Distilling Patent and Trademark Lessons
By Matt Haney
When my dad and I took the leap and started Hillbilly Stills in 2011 and then HBS Copper in 2014, we had no idea just how many different types of challenges and rewards we would find in owning our own business. Certainly one of the most surprising challenges we discovered was when we were named in a patent infringement lawsuit last year. After years of developing friendly relationships on both the hobby and craft sides of the industry, we were suddenly faced with the daunting challenge of navigating a legal process and court system regarding a patent we’d never even seen.
As the ordeal wrapped up at the end of the year, I decided that some of our experiences might help others understand the complex litigation and patent process, and I’ve distilled those ideas into this article.
1. Understand the nature of the beast
Many craft distillers are hobbyists turned small business owners, and among the myriad issues new distillers face is establishing their product lines and brands. Early on, we understood that Hillbilly Stills needed to stand apart from its competitors, but other than making top quality distilling products and marketing to our potential clients, we weren’t sure what other tools could help us accomplish that goal. While we weren’t against using lawyers, we did not know what attorneys could help us do. So my dad reached out to one of our customers, Ben Lieb, an intellectual property attorney with a law firm in Denver, to learn more about how the law might help us protect and grow our business.
Up to this point, we hadn’t investigated patents or trademarks other than securing our name, Hillbilly Stills. Ben helped us map out a protection strategy that aligned with our business goals. From the outset, a patent didn’t make sense for us, just as they haven’t made sense for most distilling equipment companies. Patents protect inventions that are new and non-obvious, and our equipment is based on technology that has existed as long as distilling. Trademarks, however, made good business sense for us because they offered us ways to enhance our brand and protect our products over the long haul.
Knowing more about intellectual property has certainly helped us grow our business. But whether you’re proactive with your intellectual property strategy or not, expect the unexpected when it comes to litigation.
2. Face reality: the lawsuit will get heard
One of the biggest wake up calls that Hillbilly Stills has had in its four years of business is that you need to be ready to face the judicial process whether you believe you should be there or not. The system is set up to hear all claims that it receives, and the judge cannot decide the case is baseless until a significant number of steps have been taken. Small businesses and entrepreneurs have no protection from the potential fallout that a pending lawsuit may impose, so ensuring you have good counsel at the ready is an essential part of staying ahead. When we first received news that we were facing a design patent infringement lawsuit from a former business partner, we weren’t sure how we could have infringed on the patent, yet the courts would not listen to our story until we reached the right point in the process.
When we first received news that we were facing a design patent infringement lawsuit from a former business partner, we weren’t sure how we could have infringed on the patent, yet the courts would not listen to our story until we reached the right point in the process.
Luckily, we were able to take advantage of our relationship with Ben, who is an experienced patent infringement litigator. Ben and his team explained the process, gave us a slew of options on how we could respond (along with their corresponding outcomes and costs) and let us decide on how we wanted to pursue the situation. Having trusted counsel was essential. While we understood the potential implications of losing a lawsuit, Ben was able to articulate a number of different ways we could address the suit and what implications each of those might have. As a still relatively young business, we appreciated seeing a scale of costs and consequences that allowed
As a still relatively young business, we appreciated seeing a scale of costs and consequences that allowed us to choose an approach that we felt was best given our financial position and appetite for risk. It was also helpful to have an attorney who showed us what makes a truly valuable patent. He illustrated the difference between run-of-the-mill patents that can be obtained through a website and customized patents that licensed patent attorneys create for their inventor clients after spending time understanding the technology at hand. Given the information he gave us, we felt comfortable choosing our approach and ultimately our destiny.
Our next step was to let the other side know we meant business. We were prepared for the fight as well as a slow process to get to a resolution.
3. Stick to your guns & wait it out.
While no one could have prepared us for the waiting — the litigation process is s-l-o-w — I am certain that it felt much less stressful because we had made key decisions about our approach, and we stuck to our guns throughout the process. Even though the lawsuit could have dragged on for years, we were able alert us if additional decisions needed to be made. We could have worried about our fate every minute of every day, but instead we used that energy to keep driving the growth of our business.
4. Be ready for anything when you start partnering with others.
While I don’t think we would wish litigation on anyone, I am confident that we learned valuable lessons throughout the process. In addition to those I have already mentioned, we certainly learned the importance of doing our research when it comes to working closely with others.
It has always impressed me how friendly everyone in the craft distilling industry is — between still builders, we have an open line of communication. We all bounce ideas off of each other, and while everyone has their trade secrets, we all do right by each other. I’ve enjoyed developing so many relationships over the years. However, we learned that it’s necessary to make sure we protect ourselves before we go into or choose to do business together with a comprehensive written agreement. Make sure you know and have addressed all the foreseeable risks involved before you step into any transaction or deal. Be prepared and understand the costs associated with proactive protection of your products and a legal battle to protect your business.
About the Author
Matt Haney founded Hillbilly Stills and HBS Copper with his father, Mike Haney, in 2011 and 2014 respectively. The company faced a patent infringement lawsuit in 2015. The case, Paul E. Caldwell v. Haney Enterprises, LLC, was dismissed in favor of Haney Enterprises by the Oregon District Court in October of 2015. Haney Enterprises was represented in the case by Ben Lieb of Sheridan Ross P.C. in Denver, Colorado.