First posted on Commercial Law International on Feb 18, 2009.

If you didn’t know already Canadians take their beer very seriously. And I don’t just mean on the consumption side.

Brewing in Canada is a very serious business indeed.

This is where the story of Dead Frog Brewery and Sleeman Breweries Ltd. comes in. It is a litigation story of David vs. Goliath, where David might just lose this time – it is a litigation story after all. It is a suit centered on the intellectual property.

The David in this story, Dead Frog, is a micro-brewery – oh sorry, craft brewery to use industry speak – from Aldergroove, British Columbia (B.C.). This pint sized – pun well intended – member of the industry is showing no signs of capitulating, if anything Dead Frog is showing signs that it is sporting for a fight.

The Goliath in this story, Sleeman, is an industry giant – though admittedly not the largest – from Guelph, Ontario. The keg sized – here again, well intended – is the one that initiated the suit and seems dead set on defending what it sees as its rights. And what is it all about?

It is a battle over a bottle.

The thing is both Dead Frog and Sleeman use clear glass bottles for their beers. However, Sleeman, the more established brewery, is well known for its clear glass bottles. Sleeman initiated suit last June in B.C. alleging that Dead Frog is illegally using its clear glass bottle design.

Dead Frog for its part has responded with a statement of defence and counterclaim and as far as it is concerned Sleeman does not have a monopoly on clear glass bottles. Moreover, the beer loving public is highly unlikely to get the two designs confused as the logos embossed on the bottles are very different – a dead frog vs. a beaver – also given the prominence of the Dead Frog name and slogan on its bottles there should be no confusion.

Now I wasn’t going to comment on the merits of the case but given the above differences and the images I saw at Great Canadian Pubs and Beer of the two bottles side by side, I think I need to. What is Sleeman doing? The embossed dead frog is in no way close to their beaver design.

Even if Sleeman had a strong case – which I don’t see how it does – litigation could be a poor business decision. As this case progress’s it will no doubt pick up more press and Sleemans could, even if it is in the right legally, be seen as a bully. Although beer drinkers are well known for their brand loyalty, they are also well know for their sense of beer justice and they could sentence Sleemans to a period of isolation. Why, oh why, in these tough economic times would any one want, or even provoke the potential, for such a thing?

I must admit that I have never tied Dead Frog, in fact I had never even heard of it until this suit but I am sure it is a fine brew. However, how else do you explain a 300% growth rate while only in its second year of operation. It must be a fine brew indeed – at least some beer drinkers think so. Sleeman on the other had I am fully acquainted and fully enjoy – honey brown.

This suit is a lose, lose, lose situation. Even if Sleeman wins on the legal merits it will lose by being labeled a bully. Even if Dead Frog wins on the legal merits it will lose – the price of defending the case will come at the expense of continuing its fantastic growth rates. And no matter whom the winner is the beer drinker will be the ultimate loser.