Beer, Wine & Spirits

Beer lawsuit over IPA leaves fans hopping mad

"Stirring the pot sometimes is how you learn things," said Tony Magee, founder and CEO of Lagunitas Brewing, the fifth- largest private craft brewer in the U.S.

He's been known to stir the pot in the craft beer industry since creating Lagunitas in California 20 years ago. This week, however, Magee apparently went too far.

His company on Monday filed a lawsuit against larger rival Sierra Nevada, charging trademark infringement in the logo for Sierra Nevada's new IPA called Hop Hunter.

Craft beer CEO sues, then says sorry
Craft beer CEO sues, then says sorry

Lagunitas believed the bold, black, all-caps lettering for "IPA" on the new beer looked very similar to its own longtime logo. "The similarity ... will create confusion among consumers as to the origin of the IPA given that both designs are used in connection with craft brew India pale ale," the filing read.

In fact, Lagunitas believes it may have originated the acronym IPA way back in 1995 as shorthand for India pale ale, and it was seeking damages "treble to its actual damages or Sierra Nevada's profits, whichever is greater," plus attorneys' fees.

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The beer battle fell flat on social media.

"Really - Is this necessary?" tweeted @FW_Brewmaster.

"This is ridiculous, @lagunitasbeer should be ashamed," added @mattmaceachem.

As for the logos creating confusion among consumers, @BeerMagazine tweeted, "The only thing confusing is this," referring to the lawsuit.

"It was stunning actually, and by 10 o'clock in the morning I was reeling," Magee said about the backlash online. "I went home at the end of the day feeling as if I'd run a marathon or been beaten up."

Magee then decided to admit he was wrong and withdraw the lawsuit. "Today I was seriously schooled & I heard you well," he tweeted.

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That's not to say that Magee doesn't think he had a case, and that consumers may be so confused by the new logo they may think Lagunitas and Sierra Nevada are working together.

"The other brewery, they do an awful lot of collaboration brews, and I never do any," he said. However, "It didn't matter that I felt that we could win in a court of law, that this was a meaningful infringement. That was irrelevant. My customers didn't want me to do it."

"Glad this is behind us," Sierra Nevada said in a statement to CNBC. "As we said, we have no interest in our beers being confused with anybody else's."

The spat comes even as craft beer continues to take market share from traditional brewers. Magee said last year Lagunitas' business grew 60 percent to nearly 600,000 barrels as the company expanded into Chicago.

He projects another 40 to 50 percent growth this year. "I don't think there's a craft brewer in the country that isn't operating at capacity." He's seen research indicating nearly half of millennials "have never even tried a Bud, Miller, or Coors ... it's not even on their menu."

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So now that these brewing frenemies are no longer involved in a lawsuit, has Magee heard from Sierra Nevada. "Do you think?" he said with a laugh.

"We don't harbor any ill will toward Lagunitas Brewing and are pleased that we can get back to making great beers," Sierra Nevada said in a statement.

Magee said the experience showed him how business has changed, especially when your business caters to millennials. "I think had we gone to a real court, we would've prevailed," said Magee, "but the court of public opinion is where our customers live, and it matters more than anything else."