Missouri AG isn’t Playing ‘Chicken’ with California

I don’t know about you, but I LOVE eggs. I eat eggs almost every day for breakfast. Eggs are delicious and incredibly healthy. Don’t believe me, go read CaveGirl Eats’ book, “EAT THE YOLKS.” So, naturally, when I see news about eggs, I’m immediately interested.

For those of you who do not follow the goings on in the agricultural industry, you probably completely missed that little lawsuit filed by Missouri’s Attorney General Chris Koster in the beginning of February. In case you had your head up a chicken’s bum during that time and are wondering what got Koster’s feathers ruffled to begin with, let me illuminate.

Very simply, Koster filed a Federal suit against California over chicken coops. I know, you must think I’m joking, but I assure you, I am not. In 2008, California voters approved Proposition 2; a ballot initiative that required all California farmers to provide larger enclosures to egg laying hens. California farmers became concerned that the new regulations would increase their costs, and put them at a competitive disadvantage with other egg farms across the country, as those farmers were not beholden to California’s more strict caging requirements. in 2010, as a result of the growing concern, the state legislature passed a measure requiring out of state producers to comply with California’s rules.

Are you following this so far? California gets pressure from various animal rights groups (most notably the Humane Society) to treat egg laying hens (and other farm animals) more ethically. California enacts law to require bigger cages. Farmers worry, because bigger cages means larger operating costs for farmers. That cost necessarily gets passed on to consumers when they buy their eggs. Those more expensive eggs get sold at the store next to cheap eggs from a different state where the California regulations do not exist. You (consumer) look at a dozen eggs for $6 or a dozen for $4, and more often than not, you will buy the cheaper eggs. So, to keep the playing field “fair,” (and of COURSE to promote public health and safety) California says anyone selling eggs in our state has to comply with our regulations. The caging requirements go into affect in 2015 for California farmers, with all out of state farmers to follow suit by the end of that year.

Naturally, this really boiled Missouri’s egg. While Missouri doesn’t even rank in the top 10 egg producing states in the country, it does send approximately 540 million of its 1.7 billion eggs to the California market. However, this situation does beg the question as to why Missouri, is stepping up to the plate to bring this lawsuit against California?

AG Koster stated that it is his job to fight against out of state “legislation that imposes new requirements or limits on  Missouri businesses.” He goes on to state that requiring egg farmers to comply with California larger coop requirements is a violation of the Constitution’s Commerce Clause, which prohibits any state from enacting legislation that regulates  conduct wholly outside its borders, protects its own citizens from out-of-state  competition, or places undue burdens on interstate commerce. Not to mention, it will cause Missouri farmers to suffer increased costs just to do business with California.

Is this really about the constitutionality of California’s regulation, or is there perhaps something else going on? At the end of the day, egg farmers are running businesses. And nobody understands the agricultural business better than BigAgra (think companies like Monsanto).

Previously included in the recently passed Farm Bill (you know, the one that slashed SNAP benefits by billions of dollars), was an amendment backed by BigAgra interests known as the King Amendment (named after and authored by noted racist Iowa Republican, Steve King). The King Amendment purported to  “prohibit states from enacting laws that place conditions on the means of production for agricultural goods that are sold within its own borders, but are produced in other states.” Uh, I don’t know about you, but that looks quite obviously aimed at a particular California law. Thankfully, the King Amendment was dropped from the Farm Bill, but it begs the question: Why didn’t Iowa bring the suit against California? After all, Iowa is the largest producer of eggs in the country, and appears to have a much larger vested interest in seeing the California legislation defeated.

This takes me back to BigAgra and Big Agribusiness. Clearly, BigAgra and Big Agribusiness have a HUGE interest in keeping costs low and regulation at a minimum. This leads me to believe that the lawsuit filed by Missouri may be an attempt to get into the good graces of these giant conglomerates. Hello! Monsanto’s headquarters are in Missouri. Obviously, the companies that make up BigAgra do not want to change their business practices, if it ultimately means a loss in profits. Forget that the chickens cannot even stand up and turn around! Profits, people! It will be interesting to see how this lawsuit turns out. I imagine it could eventually be a measuring stick for future lawsuits to come regarding state attempts at exercising food safety and agricultural regulations across the country.

 

Small Brew knocks out Big Brew with KO Trademark Punch

Big Sky Brewing Drops Suit Photo Credit: KURT WILSON/ Missoulian

To view the whole article, click HERE.

As of January 23, 2014, Missoula, Montana based brewery Big Sky Brewing agreed to drop the lawsuit it filed against  Anheuser Busch for trademark infringement in exchange for Busch removing a YouTube commercial from its channel which featured the saying, “hold my beer and watch this.”

Big Sky Brewing had been using the phrase since 2004 and had the phrase registered as a federal trademark in 2009. While the advertisements were never featured on television, Big Sky nonetheless requested that Busch cease its use of the phrase in its YouTube commercials. Based on comments by Busch’s communication director, there was no financial component to the agreement. It appears Busch simply agreed to pull the YouTube videos in exchange for Big Sky’s voluntarily dismissal.

After reading this article, I was struck by Busch’s acquiescence to simply remove the videos from YouTube in exchange for dismissal of Big Sky’s complaint. I mean, according to that very same article I mentioned above, Big Sky had sold approximately 50,000 barrels of its product in the year 2013. This is a paltry number compared to Busch who sells hundreds of millions of barrels of its product per year. For those who are  unfamiliar with “barrels,” a barrel of beer is typically around 31 gallons. This obviously depends on where you are in the world (the US measures barrels differently than the UK).

What really astounded me was Big Sky’s ability to get a company like Busch to take down a highly-visible ad, when Busch is clearly the majority owner in the market share. Normally, we’re used to seeing large corporations like Busch “muscle” their way out of a lawsuit such as this. And by “muscle,” I mean Busch using its vast wealth to pile paperwork, discovery, and motions onto Big Sky, thereby forcing Big Sky into a settlement. But in this instance, Busch appears to have simply removed the YouTube ads. In reality, the amount Busch spent on the YouTube ads was likely less than the amount it would cost to litigate the matter, so they simply took them down. However, I do believe another factor in Busch removing the YouTube ads was the fact that Big Sky just so happened to have federally registered their slogan, “hold my beer and watch this” as a trademark. In registering their trademark, it gave them a stronger foothold upon which they could bring their suit against Busch for trademark infringement. By having their slogan registered as a trademark, Big Sky was able to bring a lawsuit against Busch for federal trademark infringement and more specifically false designation of origin by way of the Lanham Act.

For some clients I have worked with, it can be difficult for them to understand how federal trademark registration can positively impact a business. Registration does not inherently prevent infringement, so why go to all the trouble and cost to register it with the United States Patent and Trademark Office? I often hear clients tell me that because they are not “a big business,” trademark registration will not confer any real benefits to them, and that they will wait until they are “bigger” to protect their intellectual property interests. I believe this Big Sky/Busch case exemplifies how a federally registered trademark can make a big difference, even when going up against a “big player” such as Busch.

Had Big Sky used the “hold my beer and watch this” slogan without registering it with the United States Patent and Trademark Office, I do not believe Busch would have been so willing to take down their YouTube ads. Would Big Sky still have a basis to claim they had superior rights to the phrase than Busch? Sure. But would the claim be as strong? Probably not. While Big Sky could claim common law rights in the mark, it would not have been as strong as their claim for infringement of a registered trademark. Trademark registration provides certain “presumptions” to registrants. For one, registration gives the owner of the trademark the presumption that they were the first to make use of the mark. While that presumption is rebuttable, without registration, you would not be afforded that presumption and would be forced to prove you were the first to make use of the mark in commerce, as well as the owner of the mark. For marks that are not inherently distinctive (read: not unique, descriptive), this can be very difficult to prove.

So, by Big Sky obtaining federal trademark registration for its slogan, they had a stronger basis by which they could sue Busch, and also had a stronger claim they were the owners and first users of that slogan. Thus, it made it easier for Busch to make the decision to “give up” the fight and take the ads down, even though Big Sky was a much smaller company and they probably could have made Big Sky’s business suffer during the pendency of the lawsuit. So, I’ll leave all you business owners out there with this final thought: Do you still think you’re “too small” for trademark protection to be helpful?