance search before entering a new market. A competitor could also have rights on a similar name and as the senior user in the market, could allege infringement.