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Monsters Kiss And Make Up

Monster Energy claims to be “the meanest energy supplement on the planet.” The company that makes it may be meaner.

Publicly traded Hansen Beverage Co., which sold $1 billion worth of Monster Energy drinks in 2008, decided last month to pick on Rock Art Brewery, a Vermont microbrewery that is owned by husband and wife Matt and Renee Nadeau and employs a staff of seven.

Rock Art produces a beer it calls the Vermonster. It’s an American barleywine (a strong ale) that is made with 110 pounds of malt per barrel. According to Rock Art’s Web site, it goes great with smoked Gouda.

Hansen said consumers might confuse the Nadeaus’ Vermonster with its caffeine-packed beverage. The similarity in the names, Hansen said, would “undoubtedly create a likelihood of confusion and/or dilute the distinctive quality of Hansen’s MONSTER marks.”

In a Sept. 4 cease-and-desist letter, Hansen said it wanted Rock Art to stop selling the brew, abandon its trademark application and pay Hansen’s legal fees.

Matt Nadeau told Hansen that he had no intention of moving into the energy drink market, so he did not see any conflict between the products. But Hansen’s lawyer said the bigger firm was not worried about Rock Art selling energy drinks. Hansen was interested in selling beer, and it wanted to have the only monster in the business.

That’s when Nadeau got angry. He later told reporters that he “said `Too bad, I'm already here. I've been here. And I'm already brewing beer.'”

Nadeau knew he needed to talk to a trademark attorney, so he contacted five. They all told him the same thing: He had a strong case and would probably win in court, but the fight would most likely bankrupt him.

But Nadeau wasn’t willing to give up the Vermonster, and neither were the beer’s fans. Supporters wrote Hansen to say that they were boycotting Monster products, and one Vermont store, the Beverage Warehouse, in Winooski, pulled the energy drink from its shelves. “Vermont's the kind of place where people stand up for each other,” the Beverage Warehouse’s co-owner, George Bergin, said.

First the local media picked up on the story. Then it was tweeted and blogged, until, eventually, national news organizations started to notice. John Curran of The Associated Press showed up to talk to Nadeau about his fight, and the article ran in 267 papers across the country.

The story of the Vermonster has a happy ending. Last week, Rock Art and Hansen signed an agreement giving Rock Art the right to continue brewing the Vermonster. While the exact terms of the agreement are confidential, Nadeau says he got everything he wanted. “All I wanted from day one was the ability to continue my brewing of THE VERMONSTER,” he wrote in a letter to supporters on his Web site.

Though the Vermonster is safe, other small businesses face continuing threats to their products, trade names and other intellectual property. Trademark disputes often are resolved not on the merits of the case but on the depth of the parties’ pockets. Most small business owners do not have the time or money to fight back, as Nadeau did.

Congress could address this issue by creating a small-claims type of court for intellectual property disputes. Such courts already are common in state and local jurisdictions. There is a federal model in the small claims procedures of the U.S. Tax Court, which allow ordinary taxpayers to take on the Internal Revenue Service in a fair forum in which taxpayers are welcome to represent themselves.

For now, the monsters are playing nicely together, but things could get ugly again if Ben and Jerry’s enters the fray. They, too, produce a Vermonster, but their version contains 20 scoops of ice cream, hot fudge, bananas, cookies, brownies, and a choice of toppings. That’s a truly formidable monster.

Larry M. Elkin is the founder and president of Palisades Hudson, and is based out of Palisades Hudson’s Fort Lauderdale, Florida headquarters. He wrote several of the chapters in the firm’s recently updated book, Looking Ahead: Life, Family, Wealth and Business After 55. His contributions include Chapter 1, “Looking Ahead When Youth Is Behind Us,” and Chapter 4, “The Family Business.” Larry was also among the authors of the firm’s book The High Achiever’s Guide To Wealth.

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