Pabst Seeks Court Determination Wresting Back Control of Rheingold Brand

There’s big money in an established brand.  That goes double for any established beer brand with a history, low price point, and no small amount of subtle marketing.  The
right combinations can result in a scheme to mint liquid gold.

There’s an untapped goldmine of long lost lagers.
Brands with breweries that were shut down but whose intellectual property and capital got bought up or mothballed until some enterprisingcompany looking to cash in on nostalgia or a vintage, perhaps even a craft appeal, or all of them, decides to revive the brand or expand it.  (e.g., The recent national push by MillerCoors to bring Henry Weinhard’s to the country.)

Enter Rheingold Beer (or rather, “re-enter”).  Nostalgia to any New York septuagenarian – a vintage brand with established credibility – Rheingold was a New York staple in the 50s and 60s.  The brewery and brand were shutdown in the 70s and apparently Stroh’s – PBR – acquired the intellectual property.  Because in 1997, the Stroh Brewery Company licensed the trademarks for Rheingold to the newly minted Rheingold Brewing Company LLC.  At least that’s what’s alleged in the pleadings filed between Stroh’s successor, Pabst Brewing Company (no stranger to reviving a brand), and the LLC, a Division of Drinks Americas Beers, Inc.  (A copy of the 1997 License Agreement between Stroh’s and the LLC is attached to this Complaint.)

In the legal action, the LLC is requesting the Court enter a judgment that Pabst hasn’t terminated the LLC’s rights to make Rheingold beer and use the trademark.  Pabst, alternatively, is seeking a judgment that it has.  And what’s at stake?  The brand “Rheingold”.  The brand’s revival was not accident.  It was a targeted campaign aimed at building a brand that appealed to the lower east side and beyond.  So whomever controls the brand, controls the rewards of the past fifteen years of marketing, advertising, and brand revival.

The legal fight is worth watching (in case the matter doesn’t just settle out of court) because Pabst is asserting a right to terminate based on contractual provisions in the licensing agreement that set minimum sales quotas (2000 bbl).  An interpretation about the effect of the provision could give some good guidance to brewers, distillers and vintners looking to license their products to other regional companies by offering an example of enforcement of a particular clause.

The real beer geeks will be interested in the licensing agreement because page 2 outlines an interesting royalty payment schedule increasing from $2.00 per bbl in 1998 to $3.00 per bbl in 2008, that many probably weren’t aware of.

Assuming the matter isn’t resolved through settlement, this matter could provide some clarity to producers and licensees.