GrowlerWerks was poised for startup success—until a patent lawsuit threatened their flagship endeavor. Here’s how intellectual property law firm Marger Johnson set them back on course.
Portland-based startup GrowlerWerks had a novel fix for flat beer.
Tired of pouring stale microbrews down the drain, founders Shawn Huff, Brian Sonnichsen and Evan Rege designed and engineered a smarter pressurized growler: the uKeg, whose automated regulator cap kept microbrews pleasantly fresh, cold and carbonated for extended periods.
The growler made a splash in Oregon’s craft beer community even in its prototype days, when a 2014 Kickstarter campaign with a funding goal of $75,000 raked in a cool $1.5 million for the nascent startup. After careful study of similar products on the market, and banking on the novelty of the uKeg’s regulator cap, GrowlerWerks applied for a patent.
A clever concept, plenty of due diligence, a wealth of seed money—all the right ingredients were in the mix for startup success. By October 2015, full patent well underway, GrowlerWerks had started delivering the finished growlers to an eager stable of Kickstarter backers.
Then came trouble: just before Thanksgiving 2015, Bend-based beer growler and accessories maker Drink Tanks filed a federal suit against GrowlerWerks, claiming the uKeg infringed on their newly broadened patent for another pressurized growler.
Shawn Huff could hardly believe it. He knew the folks at Drink Tanks (the niche draft beer container industry is small, after all) and had exhibited right alongside them at various trade shows and conferences. The suit immediately struck him as nonsense.
“It was surprising to us, and it was also kind of baffling because we were pretty aware of a lot of the [intellectual property] that’s out there,” says Huff. “Our initial reaction was: what could we possibly be infringing on?”
To help them untangle that question, GrowlerWerks called on Portland-based intellectual property law firm Marger Johnson. Suits likes these are pretty much the “worst-case scenario” for a startup, says MJ Director Kevin Ross, who teamed up with MJ Senior Associate Sean O’Brien to tackle the suit: “It’s unusual for a holder of a newly issued patent to go into full-blown patent litigation without reaching out first, for [a startup] to basically be the recipient of a suit without receiving a phone call or at least a cease-and-desist letter … this went really deep, really fast.”
MJ attorneys Sean O’Brien, left, and Kevin Ross
Some foundational problems with the Drink Tanks suit quickly bubbled up: their pressurized growler wasn’t nearly novel enough to warrant a patent so broad, say Ross and O’Brien, and instead constituted an “obvious collection of old parts.” What’s worse, Drink Tanks failed to properly reference in that original patent application a substantial number of similar products already in existence, as Patent Office rules require.
MJ immediately got the federal patent lawsuit moved from Delaware to Oregon, then successfully petitioned to have the suit put on hold while they petitioned the United States Patent and Trademark Office to re-examine (and, ultimately, invalidate) the Drink Tanks patent.
More digging revealed serious issues with the research conducted by the original patent examiner, who hadn’t delved deeply enough into the specialized niche of pressurized beer growlers before rendering a decision. The Marger Johnson team performed their own research and provided it to the Patent Office for a second review of the patent. In February 2018, after considering the information Marger Johnson had provided, the Patent Office agreed to invalidate 16 of the original patent’s 19 claims.
Now, MJ’s crafting a plan to finish off what’s left of the damaged Drink Tanks patent in federal court. Startups, be forewarned: no great idea goes unpunished, says O’Brien: “I joke with clients that you know you’re successful when somebody turns around and sues you. You’re below everyone’s radar, then, once you start getting some traction—and this is really true for startups—you’re gonna draw other people’s attention.”
If every startup is a small craft charting a course through unknown waters, says Ross, then intellectual property attorneys can be thought of as the forward spotters, posted at the bow with binoculars, eyeballing the horizon for unexpected squalls: “Oftentimes, startups are ‘damn the torpedoes, full steam ahead,’” he says. “But a little searching, a little investigation and a little due diligence can really pay back in spades.”
The seagoing metaphor holds true for Huff, though he sees his attorneys as somewhat more akin to lighthouses dotting the shoreline, illuminating the safest path forward. “You don’t know what’s out there, and they shine a light on the facts,” he says.
Regardless of what lays ahead, GrowlerWerks will press on with their mission to protect beer lovers from the tyranny of flat ales and IPAs, promises Huff, who remains proud of his close-knit, fast-growing industry, which he still insists is powered by healthy competition, enthusiastic collaboration, and deep collective pride: “Any startup has challenges they have to deal with, so we dealt with it. Our eyes are pointed forward, and we’re still stoked to be in the beer industry, especially here in Oregon.
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