Problem 3

Katharine and her family had brewed beer for years and, through a process of trial and error, had come up with a number of unique recipes.

As part of the contract with MBB, Katco Inc. was to work with MBB's brewers to create and market a new light beer. Katco Inc. provided MBB's brewers with the recipe for "Molly's Great Draft"; a recipe originally created by Katharine's Aunt Molly.

Katco Inc. devised a marketing campaign around the new beer, shortening the brewer's name to "Mickey's" and promoting the beer as "Mickey's Great Draft" and as "MGD".

Shortly after the launch of the campaign, MBB was served with two lawsuits:

(i)Aunt Molly claims that she has patent rights to the formula for "Molly's Great Draft" and sues for an accounting for all profits;

(ii) Miller Brewing Company, a large brewing company located in the United States claims that the use of the name "Mickey's" and "Mickey's Great Draft" infringe upon its trademark registration and brand names "Mickey's", "Mickey's Fine Malt Liquor" and "Miller Genuine Draft". It further claims the initials "MGD" are a recognized nickname of their beer and that the use of all of the names infringes its intellectual property rights.

MBB claims that its beer tastes significantly different from Miller Brewing Company's beer and that its marketing colours and logo are also significantly different.

Required: Examine the legal principles and issues that will be considered as part of both lawsuits and the likely result. Could MBB have avoided the problem by marketing the product as "Molly's Great Draft"? Would Aunt Molly's consent be required?