Colleges aren't happy with Bud's school spirit

Colleges aren't happy with Bud's school spirit

Billy BarnesĀ is a JD candidate at the University of Toronto.

Budweiser has begun selling beer cans in the colours of local college football teams in some markets in the US. For example, in parts of Michigan they are selling a maize (pale yellow) and blue "fan can" that matches the colours of Michigan State University. Though many universities are fine with this---or at least willing to put up with it---the campaign has caught the ire of others, including Michigan State which has threatened legal action.

It probably won't come to that because Budweiser's policy is to pull the cans immediately if the university complains, but it does allow me to consider a few questions: (1) could the universities stop Budweiser from selling the cans, and (2) should they be able to? I apologize for asking questions I can't definitively answer, but I encourage you add your own thoughts in the comments.

A university would have to prove two things: that they have a trademark and that trademark is infringed. A colour scheme is capable of functioning as a trademark. So if the university can establish that the colour scheme has acquired a secondary meaning as a source of goods, then they should be able to claim ownership rights over that scheme. The very premise of the campaign would make this seem likely: each colour scheme is available only in the vicinity of the school it is targeted at because that is where people will recognize it and buy it to support the local team. Then it is up to the universities to show infringement---that consumers are likely to be confused as to the source of the beer or the relationship between the schools and Budweiser. This question is undeniably fact-based, but it has been held that when a mark "was adopted with the intent of deriving benefit from the reputation of [the mark holder] that fact alone may be sufficient to justify the inference that there is confusing similarity." All this is to say, the case will turn on the facts but a university would have a serious chance.

If you have read reports on this in the media or comments in blogs, you may find a lot of people siding with Budweiser. After all, they're just encouraging school spirit, right? They're not actually competing with the school. Intuitively, it would feel different if they were selling knockoff souvenirs or merchandise that cut into the market for items sold at the school gift shop. But there are, I believe, compelling reasons in favour of protecting the schools. When I read about this, I was immediately reminded of the Olympic marks because people buy products in school colours or with the Olympic mark to support a public institution. American universities, as with the Olympics, make a lot of money by licensing their marks to companies that want to profit from this. Budweiser, if they are infringing, would be deriving a benefit by misleading consumers and depriving universities of licensing fees. That wouldn't be right. It's all in how you phrase it.