Marble City Brewing Company Stalled by Trademark Lawsuit

Even before its beer hits the shelves, the Knoxville brewery must tangle with claims of infringement by New Mexico's Marble Brewery

Last Friday afternoon, a new craft beer hit the shelves of Bearden Beer Market.

Generally, this would be cause for celebration for Knoxville's many beer snobs. Generally, you'd have a town excited to be just the third market for a beer.

Generally, you wouldn't see Knoxvillians like Curtis McArthur making the following post on the brewery's Facebook page: "I for one, will not be purchasing any Marble beer, and will encourage others to do the same."

But those handful of $12 six-packs from New Mexico's Marble Brewery on the Beer Market's shelves (and soon elsewhere) are at the center of a controversy—one likely to delay the city's only craft brewery from beginning its sales this month as planned.

The two men behind the local Marble City Brewing Company, Adam Palmer and Johnathan Borsodi, still seem in shock over the whole mess. In shock and really, really pissed off. Not because there's a new beer in the Knoxville market, but because that brewery is suing them for trademark infringement.

"From a competitive standpoint, it doesn't bother us one bit," Palmer says.

"We're always happy to see more craft beer in Knoxville," Borsodi adds.

What the pair aren't happy about is what they see as Marble Brewery's strategic move into the Knoxville market in an attempt to claim damages from the lawsuit—a claim Marble denies.

Palmer and Borsodi say they came up with the name Marble City Brewing Company in October 2009, after Knoxville's historic (and somewhat obscure) nickname from the days when the city produced a large amount of marble. They registered that name in April 2010.

Prior to registering as a corporation, the pair did research whether anyone else had the name. They discovered there was a Marble Brewery in Manchester, England, and a Marble Brewery in Albuquerque, N.M. Since the British beers didn't seem to be available stateside, and since the New Mexico beers were only available in New Mexico and Arizona, and since neither had City in the name, Borsodi says he couldn't imagine how there could be any confusion over similar-sounding names. Especially, he notes, because the Marble Brewery in Albuquerque is so named because it's on Marble Street, and its logo uses images of glass marbles, the children's toy, not the stone.

But in October, Borsodi received a call from Jeffery Jinnett informing him that the name Marble City Brewing Company was a problem. Jinnett is the president of Santa Fe Dining, which owns and operates a number of restaurants in Santa Fe and Albuquerque, N.M., including Marble Brewery, which is a brewpub that also sells its own beer. Borsodi says he explained that he couldn't see any possible confusion that would arise between the two breweries and declined to change the name. In November, Marble Brewery filed a lawsuit in federal court.

The original complaint states, "Marble City's unauthorized use of the Infringing Marks are likely to cause confusion of purchasers and the public in general." That's nonsense, says Borsodi. He asks if people confuse Samuel Smith and Samuel Adams, or if they mix up Lost Coast Brewery with Left Coast Brewery, and Left Coast Brewery with Left Hand Brewery.

Then there are the Paper City, Cigar City, Iron City, Watch City, River City, Capitol City, Golden City, Naked City, and Granite City breweries—the last of which, a chain based in Minnesota, has actually contacted Marble City about joint marketing concepts based on the two companies both having a rock in their names.

"They were like, let's have some fun with that—throw a rock concert or something. That's the craft beer industry," Palmer says.

That's apparently not how Marble Brewery sees the industry. Jinnett declined to comment on the lawsuit, citing company policy. But the complaint states that Marble City's "acts of federal and common law trademark infringement are committed with the intent to cause confusion and mistake, and to deceive the public." It also calls Marble City's website domain, marblecitybeer.com, "confusingly similar" to Marble's website, marblebrewery.com.

From a design standpoint, the two logos look nothing alike—Marble Brewery's is brown and green, with black type; Marble City's is red with cream type. The fonts are different, and there's a marble on Marble's logo. The websites also have nothing stylistically in common. And that's why Borsodi, who's also a lawyer, figured he had nothing to worry about.

"If we fought on the merits of the lawsuit, we would win," Borsodi says.

When asked why they don't just change their name and avoid the legal hassle altogether, Borsodi says they can't afford to. They've spent thousands of dollars already on merchandise with their logo on it—glasses, signs, T-shirts, and other promotional items. And a new name would in itself create a legal hassle, requiring a new LLC filing, new permits, new paperwork.

"The only money going into this is our money, and we're broke." Borsodi says. "We're not generating any money yet."

Borsodi and Palmer were hoping to start generating money in a week or two—after months of getting everything in place, Marble City finally has all the permitting ready and the beer brewed. But now that Marble Brewery has beer on Knoxville shelves, Marble City can't.

"If we aren't selling beer, there are no damages," Borsodi says. "As a lawyer, I have to say I'm impressed by the move."

While he wouldn't talk about the lawsuit, Jinnett would talk about Marble Brewery's decision to hit the East Tennessee market—before even hitting any of the other states bordering New Mexico.

"Knoxville's my hometown. I went to UT, and I still have a lot of friends in town," Jinnet says. "It seemed like a natural progression for me personally to take the product to my hometown."

Marble Brewery beers are being distributed locally by Chattanooga's MOLO-TENN Distributors. Owner James Sherrell says he was unaware of the lawsuit and he first heard about Marble Brewery from a friend who lives in Albuquerque. Sherrell was also unaware that Marble has no distribution outside of the Southwest, as was MOLO-TENN salesman Jeff Nunes, who has been pushing Marble locally.

"I heard there was a conflict over the name, and that's all I heard about," Nunes says, but notes he was unaware a lawsuit had actually been filed.

Borsodi declined to say how much it would cost for Marble City to change its name.

"It'd be enough that it's worth it to keep fighting, especially since we've done nothing wrong," he says.

Still, Marble City hopes a resolution can be found before heading to court—and found soon, so they can start putting their brew in local restaurants and bars instead of having it sit in vats in their warehouse.

"We have beer ready to go. We have hundreds of empty kegs ready to be filled with beer," Borsodi says.